Facts
The appellants, Dr. med. [A.] and his wife [B.] , were active in securities trading in addition to their main activities as a physician and practice assistant, respectively, in 1997 and 1998. The Cantonal Tax Office of Zurich subsequently assessed them as of 1 January 1997 for an interim assessment due to the commencement of an independent gainful activity as professional securities traders. The Federal Supreme Court decided that while the appellants were engaged in a profit-oriented activity in securities trading and the resulting profits were to be considered as taxable earned income, the legal requirements for an interim assessment were not met, as it was merely a self-employed secondary occupation. Therefore, the contested decision was annulled and the matter was remanded to the lower instance for re-evaluation.Considerations
The Federal Supreme Court stated that according to established case law, profits from the sale of assets such as securities are considered earned income if the taxpayer engages in an activity that is directed towards earning in its entirety. Indications of this are the systematic and planned nature of the approach, the frequency of transactions, the short holding period, the close connection with the professional activity, and the use of special expertise. In the present case, the appellants fulfilled these criteria, which is why their securities transactions are to be qualified as commercial trading and the resulting profits as taxable earned income.However, the legal requirements for an interim assessment were not met, as the appellants continued to pursue their main activities as a physician and practice assistant, and the securities transactions merely…