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Loss offsetting

October 18, 2015 | 30,00 EUR | answered by Steuerberater Peter Jansen

Good evening,

can negative capital gains from futures trading be offset against income tax, and if so, how, if they significantly exceed annual income?

Thank you in advance.

Steuerberater Peter Jansen

Dear questioner,

I am happy to answer your question in accordance with the rules of this internet platform as follows.

Since the introduction of the flat-rate withholding tax on January 1, 2009, profits from futures transactions, through which the taxpayer obtains a cash amount or benefit determined by the value of the variable reference size, and profits obtained from the sale of a financial instrument structured as a futures transaction, no longer belong to income from private sales transactions, but regardless of a holding period, they belong to income from capital assets according to § 20 para. 2 sentence 1 no. 3 EStG.

Therefore, both received and paid compensation payments due to the termination of an interest rate swap are taxable as capital income.

The regulation of § 20 para. 2 sentence 1 no. 3 EStG applies to all profits and losses from futures transactions where the legal acquisition took place after December 31, 2008.

However, the prohibition of a vertical loss deduction also applies to this extent.

Any losses can therefore only be offset against positive capital income under the conditions of § 20 para. 6 EStG, and not against income from other sources.

I hope I could help you and remain

Yours sincerely

Peter Jansen
Tax advisor