Forum Archive Index - September 2000

[Brian Gale <brigale@i4free.co.nz>]

It surprises me that this subject appears to have produced quite a level of 
confusion.

Lets look at it from a taxation viewpoint which is obviously important if 
you are a trader wanting to claim any losses you have incurred at the end 
of the tax year. The IRD position is quite clear :-

Realised losses are tax deductible. Unrealised losses are non-deductible.

In order to claim a loss on a share transaction you must have sold the 
security ( a monetary loss ). You cannot claim a loss if you still hold the 
security but it has fallen in value ( a paper loss ).  We had an example of 
this last financial year when Richie Marr had made a considerable loss on 
his AQL  holding and wanted to off-set this loss against his other income, 
but he hadn't sold the shares by 31/3/00 so he couldn't make the claim (his 
accountant advised him of  this when he came to do his final accounts) 
(Richie was kind enough to explain this to us in detail so I am not telling 
tales out of school)

If you still don't understand what I am talking about and you are a trader 
I suggest you see an accountant  otherwise you could be in trouble at the 
end of the financial year.

BG 


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