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Edited version of your private ruling
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Ruling
Subject: investment expenses
Question
Are the fees incurred to undertake a course a deductible expense in relation to your dividend income?
Answer
Yes.
This ruling applies for the following period:
Year ended 30 June 2011
The scheme commences on:
1 July 2010
Relevant facts and circumstances
You have earned dividend income in the 2011 financial year.
You completed a course relating to the stock market in the 2011 financial year.
The total cost of the course was approximately $300.
The value of your share portfolio at the time you undertook the course was approximately $30,000.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
ATO ID 2003/324 discusses the deductibility of expenses incurred to attend an investment seminar. If the expenditure relates to establishing a strategy or structure for an investment, it is incurred at a point too soon to be incidental and relevant to a taxpayer's income earning activities. However, if the seminar relates to the management and maximisation of income from current investments held by the taxpayer, then the expenditure will be considered a cost incurred to manage that investment.
In your case you incurred expenses to attend a course regarding investing in the stock market. You already held a significant stock portfolio prior to commencing the course. The expense is considered a cost relating to the management of your investment and has been incurred in the course of earning assessable income from your stock portfolio. Therefore, you are entitled to a deduction for the course fees incurred under section 8-1 of the ITAA 1997.