How to disclose stocks positions to tax authorities

[San_Francisco]

@Alvo

I only know Kreisschreiben Nr. 36 and it states when you aren’t a professional trader

Exactly.
There you have it: “a non-subjective way to classify”.
That’s exactly what you wanted (well… kind of. We’ll get to that).

@Alvo

Please just tell me I’m wrong and its crystal clear

It’s crystal clear when you are “safe”, i.e. when you are not classified a professional trader.

You just don’t seem to like the conclusion since your very personal behaviour doesn’t entirely fall within those “safe” criteria. But that’s just …your personal (investment) choice?!

@Alvo

Sorry but that’s not clearly laid out for me.

The preliminary criteria on the other hand are very clear. I quote (emphasis them, not me):

Die Steuerbehörden gehen in jedem Fall von einer privaten Vermögensverwaltung bzw. von steuerfreien privaten Kapitalgewinnen aus, wenn die nachfolgenden Kriterien kumulativ erfüllt sind.

1. Die Haltedauer der veräusserten Wertschriften beträgt mindestens 6 Monate.
2. Das Transaktionsvolumen (entspricht der Summe aller Kaufpreise und Verkaufserlöse) pro Kalenderjahr beträgt gesamthaft nicht mehr als das Fünffache des Wertschriften- und Guthabenbestands zu Beginn der Steuerperiode.
3. Das Erzielen von Kapitalgewinnen aus Wertschriftengeschäften bildet keine Notwendigkeit, um fehlende oder wegfallende Einkünfte zur Lebenshaltung zu ersetzen. Das ist regelmässig dann der Fall, wenn die realisierten Kapitalgewinne weniger als 50% des Reineinkommens in der Steuerperiode betragen.
4. Die Anlagen sind nicht fremdfinanziert oder die steuerbaren Vermögenserträge aus den Wertschriften (wie z.B. Zinsen, Dividenden, usw.) sind grösser als die anteiligen Schuldzinsen.
5. Der Kauf und Verkauf von Derivaten (insbesondere Optionen) beschränkt sich auf die Absicherung von eigenen Wertschriftenpositionen.

@Alvo

Please just tell me I’m wrong and its crystal clear that nobody of us poor mustachians is a professional trader

That’s what you want to hear.

For practical purposes, they tax authorities are busy and are (with 99.9% certainty) not going classify you as a professional trader for an occasional breach of the given criteria. Such as a one-time realisation of large gains that accounts for more than half of your income in a year. Or YOLOing on some stock you heard about on the internet once.

It can be reasonably anticipated with common sense that that alone doesn’t make you a professional.

[Alvo]

@San_Francisco

There you have it: “a non-subjective way to classify”.
That’s exactly what you wanted (well… kind of. We’ll get to that).

Haha no what I want is to identify a professional trader not a nonprofessional trader.
I know how to stay safe, but I don’t know what happens in a situation like we have here with arthur.

@San_Francisco

For practical purposes, they tax authorities are busy and are (with 99.9% certainty) not going classify you as a professional trader for an occasional breach of the given criteria. Such as a one-time realisation of large gains that accounts for more than half of your income in a year. Or YOLOing on some stock you heard about on the internet once.

THAT’S what I want to hear and what I assume, but it seems to be subjective. The outcome could depend on the person processing your tax declaration.

I get what you mean but I’m not sure if I could make clear what I mean.
I guess we talk about the same thing.

@San_Francisco

It can be reasonably anticipated with common sense that that alone doesn’t make you a professional.

Your trust in tax authorities seems to much bigger than mine.

[ma0]

It’s Time for Real-Time Settlement — Under the Hood

Regarding professional trading: Please stop discussing it. It’s not that they are going to cut your head… You pay more taxes once and that’s it. (It won’t happen, though)

[dom.swiss]

There was a time when I put all securities positions at year end in the tax form. Then I checked what I had submitted the previous year and I added all corresponding buy/sell transactions to explain the delta. I didn’t bother about what had happened within the year. I started submitting tax returns when they were still handwritten and YE positions was the way to do it. Not 100% compliant of me, as an afterthought. I was never challenged in the later electronic era, as the tax authorities had bigger fish to fry.

[xorfish]

I just report my year end positions and the total dividends reported by IB.

