| Author |
Message |
     astronet
Member
Username: astronet
Post Number: 3
Registered: 05-2004Rating: N/A
Votes: 0
|
| | Sunday, September 19, 2004 - 03:51 pm: |  
|
Hi,
I speculate on options and am wondering whether any losses can be deductible against my salary income for tax purposes? Can any one provide me any links to ATO or other websites that discuss the taxation treatment of options.
Any advice will be appreciated.
Thanks
|
macca888
Member
Username: macca888
Post Number: 8
Registered: 10-2002Rating: N/A
Votes: 0
|
| | Sunday, September 19, 2004 - 04:36 pm: |
|
G'day astronet
Try
asx.com.au>MARKETS>Options>Options Taxation
macca888
Subscribe to our FREE
monthly updates
Subscribe to regular Incredible Charts
updates, with new articles on Trading
Strategy, Trading Psychology, Money
Management, Tricks of the Trade,
New Indicators and the Economy.
|
|
|
|
|
astronet
Member
Username: astronet
Post Number: 4
Registered: 05-2004Rating: N/A
Votes: 0
|
| | Sunday, September 19, 2004 - 05:24 pm: |
|
Thanks Macca888,
There isn't much information on the ATO web site so this is a good start
|
supertrader
Member
Username: supertrader
Post Number: 1
Registered: 11-2003Rating: N/A
Votes: 0
|
| | Sunday, September 19, 2004 - 06:58 pm: |
|
Hi Astronet
In order to claim tax deductions for option trading losses, you need to pass one of the "Non Commercial Loss" tests. There are 4, but the one most likely to apply to you is the sales level test. Providing you have SOLD more than $20,000 worth of option contracts during the last financial year, you'll be OK. This demonstrates }you're not just 'dabbling' and have a serious business. But if you DON'T pass the test, your losses will be quarantined until a future year when when you do - i.e. they can't be applied against salary income until the loss can be considered "commercial". For more information, you can visit the ATO website, but this time, search for "Non Commercial Losses".
Hope this helps.
|
starboard_tack
Member
Username: starboard_tack
Post Number: 225
Registered: 04-2003Rating: N/A
Votes: 0
|
| | Friday, April 22, 2005 - 05:08 pm: |
|
Hi all,
There has been a bit of a discussion on another topic about the tax implications of buying put options as a hedge against a drop in price of shares you own. I thought I would move the discussion over to this thread.
See here for the other thread: http://www.incrediblecharts.com/userscripts/forums/show.plx?tpc=6&post=64111#POS T64111 and my response: http://www.incrediblecharts.com/userscripts/forums/show.plx?tpc=6&post=64116#POS T64116
To further clarify the treatment of Franking Credits I will include part of the Tax Office's document "You and your shares 2003-04". In that they say:
Holding period rule
The holding period rule requires you to hold shares ‘at risk’ for at least 45 days (90 days for preference shares) to be eligible for the franking tax offset. This rule, however, does not apply if your total franking credit entitlement is below $5,000. This is roughly equivalent to receiving a fully franked dividend of $11,666, based on the current tax rate of 30% for companies.
All this means is that you must own shares for at least 45 days, or 90 days for preference shares (not counting the day of acquisition or disposal), before being entitled to any franking tax offset.
Days on which you have 30% or less of the ordinary financial risks of loss and opportunities for gain from owning the shares cannot be counted in determining whether you hold the shares for the required period.
Financial risk of owning shares may be reduced through arrangements such as hedges, options and futures.
You have to satisfy the holding period rule once only for each purchase of shares. You are then entitled to the franking credits attached to those shares, unless the Related payments rule applies
So it seems that as long as you have held the shares "at risk" for at least 45 days before you buy the puts then there is no effect on the Franking Credits.
Am I right?
Any input that helps clear the muddy tax waters will be greatly appreciated.
Regards,
Starb'd
Edit: The link to the Tax Office paper: http://www.ato.gov.au/individuals/content.asp?doc=/content/42807.htm
(Message edited by starboard_tack on April 22, 2005)
"There is nothing - absolutely nothing - half so much worth doing as simply messing about in boats"
Water Rat to the Mole in "The Wind In The Willows"
|
mosaic1996
Member
Username: mosaic1996
Post Number: 1132
Registered: 01-2003Rating: N/A
Votes: 0
|
| | Friday, April 22, 2005 - 05:58 pm: |
|
from the ATO....
http://www.ato.gov.au/content/downloads/NAT4152-04.pdf
Have you called the ATO?
First Level Support: The person that answers the phone will have no idea what you are talking about. They will pass you to 2nd level support. This may or may not be the right area.
Second Level Support: You may have been past to the wrong area, but there is a reasonable chance that this person will be able to pass you to the right area. Once in teh right area, this person probably wo'nt be able to answer your questions, but they should be able to pass you to one of the resident experts.
Third level Support: Hopefully this resident expert will be able to answer your questions. Even if they sound like they know what they are talking about, it is worth going through this process again, i.e., talk to another resident expert to get a second opinion. It should be evident from talking to the 2 expert which one knows best (not necessarily the most advantageous response). It may be necessary to a third attempt.
Quite often I have found that what the experts tell me raises new questions once I have digested what I have been told.
My description of the above process in no ways reflects badly on the ATO - it is an unavoidable consequence of getting free advice on a relatively uncommon query on a complex subject area. The vast majority of the millions of queries handled by the ATO can be successfully answered by level 1 or level 2 support.
I have found the advice from the ATO to be excellent once you get to the right person.
Ask Your Broker
If you have a full service broker, he (or an options expert in the firm) should be able to answer your query.
Cheers,
Mosaic
|
|
Auto-Fit Trendlines
