Thursday, May 08, 2008

Croesus Mining Rises from the Dead

The stock will again be traded on the ASX from 9th May. My shares are likely worth only $20 or so. After the capital reconstruction I have 2666 shares and new shares have been issued at around 1 cent per share. Though I already wrote them down to zero in my accounts. When the company last traded in March 2006 they were worth upwards of $A11,000.

First task will be to make sure that Commonwealth Securities reinstates my shareholding correctly. I probably don't need the capital loss this year (my current taxable net gain is $A589) unless my Australian managed funds distribute significant capital gains on 30th June but I guess I might as well sell and then carry forward the excess capital loss to next year. Last year, though, my funds distributed $A12,000 in capital gains. But as most of that was long-term gains, only $A6,600 would have been taxable in Australia (I lived in the US at the time). After this year's negative share price performance I doubt distributed gains will be so high.

I'm expecting my Australian tax bill to be zero for 2007-8 (Australian tax years run from July 1st to June 30th the next year). My tax liability on dividends will be wiped out by interest deductions and franking credits (in Australia we get credits for corporation tax paid by the company paying the dividend to avoid double taxation, unlike C-corporations in the US). Snork Maiden will certainly get a refund as she didn't work till October 1st and if my bill is zero she should be able to claim me as a dependent. An additional advantage of a zero tax bill is that I won't have to pay quarterly estimated tax payments during 2008-9 (I think).

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