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Self education and Share Trading

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Newbie

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Replies 1

I currently trade shares in my own private portfolio of between $15,000 and $25,000 in value, in which i make around $2000 a year . I intend on trading more actively and would like to complete a Diploma in Share trading and Investment to improve my trading strategies and over all my success and profitability in trading stocks .
I would like to claim the cost of the Diploma as a tax deduction as i will be undergoing the Diploma with the sole objective of increasing my income from my current share portfolio.
Is this going to be acceptable as a self education expense deduction?
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Most helpful response

Devotee

Replies 0

Unlikely.

 

You can only claim such costs if you are in the business of share trading. Based on your scenario - the understanding is that this is not the case. The self-education expenditure contemplated is prior to generation income from the business of share trading. Consequently, there is no nexus between income and expenditure. It would be different if you are currently in the business of share trading.

 

Please see the ATO's guide on share trading as a business and the tax ruling on self education by a person in business TR 98/9.

 

Please be mindful that you are in the business of share trading, the shares are no longer held on capital account (ie. you will lose the 50% capital gains discount on the sale of shares held more than 12 months) and you will also be subject to the non-commercial losses rules to which you should also be mindful of the 4 tests. If you do not pass any of these 4 tests, the losses from your shares trading business are quarantined and cannot offset other types of income.

 

1 REPLY 1

Most helpful response

Devotee

Replies 0

Unlikely.

 

You can only claim such costs if you are in the business of share trading. Based on your scenario - the understanding is that this is not the case. The self-education expenditure contemplated is prior to generation income from the business of share trading. Consequently, there is no nexus between income and expenditure. It would be different if you are currently in the business of share trading.

 

Please see the ATO's guide on share trading as a business and the tax ruling on self education by a person in business TR 98/9.

 

Please be mindful that you are in the business of share trading, the shares are no longer held on capital account (ie. you will lose the 50% capital gains discount on the sale of shares held more than 12 months) and you will also be subject to the non-commercial losses rules to which you should also be mindful of the 4 tests. If you do not pass any of these 4 tests, the losses from your shares trading business are quarantined and cannot offset other types of income.