Futures Spread Trading Taxation in Sweden

Discussion in 'Taxes and Accounting' started by Traderesque, Jan 29, 2020.

  1. Hello! I was wondering how taxation (presumably treated as a capital gain) is calculated in the following scenario when you engage in spread trading futures.

    I've read on PwC country guide for Sweden that "Losses from the sale of private real property, securities, etc. are generally only 50% or 70% deductible. A tax credit may be applicable in certain instances (see the Other tax credits and incentives section)."

    Day-1: You buy the Gold/Silver inter commodity Spread (i.e., buy GC and sell SI). You end up buying 1 GC at 1575.00 and sell 1 SI at 17.95 - a few hours later the prices drop - GC drops to 1565.00 and SI drops to 17.50 so you close out your position resulting in...
    GC: 1575 - 1565 = 10 * $100 = $1000.00 Loss
    SI: 17.95 - 17.50 = 0.40 * $5000 = $2000.00 profit
    Total profit on the above spread is $2000.00 - $1000.00 = $1000.00

    Day-2: You buy a Crude calendar spread (buy Jun-20 at 54.00 , sell Aug-20 at 55.00). You were correct again - close out the spread a few days later by selling Jun-20 at 55.00 and buying Aug-20 at 55.50.

    CL Jun-20: 55.00 - 54.00 =1 * $1000 = $1000.00 profit
    CL Aug-20: 55.00 - 55.50 = -0.5 * $1000 = -$500 loss
    Total profit on Spread = $1000 - $500 = $500 profit.

    So total profit on winning trades = $2000 + $1000 = $3000.00
    Total loss on losing trades = $1000.00 + $500 = $1500.00
    Given the above transaction how is the tax calculated?

    Will you have to pay 30% capital gains tax on $3000.00 - $1500.00 = $1500*30% = $450 (tax)?
    or $3000 - ($1500.00 * 70%) = $1950 * 30% = $585 (tax) (i.e., only 70% of the lossing trades total is offset against the winning total).

    Also, are you able to deduct transaction costs such as broker commissions and exchange transaction fees? In addition, can you also deduct trading platform fees, exchange market data feed from your profit?
  2. Overnight


    Might be tough to find a certified accountant from Sweden here. Maybe check your local area?
    tomtr27 likes this.
  3. kalinka


    You can always deduct your losses from your profits. What PWC is talking about is if you
    have a netloss after profits. Broker commissions and exchange transactions fees are deductiable
    and probably platform and datafees.
    Maverick2608 and Traderesque like this.
  4. Thank you
  5. I’ve got a response from the Swedish Tax authority on my question above - apparently the netting of losses against profits depends on the asset classes - for equity indices, forex future, bond futures you can net 100% of the loss against the profits made in those respective asset classes. But for commodities you can only net 70% of the loss against the profit.

    They said (Section A on the K4 form) for market traded stocks funds and derivatives of these including options and futures based on these instruments. There is another category (Section C) for currencies, Forex and derivatives of currencies, this category would include for example government bonds futures. And there is one category (Section D) with commodities such as oil or gold, including derivatives such as futures based on these.

    For category A there will be calculated att net total profit or loss, if it is a total plus this amount will be added to your total income from capital. But if the total is a loss only 70 % of that amount will be added as a negative to the total income from capital.

    For category C it is mostly the same all profit and loss ar netted out and if it is a net profit it will be added in total but if it is a net loss it will in this case be added as a negative in whole to the total income of capital.

    For category D, the total profits and losses are added together separately, the total profits are added to the total income of capital, the losses are reduced to 70 % and added as a negative to the total income from capital.

    The total income of capital is if it is positive taxed at 30 %, if it is negative you get a tax reduction with 30 % of the negative amount on the first 100 000 kr, if the loss is bigger than that the larger amount gives a tax reduction of 21 %.
  6. bone

    bone ET Sponsor

    In the US, you can't deduct your futures trading losses regardless of the strategy you're using.

    I would strongly caution against taking tax advice on a public internet forum. Consult a tax expert privately - it's cheaper than jail.
  7. Sig


    Wait a minute, what? I actually haven't had a futures loss so not speaking from experience (obviously haven't been trading them long enough:)) but I thought you could either count it as a capital loss and net out capital gains with the $3,000 per year restriction or do a mixed straddle election?