3 CGT Optimization Strategies That Could Save You Thousands on US Stocks (Australian Investors)

If you're an Australian investor trading US stocks, you're probably paying way more tax than you need to.

I learned this the hard way during my first US stock tax season. After manually calculating CGT on 47 transactions, I realized I'd made costly mistakes that cost me thousands in unnecessary tax.

Here are the three biggest CGT optimization strategies that most Australian investors miss.

Strategy 1: Master the 12-Month CGT Discount Game

What if you could sell $50,000 worth of shares today and only pay tax on half the capital gains?

Australia's 50% CGT discount lets you do exactly this - but only if you've held shares for more than 12 months.

The Multi-Purchase Strategy

Most investors buy once, wait 12 months, then sell. Here's a smarter approach:

When you buy the same stock multiple times, you create multiple "parcels" with different purchase dates. This gives you flexibility to cherry-pick which parcels to sell based on how long you've held them and what price you paid.

Strategy 2: The AUD/USD Conversion Nightmare

The brutal truth: Every buy and sell needs converting to AUD using the exchange rate on that exact day.

First tax season: 47 transactions = 47 different exchange rates to look up. Time wasted: 3 hours of my life I'll never get back.

Where to Get Exchange Rates

• Yahoo Finance/Investing.com: Easy but ATO might not accept in an audit
• Reserve Bank of Australia (RBA): Official government rates, ATO-approved
• Broker rates: Usually not detailed enough

Best practice: Use RBA rates. They're legally bulletproof.

Strategy 3: Smart Selling vs FIFO

Most people hit "sell" and let their broker decide (usually FIFO - First In, First Out). But FIFO isn't always optimal for tax.

The Smart Strategy

• Step 1: Sell shares held 12+ months first (for CGT discount)
• Step 2: Among long-term holdings, sell highest cost basis first (lower gains)
• Step 3: Only use short-term holdings if needed

This optimization becomes impossible to calculate manually when you have multiple stocks with multiple purchase dates each.

The Bottom Line: Stop Doing This Manually

Your time is worth more than looking up exchange rates and calculating tax optimization strategies.

After this pain, I built an automated CGT calculator that pulls RBA exchange rates automatically, optimizes which shares to sell first, handles multiple parcels per stock, and generates accountant-ready reports.