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Margin Loan

Discussion in 'Accounting, Tax & Legal' started by ActiveTrade, 27th Jan, 2009.

  1. ActiveTrade

    ActiveTrade Well-Known Member

    Joined:
    5th Apr, 2008
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    78
    Location:
    Sydney
    Hi all, last year I had a margin call where I had to folk out a large sum of $$$'s to keep shares.

    The value of shares continue to fall and I eventually realised my HUGE losses.

    I am wandering ... can I claim the amount paid towards the margin as a tax deduction ?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    9th Jun, 2005
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    Location:
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    Nope - a margin call where you add cash to your loan account is effectively just a repayment of principal off your loan. Not deductible.

    Any capital losses you eventually realised when selling your shares can be carried forward to offset against future capital gains.
     
  3. ActiveTrade

    ActiveTrade Well-Known Member

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    Location:
    Sydney
    Bummer ! Thanks Sim for clarifying.
     
  4. seaview

    seaview Well-Known Member

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    8th Jun, 2006
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    Location:
    NEWCASTLE
    However, if you used borrowed funds (eg from a loan account designated as "for investment only" to top up your margin loan, then I believe the interest on those borrowings is deductible against taxable income. (This process is akin to refinancing, you just need to keep records of it all).