Dear stockbrokers, dear stockbrokers,

It must be. This year we have to look into the depots again, specifically we have to look into our tax and loss pots. In the following article, you will learn how you can use small measures to achieve large tax refunds for yourself this year.

The contribution is particularly relevant for you if your two loss pots for equities and other items are empty. Then it is very likely that you have paid the German tax authorities quite a bit of capital gains tax in the current year.

A practical note on the side: With a reasonable broker, you can find the tax information in your custody account information, for example under the tab Tax pots, taxes etc. Some brokers will not automatically provide you with this information. Then contact your broker directly! Your tax data is always available to him.

To the point: The German and, by the way, also the Austrian system have a peculiarity. Taxation is not necessarily based on our real asset growth, but rather on our realized asset growth. We are feeling this situation particularly drastically this year.

In 2022, for example, many of us took book profits with us that had been built up in the depot in the past. So if you realized price gains of 10,000 euros, you paid 2,637.50 euros to the tax authorities immediately after completing the transaction. The tax authorities are not interested in the fact that your portfolio 2022 has very likely lost net.

In fact, you are therefore liable for tax, even though your deposit assets have shrunk. It goes without saying that we have to take action in this crazy situation in the strictest sense of the word. Because none of us will ever get off to a good start with our portfolio if we also pay taxes during the slump and thus experience a kind of double slump.

In practice, this tax-related double bear market can be averted very easily with just a few transactions. In this specific case, simply select a few weak performers from your depot and turn them over. What does the stockbroker mean by „turn around“?

If a position is significantly negative, it is sold in order to make the realized loss tax-deductible. So if you manage to realize price losses worth 10,000 euros, the tax authorities will immediately refund all previously paid capital gains taxes of 2,637.50 euros.

At the end, you simply buy back the previously sold share. The book loss acts as a tax saver for you and you have not even changed your portfolio and continue to benefit from the potential of your strategy. This process of selling with subsequent repurchase is also called “turning” in stockbroker jargon.

Watch out for deadlines! Please note that a refund of paid capital gains tax is only ever possible in the same calendar year. In English: Taxes that have not yet been reclaimed by December 31 remain irrevocably in the state coffers. That’s why you have to go to the depot again this year, even if you’d rather be sitting by the Christmas tree with your family.

Get an overview of your tax data today. I can well imagine that a rich tax refund is waiting for you. Such a warm shower of money at the end of a strenuous stock market year, that’s a nice thing, isn’t it?

Incidentally, at the end of the day, a mediocre stockbroker with tax competence always performs better in the long term than a stock exchange genius without tax competence. Of course, none of us has to choose. With me, both as a stockbroker and as a taxpayer, you are competent to take full advantage of your opportunities and rights.

You can find out more about my work here.

With kind regards

Her

Alexander of Parseval

Analyst and Investment Advisor

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