Since we are talking about huge sum of money. I recommend to talk to some good tax advisor to avoid any random surprises
By the way, great work on your crypto trades. Well done 
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Make sure to talk to an expert before moving to dubai.
But one lucky bet doesn’t make you a professional trader imo Congrats 
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They won’t want to let you deduct your losses when your next gamble doesn’t pan out 
the odds of being classified as pro for this are ~zero.
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Yes. They don‘t consider everyone a trader that merely shifts his assets over once in a year.
Were you?
It seems unlikely, like other say. I don’t know what share of your net worth this is, but this could be a once in a lifetime trade. Potentially missing out because you are afraid of unlikely taxes is not rational. You are not poor, go hire a professional or two for a consultation at least.
Here is the website of the Anwaltsverband Schwyz. There is a huge list with lawyers. Ask some with websites that seem trustworthy if they know someone who specializes and would do a consultation. Find peace of mind.
PS: This bugged forum software has had me reply to @ZahliBaba , sorry.
The question of being classified as professional trader is omnipresent in this forum, but 99% is pure paranoia and misunderstanding of the ruleset. The answer is nearly always that there is virtually no risk, even for the average active investor pursuing FIRE.
And yet the exception exists: You are at risk of being classified a professional trader.
Get yourself a good tax advisor, you can afford it. And stop communicating with your tax authority, that won’t help.
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Uh, it’s kinda clear cut, it’s a lucky trade.
Maybe these were three lucky trades in an alternative asset that is a few percent points of the total net worth invested. In that case, yes, near zero risk (not zero because profit is large enough that any tax authority might simply try, but you would win that in court).
But how do you get that from the single post? I don’t see motivation, target, background or anything relating to these trades. I don’t know how much knowledge in crypto currencies that person has, how these currencies were selected and with what reasoning. I don’t see where the exit in June logic comes from, but I sure hope it isn’t relating to the six months holding period. I do see that this person just flagged their own file with the tax authority, so they will certainly have a good look. And the list goes on. There is risk in these trades, simply consider this luck is too simple.
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Hello everyone,
Since February 2022, I have had my main residence in Switzerland, and in June 2023, I submitted my first tax declaration in Switzerland for the tax year 2022. During the relevant year, I lived in Germany for the first two months and in Switzerland for the remaining ten months.
I prepared the tax declaration with the help of a fiduciary / tax advisor. However, there was a peculiarity with the securities. Although I have a relatively small portfolio of about 20,000 CHF, I conducted around 70 transactions, totaling a volume of more than 100,000 CHF, which is more than five times the initial balance (violating the Safe Harbor Rule). Since the portfolio showed an annual loss of 6.5%, I did not receive any dividends, and therefore did not derive any financial benefit from the investment, my tax advisor suggested summarizing the entire value of the portfolio as one position in the securities directory, hoping that the tax authority would not look into it in detail. Besides this position in the securities directory, my current accounts and crypto assets are listed.
Now I am worried that I might have to provide all the transaction details and, in the worst case, be classified as a commercial securities trader. What do you think? Has anyone had similar experiences or can provide some advice on my situation?
My questions are:
- Could there be issues because I summarized the transactions?
- How can I prepare if the tax authority requests detailed information?
- Has anyone had similar experiences and can give me tips on how to proceed?
Thank you in advance for your help!
Best regards,
epiktet
See my response to a similar question here:
https://forum.mustachianpost.com/t/professional-investor-status/12102/2?u=burningstone
You’ll definitely not be classified as a professional investor.
On another note, you should probably rethink your investments, 70 transactions with portfolio of 20k, I can’t magine how many transaction costs this incurred… I hope you have a low cost broker. Why so many transactions?
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I started investing in 2020 during the pandemic and before that I nearly never was active on the stock market. So the idea was to get some help from a more experienced team. Therefore I have subscribed to a stock market letter and in this letter they traded a lot. I lost some money but made my experiences and since I moved to Switzerland and especially since I found this forum here I stopped the stock market letter and went down from 75 transactions in 2022 to 45 transactions in 2023 and now 8 transaction in 2024. Also my investment style is completely different. 50% VWRL and 50% in individual stock.
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Any follow-up on that @FiredIndividual? How did it turn out?
Imagine the following situation happens:
You have an employee income of for example 100K/year, and have 1M in stocks grown over the last 10 years, where you mostly only bought in the last 10 years, not sold until now. The stocks are:
*) 400K worth of IVV (S&P 500) with 200K worth of unrealized capital gains grown over the last 10 years in them
*) 400K worth of VTI (USA) with 200K worth of unrealized capital gains grown over the last 10 years in them
*) 200K in 4 individual companies that you bought only 3 months ago
Now you rebalance and simplify your portfolio without really thinking about past trades, which includes getting into VT, and getting rid of the VTI and individual companies
You take the following steps to do this:
- sell all VTI. this means 200K worth of realized capital gains, and 400K cash
- buy 400K worth of IVV with this, now you have 800K IVV
- immediately regret that decision because you want to actually spread in VT and IVV, not have that much IVV
- sell that 400K of IVV again the same day, undoing the buy from step 2. Now you have again 400K IVV and 400K cash
- buy 400K worth of VT instead with that cash
- sell all the 4 individual company stocks (TSLA etc…) that you bought 3 months ago
- buy another 200K worth of VT with that cash
Now you have 400K IVV, 600K VT, no other stocks
Afterwards you realize this fails the ‘don’t sell stocks you bought less than 6 months ago’ and also the ‘don’t earn more capital gains than 50% of net income’. But the intention of the actions was to rebalance portfolio, not active trading
Would this sequence of actions make you a professional trader?
Also, how would the accident that happened between step 2 and 4 be treated for this when you have to declare this as professional trader? Is that sell and buy of IVV also capital gains, despite having the same amount in the end within a same day timespan?
Did you check the rest of the thread? That doesn’t sound like anything to worry about 
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Yes I read a lot of it, I never see the combination of both accidental less-than-6-months trades and being significantly above employee income happening at the same time in the examples above
I’m also curious what does happen if you are considered professional trader: are 10 years worth of capital gains taxed in a single year?
Even people who day trade derivatives that I know are not classified as pro for tax purposes, so don’t worry about rebalancing a long not leveraged portfolio.
(I still don’t remember is there was anyone on the forum who knew someone who was classified as pro)
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There is no day trading of derivatives involved here, though, it’s really about the large volume of things (this would be a huge income tax) and the 6-months thing. I think day trading derivatives is a separate issue that doesn’t answer this
I still don’t remember is there was anyone on the forum who knew someone who was classified as pro
Maybe most people don’t make such mistakes
If you’re worried about this, I’ve definitely done that kind of thing in the past. There’s nothing professional about switching from one fund to the other or rebalancing.
It’s true you’re no longer on the safe harbour rules, but that doesn’t make you professional, quoting the circular:
Selon cet arrêt, un contribuable réalise un revenu provenant d’une
activité lucrative indépendante s’il achète et vend des éléments de fortune d’une manière qui
excède la simple gestion de sa fortune privée. Il faut pour cela qu’il exerce une activité qui,
dans son ensemble, soit orientée vers l’obtention d’un revenu ou qu’il effectue des
transactions systématiquement dans l’intention de réaliser des bénéfices.
That kind of transaction doesn’t look at all they’re done to get extra short term income. Rebalancing or switching funds is a normal wealth management operation.
You can stop here. Zero “risk”.
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