What is a Trading Profit?
Trading profits are any profits realized on a position that is held for less than twelve successive months. In most countries, regulations governing the declaration of a trading profit require that the position meet certain criteria in order to receive this type of classification. The criteria are often stated more in terms of exclusions rather than identifying much in the way of defining what the return must involve in order to be classified as trading profit. Outside of the universal understanding that trading profit can only take place with positions held less than one calendar year, the tendency is to identify other characteristics that must not be present in order for the return to be considered trading profit. These characteristics, referred to as exclusions, vary slightly from one nation to another. However, there is a core group of four exclusions that are very common. First, trading profit may not be recognized on any one-off items that generate profit. Some examples of one-of
