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NoFomo(Enthusiast)Enthusiast
16 July 2025

Hi,

Can someone please advise how to report income from a prop trading firm in the tax return.

I paid a company topstep for a challenge. Passed the challenge, and got a payout of $7500.


Can I deduct the challenge fees spent trying to pass the challenge. I think I would have basically broke even after all the challenge fees and then getting the payout.


The tax form is different this year. Where exactly do I put the $7500?

And where and can I put the challenge fees to offset the $7500 and report exactly what I made in profit?


I have an ABN pty ltd, but when someone at the tax office called me, they said I can only report income from prop firms in my company where the contract was signed in the companies name.

With the company I made $7500 the contract was signed in my personal name. But the tax form is asking for an abn. Can you please confirm this and if I need to put this $7500 on my company tax return instead. I don't want to take any income from my company as I want to grow that.


Thanks

1,539 views
3 replies
1,539 views
3 replies

All replies

KaraATO(Community Support)Community Support
22 July 2025

Hi @NoFomo,


Based on what you've said, I'd say you'd report your trading money based on who signed the contract, you or your company.


If your company signed the contract it should go on the company tax return.


If you signed it yourself, the money goes on your personal tax return, even if you own a company.


You'd need to include an ABN because prop firm trading is usually treated as a business. If you used your own ABN (as a sole trader), you should put the income in your personal tax return under the business section.


If you're running a business and you're trading regularly with intention to earn income, challenge fees paid to prop firms like Topstep are generally deductible business expenses.


It might be worth seeing a registered tax agent if you're still unsure.

NoFomo(Enthusiast)Enthusiast
25 July 2025

Thanks @KaraATO

So to confirm, I put the pty ltd company abn in the tax form this year?

The online tax form is different this year. It never asked for abn last year.


Do I report this as, you were a sole trader or had business income or losses or partnership distributions, then click business/sole trader income or loss -> Business income or loss


Then on next page under business/sole trader section:

did you receive any personal services income = no

main business or professional activity = financial asset investing

Number of business activities = is this the number of trade? there is no broker statement with prop firms. you buy the evaluation and then it can be 100's of trades. If you fail the eval, they delete the account and you start again. what number goes here?


Main business name = my pty ltd abn


abn number = my abn pty ltd abn number


now the form is different from last year;

where do I put the profit and where do I put the losses?





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