Are brokers fees tax deductable?

[sus]

Hi All,

I am new for trading share.
I want to find out is broker fee tax deductible or calculate as profit/loss.
For example:
Buy ABC stock at $10000
Broker fee $25
Equal $10025.
Sell ABC stock at $12000
broker fee $25
equal $11975
Is this how you calculate profit:
$11975 (sell) - $10025(buy)= $1950(profit)
or
$12000 (sell) - $10000(buy)= $2000(profit)
And declare $50 for tax deductible.
Please, can some one explain?
Your help is very much appreciated.

 

[theasxgorilla]

My understanding (I'm not an accountant)...is that brokerage fees are NOT tax deductable if you are a share holder (by ATO definition). If you are a share trader by ATO definition then your brokerage fees are deductable.

 

[reece55]

Re: broker fee

The brokers fee forms part of the cost base when buying for CGT and the fee for selling reduces proceeds when working out your net capital gain. So yes it is deductible in a sense, but only when you have disposed of your shares.

Bare in mind however that a net capital loss for an income tax year cannot reduce your taxable income, as it is quarantined for offset against future capital gains.....

P.S i have made the assumption you are an investor and not running a trading business however...... this would change the explanation considerably....

Cheers

 

[Garpal Gumnut]

Re: broker fee

The brokers fee forms part of the cost base when buying for CGT and the fee for selling reduces proceeds when working out your net capital gain. So yes it is deductible in a sense, but only when you have disposed of your shares.

Bare in mind however that a net capital loss for an income tax year cannot reduce your taxable income, as it is quarantined for offset against future capital gains.....

P.S i have made the assumption you are an investor and not running a trading business however...... this would change the explanation considerably....

Cheers

Thats my understanding.

Remember that if you have a reasonable portfolio you can claim, magazines, newspapers, software, (some computer and office expenses, I don't as its complicated and you pay the accountant more than u get back) travel to financial conferences, AGm's depending on your holdings. The brokerage is a minor part of your tax consideration dealt with as a capital expense as far as I'm aware, when you buy and sell.

Garpal