Pretty certain it’s 0%. There’s nothing here that looks like professional behavior.
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Exactly - case closed (on this single criterion) by applying common sense.
It can be assumed in all but very extraordinary cases: if capital gains are less than half of the income, they usually are not considered to substitute „normal“ taxable income.
Note that even when capital gains are substituting for other (taxable) income, you still will rarely be considered a professional trader. You may live from proceeds of selling assets without being taxed as a professional trader - exactly as you describe (you sell in one year).
Hi, as a result from another question I posted, I was wondering if this rule “You hold your assets for over six months” can be ignored if the stock is sold for less than what I have paid. For example I bought Nio and don’t longer believe in it. I’m holding it since some months, but less than 6 months. Can this trade me anyway classify as a professionell trader?
It’s probably not a yes/no question and I would need to ask the tax department, but I thought I give it a try and it maybe is interesting for others as well. Thanks
No.
It has been discussed before in this forum. If you search for “professional trader” you’ll find a lot of information.
It seems to take a lot to be classified as a “professional trader”. I’ve never heard of it happening to anyone.
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Thanks and sorry if this has been already asked. I searched and found topics, but nothing that answers if selling with non profit would count towards that rule. I will search again, sorry.
From what I understand from reading the other posts it typically takes a lot more than just fulfilling one criteria of the list to be classified as a professional trader.
See for instance here: https://forum.mustachianpost.com/t/professional-trader-status-court-cases/7863 and Does margin interest rate trading switch you to professional trader?
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Thanks Sandro
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Especially if you have losses, you’re guaranteed to be classified as non-pro 
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There are actually quite a few court cases where people have lost money day trading options. They sued to be classified as professional traders so they could deduct their losses. But the courts say that the activity was not aimed at making profits, as the losses show. Therefore, it cannot be considered a professional activity. 
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That’s what I hope 
and actually I am.
Well it would be good for you to be classified pro, you’d deduct the losses from income (that’s why they won’t do it).
As far as I know that can’t be reverted. My losses are not high enough and the profits would be taxed. I think this only makes sense if you loose much more than your profit.
Piggy-backing here: Would you know if I run a risk by “rearranging” my porfolio - i.e., selling VWRL which I have been holding (and incrasing) since 2021 and buying FWRA (Acc, lower TER, but higher spread) instead?
What about liquidating the whole or part of stock/ETF portfolio and re-buying (same or different stocks/ETFs) with another bank (i.e., bank change, avoidance of transfer costs)?
No
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No risk. (Do you know anyone who would just rebalance and call themself a professional trader? )
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the question is what is the advantage of moving from VWRL to FWRA ?
If it is TER then it is not the only thing that matters. Best to check the Tracking difference versus their indexes.
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Thanks! I agree, TER is not everything. I like the fact that it is accumlating: no quarterly payouts and currency conversions (fees), automatic re-investment of dividends. FWRA is still young, VWRL’s parameters solid (tracking difference!). But yeah, maybe not rush things and see how tracking difference and spread develop for FWRA.
The fear of being deemed a professional trader being voiced on this forum is inversely correlated to your actual chances and risk of the tax office doing it.
I can’t really remember someone asking “But what about it if I sell x and purchase y, wouldn’t I violate rule z and become a professional trader blablabla” and me ever having to (silently) agree or wonder: “Yeah, that sounds dangerous. I wouldn’t be surprised if he/she is.”
There’ve two or three occasions though that went like “How should I declare my ten dozens of IBKR transactions and the futures or options I’ve bought or sold to the tax office - oh, and what about that margin interest, before I forget? Thank’s for any help, I’m not a professional or anything.”
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OK, let’s do more interesting example
Hypothetical Hans Mustermann
- earns 150k,
- has portfolio of 5m CHF, consisting of 100% ETF on S&P500, he invested couple years ago 2.5M, it went up 100%,
- has developed habit of gambling, and every year makes a lot of transactions flipping TSLA, APPL, and some ETF for very short time.
Last point he does on margin, lets say couple times per month, on margin of max 250k CHF. It goes more or less OK, and makes about 30k CHF per year.
150k he earns covers 100% of his needs, he actually is able to save from that, so extra 30k CHF is not income-replacement, but just is reinvested in stonks.
Now would tax office be happy to classify said person as pro?
He does make 30k from gambling on stonks, but actually makes much more (lets say 10% of 5M CHF = 500k) from totally normal portfolio part, held for years. To that normal part he actually does invest his savings from salary.
Would tax office just add 30k to 150k and tax 180k as income?
Second question - lets say that 5M S&P ETF has actually TER of 0.8% and he learned he can buy something much cheaper from Vanguard for 5 bps. He would like to rebalance everything into new ETF.
Would that suddenly add 2.5 M CHF to tax bill?
Third one if you let me is being considered pro one-way street? Once you’re in there’s no way out?
First nobody knows and depends on the tax person.
Second, I dont think even then they would classify him as pro. His income is way more than what he earns with the trading.
If you violate only one rule, in this case the 6 months holding rule, you are gucci.
You can even use margin, as long as the margin interest is lower than your total dividend income (iIrc, need to check that again, but there is balance between margin and taxable dividend income).
On the rebalancing: no problem at all as he held for more than 6 months. But IF they would classify him as pro, from that point any gain is taxable and rebalancing would cause an insane tax bill.
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