The Investor and Tax

[dombat]

Hi all I will try to be brief...I would like some clarification. As an investor
If you only get say 400 income from dividends if your expenses actually come to 1000 do you just have to cop 600 sweet ?

Also a trading platform and internet provider is surely a cost like brokerage
or am I wrong? I would also like to argue that if you subscribe to say the chartist that the subsciption should be viewed as a cost. While I am on the subject if you have a margin loan again is that a cost or an expense? If it is an expense then again unless you get a whole lot of dividends you really would end up quite a lot out of pocket...um.
Thanks any help would be much appreciated.

 

[123enen]

Hi all I will try to be brief...I would like some clarification. As an investor
If you only get say 400 income from dividends if your expenses actually come to 1000 do you just have to cop 600 sweet ? .

Expenses are tax deductible provided there is a nexus ( relationship ) between the expense incurred and the income received.
A trading platform and proportion of internet use related to your investment activity is a legitimate tax deduction. That is , it helped you earn your income.
Subscription to investment related newsletters and magazines are also legitimate tax deductible expenses as they were derived in trying to earn an income from shares/investments.
Interest on margin loan and margin loan costs such as transaction fees are also legitimate tax deductions.

( Capital guaranteed margin loans are a little more complicated as there is an "insurance component" that is or was treated differently. At least it was years ago. Might be different now. )

Any franking credit from your dividend is treated as INCOME even though you don't physically receive it. It is however treated as a REBATE which is better than a tax deduction.

If this is all new to you have an accountant do your tax at least for the first and second year.

 

[dombat]

Thanks for that...but what i am trying to ask (in a very poor way) is that I thought a capital loss was the only deduction against a capital gain, only a sharetrader can claim these expenses against their income. The crux of it is I am not sure that people are confusing a sharetrader with a investor. Sure there are a heap of expenses but the question is as an investor you can only claim them against your income eg dividend amount. I need to go and see an accountant but mine isn't very good on this matter as this is his advice..is he wrong. Anyway would appreciate a referral to a good acountant in melbourne in the northern burbs. Thanks again

 

[123enen]

As an investor you cannot claim the expenses mentioned earlier against any capital gain, only against income ( including salary wages income etc from your day job.)

 

[dombat]

Thankyou so much, that is good news...now for a new accountant and I am serious...so can anyone tell me someone who is good for the small investor in Melbourne?