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poot 22.10.2020 11:54

Tax return: buy/sell shares within 1 yr
 
Hi all, as I understand it, I just need to declare the shares in my portfolio as of 31/12?


So what if I bought some shares in say March, and sold them by November: would this need to be declared somehow?


thanks for any clarification (ZH canton, if that makes any difference....)

fatmanfilms 22.10.2020 12:03

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by poot (Post 3229786)
Hi all, as I understand it, I just need to declare the shares in my portfolio as of 31/12?


So what if I bought some shares in say March, and sold them by November: would this need to be declared somehow?


thanks for any clarification (ZH canton, if that makes any difference....)

Thats how I did it, I did not trade that often but I suspect there would have been 1 or 2 shares per year that fell into that category & did not pay a dividend.
They don't seem to be very interested in fine details, I held accumulating units with Fundsmith & never showed any rolled up dividends over 4/5 years they never queried it. One year they claimed I had made 5 mistakes, I had left of the value of my rental deposit account, showing just interest. I appealed 4 of there points & they accepted the appeal on all 5 points!

poot 22.10.2020 12:25

Re: Tax return: buy/sell shares within 1 yr
 
Thanks for the info! Sounds good.

So as evidence would you just show for example an extract of your brokerage from 31/12 which lists the positions on it?

roegner 22.10.2020 12:26

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by poot (Post 3229811)
Thanks for the info! Sounds good.

So as evidence would you just show for example an extract of your brokerage from 31/12 which lists the positions on it?


I just show what I have per 31.12 (now with a list provided by the bank)

fatmanfilms 22.10.2020 12:28

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by poot (Post 3229811)
Thanks for the info! Sounds good.

So as evidence would you just show for example an extract of your brokerage from 31/12 which lists the positions on it?

I provided 31/12 statements for all brokerage accounts, I used the closing USD/EURO/ exchange rates, never looked at the official Swiss rates.
Dividends I valued at the daily FX rate.

Enohzee 22.10.2020 13:04

Re: Tax return: buy/sell shares within 1 yr
 
I just declare the value of all holdings at 31/12 and dividends received during the year. Never had an issue. I don't go into much detail really - more detail on the DA-1 though.

There are some rules that apply when considering if you are a professional investor (will increase taxes you pay). E.g. if you have a high portfolio turnover, or if you hold shares for short periods of time. It's up to the discretion of the tax dept. to determine your status.

Enohzee 22.10.2020 13:05

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by fatmanfilms (Post 3229815)
I provided 31/12 statements for all brokerage accounts, I used the closing USD/EURO/ exchange rates, never looked at the official Swiss rates.
Dividends I valued at the daily FX rate.

I've been questioned on the FX rate, they changed to the official swiss ones for my tax return, but was all fine

poot 22.10.2020 14:20

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by Enohzee (Post 3229843)
I just declare the value of all holdings at 31/12 and dividends received during the year. Never had an issue. I don't go into much detail really - more detail on the DA-1 though.

There are some rules that apply when considering if you are a professional investor (will increase taxes you pay). E.g. if you have a high portfolio turnover, or if you hold shares for short periods of time. It's up to the discretion of the tax dept. to determine your status.


If I'm right in thinking, the DA-1 is only optional, so if I want to claim something back for withholding tax on dividends?


Also I guess the tax office would never know how high your portfolio turnover is, assuming you only show positions as of 31/12......

Enohzee 23.10.2020 09:48

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by poot (Post 3229884)
If I'm right in thinking, the DA-1 is only optional, so if I want to claim something back for withholding tax on dividends?


Also I guess the tax office would never know how high your portfolio turnover is, assuming you only show positions as of 31/12......

Correct for DA-1.

Correct for turnover, but I imagine they could ask to see your trades, if they wanted to.

They could figure out based on your positions and your capital gains how much your portfolio turnover is likely to be... and could then ask for that information.

fatmanfilms 23.10.2020 11:40

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by Enohzee (Post 3230278)
Correct for DA-1.

Correct for turnover, but I imagine they could ask to see your trades, if they wanted to.

They could figure out based on your positions and your capital gains how much your portfolio turnover is likely to be... and could then ask for that information.

Quite difficult to do as they do not know of deposits / withdrawals, If you trade a lot there is likely to be plenty of losses too. Most fund managers who trade every day, multiple times a day under perform the index they attempt to beat.

poot 23.10.2020 11:51

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by fatmanfilms (Post 3230346)
Quite difficult to do as they do not know of deposits / withdrawals, If you trade a lot there is likely to be plenty of losses too. Most fund managers who trade every day, multiple times a day under perform the index they attempt to beat.


