# Tax deductions and trading



## tom82 (20 June 2014)

I would like information on tax consequences / deductibility of establishing / setting up an office for the purpose of trading (whether it is share, forex or CFD trading), I understand that expenses that can be claimed for are subscriptions, courses, professional fees and costs associated with running of that office, but what about the setting up of the office eg furniture?

How many trades per month would the ATO consider a person taking to be called a trader and be considered as a business venture?

Thank you and look forward to your reply


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## tom82 (23 June 2014)

tom82 said:


> I would like information on tax consequences / deductibility of establishing / setting up an office for the purpose of trading (whether it is share, forex or CFD trading), I understand that expenses that can be claimed for are subscriptions, courses, professional fees and costs associated with running of that office, but what about the setting up of the office eg furniture?
> 
> How many trades per month would the ATO consider a person taking to be called a trader and be considered as a business venture?
> 
> Thank you and look forward to your reply




From what I understand there is no set number of trades a trader is required to trade to be classified as a trader.
If the person treats their trading venture in a business like way, keeping records, documentation, diaries, trading in a repetitive manner, keeping a business or trading plan and that the person trades regularly they might be able to be classified a trader.

With regards to my forex activities, I keep records, documentation, trading plan and trade in a repetitive way.

Any ideas, comments, etc would be welcomed.


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## VSntchr (23 June 2014)

This page should help a bit:

http://www.taxpayer.com.au/KnowledgeBase/10029/Individuals-Tax-Super/Working_from_home_deductions

and perhaps this:
https://www.ato.gov.au/Business/Deductions-for-business/Home-office-expenses/


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## tom82 (23 June 2014)

VSntchr said:


> This page should help a bit:
> 
> http://www.taxpayer.com.au/KnowledgeBase/10029/Individuals-Tax-Super/Working_from_home_deductions
> 
> ...




Thank you for bringing those pages to my attention. I was aware of http://www.taxpayer.com.au/KnowledgeBase/10208/Small-Business-Tax-Super/Share_investor_or_trader and pages such as at the ATO site https://www.ato.gov.au/Business/Investments,-shares-and-options/In-detail/Carrying-on-a-business-of-share-trading/Carrying-on-a-business-of-share-trading/

So you are saying or suggesting that share traders might be able to claim the same / similar expenses from working from home as for other professions that might also work from an office in their home?

I dont know where that site and the ATO get the $0.34 cents from, would like to know how they came to this conclusion.

Thanks


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## Wysiwyg (23 June 2014)

tom82 said:


> So you are saying or suggesting that share traders might be able to claim the same / similar expenses from working from home as for other professions that might also work from an office in their home?



I claim a percentage of floor space as my office. Since this is my PPOR, when I sell house in the future that percentage of floor space is liable to CGT.


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## tom82 (23 June 2014)

Wysiwyg said:


> I claim a percentage of floor space as my office. Since this is my PPOR, when I sell house in the future that percentage of floor space is liable to CGT.




My understanding is you can claim the floorspace (occupancy expenses) if that space is used exclusively for work purposes.
Don't you mean that floor space will not be liable for CGT?


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## Wysiwyg (23 June 2014)

tom82 said:


> My understanding is you can claim the floorspace (occupancy expenses) if that space is used exclusively for work purposes.



Yes that is correct.  


> Don't you mean that floor space will not be liable for CGT?



No, I am absolutely positive that the floor space claimed for carrying on a business in your PPOR is liable for CGT when the PPOR is sold.


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## tom82 (23 June 2014)

Wysiwyg said:


> Yes that is correct.
> No, I am absolutely positive that the floor space claimed for carrying on a business in your PPOR is liable for CGT when the PPOR is sold.




Isn't there a small business CGT concession you can / could use to reduce the capital gain?


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