That was the first thought that entered my mind when I received the above email. Or was it spam? After all, why would the Australian Taxation Office adress me with a simple "Hi", when they already know more about me than my wife does, including my full teutonic name "Manfred-Peter"? I checked the sender's email address and it was definitely 'no-reply@ato.gov.au, so what are they trying to tell me?
From the very beginning when, through too much hubris as well as inexperience, I suffered some very heavy losses, I have always bought shares as an investment, even though I could have declared myself a trader and deducted those losses from my other income and enjoyed many tax-free years. Instead, I quarantined those losses in 'Section 18 Capital gains' of my subsequent tax returns, carrying them forward from year to year, until I could apply them against some future capital gains.
That time came in early May when BHP finally lived up to its long-held promise and shot up to almost $60, and I was able to sell the shares, some of which I had bought as long ago as 2023, for a substantial profit.
I was cloistered inside "Melbourne" all day yesterday, using my trusty old 'Made in Germany' ARISTO-SCHOLAR slide rule, with which I had left the "Vaterland" in 1965, for nothing better than drawing up columns on sheets of paper, so as to match up all the buy-and-sell transactions to calculate the capital gains in readiness for next month's tax return.
I usually lodge my own tax return, but seeing how the tax office has taken a sudden interest in me, I shall present all those buy-and-sell contract notes and my own tabulations to the local office of H&R Block for their 'seal of approval'. After having considered myself an investor for over thirty years, I don't want to argue the case that I should not be treated as a trader. At last count, with an average of six transactions a month over the current year, and a total of just ONE transaction for the whole of the year before, I should think I can hardly be called a trader.
Although my focus is on capital growth and long-term dividend income, I am not a totally passive investor. World events - and recent Trumpian excesses - may make me seek safety in cash when I sell down some of my shareholdings, only to buy back in again when I consider it safe.
(Luckily, I did buy back in again after my sell-down in early May, because Trump said - once again! - that a peace deal with Iran was within reach, and BHP went ballistic, closing overnight in New York at the Australian equivalent price of $64.50. Sometimes, being careful will pay off!)
Now it's time I put away the slide rule and take a rest in my favourite chair outside "Melbourne". Thanks to those recently made capital gains, I may even be able buy a can of white paint and give the old chair a new lease of life.
"If you dream big long enough, anything can come true."
