Ann: Half Yearly Report and Accounts, page-24

@Keith58 @Dave665

I was a tax agent in a past life - quite some time ago now but I can explain a little about what you're talking about.
The rule in all of your trading that you need to understand is that the Tax Office has underlying Tax Avoidance clauses inside the Act that effectively preclude deductions where the transaction that generated the expense / loss (and therefore the deduction) was transacted with tax avoidance as its main aim.
The Provisions are more complex than the few words I just offered but that's the guts of it.

The two most salient issues in your discussion lies, first, with the ability to apply dividend franking credits.
Here, the advantages offered by franking credits cannot be part of your Taxation return if the shares to which the franking is linked were held for less than 45 days and your total franking credits included in your return for the year were greater than $5,000. In such a case you present your franked dividend amount as dividend income but not include the related franking credit.
But, if your total franking credits for the year were, say $4,200 (so less than $5,000) and the share in question was held for less than 45 days, you can include the franking credit in your return although the Tax Office may choose to have a closer look at the underlying purpose here and reject the use of the credit at a later date. This, however, is not likely.

The other issue touched on (and it's a different issue) was selling shares at a loss with a primary view of including the loss inside your Tax return.
The Tax Office refers to this as a "wash sale" when you re-buy shares in the same company a short time later.
If the Tax Office considers a sale of shares as a wash sale, they will disallow the deduction represented by the loss. I don't recall the period, after which it is OK to re-buy the shares without losing the deduction but I used to consider any period longer than 60 days as an appropriate interval to enable the deduction.

I'm a bit rusty on all of that now so you should use a Tax agent if your transactions are sailing close to these rules.