Capital Gains Estimator

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Personal Plus 2017. Under the Tax heading is "Capital Gain Estimator" which is quite useful, but I am sure there is an error in how it calculates Tax owing which is labelled "Approx tax". The correct way to calculate capital gain, is & quoting from the ATO site : "Subtract the cost base from the capital proceeds, deduct any capital losses, then reduce by the relevant discount percentage." The reckon process is in error in that it applies the discount to the net gains, before deducting any capital losses! Thats nice, because it ends up with a lower tax to pay, but it is incorrect. An example to explain it, on sale of 2 shares: Sh1 has a net capital gain of $10,000 and Sh2 has a net capital loss of -$2500. The correct tax is ($10000- $2500) x 50% x tax rate of say 32.5%= $1218.75 tax to pay. But Reckon's CG Estimator does it this way: ($10,000 x 50%) -$2500 x 32.5%= $812.50 tax to pay. I wish the latter was correct, but the ATO I'm sure is not so generous. 
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david klumpp

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Posted 7 months ago

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Diver Dave

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David, you should also be aware that the calculation may not be correct if the sale involves some shares of a number of parcels.  If there has been a Deferred Tax or Capital Return payment, Reckon does not correctly allocate the return to each parcel - it should be allocated on a per share basis, but from memory, is allocated according to the cost base of each parcel.

If all of a particular stock is sold, the calculation is correct, but not when only some of the oding is sold.

For both the reason you have pointed out, and the above, I prefer to calculate the correct nett, taxable capital gain in a spreadsheet, which can also take into account any carry forward tax losses.
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Diver Dave

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some of the holding!, not oding.
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david klumpp

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Thanks Dave for the prompt response, I appreciate your expansion on this. In my case it included no Deferred Tax or Capital Return payments, but the part parcel issue did apply in my case. However, I do find Reckon's system does recognize separate lots, it gives you the choice of lots, and moreover the usual rule of "first-in" lot is the one usually selected for CG tax estimate.
My original point though remains, that error exists in the CG Estimator, and I think Reckon should fix that (any Reckon authorities watching?). I know there is a disclaimer there that says its only an estimate, and one should not rely on the estimate for serious tax estimate (and I don't of course), but to leave such an error in place is not excusable.