Indeed......and speaking of deposits, would you declare the cash balance in your broker the same as cash in any other bank account?


I assume you don't declare the total net liquidation value of your brokerage account, as this would mean the total wealth amount would double, due to adding together both the balance of the brokerage, and the value of the stocks.

fatmanfilms 23.10.2020 11:57

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by poot (Post 3230356)
Indeed......and speaking of deposits, would you declare the cash balance in your broker the same as cash in any other bank account?


I assume you don't declare the total net liquidation value of your brokerage account, as this would mean the total wealth amount would double, due to adding together both the balance of the brokerage, and the value of the stocks.

Cash balance as normal.

Landers 23.10.2020 14:35

Re: Tax return: buy/sell shares within 1 yr
 
Just like if you closed a bank account but received interest, you would declare the interest but the end of year value would be 0.


So for shares you enter your dates of trades and it'll work out the dividends for you even if the end balance is 0.
If the holdings are not in the system then you enter the dividends manually.

Enohzee 23.10.2020 14:41

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by fatmanfilms (Post 3230346)
Quite difficult to do as they do not know of deposits / withdrawals, If you trade a lot there is likely to be plenty of losses too. Most fund managers who trade every day, multiple times a day under perform the index they attempt to beat.

That's fair... but.... lets say a trader is a genius / incredibly lucky. Makes a bunch of very profitable trades and ends up with double their wealth at end of the year, and different holdings.

Would make sense the authorities would then ask for a trading record to see where the wealth has come from.

fatmanfilms 23.10.2020 16:13

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by Enohzee (Post 3230452)
That's fair... but.... lets say a trader is a genius / incredibly lucky. Makes a bunch of very profitable trades and ends up with double their wealth at end of the year, and different holdings.

Would make sense the authorities would then ask for a trading record to see where the wealth has come from.

Quite possibly, it really depends what doubling their wealth entails 10k-20k or 1 million to 2 million?

trixxiee 23.10.2020 17:07

Re: Tax return: buy/sell shares within 1 yr
 
Let me piggyback...What if I am taxed at source and do not file a tax declaration. Since March I started buying every month some US stocks using Interactive Brokers. Do I need to declare my earnings?

Landers 23.10.2020 17:37

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by fatmanfilms (Post 3230488)
Quite possibly, it really depends what doubling their wealth entails 10k-20k or 1 million to 2 million?




I think there's no "depends" - if you have income from dividends (that haven't already been subject to Swiss withholding tax) then you should declare them.

fatmanfilms 23.10.2020 17:42

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by Landers (Post 3230523)
I think there's no "depends" - if you have income from dividends (that haven't already been subject to Swiss withholding tax) then you should declare them.

I never for 1 moment suggested otherwise. If the dividends have been subject to Swiss withholding tax all the more reason to declare.

LuganoPirate 23.10.2020 17:45

Re: Tax return: buy/sell shares within 1 yr
 
I don't know the rules here, but in the UK and USA, it's called bed and breakfasting or a Wash Sale in the US. Here's the definition:

The IRS wash sale rules may apply when you sell or trade a stock or other security at a loss. It will be classified as a wash sale if you do one of the following things within a 61-day period beginning 30 days before the sale and ending 30 days after it:
  • Buy substantially identical stock or securities
  • Acquire substantially identical stock or securities in a fully taxable trade
  • Acquire a contract or option to buy substantially identical stock or securities
The UK has a similar rule though not sure of the time period. What used to happen is just before the end of the tax year at market close, clients would sell their loss making shares, and buy them back the next day on market open. They could then establish a loss to set off against capital gains.

That was clamped down on. Of course there is no capital gains in most of Switzerland (unless you're classed as a professional trader) but concerning a tax return I'd think if you have say CHF 100,000 cash + CHF 100,000 in shares and you sell the shares, you still have assets of CHF 200,000 for wealth tax purposes.

HickvonFrick 23.10.2020 17:50

Re: Tax return: buy/sell shares within 1 yr
 
Quote:

Originally Posted by Enohzee (Post 3230452)
That's fair... but.... lets say a trader is a genius / incredibly lucky. Makes a bunch of very profitable trades and ends up with double their wealth at end of the year, and different holdings.

Would make sense the authorities would then ask for a trading record to see where the wealth has come from.

Im up over well over 50% this year - let's see :p


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