We work on a self assessing system. The Tax Office doesn't have to do anything - it is up to you. An example will help clarify - you buy 1000 shares in NAB, then another 100 then another 250 and so on and so on until you have say 5500 shares. If you sold 800 shares then you would assume you are selling 800 of the initial 1000 you purchased (FIFO - first in first out meaning the first purchased are the first sold). It is possible if you purchase 1000 and then sell 1000 a week later you can argue you have purchased and sold that particular lot and calculate losses or gains on that parcel.
Thanks for the info mate. No what I meant was if I have an online business. Say I have a blog about dogs and make money through that. Say I owe $10,000 in taxes for the year. Generally you can claim computers and other business expenses and that will offset your tax owing, so I may only need to pay $3,000 of tax instead of $10,000. So my question was if say in 5 years I sell my silver and I make a profit of $20,000 that I believes is added onto my existing income of my job or business. So say I 30K with my dog blog and 20K due to selling silver..... my total income for the yer would be 50K is the tax owed separated or its it just one lump sum of tax owed between the silver and business...if so....couldnt I buy a bunch of TVs and computers and say its for my business, would this deduct some of the capital gains tax I owe from selling the silver.
The language is very important - Taxable income (Gross Income less Deductions) of around $55,000 would mean you have around $10,000 in tax to pay. If you increased your deductions so that your taxable income was only around $26,000 (that means finding another $29,000 in deductions) then you would have about $3,000 to pay in tax That would be correct - you would need to correctly calculate the gain taking into account any discount but basically the gain would increase your taxable income The income is separate but the tax is not (if that makes sense). If you increased your deductions on the business income so that you had $0 income then the total taxable income would only be the capital gain ($20,000) and you would have around $2,100 in tax to pay. If you increased your deductions to the point where you made a loss then (as long as you satisfied one of the business tests from my previous post) that loss could offset your gain and that would further reduce your taxable income and therefore your tax. Revenue or income losses can be used to offset capital gains but capital losses cannot be used to offset revenue or income. Hope that helps
Hi guys, if some day i decide to buy some RE using the profits made from stacking silver, i will have to pay CGT but what if i dont have a high paying job and cant pay the CGT?? sorry if this is a silly question or have not thought about it hard enough. appreciate your feedback. Cheers
Your tax payable is calculated based on your income + capital gains. If you make $60k profits in one financial year from selling off your stack and no job or centerlink entitlements you will only be required to pay taxes on $60k. Whereas if you had a $60k job and made $60k profits in the same financial year, you would have to pay taxes on $120k. The CGT can never be higher than your net capital gains for the year...unless your net capital 'gains' is negative (ie. you lost heaps of money).
I suggest keep a portion of the proceeds from the sale aside for tax purposes - your income shouldn't matter in this case as you will be paying the tax from your sale income. If you fail to pay your tax obligations they will enforce a payment plan and include interest and charges - should this fail they have options upto and including imprisonment.
You do not need to have a high paying job or money in the bank or anything like that because the government simply steals a portion of your silver! So you sell 1000 ounces and - depending on what the dollar price paid initially was - you could potentially have up to 45% of all your silver sold stolen by the government in CGT. Remember - CGT is simply a forced inflation tax as inflation is not taken into account at all in working out what your "profit" is.
That is exactly the problem - CGT is a carefully thought out strategy of government to enforce at least a portion of the inflation tax on those who would attempt to protect themselves from the inflation tax. It is morally indefensible and throws some light on the insidious alliance between robber bankers and government in their attempts to steal the private property of citizens through inflation.
I believe that in the UK at least Gold Sovereigns and Silver Britannia coins are Capital Gains Tax Free from what I have read online.
CGT exists to tax people who earn money by trading assets rather than earning money from a paycheck. It is perfectly reasonable to tax people who buy assets and sell them in order to make a profit. If CGT did not exist, the government would need to raise the lost revenue by increasing PAYG tax rates on the poor suckers who go to work for a boss every day while rich people trade shares and houses and businesses without paying any tax.
I'll let that one go through to the keeper Big A.D. You know my feelings about CGT. (Well maybe just a little dab outside off-stump )
The issue is that there is almost never any real "capital gain" present - only depreciation in fiat money - which the government forces you to use as currency and can then manipulate with inflation, which is nothing more than a TAX. So yeh - you may think its reasonable, but nobody who understands what inflation really is would be happy to pay CGT. The example you use of a trader has very little to do with inflation - such people buy low and sell high after a relatively short period of time by either adding some value or simply buying for under market price (perhaps from a distressed seller) and then selling at market price. In this case, it could be argued to be reasonable to pay a tax on the profit made. The tax laws already cater for this kind of case and the person would be seen as a trader and the profit would be seen as income, not a capital gain anyway. There is no moral justification whatsoever for a capital gains tax - it is theft by inflation plain and simple. if you buy 1000 ounces of silver, i dont care what the fiat price may do - you still have 1000 ounces of silver! There is no capital gain made at all - the silver cannot clone itself or have babies ... it remains 1000 ounces of silver. any change in the fiat price is due to inflation only, and taxing that inflation-induced increase in the fiat price amounts to theft by inflation.
+1 - not that it makes any difference capt. because my +1 you have gained will be eroded by inflation.
Hang on, inflation is running at about 3% p.a. so any gain that is more than 3% p.a. can't be due to the simple effect of inflation. I'm not a trader, but I bought some silver 18 months ago for about $19/oz and this week its worth about $35. If I sold it today, I'd have made an 85% return on my investment (about 60% p.a.). 60% p.a. is more than 3% p.a. Now, I wish I had $20 million in capital to make my living buying stuff, holding it for a while and then selling it, but even if I did I'd still expect to pay tax on the profits I made (and I know people who do make their living this way who do very nicely with their deals). Its not like wage earners don't have to keep negotiating pay increases to keep their "real" salary in line with inflation either. Everyone has to deal with the effect of inflation, regardless of whether they're trading assets or earning a salary.
CGT is a tax like any other tax. All of which are designed to re-distribute wealth from the richer to the poorer. The way they operate is basically irrellevant - what you need to do is take all taxes into account and see that we are one of the highest taxed countries in the world (when I say this I take into account levies, state taxes, licence's etc etc) and ask whether we are getting value for money. Some say yes, some no. I sit on the fence. I was educated, have clean water and utilities that rarely stop working and drive on roads that are free to travel (fines and licence fees aside). My sisters husband has had substantial medical problems (he had a heart transplant at 38) and I know that without our system of health care he would be dead. The doctors estimate upwards of $5m in medical costs if he had to pay for his treatments. All of this takes tax dollars - the real problem is the burecratic wastage of our funds. All said, our tax system needs a massive overhaul (Henry was a joke).
