Let's start by saying that we were impressed. Not so much by ChatGPT's ability to work with the complexities of the tax system, but for its tone and approach. The outcome from our testing is that you might end up with some general comments that are reasonably accurate, but you're unlikely to get an answer that can be relied on.

Question: How much capital gains tax does an Australian resident pay on an investment property with a worked example.

ChatGPT: An Australian resident pays capital gains tax (CGT) on the profit made from selling an investment property. The CGT rate in Australia is currently at 45% and the resident will pay 45% of the $150,000 profit, which is $67,500.

The accountant: There is no CGT rate of 45% that applies specifically to capital gains. Net capital gains form part of an individual taxpayer's assessable income. This figure is then used to calculate the individual's taxable income for the relevant income year. The tax rate that applies to an individual's net capital gains is impacted by the individual's other income or losses.

Also, while the highest marginal tax rate for individuals is currently 45 cents for each dollar of taxable income above $180,000, Australian residents are also normally subject to the Medicare levy of 2%.

ChatGPT also failed to mention the 50% CGT general discount available to Australian residents who have held an asset for more than 12 months, or the indexation method for assets acquired before 21 September 1999.

ChatGPT: It is advisable to consult with a tax professional to determine the specific tax implications of selling an investment property.

The accountant: Yes, indeed it is. Thank you ChatGPT.