Forum Archive Index - July 2000

["ritchie marr" <ritchie_marr@hotmail.com>]

Morning all,
Derek, Brian is correct; you simply put in a full set of accounts as a 
trader when you do your tax return.
I do have long term stock investments/ value investing which I keep 
completely separate from my trading portfolio. The first way to do this is 
to have two completely separate accounts with your broker; one is a trading 
account as is duly named so. The other is a personal investment account, 
which is under your own name or perhaps called a retirement account. You 
cannot claim any of the expenses including brokerage from the investment 
account. Like wise you can not claim any of the loses either.
If you choose to trade and then stop, your investing must be reflective of 
your new direction, ie turnover of shares would need to be fairly sparse for 
a while so as to not attract attention to the perception you are still 
trading.

The key to it all is keeping good records.

Another option is to set up a trading company...your very own gpg. This then 
becomes a stand alone identity through which you can trade as often as you 
like and make as much profit as you can. Depending on your circumstances you 
can then put yourself on the pay roll, or your wife/husband thus to some 
degree altering the tax implications of the company in your favour, and pay 
the excess out as a dividend. Gives you a great opportunity to learn how a 
business runs.
Naturally doing this frees you the individual up to be an investor, who pays 
no tax on capital gains of personal investing....provided your trading 
frequency is not so high that again it draws attention to you.

I actually have a "shell" company, which owns a slab of forestry up north, 
and have started trading within this on a small scale with the purpose of 
covering the costs involved in the asset.

Well I am off to watch some of my students play in the North Island 
Badminton Championships in Palmerston.  One of them has a lap top so I shall 
endeavour to keep myself updated over the week.

Good luck/skill everyone for the up and coming week.

Ritchie


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