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Author Topic: Tax  (Read 192202 times)

Delusionsofgrandeur

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Re: Tax
« Reply #165 on: November 18, 2013, 06:38:03 am »
Thanks guys,this is the final petty question I have regarding tax on trading accounts.I just want to be 100 % sure off all variables.

Lets say I open 3 or 4 trading accounts for 3 or 4  different shares.Since who knows which shares would have to be sold abnormally early (before 3 years),can one just treat each share and account individually as trading or investment accounts.

This way each share can be taxed individually instead of the entire account long term investments and all getting slapped with 40% tax.

Thing is that I am not aware if this is possible,or if the tax man will object.
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Bundu

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Re: Tax
« Reply #166 on: November 18, 2013, 10:59:23 am »
AFAIK a balanced portfolio should hold around 10 shares - that would then require 10 accounts  ???

I just have one account and use the 3 year rule O:-)
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« Last Edit: Tomorrow at 06:13:55 PM by Bundu »

Orca

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Re: Tax
« Reply #167 on: November 18, 2013, 11:12:53 am »
As long as you keep records of purchses and sales. Keep a file for each tax year. Calculate the average base cost (use the Due By You as it includes the costs)  and keep it as Open Stock in the first page of your file.
Most important is for you to keep track of the date and cost of your shares.
Once any share in your portfolio reaches 3 years and 1 day old SARS is obliged to treat it as CGT if you sell any portion of it.

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Bundu

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Re: Tax
« Reply #168 on: November 18, 2013, 11:17:38 am »
yip, I have all the trading notes and enter each transaction into an xls sheet - simple enough
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« Last Edit: Tomorrow at 06:13:55 PM by Bundu »

Delusionsofgrandeur

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Re: Tax
« Reply #169 on: November 18, 2013, 11:25:54 am »
Quote from: Orca on November 18, 2013, 11:12:53 am
As long as you keep records of purchses and sales. Keep a file for each tax year. Calculate the average base cost (use the Due By You as it includes the costs)  and keep it as Open Stock in the first page of your file.
Most important is for you to keep track of the date and cost of your shares.
Once any share in your portfolio reaches 3 years and 1 day old SARS is obliged to treat it as CGT if you sell any portion of it.

So why don't all people do that,open up multiple accounts for multiple stocks,besides it being a pain in the butt to set up?In that way they avoid paying 40% tax on all their stocks instead of the ones that they actually have to sell before 3 years or sell frequently.

From what I understand now is that it is not you that are seen as a trader or an investor,but rather your accounts that are seen as investment or trading accounts.Am I right or delusional?

Also,if I am correct is this all legal?
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Orca

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Re: Tax
« Reply #170 on: November 18, 2013, 12:35:12 pm »
Perhaps this will help. If you read up on Google, you will come across sites that state that it is up to you to prove your intention to SARS and once SARS deems you a trader, they will keep taxing you as a trader even after 30 years.
Those are old websites and articles. Only read stuff from SARS website as it has the latest documents and acts.
The 3 year rule has been signed and added to the act.
Even if you have 1 portfolio with 1 three year old share and 100 trading stocks in that same portfolio, that 1 share will be taxed at CGT if you sell it. The others will be taxed as revenue.

Stick to your main aim. Two portfolios. One for long term and one for trading. So what if you sell one or two stocks in your long term before the 3 years are up. You simply add the gains to your trading account gains.
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Delusionsofgrandeur

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Re: Tax
« Reply #171 on: November 18, 2013, 03:35:59 pm »
Ok,thanks Orca,I understand completely now.
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Orca

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Re: Tax
« Reply #172 on: November 18, 2013, 06:27:13 pm »
Write this down Delusional. When filling in your tax for your trades if you did actually do some trading in any of your portfolios. It works exactly the same as any small business.

Cost of Sales = Opening Stock at cost + Purchases less Closing Stock at cost.

Gain/Loss = Sales less Cost of Sales.

All this will be on your year end Holdings Analysis sent to you except that you need to work out the Opening Stock Cost ie, the weighted average cost that I told you about.

Your long term stocks will not have any effect as they will open at year start and close at year end at the same cost price.

From the Gain/Loss, you can deduct internet costs and wear and tear of you maid and stuff.

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Delusionsofgrandeur

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Re: Tax
« Reply #173 on: November 26, 2013, 06:58:04 am »
Thanks for the Cheat sheet Orca.
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Orca

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Re: Tax
« Reply #174 on: December 02, 2013, 06:47:46 pm »
Just seen my tax results for my disclosure of trading activities since 2009.

2009. Objection denied due to prescription.
2010. Objection denied due to it being invalid.
2011. Objection denied due to it being invalid.
2012. Objection denied due to it being invalid.

 :wtf: They don't want my money.  :TU:
« Last Edit: December 02, 2013, 06:51:56 pm by Orca »
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Orca

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Re: Tax
« Reply #175 on: December 02, 2013, 06:53:48 pm »
Now where is Bread? He was in the same predicament as me.
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Orca

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Re: Tax
« Reply #176 on: December 04, 2013, 06:41:51 pm »
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yossarian

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Re: Tax
« Reply #177 on: December 04, 2013, 08:34:13 pm »
That link won't work properly tomorrow...

Try this (and "like" the dudes if you feel like rewarding them for writing interesting articles):

https://www.facebook.com/notes/seed-investments/making-use-of-the-cgt-exclusion-gerbrandt/687151884648866
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Orca

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Re: Tax
« Reply #178 on: December 05, 2013, 07:45:18 pm »
I have one problem with Seed's method. Obviously the larger your portfolio value, the less you score. Now if you have a R100K portfolio and do as they say then at some point SARS will not tax you at CGT but Revenue. The 3 year term will catch up very quickly if you are using the FIFO method. Obviously you cannot use the weighted ave for this.
I emailed them as to this and waiting for a reply.
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Orca

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Re: Tax
« Reply #179 on: December 08, 2013, 07:34:41 pm »
A new problem. I have held my shares for 2 years and intend to go for the 3 year thingy. When I bought my stocks, I used the Weighted Average method.
Now after 2 years, I want to add a substantial amount to these same stocks and will apply the same Weighted Average Method for the base cost.
Will my 3 year thingy start all over again? Obviously I cannot change to FIFO now as I have been using W A for years.
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