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FIF Threshold question
Hi all,
Just posting a quick question in the hope someone here might know the answer.
If you have $22,000 (cost price) in FIF investment 1 at the beginning of the tax year
and $10,000 (cost price 5,000 shares at $2 per share) in FIF investment 2 at the beginning of the tax year
and you buy a further $5,000 of investment 2 (5000 shares at $1 a share) during the tax year
and then sell half the investment you has in FIF Investment 2 (5000 shares)
and then subsequent to all of this buy $22,000 (cost price) of FIF investment 3 during the tax year
All prices are NZD
The question is as the share price for FIF investment 2 was different is your remaining holding based on an average of the share price or is a first in first out approach taken?
If the shares remaining are based on the average then you would exceed the threshold but if not you wouldn't or am I misunderstanding how the threshold works?
Thanks in advance to anyone who can cast some light on this. I haven't made any of these transactions yet but am thinking of doing something like this and want to understand the tax implications before I do.
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