Can I tax deduct my stock?

[jaydisc]

I doubt you can use the capital of acquiring your collection as a tax write off.

Well, this is what I'm trying to ascertain. As a "toy collection", you're probably right. As "stock" for sale, I think I might be able to. Now, in order to prove that indeed it is stock, I have an inventory database, photos of the merchandise (MISB), and receipts for purchases.

The tough part is explaining why I don't have any current income arising from it. I do have a lot of money flowing in to my bank and PayPal account due to the group orders I manage and the hunting I do on behalf of others. I could argue that this very limited revenue is income for this business.

Of course, I'm doing a lot more buying than selling, so naturally, I'm running at a loss. Now, the tax office limits how long you can run at a loss to your own tax benefit (three years I think). So, I should at least get three years of tax benefit for accruing future stock, and then my baseless theory and hope is that somehow due to the nature of the business (time maturing collectibles), I can stave off this period for at least a few more years, if not longer.

Sound reasonable?

I'll be seeing my accountant in a little over a month and I will put this to him. I will of course let you know my results. I was just wondering if anyone had any experience in this area.

[jaydisc]

Have you got an ABN number and have registered as a small business, if so you may get away with it.

Yes and yes.

[Tober]

When you filled out the application for the ABN didn't you have to declare weather you were an import/export business or a trader? It's been a long time since I filled it out so I can't really remember.

I can't believe you spend $5000 a year on scalping collecting trading.

[jaydisc]

I got my ABN as a sole trader, not in context to a specific business. That was the same year that ABN's appeared, so my memory is a bit hazy.

I have since registered a Victorian business name for my software business, but state business registrations are really just aliases. So, I'm still <insert my name here>, but in Victoria, I'm doing business as <insert business name here>

As far as the 5,000, it's more like 4,800 to date, and Games of Deception was about 20% of that. Hey, it's my first year! Leave me alone!

[autobreadticon]

disclaimer-reader beware

entertainment expense = tax deduction
e/g i brought the toys so when i am consulting customers their children can have something to play with

or a Japanese businessman really wanted to play with transformers, in order for me to close this business deal , i brought him transformer toys so he could play with them

[jaydisc]

Unfortunately, they've pretty much axed the ability to deduct "Client Entertainment". Too much abuse.

[Tiby]

There are specific categories for this, such as artwork (paintings etc). They can classify as investments. I don't think we can get there with these figures. Artworks are generally one of a kind.

[Vector Sigma 13]

Its would be like living the ultimate TFormers dream!

Buying, selling and playing with them. I think if you are gonna sell stuff like that the only way to escape ridicule (not that its anyone elses business really) is to buy cheap, add a minimum mark up and sell shite loads of it! And provide a exceptional customer service.

If youre going to run a business its gotta make money otherwise you dont get very far.

Theres my two bobs worth.lol

[autobreadticon]

disclaimer

you could buy eductional transformers for your kid and claim the 'min' deductable expense for education on your income tax form

for the entertainment expense try going for the first option

[Pulse]

For some reason, I don't think the ATO would ever buy it...