Easy Equities good or bad?

zerocool2009 said:
I think the golden rule is to take divs out of the equation ... but rather work on the rule, you can have R40k gains when selling (looking at cgt), before you get taxed again. Thats how I see it
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So here's the question. You have the R40k allowance and you sell an asset for R50k profit. But you also have a R20k loss from the previous year. Does the 50k first come off the 20k so you have no loss for the next year? Or does it come off the 40k first so you have a R10k (20k-10k) loss carried to the next year?

Anyone know?
 
Does anyone have any experience with breaching the SOFV amount for a given year and know how quickly they respond to queries/submitted documentation?
 
potter123 said:
Does anyone have any experience with breaching the SOFV amount for a given year and know how quickly they respond to queries/submitted documentation?
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They did not respond when I exceeded it. Did not affect my account and I was able to buy and sell. :)
 
Swa said:
So here's the question. You have the R40k allowance and you sell an asset for R50k profit. But you also have a R20k loss from the previous year. Does the 50k first come off the 20k so you have no loss for the next year? Or does it come off the 40k first so you have a R10k (20k-10k) loss carried to the next year?

Anyone know?
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I would guess its like use the R40K window or lose it. Anyone can confirm maybe ...
 
AirWolf said:
Prepaid tax:

If you buy a share, then get dividends on same.
Thereafter, the share drops. You sell at the point where you break-even - loss on share price equals dividend.

You now have a capital loss on the share and dividends (that have been already taxed).

Any profit on shares up to loss above incurs no capital gains...

Just a thought (in light of RMH dividend)...

Thoughts?
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Nope doesn’t work. There’s a provision in the act that determines extraordinary dividends. If it’s more the 15% of the share and you don’t keep the share for longer than 3 years. Your losses are disregarded.
 
zerocool2009 said:
Yes .... if you CGT is less than 40K when you sale (its tax free)
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So in a tax year if you made 40k loss, then make 80k profit i.e. net 40k profit (for the financial year) so no extra tax. And the share you made the 40k loss on paid you you 40k dividend (after dividend tax). So you're effectively 80k up with no further tax burden.
 
AirWolf said:
So in a tax year if you made 40k loss, then make 80k profit i.e. net 40k profit so no extra tax. And the share you made the 40k loss on paid you you 40k dividend (after dividend tax). So you're effectively 80k up with no further tax burden.
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Ignore the dividend received. If you have 4 shares, and make 40K profit overall (after you sold, you wont pay tax).

See it the same as if you have rental properties. You have expenses and income, and you need to proof if you made a loss or a profit
 
AirWolf said:
So in a tax year if you made 40k loss, then make 80k profit i.e. net 40k profit (for the financial year) so no extra tax. And the share you made the 40k loss on paid you you 40k dividend (after dividend tax). So you're effectively 80k up with no further tax burden.
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Dividends are taxed separately from your normal tax or capital gains tax. There is an exception if the dividend originate from offshore.
Dividends from South African-resident companies are exempt from normal tax under section 10(1)(k)(i)
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AirWolf said:
So in a tax year if you made 40k loss, then make 80k profit i.e. net 40k profit (for the financial year) so no extra tax. And the share you made the 40k loss on paid you you 40k dividend (after dividend tax). So you're effectively 80k up with no further tax burden.
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You can only claim losses if you held the share for more than three years otherwise it is seen as normal income. ;)

Oops, seems my comment on the topic is flawed. :eek:

This is what TaxTim have to say:

How the sale of shares/investments impacts capital gains tax

The sale of shares or investments attract Capital Gains Tax in the same way as the sale of a property. You would add up the amount received for the shares sold (Proceeds) and take off the amount paid for the shares when you bought them (Base Cost). The difference would be the capital gain.

The gain would be added to all your other capital gains for the year (less any exclusions) and then you would include 40% of the total in Taxable Income and be taxed as per the tax tables.

Every year, the fund or financial institution where your money is invested in will send you what is called an IT3c. This represents sales of shares or unit trusts you may own. Look out for the words:
• Gross Proceeds
• Base Cost
• Weighted Average Base Cost

When completing your tax return, you can add all share/unit trust sales together and then include all the proceeds and all the costs under one disposal.
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Applying the above to your question I'm of the opinion that your position will be as follows:

Dividend of R40k are excluded from CGT.

Stock purchases (Base cost): ?
Proceeds: R80k profit - R40k loss = R40k

Tax liability: Proceeds - R40k exclusion = R0
 
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Quicks said:
So what is happening see everything is taking a dive some worse than others. So what are you guys doing?

1. Selling or sold before it crash.
2. Buying more of the same on the cheap.
3. Checking and investing into new stocks.
4. Waiting to see what will happen.
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2
 
LaraC said:
You can only claim losses if you held the share for more than three years otherwise it is seen as normal income. ;)
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Not correct. If you hold a share for >3 years, it is automatically considered CGT, but if held for <3 years it comes down to intent only.
 
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