This is a mobile optimized page that loads fast, if you want to load the real page, click this text.

What's wrong with "wash sales"?

Jump to new
This may sound an odd request, but is there any issue with sale / repurchase where a capital gain will be generated (as opposed to loss)?

There are various reasons for doing this, including bringing forward capital gains to current year, increasing the cost base, standardising the cost base across multiple purchases of the same stock, generating a gain to offset a capital loss (not from a wash sale situation), either in current year or a carry forward one.

I've read the ruling, but it seems to apply specifically to the scenario of generating a capital loss, and makes no mention of using this technique to generate a capital gain.
 
ian56 said:
I've read the ruling, but it seems to apply specifically to the scenario of generating a capital loss, and makes no mention of using this technique to generate a capital gain.
Click to expand...

I guess the only reason to trigger a capital gain in one year is if you think you will be receiving more income the next year, so would prefer to pay it in the current year as it will be less. And just maybe, the ATO would still see that as Tax Avoidance! Coz they are like that!
 
ian56 said:
This may sound an odd request, but is there any issue with sale / repurchase where a capital gain will be generated (as opposed to loss)?
Click to expand...

As long as you pay the appropriate amount of tax it should be fine. The provisions are for "avoidance" of tax obligations. If you are not avoiding any tax there is no reason to question it. You could do this to restructure your accounts as you said.

If you want to pay tax now, I'm sure the ATO would be more than happy to take it.
 

The provissions may be for tax avoidance, but in the long term... they're gonna have to pay those taxes anyway, so how is it any different if they pay them this year or next?
 
jono1887 said:
The provissions may be for tax avoidance, but in the long term... they're gonna have to pay those taxes anyway, so how is it any different if they pay them this year or next?
Click to expand...


exactly!! ----

the tax boyz/government polies/ bureaucrats/whatever u want to call them are a joke ----

they cant handle the fact that the "system" actually has a few loopholes in it whereby punters (that would be traders ) can use the system to position themselves better into the future ----- BUT, the polies cant catch the bigwigs cause there are a lot of other avenues for them to "manipulate"

the rule is actually designed to stop the bigwigs manipulating their "wealth" position because Mr bigwig has a squillion irons in the fire. and share trading is just another avenue to launder a bit of short term downside into a tax benefit ---------

the gov/tax boofheads just try and put the "fear of God" into the small punter cause that is the only guy they can put pressure on ---- the whole system is a load of crock -----

if they wanted to stamp out the rorting, simply put a ceiling on the $ amount an "entity" can claim in any given tax year ---- problem solved !!!

average Joe would be happy to spread his 20 grand loss over 3 years cause he'd still end up ok --- but bigwig bullyboy would have a spaz attack cause he wouldnt get his squillion dollar tax rebate to offset his squillion (X2) income for the given tax year ------- the big boyz rule the market (and the way the Gov. operates/tries to recoup their taxes etc ) --- in the words of the great movie "Cuckoos Nest" ----- play the game !!! lol ------
 
jono1887 said:
The provissions may be for tax avoidance, but in the long term... they're gonna have to pay those taxes anyway, so how is it any different if they pay them this year or next?
Click to expand...

Because its possible for taxpayers to defer paying the tax and then next year go in to bankruptcy or leave the country (particularly foreign companies) and avoid paying altogether.

The ATO is trying to cover all avenues of avoidance.
 
Krusty the Klown said:
Because its possible for taxpayers to defer paying the tax and then next year go in to bankruptcy or leave the country (particularly foreign companies) and avoid paying altogether.

The ATO is trying to cover all avenues of avoidance.
Click to expand...

Whats stopping that same company/person leaving the country at the end of this year, or just before tax returns are due??
 
Does anyone know the origins of taxation??
I more I think about paying taxes on my hard earned money.... the more unreasonable it seems to me that I would have to pay half of this to the government.
 
