Tax advice

[skeet]

I flicked the IRD an email via my login on there website a couple years ago just to clarify what my position was.

They deemed I was "not in the business of trading' and my loss (it was a bad year lol) they advised "This is a capital loss and therefore not claimable, even if you purchased these with the intention to sell"
I've left it at that since then with the thought that if I made money it must be a capital gain and therefore not claimable even if I purchased these with the intention to sell.

They did ask if I traded over 50k worth of shares or if I owned more than 50k worth of shares so I guess that point there must be different rules.

[Harvey Specter]

Most small investors would never go to court due to costs. There are a few big investor cases but they are quite old now.

[MunsterNZ]

Thanks again... It appears that intention is the key point. I think the fact that i have held the shares for over 3 years and am now planning to sell some to pay off some of the mortgage means i am not classed as a trader. Thank god for no CGT!!
Munst.

[couta1]

Thanks again... It appears that intention is the key point. I think the fact that i have held the shares for over 3 years and am now planning to sell some to pay off some of the mortgage means i am not classed as a trader. Thank god for no CGT!!
Munst.

Munster in your situation I wouldn't even give paying tax a second thought as you have no obligation to,cheers

[couta1]

KW IMHO your onto it mate and my study and research puts me in your camp absolutely,there's a PhD student at AUT who published a comprehensive paper on Share trading and tax in NZ and the history of court cases etc ( Don't have the link) but that papers a must read to make you realize how messed up and Grey the current system is and the application of tax law in regard to share trading

[Xerof]

They did ask if I traded over 50k worth of shares or if I owned more than 50k worth of shares so I guess that point there must be different rules.

skeet, they were digging to see if you might be liable to tax under the FIF regime, I suspect

best to ask an accountant, not IRD

[couta1]

Its probably the paper that I published the link to above :-)

There is nothing wrong with the law being a bit grey - as this means that you can play it to your advantage. At present, so long as you know what to say and do, you can easily prove that you don't have to pay tax. After all, its very difficult for the taxman to try and prove that what you were thinking at the time is different from what you say you were thinking :-)

I'd rather confusion than the Australian approach which is to tax everyone and everything - no discretion at all.

Agreed,looking at Aussie tax law other than the blanket CGT it appears quite a rigorous test is applied before they will accept you as a legitimate trader and able to claim losses

[skeet]

skeet, they were digging to see if you might be liable to tax under the FIF regime, I suspect

best to ask an accountant, not IRD

I had and he had no idea, advised me to ask the IRD >_<

[couta1]

skeet, they were digging to see if you might be liable to tax under the FIF regime, I suspect

best to ask an accountant, not IRD

Correct,In my discussions with them the amount you have in shares is irrelevant in determining whether you are a trader or not be it 10k or 1 million,its all about intent at time of purchase

[skeet]

But isnt it the intent and purpose of buying stocks to make a profit? I know dividends are declared and that makes sense, but no one buys shares to lose money.