Capital gains tax and reinvesting

[egosbar]

hi all thanks in advance for any help

just wondering how capital gains will affect my reinvesting
what i want to know is if i take 10000 profit and reinvest it in shares do i need to pay capital gains on that or does it work out that i still havent made a profit as my shares are reinvested

 

[galumay]

If you make $10k profit then you need to add that profit to your income for tax calculation. If you held for over 12 months it will be discounted by 50%. It is irrelevant whether you buy more shares, buy 1kg of cocaine or put the money under your bed.

 

[egosbar]

that sux fk the government gambling is non taxable and this is basically what we are doing

 

[galumay]

that sux fk the government gambling is non taxable and this is basically what we are doing

It may be what you are doing! I am hopefully investing and not gambling.

 

[egosbar]

It may be what you are doing! I am hopefully investing and not gambling.

lifes a gamble dont matter how you put it , if you can make or lose money its a gamble , same as a pro horse better hes still gambling call it what you like same thing in my eyes , we are just trying to increase our odds of making money by knowledge, note the key word odds thats a gambling term to me

 

[tech/a]

Does a Book maker gamble?

 

[egosbar]

Does a Book maker gamble?

interesting reply , are we the bookie or the punter? wouldnt the stockbroker be the bookie? either way doesnt really matter i do call it investing to my wife haha

 

[tech/a]

If the book maker runs a business then so to can the professional punter.
Both do it without gambling. Doesn't mean they don't lose from time to time.
Accumulated Losses don't exceed accumulated Profit. Successful business.

Same with traders.
Stock brokers in the old sense provide a service.
Online brokers provide a vehicle to trade.
Good investors and traders run a business they don't gamble.

So when you learn to trade like a bookie you'll know exactly what I mean

Have a look at Pete's Trading thread.

 

[galumay]

The logical extension of your argument would be that buying an investment property is gambling and capital gains wouldnt be taxed, good luck with that one!

 

[egosbar]

The logical extension of your argument would be that buying an investment property is gambling and capital gains wouldnt be taxed, good luck with that one!

not really an argument just a thought , all good ill check out the trading books lol and ill say to myself ten times before i go to bed im an investor not a gambler haha

 

[egosbar]

The logical extension of your argument would be that buying an investment property is gambling and capital gains wouldnt be taxed, good luck with that one!

although my point is fk the government , we have paid tax on the money we are investing and can take a loss or profit , but they still want to make us pay capital gains tax even on interest its a joke really but you cant beat them , any thoughts on software to help run this investing buisnees , say for example for the position im in at the moment , ive invested 12k its up to 20k in one month , so if i want to sell and reinvest i sell and make 8k then pay capital gains of 2.5-3k odd and reivest the total i then have to pay capital gains again when i sell the next transaction bloody confusing how do you keep track of it all lol and when to sell and buy without ending up with a big tax payment you have to make end of financial year

 

[galumay]

Yes, you pay tax when you earn the money, but obviously if you use that money to earn more money then tax is applicable.

I use an excel spreadsheet to track, but then I am an investor so I dont make many trades. Paying tax at the end of the year is a good thing, it means you made money. My aim is to pay $1m tax!

Also you only pay the CGT at the end of the financial year, not each time you make a trade. You just work out your overall capital gain for the year, discount if applicable and add it to your income.

 

[egosbar]

yep got it thanks , im not bad at excel so that sounds like a plan , do you have a master excel file you could share so i can see how youve set it up , no problems if not but would save me stuffing around lol , cheers for the advice , my aim is also to pay $1m in tax haha i like that plan
heres the problem i guess if i want to reinvest then i need to sell something at end of financial year to pay the cgt or maybe its better to only reinvest the difference and keep enough coin to pay the tax man

 

[Value Collector]

that sux fk the government gambling is non taxable and this is basically what we are doing

the government taxes the hell to of gambling, normally the tax is set up so you don't see it though.

 

[Value Collector]

not really an argument just a thought , all good ill check out the trading books lol and ill say to myself ten times before i go to bed im an investor not a gambler haha

whether you are gambling or not comes down to you and how you are approaching it, and just because there is risk doesn't mean you are gambling.

If you buy an ownership interest in say a gas pipeline, and plan for your return to come to you over time from the earnings of the gas pipeline, you are an investor.

However, if buy an ownership interest in a gas pipeline hoping to sell for a profit tomorrow, you are more than likely gambling or at least engaged in speculation.

 

[Value Collector]

heres the problem i guess if i want to reinvest then i need to sell something at end of financial year to pay the cgt or maybe its better to only reinvest the difference and keep enough coin to pay the tax man

Thats one of the benefits of longterm investing in companies that are growing, you pay less tax, and keep more funds compounding.

for example.

if there was a stock that grew at 10% per year, and investor A bought and sold it each year paying capital gains tax, but investor B just let it compound without selling, investor B ends up with more wealth.

Because Investor B delays paying any capital gains tax for many years, he can have more capital compounding to his benefit rather than sending it to the tax department every year.

 

[tech/a]

Because Investor B delays paying any capital gains tax for many years, he can have more capital compounding to his benefit rather than sending it to the tax department every year.

Certainly benefits in that.
The only X factor is the capital gain of 10% or whatever maintained over the full year.
Cant see the point in making a 10% loss over a year in the attempt of cutting a tax gain.
Unless of course your earning big bucks and a deduction from capital loss comes in handy.
But that gets counter productive the greater the loss becomes.

 

[egosbar]

the government taxes the hell to of gambling, normally the tax is set up so you don't see it though.

thats very true not poker though lol i make good coin there

 

[egosbar]

Thats one of the benefits of longterm investing in companies that are growing, you pay less tax, and keep more funds compounding.

for example.

if there was a stock that grew at 10% per year, and investor A bought and sold it each year paying capital gains tax, but investor B just let it compound without selling, investor B ends up with more wealth.

Because Investor B delays paying any capital gains tax for many years, he can have more capital compounding to his benefit rather than sending it to the tax department every year.

thats what im trying to work out and come to the same conclusion i think at some point i will probably take some profit but hopefully they are steady growth for over a year

 

[egosbar]

thanks for you help men , go the pilbara gold rush lol