Allowance in income tax
August 17, 2019 | 35,00 EUR | answered by Steuerberater Knut Christiansen
I have invested in a film fund that will be dissolved in 12/2019. The distribution due there is considered income from commercial business. Since I already sold a wind power fund 4 years ago, in which I claimed § 16 para. 4 EStG, I now personally have no option for reducing income tax through an allowance. However, my wife and I are jointly assessed for tax purposes. She has not yet claimed § 16 para. 4 EStG. Furthermore, she has a carryforward commercial loss according to §10a GewStG in a similar amount.
Questions: Can I transfer the film fund to my wife in the short term and would this have any tax implications? If so, would she have the option to offset the commercial loss or alternatively claim § 16 para. 4 EStG? If not, would we still have the option of the allowance under § 16 para. 4 EStG through joint assessment without transferring the fund?
Good day,
the tax-free allowance according to Paragraph 16 (4) of the Income Tax Act is granted only to individuals. This means that within the context of joint assessment, it is only available to the spouse to whom the income is attributable. If it has already been claimed earlier, there would be no further possibility for this spouse.
In my opinion, transferring it to the wife would not be recognized for tax purposes, as it would constitute an abuse of legal forms according to Paragraph 42 of the Tax Code. The transfer would only be made to obtain tax benefits, which is generally not recognized for tax purposes.
The carryforward of business losses can only be offset against the commercial income of your wife for her business operation. Additionally, it is not possible to offset them against positive income from the film fund.
I regret that I cannot provide you with better information.
If you have any further questions, please feel free to contact me.
Kind regards,
Knut Christiansen
Tax advisor
