ETF Short term capital gains taxation in ICTAX

Taxes
1

Hi,

given ETF

If we look at ICTax calculation we see:

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  • ordinary income taxed (OK),
  • long term capital gains marked as Kapitalgewinn and not taxed (nice),
  • but short term capital gains taxed as ordinary income.

Do you know if this is correct? Is the distinction between short and long term cap gains specified in tax law, or maybe it’s just incorrect data in ICTax?

Cheers

1 Like
2

Could be incorrect. I wondered myself this as well.

For example all of KMLM‘s distributions are tax free cap gains. But they shouldnt differ much from cta.

That ordinary income is taxed is clear. But any cap gain should be tax free.

There is this pdf: https://froriep.com/wp-content/uploads/Marcel_Jung_Taxation_of_structured_products.pdf

So should be tax free in my opinion.

3

talking about KMLM - could you claim US withholding tax back? Not sure if Tax autorities will bark when you want to claim something back from then; but you don’t pay tax on the distribution as such.

4

Your article dated from 2008. The law changed mutliple times in the meantime.

I would recommend the reading of the Circ 15 for the latest information related to structured products.

The SFTA updated some data the last 24h

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5

Hi,

care to TLDR of circ 15? Difficult for me to parse it.

Also what changed on your screenshot of CTA? I don’t really see any difference regarding dividend from 26th.

Different question - Simplify is pretty good with listing all 3, income, short and long term cap gains.

Here there is nothing about distributions other than:

Distribution Frequency: Quarterly (Ordinary Income), Annual (Capital Gains)

And looking at 2022 I see similar thing:

$1.1822 dividend = 0.7093+0.4729

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So two out of three: income, ST, LT are taxed.

Is there some website or data provider that specifies accurate data for each distribution? Here I can only do guesswork which one was income, which one short term cap gains?

6

they added two taxables income (July and September) you didn’t have before.

7

I trimmed that table in screenshot to have only december :wink:

8

I may have found the reason (thanks chat gpt plus data analyst)

It said that intransparent products have to be fully taxed. So it might be that cta isnt fully transparent in what kind of options/futures it trades and the amounts? And only the transaprent capital gains part is therefore tax free.

I know that KMLM is 100% transparent in what they do and it is tax free, as you would assume.

9

So I asked the source itself and got this response:

Die Publikation ist korrekt. Short Term Capital Gains sind steuerpflichtig, nur Long Term Capital Gains gelten als Kapitalgewinn.

Q Ausschüttung mit Quellensteuerabzug (steuerpflichtig)
Z kurzfristiger Kapitalgewinn ohne Quellensteuerabzug (steuerpflichtig)
KG langfristiger Kapitalgewinn (steuerfrei)

I still can’t find any actual distinction in those circulars etc but I guess it might be just a “taxation convention”.

10

Sounds pretty arbitrary tbh.

How are these defined?

11

I don’t know where ictadmin get the data, I have also seen in the past misallign data.