Professional investor/trader status

https://forum.mustachianpost.com/t/interactive-brokers-which-reports-needed-for-tax-declaration/4270/34

Could we maybe make a dedicated thread on the professional trader status ? If anyone asks that same question each time they sell a piece of security we are not out of the woods…

You have to ask yourself how does your profit compares to your usual revenues, did you make a 5 k profit but earn 100 k a year ? then you are not going to be tagged as such because of a single transaction. Did you make a 1 million profit trading options on the recent $GME trade then you might be a candidate for that price.

That being said, you are not required to disclose any single trade you did while filling in your tax return, only the dividends and the state of your portfolio at the end of the year are required. If there is a discrepancy between your wealth at the end of the previous year and your wealth at the end of the current year and that discrepancy cannot be explained with your declared income the tax authority will ask you to justify and that’s when you may be flagged as a pro trader in case this increase results from a massive trading gain.

Another interesting source on that topic : link , point 3 of that document describes the usual process to become pro trader, in line with what’s above.

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