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Business Loss

Discussion in 'Accounting, Tax & Legal' started by kshare, 7th Oct, 2009.

  1. kshare

    kshare New Member

    Joined:
    4th Oct, 2009
    Posts:
    3
    Location:
    QLD
    Hi everyone,
    Can I claim my business loss against my wages income in my tax return.
    I did have an assessable income of $20,000 for the year in my business.
    Thanks
     
  2. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Depends on whether you are caught by the Division 35 non-commercial business loss provisions.

    Small turnover businesses lacking significant assets and never having turned a profit can end up having their losses quarantined.

    Check out the ATO website and see if this may apply, but better still ... ask your Accountant !

    Cheers,

    Rob
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
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    Posts:
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    Location:
    Sydney, Australia
    I think more information would be needed - what is the nature of the business? How is the business structured (Pty Ltd, Sole Trader, Partnership, etc) ? Has the business previously shown a profit? How long has the business operated.
     
  4. kshare

    kshare New Member

    Joined:
    4th Oct, 2009
    Posts:
    3
    Location:
    QLD
    I am a sole trader. Been in share/options and CFDS trading business for past 2 years.
    Cheers
     
  5. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Have you had a private ruling from the ATO confirming you are a business of trading in securities ?

    Carrying on a business of share trading

    In which case you will have been valuing trading stock at year end and declaring income or claiming deductions based on unrealised changes in value as well. Also, you will be paying tax on trade gains without any 50% discount.

    Otherwise the ATO might regard you as an investor, and losses will be on the capital account. These will not able to be deducted except against other capital gains.

    Cheers,

    Rob
     
  6. kshare

    kshare New Member

    Joined:
    4th Oct, 2009
    Posts:
    3
    Location:
    QLD
    Hi Rob,
    I dont have a private ruling from ATO confirming I am in a business of trading shares.

    However,
    (1) I have made more than 50 trades in a year.
    (2) The combined value of the trades for the entire year has been well above $100,000.
    (3) I dont hold shares for a long period. Maximum 2-3 weeks.

    Thanks
    Kashyap
     
  7. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Based just on those facts, your assumption that you are a trader seems reasonable.

    You still need to talk to an Accountant to see whether you could even increase your "losses" by optimal valuation of your closing stock, if you have other assessable income.

    Cheers,

    Rob

    PS Publishing your details can attract spruikers and spammers !!