Author Topic: ELI5: AMIT cost basis adjustments  (Read 635 times)

mspym

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ELI5: AMIT cost basis adjustments
« on: October 03, 2020, 04:48:21 AM »
I am a little mystified about what I actually need to do with any cost basis adjustments on my AMMA/AMIT statement. I've googled it and read what the ATO have to say but I'm still kinda unclear on what if anything I need to do with any adjustments.

- Are they a thing I can horde up until I sell and adjust any CGT obligation?
- Are they something that gets cleared at the end of the tax year?
- do I just need to track them (?) and adjust the price for all units purchased by an infindesmal fraction of a cent or are they something that applies only to a given set of purchased units?
- how does an adjustment become a CGT obligation, as alluded to by the ATO?

Any help you can give me is much appreciated - I am not used to researching and being left as stumped at the end of it as I was at the start.

deborah

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Re: ELI5: AMIT cost basis adjustments
« Reply #1 on: October 03, 2020, 05:27:39 AM »
I think the cost basis adjustments are changing the cost to you of each individual unit. You need to record what your new cost basis actually is, so that you use this when you actually sell them, rather than the amount you actually paid. CGT will then be paid on the capital gain from the adjusted cost.

This often happens when companies have share splits, so the shareholders are issued with extra shares, and the value of each individual share is reduced.

marty998

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Re: ELI5: AMIT cost basis adjustments
« Reply #2 on: October 03, 2020, 05:45:43 AM »
Number three. You allocate it across all the units you held at the time. Some years itíll decrease the cost base, some years itíll increase it. Just depends on the tax position of the fund each year.

mspym

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Re: ELI5: AMIT cost basis adjustments
« Reply #3 on: October 03, 2020, 06:02:07 AM »
Thank you Deborah and Marty. So I can't hold on to an adjustment amount and decide to apply it to a specific sale? It's applies to all units held at the time of the tax statement.

 so I assume this calls for another spreadsheet tab to track original price/adjusted prices since the transaction history only records the original cost of each parcel?

deborah

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Re: ELI5: AMIT cost basis adjustments
« Reply #4 on: October 03, 2020, 06:05:20 AM »
Yes.

marty998

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Re: ELI5: AMIT cost basis adjustments
« Reply #5 on: October 03, 2020, 08:26:33 PM »
No new tab required on the spreadsheet, just add a column for each year to the right of your purchase amounts, allocate the AMIT amount proportionately among the various parcels (parcel/total units x AMIT amount for tax year), and sum right to get the adjusted cost base.

Easy. Well, should be anyway.

mspym

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Re: ELI5: AMIT cost basis adjustments
« Reply #6 on: October 03, 2020, 10:48:58 PM »
Thank you! New columns [AND a grouping] added to my cost basis spreadsheet. Next up: tax return.