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CGT Consequences of a purchasing and selling an Income Stream

Discussion in 'Accounting, Tax & Legal' started by Terryw, 9th Sep, 2006.

  1. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    I have been thinking about the taxation consequences of purchasing an income stream such as a loan book (mortgage broker's trails) or a realestate agent's rental book (taking over managing prroperties). These sorts of investments provide high annual returns, but the book value gradually declines (or rapdily in some many cases) as people refinance, sell homes, or move agencies/brokers etc. So what would happen if you purchased a loan book for $100,000 in year 1, but you sold it after year 3 when it is only worth $20,000? Would that be a capital loss of $80,000? What do you think? Thanks
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    I've spoken to one accountant, (whom I do not trust to get things correct!), and he said that I could claim a capital loss if the loan book were to be resold at a lower figure than purchased.