I am a beginner stock investor. Have I understood this correctly? For example, if I have capital gains of 1000€ and capital losses of 0€ at the end of the year, and I sell stocks that are at a 1000€ loss and buy them back immediately. Are the capital gains now zero and the tax on them 0?
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In principle, yes, but the matter is controversial and can be interpreted as tax evasion if you buy the shares back too early just to avoid paying taxes. It’s worth looking into. An article from the Finnish Securities Market Association (Pörssisäätiö) from 2010:
http://www.porssisaatio.fi/blog/2010/04/29/verottaja-hyvaksyy-edestakaiset-osakekaupat/
Finnish Tax Administration’s (Verottaja) guideline:
https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/48973/luovutustappioiden_vahentamine/
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Cool that beginners are also coming to the forum 
welcome! Hopefully the bear market won’t scare them away either!
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So could everything be different than before
Yeah. Selling expensive shares from the bottom of the dip and then buying them back a bit later will indeed generate a capital loss for the current year, but at the same time, the portfolio will grow by the exact same amount, and taxes will be paid later on corresponding capital gains. So, even the maneuver Jyrki presented is just a postponement of tax payment. Masse does not recommend it. The bear always gets its due in the end 
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Even though Masse doesn’t recommend tax maneuvering here, I’m asking from a tax optimization perspective. 
Person Alwar (name changed) made a few sales before the recent declines. As a result, Alwar is now facing tax consequences due to capital gains. Alwar couldn’t wait for the fire sales and ended up buying a few stocks that have now declined a bit.
What should Alwar do now?
- Forget “optimizations”, dutifully pay taxes on gains, and buy more during dips with the thought that the acquired ones will eventually turn green again.
- If the decline continues, sell (and buy back the same amounts) of the fallen stocks during the rest of the year, at most enough so that the net result between capital gains and losses is ±0.
- Start a thorough “optimization” and sell declining stocks throughout the rest of the year, while buying back the same amounts. This might even lead to a situation where, at the turn of the year, there’s a large pile of cheaply bought stocks and transferable capital losses for future years.
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äänestäjää
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I have capital losses of 450 EUR, with the last deduction year being 2019. This year, I have sold funds at a profit of 259 EUR. Which of the following options is correct?
A) 450 EUR - 259 EUR = 191 EUR, meaning I can still sell at a profit of 191 EUR this year without tax implications.
B) 450 EUR - 259 EUR x 0.3% = 372.30 EUR, meaning I can still sell at a profit that generates 372.30 EUR in tax this year without tax implications.
I’ve been investing for just over a year and would appreciate help from more experienced people. Thanks in advance!
A is correct
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On November 25, starting at 11 AM, we will have a tax lawyer on inderesTV to answer current questions related to investor taxation. You can submit questions in advance here, but we will also take questions during the live broadcast. The event will be hosted by @IdaIlkko: Sijoittajan verotus 2020 – mikä muuttuu? Verojuristi vastaa - 25.11.2019 - 11:00 alkaen - Inderes
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It’s certainly true that if you defer paying taxes, you get compound interest on the best stocks.
Tip: Have two or more book-entry accounts. This way, you can keep your good stocks in a separate portfolio if you want to trade them, assuming you have the time or insight for it.
Quick question from your old uncle. The answer could probably be found on the tax authority’s website, but I can’t be bothered. The forum is faster anyway
So: When capital losses accumulated during the tax year are first deducted from capital gains (?), and then, if there are still losses, from accumulated gross dividend income (?), will the advance taxes paid on dividends be returned to the artist after the tax assessment is completed (e.g., if the final situation is ± zero, when losses equal gains plus gross dividends combined)?
The same applies, of course, if the balance remains negative. If the tax authority (hopefully) returns these unnecessarily paid dividend prepayments to the artist, will they earn interest?
Quick know-it-alls to the rescue
Uncle Masse, FA, tax tricks are uncle’s only weakness…
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Forum, damn it. Where is the answer???
Uncle Masse, FA, are tax refunds without interest fooling the people?
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Masse, I tried to look for help with your question on Vero’s (Tax Administration’s) website, but couldn’t find anything. I found this article Sijoittaja, huomasithan tämän: Luovutustappiot voi vähentää osingoista | Talouselämä, based on which I would dare to say that if you have paid advance tax on dividends before the losses occurred, then the excess taxes should be returned normally in the spirit of a tax refund The article also contains a concrete example, and to my understanding, an article published in 2017 does not contain outdated information in this case.
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Good article, but it didn’t directly answer uncle’s question. So, in plain terms: A young aspiring investor named Johannes (name changed ) incurs capital losses totaling €5000 in the tax year, capital gains of €3000, and receives gross dividend income totaling €1000. If Uncle Masse’s calculation and its method above are correct, then Johannes makes a loss of €1000 in the tax year, meaning 25.5% has been withheld in advance from his dividends unnecessarily. So, does Johannes now get this €255 back from the tax authorities - even with a small interest?
Uncle Masse, FA, now expecting a better response and make it snappy 
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Ah, you asked about tax withholding, my bad. Wikipedia says that tax withholding errors (in general) are refunded either as a tax refund or with an additional tax payment. Since dividends fall into an income category from which tax is withheld, one could assume that it works the same way with dividends as it does, for example, with salary. Someone who knows more about taxation can comment on whether this is true, but as long as there is no differing information, I would argue that Johannes will get 255 euros back from the tax authorities, with a 0.5% interest
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Thank you, reliable chaplain! Let’s take this divine… (no, Johannes’) truth unless anyone refutes it on this forum!!
Statements from Masse and Johannes strengthening faith are also desirable
Uncle Masse, FA, the forum is the best
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Assuming Johannes has no other income in the tax year, and no outstanding taxes or tax debt, for example, the tax refund will be 255 euros. Earned income with withholding tax may change the situation. The tax refund with interest will be paid in July of the following year at the earliest.
Since 85 percent of the dividend of a publicly listed company is taxable, a dividend of 1000 euros represents 850 euros of capital income. Johannes’s tax loss is thus 1150 euros (3000e + 850e - 5000e) instead of 1000 euros. Any deductions made from capital income will increase the amount of the loss.
Here is a diagram of the order of deductions: https://www.vero.fi/contentassets/e4637ee334124af6ab57fdfc7fe8fd68/taulukko-ansio--ja-paaomatulojen-verotuksen-toimittamisesta.pdf
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Thanks for clarifying the loss! But Johannes gets 255 euros back from the tax authorities, plus 0.5% interest! This is actually more than the usual bank interest rate for a current account, so it’s worth collecting dividends and being happy when the tax authorities lend your money at 0.5% interest for a little over a year 
The deduction order diagram for 111 was pretty brutal, by the way! Everything is perfectly clear there, except if Johannes has those capital deductions related to reindeer husbandry 
At that point, Uncle Masse would at least throw his hands up in surrender
Uncle Masse, FA, thanks for the forum, thanks 
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1000 euros a year tax-free.
“Have you held onto your profitable stocks all year? Now might be a good time to make a small sale if you want to, for example, rebalance your portfolio. If the total selling prices of securities or other assets you’ve sold during the entire year are no more than 1,000 euros, the profit is not taxed. Selling up to a thousand euros can be a good way to realize profitable stocks every year and thus supplement the capital income flow in your portfolio tax-efficiently.”
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