The following may explain why some posters differ from others in...

The following may explain why some posters differ from others in relation to tax. I am a share trader through a Company and, as such, can claim all expenses incurred including buying & selling shares; just the same as buying & selling chaff for example. At the end of the FY I take revenue gain & losses less expenses.

Value of stock (shares) held at the end of the FY is determined by the lower of cost of the share, when purchased, or the value of the share at the end of trading for the FY. I am not sure of the affect of the last budget on 'share trader' and 'share holder' and have asked my accountant to explain the implication (if any). Budget talk by Swan at the following site.

http://www.abc.net.au/news/stories/2008/05/01/2232267.htm

Carrying on a business of share trading

The difference between a ‘share trader’ and a ‘share holder’

The way in which income and expenditure are dealt with in relation to shares varies depending on whether you are a share trader or a share holder.

While the Tax Office considers each case on its individual features, in summary a share trader is a person who carries out business activities for the purpose of earning income from buying and selling shares. This person's position may be briefly summarised as:

* receipts from the sale of shares constitute income
* purchased shares would be regarded as trading stock
* the nature, regularity, volume and repetition of the share activity
* costs incurred in buying or selling shares are an allowable deduction in the year in which they are incurred, and
* dividends and other similar receipts are included in assessable income.
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A share holder is a person who holds shares for the purpose of earning income from dividends and similar receipts. This person's position may be briefly summarised as:

* the cost of purchase of shares is not an allowable deduction, but is a capital cost
* receipts from the sale of shares are not assessable income – however any net profit is subject to capital gains tax
* a net loss from sale of shares may not be offset against income from other sources, but may be carried forward to offset against future capital gains made from the sale of shares
* costs incurred in buying or selling shares are not an allowable deduction in the year in which they are incurred, but are taken into account in determining the amount of any capital gain
* dividends and other similar receipts are included in assessable income, and
* costs (such as interest on borrowed money) incurred in earning dividend income are an allowable deduction at the time they are incurred.