Hello,
I think I have just trapped myself in a very sticky situation. I want to make sure everything done correct to transition for my future plans surrounding the ASX share market. I need some help to gather all the information before seeking professional assist to minimise the cost due to bottlenecks in getting documentation).
Backstory:I opened my brokerage account during the COVID19 drip in April 2020 buying relatively small parcels ($1000 to $10,000). I realised some 10-30% ROI profits up until July 1st totalling 40 transactions (buys and sell) I reported this on my FY19-20 tax return and received refunds on some franking credits.Roll in over to FY20-21, I was placed on job seeker and active filled the objectives set out for me – I am no longer on jobseeker. While trying to get job I tried to experiment with day trading on the ASX with the entire YouTube videos highlighting that is quite easy given the current financial situation. I used my savings and maximised the advantages of T+2 settlement on Commsec. Now, I have accumulated over 152 transactions since the start of the financial year 2020-2021 to present:
- With a tiny running paper loss in my current portfolio (Having paper gains offsetting paper loss);
- I also have a ledger recording a “break even� based on trades I have completed (100+ being profitable but getting offset after 6+ horrible trades);
Issue/Concern:
(1) Reading up on my tax obligation, I am a trader and need an ABN based on the transaction activity. Do I need to apply for an ABN ASAP before the end of this financial year?
(2) Based on this classification, I lost some methods of sale allocations due to being a business. As such, the way I have been recording my ledger places me in a significant difference in with FIFO , HIHO and LILO i.e. significant capital losses along current cost basis in active portfolio getting changed (but overall the same financial position on as cash position).
- For example:
- April 01 | Buy ABC 10,000 shares for $1.00 and then sell ABC 10,000 for $1.20. (Transaction 1)
- April 01 | Buy ABC 10,000 shares for $1.25 (with intention of holding) (Transaction 2)
- April 02 | Buy ABC 10,000 shares for $1.06 and then selling ABC 10,000 for $1.20. (Transaction 3)
I would record the sale in my ledger as shown in the brackets. As you can see using a FIFO method would highlight a significant loss for me. Am I wrong that I cannot record my transaction? I can provide detail evidence to show how each parcel was traded.
(3) Would my job seeker payment be at risk now (need to return funds) that I would have to register an ABN (as it could be seen as a form of employment)? I updated my assets (cash accounts and shares) and income accordingly and meeting my mutual obligations. I would also follow the link where it stated “for income from non-employment click here�.(4) I am looking at day trading for FY2021-2022, after experiencing this market as a side hustle. I would like to start fresh with a new specific brokerage account for this to divided transaction. If I sell my active portoflio right now for a loss, how would that affect me following my plans.
1,658 views
3 replies