What tax exemptions apply to capital gains?
May 17, 2024 | 40,00 EUR | answered by Robert Kockel
Dear tax advisor,
My name is Paula Schmidt and I am currently dealing with the taxation of my capital gains. I have invested a significant amount of capital and would like to know what tax exemptions apply to capital gains. I have not delved deeply into this topic before and am unsure of how to correctly tax my capital gains.
My current situation is as follows: I have various investments such as stocks, funds, and fixed deposit accounts from which I regularly earn capital gains. So far, I have simply received these gains transferred to my account without delving into the tax treatment. However, I have heard that capital gains are taxable and would like to know what exemptions are available to me.
My concern is that I may not be taking advantage of tax benefits or making errors in the taxation of my capital gains. Therefore, it would be very helpful for me if you could explain to me exactly what tax exemptions apply to capital gains and how I can correctly report them in my tax return.
Could you please explain in detail what tax exemptions apply to capital gains and how I can use them to minimize my tax burden? Are there any specific regulations or special considerations I need to be aware of? I thank you in advance for your assistance.
Sincerely,
Paula Schmidt
Dear Mrs. Schmidt,
Thank you for your inquiry regarding the taxation of your capital gains. It is important to address this issue in order to take advantage of tax benefits and avoid potential mistakes. I will now explain in detail the tax-free allowances for capital gains and how to correctly report them in your tax return.
First of all, it is important to know that capital gains are generally taxable. This includes interest, dividends, profits from security sales, and returns from investment funds. However, there are certain tax-free allowances that allow you to keep a portion of your capital gains tax-free.
The most important tax-free allowance for capital gains is the so-called savings allowance. For singles, this is 801 euros per year, and for married couples, it is 1,602 euros per year. This means that you can receive capital gains tax-free up to this amount. It is important to note that this allowance applies to all types of capital gains, for example, both interest from a savings account and dividends from stocks.
If you earn capital gains above the savings allowance, they are usually taxed with the withholding tax of 25% plus solidarity surcharge and, if applicable, church tax. However, you can also issue an exemption order to your bank to use the allowance of 801 euros or 1,602 euros. This way, your capital gains up to this amount are not automatically taxed, but remain tax-free for you.
It is also important to know that there are various ways to optimize the taxation of your capital gains. This includes using tax-optimized investment forms such as investment funds or targeted loss offsetting in security sales. I am happy to advise you individually on these options as well.
In summary, the savings allowance is the most important tax-free allowance for capital gains, allowing you to receive a portion of your capital gains tax-free. It is important to use this allowance and, if necessary, issue an exemption order to minimize your tax burden.
I hope this information is helpful to you and I am happy to assist you with any further questions.
Best regards,
Robert Kockel, Tax Advisor
