My understanding of how the whole trader investor thing works is as follows.
If someone is trading and in the business of share trading they record all gains and losses on revenue account, and they don't need to crystallize the loss to get benefit of it since its is reflected in their closing trading stock, which they can take at market value. I should also caveat that with if their in the business of trading their not eligible for the 50% CGT discount but get to utilize the loss through the market valuation as at 30th June of their stock on hand.
If someone is just an investor they would hold those shares on capital account. Disposing of them and then just reacquiring a couple days after for the mere purpose of crystallizing a capital loss may be deemed a 'wash sale' and subject to Part IVA which would mean the loss they realized will be disregarded.
I would suggest speaking to your adviser before entering such an arrangement.
Cheers,
JN
LPI Price at posting:
26.5¢ Sentiment: Hold Disclosure: Not Held
