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Kaplan Exam Kit – indexation allowance – Qn 68 (ii)

This topic has 2 replies, 2 voices, and was last updated 7 years ago by juliasanmartin.

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February 24, 2018 at 3:30 pm #438721
juliasanmartin
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Would anyone know what indexation allowance is not used for the sale of Monk building?
Thank you
February 24, 2018 at 3:54 pm #438723
fbawany
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Indexation Allowance (IA) is only used to reduce a capital gain, the sale of the Monk building resulted in a loss, thats why there is no IA.
IA cannot be used to increase a loss.
February 25, 2018 at 10:27 am #438833
juliasanmartin
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Thank you fbawany, it makes sense & the worst is that I know this rule.
I just didn’t subtract cost from proceeds & so didn’t realise it was a loss. Lesson – finish off the questions! : )
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