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Old 03.03.2019, 22:01
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Offsetting net salary income with big losses on stock exchange?

Hi all,

In 2018 I had substantial losses on the stock market (more than 50% my annual income) and was wondering if it is possible to offset the net salary income with these losses and thus pay reduced taxes?

In other words, is the taxable income calculated on the net salary income alone (while stock losses are separately considered only in the wealth tax part of the tax return), or is the taxable income calculated as net salary income minus the losses?

Much appreciated if anyone knows the answer.

Cheers
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Old 03.03.2019, 22:04
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Re: Offsetting net salary income with big losses on stock exchange?

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Hi all,

In 2018 I had substantial losses on the stock market (more than 50% my annual income) and was wondering if it is possible to offset the net salary income with these losses and thus pay reduced taxes?

In other words, is the taxable income calculated on the net salary income alone (while stock losses are separately considered only in the wealth tax part of the tax return), or is the taxable income calculated as net salary income minus the losses?

Much appreciated if anyone knows the answer.

Cheers
No, there is generally no taxation of stock exchange profits or loss's
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Old 03.03.2019, 22:09
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Re: Offsetting net salary income with big losses on stock exchange?

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No, there is generally no taxation of stock exchange profits or loss's
Lets say they classify me as a professional trader. Would I be able to reduce taxes in this case?
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Old 03.03.2019, 22:15
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Re: Offsetting net salary income with big losses on stock exchange?

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Lets say they classify me as a professional trader. Would I be able to reduce taxes in this case?
If you were a professional trader but you will end up paying AVS as well as tax, so potentially well over 50% of any profits will be lost.
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Old 03.03.2019, 22:24
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Re: Offsetting net salary income with big losses on stock exchange?

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If you were a professional trader but you will end up paying AVS as well as tax, so potentially well over 50% of any profits will be lost.
Sorry, I meant classified as "professional investor", not trader. Her is a link with clarification:

https://www.moneyland.ch/en/stock-ma...ofits-tax-free

As I said I have a significant net loss (no profits) from trading. And AHV is paid from my "normal" full-time job unrelated to finance.
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Old 03.03.2019, 22:27
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Re: Offsetting net salary income with big losses on stock exchange?

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Sorry, I meant classified as "professional investor", not trader. Her is a link with clarification:

https://www.moneyland.ch/en/stock-ma...ofits-tax-free

As I said I have a significant net loss (no profits) from trading. And AHV is paid from my "normal" full-time job unrelated to finance.
The last thing anyone in their right mind would want to be classified as a professional investor. As previously said you will have to pay AVH & income tax on your profits.
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Old 03.03.2019, 22:33
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Re: Offsetting net salary income with big losses on stock exchange?

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The last thing anyone in their right mind would want to be classified as a professional investor. As previously said you will have to pay AVH & income tax on your profits.
If my total annual net income that I declare in the tax return would be less than half as a professional investor, compared to being an individual investor, then it would make sense. e.g. declaring 50k instead of 150k.
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Old 03.03.2019, 23:00
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Re: Offsetting net salary income with big losses on stock exchange?

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If my total annual net income that I declare in the tax return would be less than half as a professional investor, compared to being an individual investor, then it would make sense. e.g. declaring 50k instead of 150k.
No because you will always be a professional investor, it's not something you can choose each year as you choose.
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Old 03.03.2019, 23:04
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Re: Offsetting net salary income with big losses on stock exchange?

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Hi all,

In 2018 I had substantial losses on the stock market (more than 50% my annual income) and was wondering if it is possible to offset the net salary income with these losses and thus pay reduced taxes?

In other words, is the taxable income calculated on the net salary income alone (while stock losses are separately considered only in the wealth tax part of the tax return), or is the taxable income calculated as net salary income minus the losses?

Much appreciated if anyone knows the answer.

Cheers
Well first of all it is very unlikely that you would get this status, if you are already fully employed... next if you do get the status it will not be for a single year and it will definitely not to start in a year you made a loss.

As a private individual you are not taxed on capital gains and you are also expected to take the hit when you loose... Be very careful what you wish for because it could open a whole new can of worms for you.
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Old 04.03.2019, 01:49
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Re: Offsetting net salary income with big losses on stock exchange?

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No because you will always be a professional investor, it's not something you can choose each year as you choose.
Do you have some references for this? I thought this status was awarded on a year-to-year basis and it's merely that you can deduct losses over next 7 years
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Old 04.03.2019, 08:08
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Re: Offsetting net salary income with big losses on stock exchange?

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If my total annual net income that I declare in the tax return would be less than half as a professional investor, compared to being an individual investor, then it would make sense. e.g. declaring 50k instead of 150k.
Pennywise but pound-foolish because you'd still be considered professional in the following years.
"The last thing anyone in their right mind would want to be classified as a professional investor. As previously said you will have to pay AVH & income tax on your profits."
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Old 04.03.2019, 10:56
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Re: Offsetting net salary income with big losses on stock exchange?

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I thought this status was awarded on a year-to-year basis and it's merely that you can deduct losses over next 7 years
Do you have some references for this?
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Old 04.03.2019, 11:02
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Re: Offsetting net salary income with big losses on stock exchange?

You first.
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Old 04.03.2019, 11:43
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Re: Offsetting net salary income with big losses on stock exchange?

OP, go ahead and ask to be classified as Professional Trader/Investor in 2018 tax return.

Be prepared for Tax Office to re-open 2017 tax return, which was overflowing with capital gains.
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Old 04.03.2019, 11:45
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Re: Offsetting net salary income with big losses on stock exchange?

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Do you have some references for this?
Just let him believe that he can register as a professional in all yrs he makes a loss and deduct this loss from his income from his other job, and be a private investor in all yrs with a win to avoid any taxes.

It is what he wants to hear, and not our problem.
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Old 04.03.2019, 11:58
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Re: Offsetting net salary income with big losses on stock exchange?

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Do you have some references for this? I thought this status was awarded on a year-to-year basis and it's merely that you can deduct losses over next 7 years



Does it really matter, evidently you are not very good at trading anyway
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Old 04.03.2019, 13:28
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Re: Offsetting net salary income with big losses on stock exchange?

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OP, go ahead and ask to be classified as Professional Trader/Investor in 2018 tax return.

Be prepared for Tax Office to re-open 2017 tax return, which was overflowing with capital gains.
They will re-open more than 2017 and the new classification will also raise questions about the work permit since the OP is not here to work as an employee nor does he meet the economic sustainability requirements because of his losses.....
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Old 04.03.2019, 13:42
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Re: Offsetting net salary income with big losses on stock exchange?

Here is the Guidance (Weisung) of the Federal Tax Authority (https://www.estv.admin.ch/dam/estv/d...6-D-2012-d.pdf)

Here is position paper of Credit Suisse on the issue (https://www.credit-suisse.com/media/...handler-de.pdf)

Both in German.
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Old 04.03.2019, 14:59
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Re: Offsetting net salary income with big losses on stock exchange?

Wow..

For a few hundred francs there are plenty of people who know how to complete a tax return form in the most efficient manner possible.

But the idea that you could offset investment losses is pretty laughable. Why not offset deprecation of your car's value or your stamp collection or your reputation...
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Old 04.03.2019, 15:09
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Re: Offsetting net salary income with big losses on stock exchange?

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OP, go ahead and ask to be classified as Professional Trader/Investor in 2018 tax return.

Be prepared for Tax Office to re-open 2017 tax return, which was overflowing with capital gains.
Specially check first if you fulfilled all your tax reporting obligations in the previous years. Depending on that you might have to use your once in a life time get out of tax issues for free card (just pay owned tax).
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