Tax advice

[Aaron]

Sorry I forgot to mention that I complete the tax return on a cash basis, therefore only have to worry about what I have sold, not what is remaining.

But would have to agree with both you Aaron and HS be consistent, just not sure what that is yet.

Unless you are a barrister or doctor, Jay I think you have to account for business income on an accrual basis which would include valuing closing stock. The cash basis is applicable to salary and wage earners and dividends can be returned when received rather than the ex date but trading would be a business activity which requires accrual accounting.
Don't take my word for it though, it might pay to get some professional advice if the amounts you are trading are significant.

[Harvey Specter]

Unless you are a barrister or doctor, Jay I think you have to account for business income on an accrual basis which would include valuing closing stock.

From an IRD Questions we've been asked:

Question

Can a taxpayer claim a deduction for unrealised share losses?
Answer

Generally, unrealised share trading losses will not be deductible for tax purposes.
Taxpayers in the business of trading in shares hold shares as trading stock. Under the trading stock rules, shares must be valued at cost. Consequently, only realised losses are deductible. However, the shares may be valued at nil if they:

• • have no current or likely future market value; and
• • have been written off as worthless by the taxpayer.

Alternatively, shares which are bought for resale at a profit may not be classed as trading stock, but could meet the definition of “revenue account property”. A deduction for revenue account property is available only in the later of:

• • the income year in which the property is disposed of; or
• • the income year in which the proceeds are derived.