After having determined the capital proceeds, cost base or reduced cost base, you work out whether you made a capital gain or loss for a CGT event.

You make a capital gain if the capital proceeds are more than your cost base.

You make a capital loss if your capital proceeds are less than your reduced cost base.

Do this for all the CGT events in an income year so you know whether you made a capital gain or loss for each.

For example, Annisa has sold her farmland for $240,000 and investment shares for $17,000.

Annisa has calculated that the cost base (for a capital gain) of the farmland is $160,000. She made a capital loss on the shares, so she calculates the reduced cost base, which is $22,000. Her calculations are as follows:

Farmland

Capital proceeds – cost base = capital gain or loss

     $240,000 – $160,000 = $80,000 gain

Shares

Capital proceeds – reduced cost base = capital gain or loss

     $17,000 – $22,000 = $5,000 loss

Therefore, Annisa worked out that she has made a:

• capital gain of $80,000 for the sale of farmland
• capital loss of $5,000 for the sale of shares.