Tax on active traders in Germany

[Overnight]

In America the tax rate is determined by holding period. If trade held 1 year, capital gains treatment. If less than 1 year, ordinary income.

For stocks, I thought -1 year was short-term capital gain, +1 year long-term capital gain?

 

[Scataphagos]

For stocks, I thought -1 year was short-term capital gain, +1 year long-term capital gain?

Short term capital gain and ordinary income are the same rate.

 

[Overnight]

Short term capital gain and ordinary income are the same rate.

Then why are they listed as two-different line items on the 1099? Fucking IRS inefficiencies!

 

[Scataphagos]

Then why are they listed as two-different line items on the 1099? Fucking IRS inefficiencies!

Though short term capital gains and ordinary income are taxed at the same rate, "other things" apply to ordinary income... social security and medicare taxes, for example.

The US tax code is 70,000 pages (or is it 80,000 now?)... anything but "fair"... much of it HORSE SHIT... with special interest carve-outs, sadly.

 

[Maverick2608]

No such differentiation exists in the UK either. Sounds to me like a typical 'what goes for the US, surely goes for the world' attitude.

GAT

I am happy to be wrong on this subject. Do you know whether the differentiation exists in Spain or Italy?

 

[greejan]

In Spain there was a system similar to the US (differentiation between more/less than one year holding) up until 2014 iirc, but currently everything is taxed as short-term gains rates, between 19% and 23% (the rates were lowered a few points when the law changed).

 

[virtusa]

In Spain there was a system similar to the US (differentiation between more/less than one year holding) up until 2014 iirc, but currently everything is taxed as short-term gains rates, between 19% and 23% (the rates were lowered a few points when the law changed).

Just going to the PWC website I found this:
https://taxsummaries.pwc.com/spain/individual/taxes-on-personal-income

 

[greejan]

Just going to the PWC website I found this:
https://taxsummaries.pwc.com/spain/individual/taxes-on-personal-income

That's right, from 2021 a new bracket has been added for income above 200K, at 26%. Unfortunately tax codes change constantly (usually for the worse).

 

[murray t turtle]

In America the tax rate is determined by holding period. If trade held 1 year, capital gains treatment. If less than 1 year, ordinary income.

%%
True;
unless it's a Roth or back door Roth, in that case you owe no tax

 

[Maverick2608]

In Spain there was a system similar to the US (differentiation between more/less than one year holding) up until 2014 iirc, but currently everything is taxed as short-term gains rates, between 19% and 23% (the rates were lowered a few points when the law changed).

But are you sure Spain does not tax trading income as business income if volume, frequency etc. surpasses a certain threshold (to be assessed subjectively by the tax authorities)?