Edited version of private advice

Authorisation Number: 1051808190140

Date of advice: 22 February 2021

Ruling

Subject: Business deductions

Question

Are the gains or losses made from your CFD trading assessed under sections 15-15 and 25-40 of the ITAA 1997 and treated as profits or losses made from an undertaking or scheme?

Answer

Yes

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You have been trading contracts for differences (CFDs) during the financial year ended 30 June 20XX.

You undertook your CFD trading activities alongside your regular full-time employment.

You invested an amount of money each month since you started trading which resulted in a loss of $X.

The underlying motive of your trading was to make a profit.

During the financial year you completed more than X number of transactions.

You do not have a formal business plan.

You have bought a new laptop, paid for a 24/7 server to run the trading platform and bought several software amounting to $X to analyse the market.

You have established a dedicated space in your home to do market monitoring and research.

You educate yourself and utilised resources by:

•         using an online video platform,

•         subscribing to learning material for which monthly fees are payable,

•         paying for trading experts to obtain market insights and technical data,

•         attending webinars,

•         following the market through broker and trade news channels, and

•         trying to automate a few trading strategies.

You use Excel sheets for record keeping.

You made a loss of $X from CFD trading.

You have since stopped trading.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 15-15

Income Tax Assessment Act 1997 section 25-40

Income Tax Assessment Act 1997 section 118-20

Income Tax Assessment Act 1997 section 995-1