Question 1

In relation to CGT, which of the following statements are correct? In each case state whether the statement is 'TRUE' or 'FALSE' and provide an explanation for your answer, citing the relevant law.

(a)If a taxpayer makes a capital loss on the disposal of their personal jewellery, they can use that capital loss to offset any type of capital gains that they might have.

(b)If a taxpayer makes a capital loss on the disposal of their car, they can use that capital loss to offset any type of capital gains that they might have.

The statement is incorrect.

Cars are an exempt CGT asset. s118-5

(c)If a taxpayer makes a capital loss on the disposal of a personal use asset such a boat that they purchased for $20,000 and sold for $12,000, they can only use that capital loss to offset their capital gains arising from personal use assets.

(d)If an employee uses her own laptop computer exclusively for work purposes, her laptop computer would be considered a 'personal use asset' for CGT purposes.