Tax calc

[olilau]

hi sugar snap, would love to part with some sage advice, but admittedly, i know nothing about furures trading, but will try to educate myself on the subject a little. it does sound however, when you say "exposure" that you are sitting on positions that are not closed. so, if you have sold a share you don't own yet (short) a sale has actually taken place and creates an exposure relative to the value at a certain point. instinctively i would say (if my assumption is correct) that yes, the exposure should be included. i will ask my contact at KPMG when i next get the opportunity - sorry, this might not help you right now.

[Sugar_Snap]

Hi olilau, I am very interested in this tax issue and will do a little bit of research myself (ringfencing as well). I belong to a tax club and will check this out. My only question at this stage is why does SARS ask you if you want to ringfence the loss? They are giving you a choice here. What if you decide to stop trading and have a loss? How long will they carry this forward and surely they must allow you to offset the loss against other income in this case. Will be interesting to find out from KPMG what they know about this. Will check this out over the weekend and let you know. Lets get to the bottom of this once and for all.

[Sugar_Snap]

Hi HG, the negative figures crossed my mind and I did not feel comfotable with it, does not make accounting sense to show income as a negative expense. I will look into this and try all my resources to find the right answer. I can't wait to submit my IT12, but must feel ok in doing so. SARS frontdesk employees do not have the expertise in this field to help us. Will have to go to the tax gurus, and seeing that tax is such a broad field, this might take some time, but hang in there.

[HateGauteng]

Thanks holding my breath.

[HateGauteng]

I wonder if this applies to pension funds as well. My pension fund had negative growth last year.

[#6]

You must tick "Local Business, trade and professional income" at the top to customise the form. Under ""Local Business, trade and professional income",you specify your cost(purchases) and turnover(sales), then according to your profit/loss, use codes 2599 for loss and 2598 for profit. Hope it makes sense. ;-) http://www.sars.gov.za/uploads/images/0_Updated_Source_Code_Booklet.doc I filled a while back and used source code 2599. Took 2 days to settle. Do not infringe your losses.

[HateGauteng]

Thanks Moola. What's "infringe on your loss"?

[#8]

My bad, meant to say "ring-fence". Drunk with "infringe" ;-)

[olilau]

hi guys - hmm, again, only guesswork here, but the "option" NOT to ringfence to me makes sense only from a perspective of where trading is not your primary business. if your sole purpose and livelyhood in life is derived from trading income, then trading losses along with coffee for those late nights are deductible against income generated because its all in the production of income anyhow. where, like me, you earn a salary and pay tax, and invest/trade on the side, i very much doubt that SARS will let me deduct any investment/trading losses against PAYE paid on my day job. i have a seminar later this month on other tax issues and will try to raise these interesting questions with the tax partner.

[GarethJ]

Thanks for the info. Any idea how far one can go in claiming additional Trading-related Expenses? Monthly OST fees, subscriptions to Trading Sites/financial mags, internet subs etc. etc.

[Preston]

Standard Bank is teeming with CA's. They should assist their client with tax issues.

[#12]

Well, didn't ringfence my first return, neither did i with the last i filled, on 2 july. I have a friend who is a tax expect and when i ask Him about the ringfence, he said i should not. Basically i took the amount you get from the futures P&L report, which was then called Base cost/sale. Seems to have changed. Purchases(Base cost), Sales(proceeds) believing that the base cost included my brokerage. The difference worked out to just the amount reflected on the tax statement, Profit/loss. Now the P&L report has an extra column for brokerage, am not sure how you will reflect it on the return, but am pretty sure it's an amount included in the cost of your investment, since when you buy, your cost price gets determined from the cash spend including brokerage. As for monthly fees, etc, it's more like i open a bank acount, pay a monthly fee, etc, etc. That's a "personal" expense. Hope makes sense :)

[SimonPB]

why ?? we also teeming with lawyers, should we help you sue, or maybe sue you ??

[Preston]

Who is contributing to your division bottom line profits. is your lawyers or SBK clients? We are "Moving Forward" and not stuck in stone age philiosophy.

[SimonPB]

yaya boet .. so you're suggesting we cater to all our client needs ?? what happened to offering a specialised service and leaving other specialised services to the experts ?? and tax extends well beyond just trading .. go repo some cars ..

[HateGauteng]

I'm busy with my efiling form now. Trying to get the SSFs into it. I got SSF toal and Grand Total. Both figure are the same and both are negative. I see the figures for brokerage but I can't distinguish a figure for total cost.

[HateGauteng]

I can get around this by doubling my "cost of sales" and hence get a loss in the final column. Just wondering if this is the correct way to do it?

[Preston]

Mr Simon Brown, with respect, you seriously missing the substance of my argument. Case in Point: SBK must look after its client base. Provide valued added services that will add value to the "Moving forward" slogan otherwise, you rather change your logo to , "Eish, whatever"

[Preston]

Repo from Car, House Repo? Dude i am not in the repossession dept. Try Regulatory,capital management and then you will be heading in the correct path.

[HateGauteng]

Just joking I took the sum of the negatives and added it to the sum of the positives. I come out with respectable sales and cost of sales.