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Is the taxpayer entitled to claim a deduction for brokerage fees and stamp duty costs incurred with every share trade as a share trader under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Yes. The brokerage fees and stamp duty are deductible under section 8-1 of the ITAA 1997.

The taxpayer is carrying on a business of share trading.

In respect of each share trade, the taxpayer incurs brokerage fees and stamp duty.

A general deduction under section 8-1 of the ITAA 1997 is allowed for outgoings to the extent that they are incurred in gaining or producing assessable income or in carrying on a business for that purpose, except to the extent that the expense is of a capital, private or domestic nature or incurred in gaining or producing exempt income.

The taxpayer incurs brokerage and stamp duty costs when they purchase or sell shares. The purchase of shares by a sharetrader would be regarded as the purchase of trading stock and would be considered an outgoing incurred in gaining or producing assessable income. The expenses are not considered to be of a capital, private or domestic nature.

The taxpayer is entitled to claim a deduction under section 8-1 of the ITAA 1997 for the cost of brokerage fees and stamp duty they have incurred in respect of the share trading activity.