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roaminoz

18,302 Posts.

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28/10/17

13:27

Post #: 28278333
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Originally posted by FlashFish ↑

just wondering if anyone uses the LIFO method for CGT and profit/loss

I have never let my holdings of ABC company go below 50,000 shares since the 1st of July 2017.
In addition to those shares in the same account I have bought and sold about 1 million shares for a profit that gets me into the 1st tax bracket.

Using FIFO I have a gain of 150% on the LT 50k shares for FY 2017/2018
Using LIFO I have an unrealized gain of LT 150% on the 50k shares for FY 2017/2018

This article states that you have to advise your Broker which method you use. I contacted Broker ANZ and they are unable to take a request of this nature. To me, that means it defaults to what I and my accountant nominate .
https://www.********/knowledge-center/how-to-sell-stock-with-fifo-or-lifo.aspx

My accountant only uses FIFO, all I have to do is convince him that LIFO is a legitimate trading strategy.

Thanks

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You can use any strategy you want, as long as you have written evidence of what you have done to get to your figures.

If you bought 3 parcels 50k, 40k, 60k and you sold 20k. If you can show you sold 10k of the 50 and 5k in each of the 40 and 60 it is all legit.

Obviously you can only claim your brokerage once in the transaction as part of your cost base though. It is easier to use the full brokerage in the first transaction, rather than splitting it up over multiple sells.
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