Posted on: 15-10-07 21:14:37
Hello,
Wonder if anyone trading stocks/forex is aware of and would advise on how the profit is taxed, and the tax treatment of losses?
Rgds,
Newboyo
ps I did search the forum, but couldn't find anything in this connection.
Quote:
Originally posted by newboyo[/
Hello,
Wonder if anyone trading stocks/forex is aware of and would advise on how the profit is taxed, and the tax treatment of losses?
Rgds,
Newboyo
ps I did search the forum, but couldn't find anything in this connection.
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Hello,
If you are filing taxes and need some paid help, then, you will do better seeking the advise and filing the same through a tax accountant. And why you talking about the losses. Did you loose some money....? I told you .... not to.... yea.... hind sight 50-50.
I will outline to you a little bit about the taxes. This is not advise.
You earn your regular income working for a company or an individual, then, you pay your taxes on Employment Income.
At that time, when you invest in stocks (scrips) and if they appreciate in value and you hold onto them, you will Accrue the gains, which are Capital Gains, and only upon Disposal of the stocks, you Add them to that particular years' income in the appropriate Tax Schedule and pay taxes according to the slab rate you fall under. (sounds like you are getting crushed even before you get started) If you hold onto them, then, NO taxes. Thats the way to go...
If you use a tax program, you can play with it and see what happens ....with different scenerios, by incresing the gains or the income or both.
If you have losses with the stocks you purchased, then you have Capital Losses.
It is once again filled in the appropriate Schedule and it is KEPT Seperate, as Losses for that year. They will tell you so in their NOA. (Notice of Assessment)
This loss can be Carried Forward Indefinitely.
In the years to follow, if you have some gains, then, you can go back and claim the gains against the losses that you REPORTED in the previous years. If you don't report then you loose. I am sure you can go back Three Years and amend the Tax filing. {If in the year in which you claimed the losses, the adjustment is 50%, then, you claim the same rate when you claim the gains}
FOREX and DAY TRADING:
If during the working years,(for a salary) you file and claimed the Capital Gains, anytime you do any kind of trading, whether it be DAY Trading or just trading, then, you can still claim the capital gains and losses, just as you normally did and no questions asked. (I don't know if you GRAND FATHERED IT)
Now comes another ball of wool of a different colour: When you are PLAIN DAY TRADING, day in and day out, the tax man CAN claim that it is your daily bread and FLOG the whole lot of income as WAGE and ask you to pay the FULL SHOT and not provide you with the benefit of "The Capital Gain". OH OH
(Now I am getting Shot.....) We don't win. NEVER. Now your wife knows who is your partner in life, if she did not know upto now, she only gets the balance of money left over, called the 'take home pay'.
So, you can get a little bit of wages from the neighboring shop or team up with another trader and swap some income between the two of you's as SALARY. HOWZAT?
Alternately, buy two stocks of each from the direct purchase for about thirty odd companies, from time to time, and create a portfolio. Now you have a turnaround in one item, i.e., the currencies. Now you BUY and HOLD too. What the heck??!! Are you day trading...?? No....!!! Tit for tit... I am sorry Tit for Tat.
In the United States, Forex trading is O.K. They do not ask for tax on it. So depending upon who you are and where you are, you can take advantage of it.
Hope you get some idea of what it is here and somewhere else too. Once again this is not tax advice. 'Just the flow of the go.' You heard it in the subway... and so did I... AHhhhhhh.....
"Quo Vadis?"
Freddie.
thank you for the information.
rgds,
newboyo
C T FOR SMART DESIES.
SOME THING TO READ AND DIGEST FOR THE HOLIDAYS.
May all of you have a Wonderful Christmas and all the best through the Year.
Freddie.
https://secure.efxnow.com/forex2/eng/ct-dummies.pdf
