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Taxation and capital losses/gains

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I am not giving financial advice but can only state how I dealt with a loss years ago in my early trades. The accountant called it a "one off money making venture or scheme". There may be ways of dealing with small losses, but that is how we dealt with a big one.
 
How does this mix with the 50% discount?

Here is a situation (as an investor not a trader):

Have a capital loss of $2000 in last FY. These shares were only held for 2 months.

Have a capital gain of $10000 this FY. These shares were held for 3 years and get the 50% capital gains discount.


Can that loss offset that gain?

So I guess it would be 10k-2k=8k/2= $4000 capital gain as far as I understand.

The reason I am asking is that the $2000 loss wasnt held for 12 months.
 
As I unsderstand it, you can only carry over a capital loss if you're classified as a trader. Only your Accountant will be able to tell you for sure, but you may already find an answer here:
http://www.ato.gov.au/businesses/content.asp?doc=/content/21749.htm&page=1#H1
 
jono1887 said:
Trader
- Income: can deduct from normal income

Investor
- Investor: can deduct from other capital gains... losses can be rolled over to later years when you profit later on.
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pixel, I think you can carry over a loss if you are an investor. If you are a trader, however, you can reduce your current income (which is even better!)

The question I have is: Can a 2 month loss in a previous year offset a 2 year profit this year?

Heh, the reason I ask is because I held CSS
 
Yes, you can carry forward a capital loss.
 
drlog said:
So I guess it would be 10k-2k=8k/2= $4000 capital gain as far as I understand.

The reason I am asking is that the $2000 loss wasnt held for 12 months.
Click to expand...

That's how i understand it...makes no difference how long you held the loosing investment and applies if your not a trader.

Note im not an accountant or adviser of any kind. but have done my own tax for the last 2 decades.
 
Thanks So_Cynical. Now I can move away from the worst investing mistake I have made
 
drlog said:
Thanks So_Cynical. Now I can move away from the worst investing mistake I have made
Click to expand...

Yep shame Clean seas has fallen in a hole....i really liked there story, just lucky for me i never liked it enough to buy in....i really should cut lose my biggest loser as well.
 
So_Cynical said:
Yep shame Clean seas has fallen in a hole....i really liked there story, just lucky for me i never liked it enough to buy in....i really should cut lose my biggest loser as well.
Click to expand...
What's your biggest loser, So Cynical? Why are you hesitant about giving it the chop? Do you think it will rebound?
 
Go to the ATO website and search for share trader or share holder. There's information about how the ATO assess which category you fall into and the different treatments of gains/losses and dividend income.
 
Julia said:
What's your biggest loser, So Cynical? Why are you hesitant about giving it the chop? Do you think it will rebound?
Click to expand...

CTO is my biggest loser, paid to much for it way back when (mid 07 i think, when i didn't really have a plan) and just kept on hoping, ive been openly critical of them in the CTO thread, and actually bit the bullet about 4 months ago and put in a sell order to crystallise my loss...but turned out i was half a cent to greedy, and subsequently the SP lost another 30% or so.

Somehow lucky because its the only stock i hold from my buys in 07 that i didn't average down into...and its the only stock that didn't bounce of the bottom for me...again also lucky because it wasn't a big buy in for me either i treated them like a specky and only put in specky money.

Right now sitting on a 80% paper loss with CTO, i suppose 1 complete dog outa 25 aint to bad going? all things considered...hesitant because i don't like losing money and no there's no chance in hell they will come good/rebound.
 
Thanks for explanation, So Cynical. I'd never heard of CTO. Just had a look at the chart and the last few days have seen the SP move above the MA for the first time in a while, so maybe it's on the road to recovery?

So having this happen still doesn't convince you about staying on a positive trend and getting out when that reverses?

Not directly related to this discussion, but there has previously been discussion about dollar cost averaging, something I don't see as particularly sensible.

Heard Paul Clitheroe (how do some of these people get to be regarded as gurus?) on the radio last night recommending this strategy. I don't understand how they can suggest this is more logical than making an entry into a desired stock at an appropriate price level.
 

CTO up 20% today LOL...ive put in a sell order (high ball) and will hope the mystery rally continues :dunno: Julia i have had an almost perfect run buying new stocks on a falling SP, and averaging down into my older holdings over the last 16 or so months.

Its simply working for me...today out of a portfolio of 20 stocks ive got one hitting a new 12 month high (VRL), one hitting a 8 month high (HDF) two stocks within 2% of there 52 week highs (CPU & KSC) all paying divies at least twice a year and all brought at 40 to 70 discounts to there current SP's

Now you just cant do that if your buying an up trend and waiting for confirmation of a rally, waiting for the good announcements...i buy in anticipation of those good announcements coming. I think its fair to say the market behaviour and sentiment is really suiting me at the moment...im confident it wont last.
 
I can't argue with that, So Cynical. Clearly you know the stocks you're buying into so that gives you the confidence to think they'll rebound strongly which they indeed seem to have done.

Good for you. It does demonstrate that "rules" aren't always inviolable, and a discretionary approach has a lot to be said for it.
 
I have reduced my income with my losses 2 years now. I was involved in the CSS debacle as well and leveraged big using my own money of course. But AOE made a bit of it back for me. I still need a small miracle to be in the black though.

Anyway make sure you document all your losses with statements and as far as I am aware you need to have a total trading volume = to 40-50K. But that's what the tax man told me. Something like that. Forgot now.
 
Nero64, I feel a similar pain to you

Why would the volume have to be a specific range? Surely even a $100 capital loss could offset some of your capital gain?
 
Well, according to me you should pay tax regularly.It does not matter how much capital you loss/gain...According to your capital gain you must pay tax.If you will not pay tax then you may have to pay huge penalty.
 
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