The transactions are documented in the activity report.

[arthur]

Attaching the activity report gives maximum transparency clearly.
But legally you are not required to hand it in?
Account for all dividends and declare the EOY portfolio and that is it, I thought.

[xorfish]

I don’t want to be a pain in the ass for the people that verify my taxes.

[San_Francisco]

@arthur

But legally you are not required to hand it in?

Couldn’t they request documents / evidence though?

@arthur

Account for all dividends and declare the EOY portfolio and that is it, I thought.

Isn‘t that much more laborious though?

My IB account is literally one line in the tax declaration with the account balance and total of income.

[rolandinho]

@San_Francisco

My IB account is literally one line in the tax declaration with the account balance and total of income

Is that because you only have one position at IB like VT (or similar) ? Or are you summarising 10 different positions as “various stocks” and putting down total value & total dividends? What about buy/sell if on various dates etc?
If your one line works, I’m putting in much too much effort!

[San_Francisco]

@rolandinho

Is that because you only have one position at IB like VT (or similar)

Quite the contrary! I‘m doing it cause I’m too lazy to list all my positions manually.

I just create a new item (row) in the tax software, select „Steuerauszug/Depot“ (tax statement/securities account) and copy total balance and total income for the year?! That‘s it. Has been accepted for a couple of years.

[LeStache]

This tax discussion is way too rational for a GME thread and severely lacking in YOLOs. Can we move it to a suitable thread? I’m sure there’s one around somewhere.

P.S. My accountant listed all my shares as one EOY position with ”Diverse Aktien name of broker. I think the EOY positions were an attachment.

[arthur]

Way too rational, you are right!

[Bojack]

I stopped reading this thread, have like 150 unread posts. Don’t tell me I have to now sift through it to find the ones to split?

edit: thanks @Julianek

[MUFC_OK]

I filled in all stocks separatly and I am struggling to figure out how to put dividend (paid out quarterly, not held for all 4 quarters)

[San_Francisco]

Just enter the purchase and sale transactions (number of shares and date), and it will figure out the dividends automatically (from ICtax, as long as the stocks are listed)?!

[MUFC_OK]

I don‘t think this works with taxme.ch

[rolandinho]

@San_Francisco

I just create a new item (row) in the tax software, select „Steuerauszug/Depot“ (tax statement/securities account) and copy total balance and total income for the year?! That‘s it. Has been accepted for a couple of years.

Wow. That may be quite a game-changer for me, cos I’ve built up quite a few small positions recently. Thank you. Will try it out this tax declaration season! Sorry one more question - Are yours all US stocks, so all dividends have 15% WHT & go on DA-1? I have some Smithson ETFs @ IB, so that’d be separate as there wouldn’t be 15% WHT on that… although not sure now if Smithson pays a dividend at all

[San_Francisco]

@rolandinho

Sorry one more question - Are yours all US stocks, so all dividends have 15% WHT & go on DA-1?

No, never been US-only.

I could do the same in DA-1 in my tax software, never tried that though.

[Mobius]

I’ve once asked this to the tax inspector who worked through my taxes the year before (crazy right? In Switzerland you can speak to the person who’s actually going over your tax declaration!).

The important thing is to list any position changes you’ve done during the tax year since that influences the dividends (income) you’ll have received. If you purchased an ETF in December and missed all dividends, you don’t want to be taxed for that. On the other hand, they don’t care about the dates of stock purchased in previous years, since you’ll have collected the full year of dividends anyway. In this case, you should consolidate them per ETF/stock.

[San_Francisco]

@San_Francisco

I just create a new item (row) in the tax software, select „Steuerauszug/Depot“ (tax statement/securities account) and copy total balance and total income for the year?! That‘s it. Has been accepted for a couple of years.

Important note: This works for distributing ETFs (such as the VT and most if not all U.S.-domiciled ETFs).

For accumulating ETFs, IBKR would not list the “virtual” taxable income according to ICTax, so one might risk underreporting - unless you adjust or report separately.

No new info really. But I just stumbled over it, since this year is the first I’m just copying the income values (due to having switched my base currency to CHF) and not calculating income manually. (I actually had one accumulating ETF but sold before the tax “payable” date in ICTax).