Is it possible to deduct total loss of a car at V+V?
August 29, 2011 | 30,00 EUR | answered by Michael Herrmann
Dear Sir or Madam,
In addition to my employment, I also have income from property and capital gains (3-family house). In 2010, I had a viewing appointment with potential tenants for one of the 3 apartments. On the way back from the property to my residence, I had an accident. There was significant damage to the car (almost a total loss - as the repair costs would amount to approximately EUR 23,000 if it were to be repaired). The vehicle has been deregistered since then. No reimbursement was made by an insurance company (no comprehensive insurance). The car was a used vehicle (7 years old) that had been purchased approximately 4 weeks prior for EUR 20,000. Selling the car in parts or as a damaged vehicle could potentially generate proceeds of approximately EUR 2,000.
My question is: can I claim the total loss as part of my income from property and capital gains in any way? How much % or EUR could potentially be deducted? Could you provide me with any references in the law that I could use to argue this with the tax office?
I kindly request a prompt response as the deadline is August 31, 2011. Thank you very much.
Best regards.
Dear inquirer,
first of all, thank you very much for your inquiry, which I would be happy to answer based on the information provided and in the context of your investment in an initial consultation. The response is based on the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.
The costs of an accident that occurs during the drive between your residence and the rented apartment can generally be claimed at the tax office.
A prerequisite for recognizing accident costs as deductible business expenses is that the accident was caused as a result of a drive motivated by income generation. There should be no negligence, such as alcohol, involved. This requirement is also not met if the accident occurred on a privately motivated detour.
Deductible expenses include repair costs, expenses for self-regulation, the self-participation in the comprehensive insurance, damages to personal property, expenses for experts, lawyers, and courts, as well as other expenses related to the accident. In case of a total loss or theft, as well as in the case of minor damage that is not repaired, a "depreciation for extraordinary technical wear and tear" (AfaA) can be claimed. This AfaA is the difference between the tax book value before the accident and the market value after the accident. The tax book value in your case is determined by the acquisition costs minus a depreciation for the month of use.
Reimbursement from third parties, such as liability or comprehensive insurance, must be offset. Therefore, damages not covered by insurance on third-party property are also deductible.
In your case, it is crucial to prove the income-related purpose of the trip. Therefore, you should have the location and timing of the apartment viewings confirmed by the prospective tenants.
I hope that these details have provided you with a sufficient overview of the situation within the scope of your investment and this initial consultation, and remain
Yours sincerely,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor
