RetireJapan

1. Offsetting losses. Let's say I own shares in A and B. Coming up to the end of the tax year, my shares in A have doubled in value, and my shares in B have doubled in value. Let's say I sell all of A -> this would make me susceptible to capital gains tax on the profit. Is there any downside to selling B at a loss and buying it back straight away? I would assume that on paper it looks like I've sold at a loss, and so that loss value offsets some of the gains taxes from A, but in reality my position in B hasn't changed.

Okay, so let's say a 100k profit in A and a 100k loss in B. Is this a direct cancel out? Or can I only cancel 20k of the loss in B (equiv. to the CG tax I pay on my profit for A)? Also, is there an overall limit to how much loss can be offset?

TokyoWart wrote: ↑Wed May 26, 2021 12:28 pm

Okay, so let's say a 100k profit in A and a 100k loss in B. Is this a direct cancel out? Or can I only cancel 20k of the loss in B (equiv. to the CG tax I pay on my profit for A)? Also, is there an overall limit to how much loss can be offset?

On a 100,000 yen capital gain you'll pay around 20,000 in tax in Japan. If you realize a loss of 100,000 yen it can eliminate that tax or eliminate 20,000 worth of taxes on your dividends (100,000 yen in dividends would be taxed at about 20,000 yen) in Japan. There's no limit in absolute terms (e.g. a 100 million yen realized capital loss can offset a 100 million yen capital gain) but if your losses exceed your gains and dividends you can only roll them over for up to 3 years.

Hi, I'm a complete newbie to this myself but say I have a specific account on Rakuten (特定口座) would they handle this whole thing automatically or is this one of those things that we need to file by ourselves?

adamu wrote: ↑Thu Mar 18, 2021 5:57 pm

Viralriver wrote: ↑Thu Mar 18, 2021 8:35 am Definitely not a simple question

Yeah, post nomikai this is too much to take in

It's technically possible that you're at a paper loss in USD, but comparing the aggregate yen value at purchase times to the current yen value results in a profit, due to the dollar being worth more. Although your stocks are worth less, the dollar value still gets you more yen than before (but just holding dollars not stocks would have been better).

As for the account balance, the available amount often takes into account transactions that have not cleared yet, so if you made a recent sale, it usually takes a few days (until the 受渡日) in until you can actually use that money. Likewise a purchase order may lower your buying power even though the funds have not yet been debited.

beanhead wrote: ↑Wed Apr 14, 2021 12:51 am

donut wrote: ↑Tue Apr 13, 2021 1:20 pm
Am I reading the settings page correctly, my account is set up so I the taxing is done automatically?
With these settings, is there anything I have to do for the year end tax? Like print and attach something.
I am asking to make sure (and have the courage to do it at last).

Yep, it is set up correctly. My understanding is that the 20.315 % will be automatically taken for any capital gains you make on those investments you purchase in your tokutei account. In this case, you do not need to submit anything.

If you wanted to claim that capital gains tax back (offset losses), then you would need to submit at year-end.

Tkydon wrote: ↑Mon Jul 05, 2021 2:20 pm
That is nearly correct. If your total income from these Japanese sources other than your your Employment Income, then, as tax has been withheld at 20.315 % (15% National, 0.315 Reconstruction and 5% residential Taxes), then you do not have to file.
But, If your income from these sources other than your your Employment Income exceeds Y200,000, then you Must file, even though tax has been withheld at 20.315 % (15% National, 0.315 Reconstruction and 5% Residential Taxes).
If your income is from from accounts that have not been subject to withholding, or from overseas sources, then you Must file, as that income has been subject to withholding tax at source.

zeroshiki wrote: ↑Mon Jul 05, 2021 2:33 pm

Tkydon wrote: ↑Mon Jul 05, 2021 2:20 pm
That is nearly correct. If your total income from these Japanese sources other than your your Employment Income, then, as tax has been withheld at 20.315 % (15% National, 0.315 Reconstruction and 5% residential Taxes), then you do not have to file.
But, If your income from these sources other than your your Employment Income exceeds Y200,000, then you Must file, even though tax has been withheld at 20.315 % (15% National, 0.315 Reconstruction and 5% Residential Taxes).
If your income is from from accounts that have not been subject to withholding, or from overseas sources, then you Must file, as that income has been subject to withholding tax at source.

So if you make a 200k profit in any given year, you're forced to do a kakutei shinkoku? Is that right?