I recently switched to Interactive Brokers (from Degiro). I currently only own VWRL and intend to hold it until I reach FI. After MPs latest Post on margin trading I got interested in the topic. I’m not particularly afraid of being classified as a professional investor (although margin trading seems to violate at least one indicator), but I’m more worried what this means for my tax declaration. Especially, since I’m a B-permit holder.
Any experience with that?
Depending on the leverage you could be classified as a margin trader. However: If you use moderate leverage (< 1.3) and have some form of dividends, that shouldn’t be a problem. Also: You only get taxed on realized capital gains, not on “Buchgewinn” probably no country on earth taxes you on that.
The debt + interest can be deducted. In my tax software there is a dropdown with different loan categories, one is “Lombardkredit” this is a margin loan.
But I just started early in January this year (what a timing lol) so I don’t know how they will treat me.
Just read the Kreisschreiben of the ESTV an make sure your taxable dividends > deductible interest.
And don’t speculate with options and short frequency trades etc.