Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) CGT event H1 happens if a deposit paid to you is forfeited because a prospective sale or other transaction does not proceed.
The payment can include giving property: see section 103 - 5.
Example: You decide to sell land. Before entering into a contract of sale, the prospective purchaser pays you a 2 month holding deposit of $1,000.
The negotiations fail and the deposit is forfeited.
(1A) The amount of the deposit is reduced by any part of the deposit that is:
(a) repaid by you; or
(b) compensation you paid that can reasonably be regarded as a repayment of all or part of the deposit.
The payment can include giving property: see section 103 - 5.
(1B) However, the deposit is not reduced by any part of the payment that you can deduct.
(2) The time of the event is when the deposit is forfeited.
(3) You make a capital gain if the deposit is more than the expenditure you incur in connection with the prospective sale or other transaction. You make a capital loss if the deposit is less .
(4) The expenditure can include giving property: see section 103 - 5. However, it does not include an amount you have received as * recoupment of it and that is not included in your assessable income.
Example: To continue the example: if you gave a lawyer wine worth $400 in connection with the prospective sale, you make a capital gain of:
