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Tax questions (before paying an advisor)


theflasherman

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In reply to: mosaic1996 on Monday 28/04/08 09:13pm

 

Thanks Mosaic and others,

 

QUOTE
but where in substance, there is no significant change in the taxpayer's economic exposure in the asset

 

I'm not sure if it applies either, as there IS a significant change in the taxpayer's economic exposure to the asset. (I am disposing of the asset)

 

wolverine: The underlying tax reason for enquiring about this is .... I purchased MFS (OCV) as a punt on the last day it traded, at 99c. I am expecting a loss on this if and when it is relisted. I would like to transfer the impending loss to the mrs BEFORE it starts trading again. It's not as if there is anything dodgy about the transfer, I could have purchased them in her name to begin with (or better still, not purchased them at all)

 

Of course this would completely backfire if it relisted at a premium - but I doubt it.

 

Cheers,

Duster.

 

 

 

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In reply to: Duster on Monday 28/04/08 10:17pm

Hi Duster,

 

QUOTE
I'm not sure if it applies either, as there IS a significant change in the taxpayer's economic exposure to the asset. (I am disposing of the asset)

 

The ATO has made other statements that cover the sales of an asset to a related person or entity (company, SMSF, trust, etc) in which the seller continues to have an economic interest.

 

Generally, a spouse is included. However, as you are dumping a loss on the wife, you could argue that you won't have an economic interest in the shares (or any other assets for that matter) if she finds out about it http://www.sharescene.com/html/emoticons/biggrin.gif .

 

In reality, the ATO recent warnings are about realising losses so that you can offset a capital gain. This probably lets you off the hook as you are not making a loss.

 

However, if the wife is the savvy investor, and has realised (or unrealised for that matter) gains that will be offset against the anticipated caital loss on your shares, then the tax office may get a bit dirty.

 

Have you ever considered setting up a discretionary/family trust? Trusts allows you to distribute gains, interest income, dividends, etc to whoever you choose.

 

Cheers,

Mosaic

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  • 2 weeks later...

Hi all!

 

I have a predicament..

 

Say I have 1,000 shares in company ABC. I have held these for two years. Therefore if I sold them tomorrow, I would benefit from the capital gains tax 50% rule whereby I only pay 50% capital gains on an ASX security held for 1 year and 1 day.

 

However, today I buy another 1000 shares in same company because I have identified a short term trading potential. I want to sell them say, next week.

 

So I now have 2000 shares in ABC and will sell 1000 next week. Assuming I make a profit, which shares am I actually selling? How will I know if I pay full capital gains tax or only 50% of it?

Got me stumped.

Cheers

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In reply to: PJ83 on Thursday 08/05/08 03:54pm

You can nominate which ones are being sold. Obviously your records must be properly updated to show which ones you have sold so future sales will reflect the appropriate cost base.

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In reply to: PJ83 on Thursday 08/05/08 04:24pm

Hello PJ83 the choice is yours, if you sell 1000 of the 2000 you can book the profit on the 1000 you have held for 2yrs and benifit from the 50% capital gains or you can sell the most recent purchase and not benifit and pay the full tax on any profit.

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Perhaps I can also be helped, I have some shares showing a loss I want to sell to realise the tax loss and offset against some profits, I then want to buy back the shares as soon as possible, is there any minimum period of time before I can repurchase under the tax rules.Thanks in advance.
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In reply to: Idyll128 on Thursday 08/05/08 04:00pm

Ya thats right - default accounting position is first on, first off... alternately you nominate parcels... ya and keep clear records and clear instructions for your accountant, otherwise they will revert to the default. Cheers, DL

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