This was an example with a round number, does more employee income increase the risk or decrease it?
The more normal income, the better 
If you are living from your income from a “usual” type of job, you are not a professional trader. If you liquidate your portfolio holdings to live off it, you are still not. If you do leveraged day trading, options writing, futures - MAYBE! 
Thank you very much everyone 
One more question still: just to know what happens in the unlikely scenario one would be considered a professional trader
Imagine you indeed are a professional trader (e.g. you have a separate account in which you do active day trading and already have professional trader status for years), and now you execute the above scenario on a different account that you used for the long term: Will in that case 10 years worth of capital gains be taxed in a single year? Will that accidental trade between 2 and 4 cause first in first out capital gains income tax?
Only the commercial wealth is impacted, this is just as if you were self employed from a tax perspective (so different accounts should be sufficient to make this clear).
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And what if the account on which you did that 10-year-held-stock trade was such a commercial account? I did not want to limit the example above… if the tax office suddenly declares you who is an employee a professional trader anyway, do you have to do things to get commercial accounts and such?
That’s a lot of if I’m not sure what you’re trying to get at.
Tax office and courts are reasonable, you won’t be taxed on the capital gains accumulated over decades because you did a bit more trading than usual at some point.
People who are professional investor already know they are professional investor
People who are not are the ones who mainly wonder if they are
Buying and holding and then selling stocks or ETFs is not professional investor. If that’s the case then everyone in this forum will be professional
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Wait, is that true? You mean that realizing gains of 400k from things bought long time ago (what @Flabbergast mostly has done here, with the exception of the 3 months), would be equally a ‘prof. trader flag’ as when realizing 400k with an intra-day trade?
Thats hard to believe?
I’m not a lawyer, but if you trade commercially (e.g. in a limited company), you are not forced to account at prices bought, but can mark to market.
So, if you are classified as a professional securities trader for a certain period, I see no reason, why you couldn’t mark to market at the beginning of that period. (@oslasho ?)
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I read Kreisscheiben nr 36, and it says, in the case that those 5 criteria are not fulfilled, an assessment is done.
In section 4.3.2 it gives the weighting of the assessment, and the most important first listed weighting, is: the frequency of trading, and the volume of trading. Things like using derivatives come only after that in importance.
So is it then not likely that they consider this as a professional trading activity after all?
I accidently replied a ‘general’ reply to your specific post, but I do have a question about your post: what does marking to market mean? Compared to when are the capital gains compared to if you mark it this way?
And is having a commercial company (limited company, …) required for doing this? Or can an individual person count for this?
If you do accounting for a business (as opposed to private/non-business activities of a natural person), you have a book. In the book you have assets, and those have values. There are laws about what those values can be. For publicly traded securities that have a market price, you can not only:
- set the value to the price bought
but alternatively:
- set the value to the market price at the beginning and end of the period.
And there might be more possibilities.
If you choose the second option, there is a difference on your balance sheet in all likeliness, and that difference will be taxed.
But of course only that difference and not the difference to the price you bought at. That you already paid in previous periods (or not, because this was private assets, and there is no capital gains tax for those).
The stocks also went up because of unrealized capital gains, do they also count for this balance sheet difference?
But I don’t have any accounting/books now since I’m a private person. If they would retroactively decide I was doing professional trading in this period, would I be able to have books/accounting about this past period? Or would I still be a private person, not be able to have this, and be required to do option 1 (value to price bought)?
Take an educated guess.
If you don’t know, and can’t reconstruct, how much you had at the beginning of a period, you can probably also not know for how much you bought.
Then the value is probably assumed as 0 and you’ll pay taxes on the whole sale price.
But reconstructing your holdings for a recent period up until now isn’t hard. All brokers can tell you what you bought and sold for many years back.
I really don’t know… I’d hope that only the income you pay to yourself (if that is something you can even do as a single-person non-company who became seen as a professional trader) would count as actual income and unrealized capital gains are not actually usable income. But I don’t know much about balance sheets currently (e.g. whether and how your stocks are listed on them)
Look, I suggest we stop the discussion here. @Flabbergast , you stop panicking and go back to live your life. This is not the first time this discussion is popping up, the arguments are always the same, and we still haven’t heard any real stories about some investors being taxed as pro traders.
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We should program some kind of bot, that auto-answers this before a post with questions regarding this gets through a filter or something 
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Hi all,
I moved from Zurich to Vaud and I am worried about being classified as a professional investor here. I am on a sabbatical from my IT job in all of 2024 and lived solely from selling stocks (no other income).
Should I go to the tax authorities myself to clarify (is this even possible?)? Or does anyone know a tax advisor specialized on such cases?
Not knowing how I will be taxed is a heavy burden on me, any help on how to gain clarity in advance would be highly appreciated.
Thank you.
Don’t worry, you won’t be classified as professional.
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Welcome, @D.Welch !
As @nabalzbhf says, don’t worry.
If you’d like to read up on some of the rules when you might be classified as a pro, there’s many (IMO) hyperbole discussions about this on this forum, typically fizzling out.
I’ve summarized my view here.
Enjoy your sabbatical!