Quote:
Originally Posted by Citroënbender
CGT question, as we’re looking at buying to demolish, develop a duplex and sell within two years. A rough sketch is:
Purchase: $2.5M
Development costs $750K
Interest $200K
Other income in the period to settlement $350K
Projected gross return $4M (settled by 30 month mark)
Do the development costs offset the capital gain, or are they borne by the developer? I would assume the former, but cannot see a clear answer.
Note: I’ve scrutinised a number of similar projects from purchase to completion/sale in the subject area and am reasonably confident (conservative) with final sale pricing.
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I know where you can get the exact answer to that question in a legally binding, formal way.....
Ring the ATO.....
