Forex Trading (Individuals)

Forex Trading

  1. Your assessable income includes a forex realization gain you make as a result of a forex realization event.
  2. You can deduct a forex realisation loss that you make as a result of a forex realisation event.

Where do you declare the income on your tax return?

  • You will be in the business of forex trading by the ATO as you trade for a profit, regularly and have speculation intent. This is regardless of the balance of currency used for trading.
  • These business income and expenses (trading profits/losses) are disclosed in item 15 of your income tax return if you are using a Sole Trader ABN.

Can I claim a deduction for trading courses?

  • Yes, as long as you are actively trading and there is income and expenses to demonstrate there are business activities. The proper record to be kept is the invoice and receipt of payment. The trading course should have enough details to show that the education will be linked to the potential for increased income through trading activities.
  • You can claim deduction for any expense incurred in relation to earning business income. Further, If you are having coaching support and you conducted the courses prior to doing any trading then you cannot claim them (just like a uni graduate cannot claim their courses they studied before employment).

What are the basic documentation that is required for your trading business?

  • Brokerage trading summary Profit & Loss statements for the relevant financial year
  • Documentation for any other costs such as fees for margin trading etc if not reported on the trading summary
  • Invoices for any training, education, costs of any trading platforms

We advise engaging with a professional to correctly report trading details and plan ahead for the expected taxation events and re-investment strategies that are involved in your existing structure. Please contact us to walkthrough your individual circumstance.

Book in a complimentary discovery call with one of our client managers to discuss business solutions.