Brandon is employed full time as a Senior Officer with the commonwealth Department of the Environment (CDE) in Sydney. For many years, he has also been actively involved in the share market, which occupies him about 20 hours per week. Because the markets he trades online are open only during business hours, it was agreed with his employer that he would make up any lost time by working back after hours. Brandon utlised margin loans, provided by a broker, to manage a diverse portfolio of shares.

In the 2009 income year, there were 200 share transactions with a turnover of $950000. Because of the Global Finances Crisis, however there were only 10 transacrions with turnover of $100,000 in the following income year. The average number of share transactions increased to around 150 with a turnover value of $550,000 for each of the 2011 and 2012 income years.

In year ended 30 June 2013, Brandon sustained a $125000 loss from his share market activities where only 45 transactions were conducted. The majority of shares traded in that year were in blue stock companies with a small fraction representing speculative shares.

Brandon has always utilized the services of Commsec (an online broker with share market trading information) and other financial institutions to assist in his research and decision-making and he subscribes to the Bloomberg Commodity outlook, a monthly source for fundamental and technical analysis, data and insight on energy, metals and agriculture.

As a result of the recent audit of Brandons tax affairs,on 20 November 2018 the Australian Tax Office (ATO) issued Brandon with an arranged assessment denying him the deduction for the $125,000 loss he incurred in 2013. Advise Brandon

1. Whether he is entitled to claim a deduction for the loss of $125,000 incurred in 2013. (15)
2. Whether the ATO has pohas power to issue Brandon with an amended assessment in relation to the loss sustained in the 2013 tax year and how can Brandon seek to have it set aside?

• Review and appeals page 1181