I have always treated myself as a share investor but my activity this financial year has changed significantly.
My current approach:
- I buy and sell shares every week, typically 2–4 transactions per week
- I hold positions for a few weeks before selling at either a profit or a loss
- I sometimes buy back into the same company if I think conditions have improved
- I have a full-time job — share trading is not my main source of income
I have read the ATO guidance on Share investing versus share trading, but I'm still unsure whether my activity now qualifies as carrying on a business of share trading.
My specific questions are:
- Based on the frequency and pattern above, would the ATO likely consider me a share trader rather than a share investor for this financial year?
- If I am now a trader, does this apply from the start of the financial year, or only from the point my activity changed?
- What are my record-keeping obligations as a share trader? I currently only have basic records through my broker (Sharesight) — is that sufficient?
- Can my trading status differ from year to year, depending on my activity level?
Regarding wash sales (if I am still classified as an investor):
- Some of my transactions may look like wash sales — I sold shares at a loss and then bought back into the same company shortly after when I felt conditions had improved. This was not done deliberately to manufacture a capital loss, but the pattern is there. How should I treat these transactions in my tax return?
Any guidance would be appreciated. I am happy to consult a tax professional but want to understand the basics first.
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214 views
2 replies