Does anyone know the origins of taxation??
I more I think about paying taxes on my hard earned money.... the more unreasonable it seems to me that I would have to pay half of this to the government.
 
jono1887 said:
Does anyone know the origins of taxation??
I more I think about paying taxes on my hard earned money.... the more unreasonable it seems to me that I would have to pay half of this to the government.
Click to expand...

lol --- im sure 99% of the population feel the same Jono ---

blame the Egyptians ---- they knew people had to eat, so they started taxing cooking oil ---- and they came knocking on your door to make sure u were using your quota -----

but the Romans took it to a new level ---- Julius bludy Caesar ---- an early incarnation of Paul Keating haha ---

best way to beat the tax man --- with a stick lol --:horse::hammer:
 

I've read that quite often the richest people pay a smaller proportion of their income in taxes than most other regular people, how do they go about doing this?

And if you open a trading account in a low income country.... would it be tax evasion if you didnt pay the Aust govt your taxes??
 
jono1887 said:
I've read that quite often the richest people pay a smaller proportion of their income in taxes than most other regular people, how do they go about doing this?
Click to expand...

(b4 i begin, i place my tongue firmly in cheek )

they buy a BMW to use on their milk run ---- the depreciation offsets some of the income from their rental properties, which are used as collateral to take out a 1 million dollar loan to buy the 3 local takeaways which turn over 95% of their income in cash sales ---- these will obviously run at a loss over a long period of time as the interest repayments on the loan are pretty high ---- meanwhile the mattress is becoming so stuffed with cash that they will have to go and buy a new boat just to get rid of some of it ----- and the cycle goes on ---

seriously though, a lot of wealthy people employ a lot of regular workers, so they are in effect paying a lot of tax indirectly ---- i have no problem with wealthy folk paying very little tax ----

jono1887 said:
And if you open a trading account in a low income country.... would it be tax evasion if you didnt pay the Aust govt your taxes??
Click to expand...

yes it would be considered evasion --- unless u dont get caught !!

u could just pack up and move to Panama of course (no tax issues)----
probably a lot simpler to improve your trading to the point where u dont care about being taxed ---- then give half of your cash to charity just to spite the tax man
 
jono1887 said:
Does anyone know the origins of taxation??
I more I think about paying taxes on my hard earned money.... the more unreasonable it seems to me that I would have to pay half of this to the government.
Click to expand...

I hadn't heard about the Egyptians taxing cooking oil, but I remember that Kings during the dark and middle ages only used to levy a tax when they had to fund a war. There was no public service or infrastructure to pay for then. and no services provided to the public.

Income did not start being taxed until the late 19th Century. Australian states started collecting income tax and then the Federal Govt introduced their own one during WW1. I think it was around 1942 that the Federal Govt took over collection of all income tax and gave a portion of it back to the states.

I recall that a lot of the taxes collected before this were excises on alcohol and imports and such.

CGT did not come in until the 1980's (Thanks Mr Keating).

I can't believe I can actually remember all this..... maybe studying actually works........
 
jono1887 said:
And if you open a trading account in a low income country.... would it be tax evasion if you didnt pay the Aust govt your taxes??
Click to expand...

You are obligated to report foreign earnings on your Aussie return. But if Australia does not have a tax treaty with that country, then I don't know how the ATO would find out about your activities.

If there is a treaty in place, you usually have to pay about 10% tax in the country where the income is earned, and then report income and tax paid on your Aussie return and you will get credited the foreign tax.

It would be an interesting thing to see if one could in fact get away with not reporting foreign income, but with Information technology the way it is these days, and the fact that the ATO is probably the most efficient government department, it would be a tough task.

Please let us know if it works............
 
Just on the overseas trading account:

Under the Income Tax Assessment Act if you are considered a 'resident for tax purposes' (There are four tests if you satisfy any then you are a resident) then you are taxed on income from ALL sources.

To avoid double taxation Australia has Double Tax Agreements in place with many countries.

If there was no DTA, the income would be assessable under the ITAA...

Kieran
 
You must log in or register to reply here.

Similar threads

Trading US Stocks
Replies
3
Views
2K
karenjones
K
February 2025
2 3 4
Replies
61
Views
6K
ducati916
D
Annualised CGT on day-trading?
Replies
6
Views
2K
Austwide
B
Evidence needed that shares are bought for child
Replies
2
Views
837
Bruiserh89
B
D
Tax on offshore ETFs - Loophole?
Replies
5
Views
1K
Belli
B
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more...