Forum Archive Index - September 2000

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

> 
>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.
>
>
Since when have you got your investment advice from the IRD Brian?  
What hot tips have they given you this year?

The only reason the IRD have this definition of real gains and losses 
is for the convenience of them collecting tax money off you.   If you 
are a trader and sell, your profits are sitting there in your bank 
account all set for the IRD to take their cut.  If you haven't sold 
the money isn't in your account waiting for them to grab.  It's that 
simple.
>
>
>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)
> 
>
Yes, and no doubt Richie paid up the tax on his profits as having 
sold, he had the money to pay whatever tax was due.  The IRD got 
their money.  That is all they care about. 
>
>
>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.
>
Your point is well made Brian.   I do understand.   That is one of 
the reasons why I am not a trader ;-)

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