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Thanks for your question. As you can appreciate, CFD’s are a complex topic!
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I hope this helps, JodieM
Sure @CHon. I did got callback from ATO and person was very helpful. He clarified things for me and in short my understanding was correct. I am submitting my tax today. I would suggest you to do request for call service and discuss your situation personally.
@JodieM Thanks for your advice.
As a follow up to this thread in respect of the tax treatment of CFD's (which is very helpful), I have a query surrounding the non-commercial losses requirements, in particular the Assessable Income test.
The Assessable Income Test provides the following (per https://www.ato.gov.au/business/non-commercial-losses/four-tests/#Assessableincometest):
To pass the assessable income test, assessable income from your business activity during the financial year must be at least $20,000.
Assessable income includes:
If you pass the assessable income test, you can claim your losses in the current year.
As it relates to the trading of CFD's, can you please provide some insight into how ordinary income is defined given that you not actually selling a share (but rather a derivative of that as that is what a CFD is) hence would'nt be holding trading stock as such.
Is it the sum of all profitable CFD trades only (hence exploring this qualification criteria) or is it the net of profitable and unprofitable trades? Any help on this would be greatly appreciated.
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