Maintenance expenses for rented apartment while receiving replacement earnings (sickness benefits)
September 25, 2011 | 25,00 EUR | answered by Oliver Burchardt
Due to an illness, I have been receiving sick pay since the beginning of this year. As a result, I am subject to the progression clause and would have to pay high taxes on the income from my rented property.
To avoid this, I intend to carry out necessary maintenance expenses in my rented property this year.
My question is:
If I make the maintenance expenses as described and I fall below the 0 euro threshold for tax purposes this year, is it possible to carry forward the maintenance expenses for the year 2011 as a loss carryback for 2010 (or as a loss carryforward for 2012)?
And if the option of loss carryback exists, which would be preferable to me:
Will the actual loss for the maintenance expenses in 2011, which is not covered by the income from 2011, be deducted directly from the tax already paid in 2010 and refunded to me as a total amount, or will my entire income and expenses for 2010 be recalculated, so that the loss carryback would then have little impact on me?
Dear questioner,
Thank you for your inquiry, which I am happy to answer as part of an initial consultation.
Please note that the tax assessment is based on the information provided. Changing, adding, or omitting information can affect the result, possibly significantly.
If you incurred a loss from your total income in 2011 (not just income from renting and leasing), the loss will first be carried back to the previous year up to an amount of EUR 511,500 or EUR 1,023,000 for jointly assessed spouses.
This carryback is done in such a way that the loss is deducted before considering special expenses and extraordinary burdens, and then the taxable income is recalculated. The difference between the tax paid and the newly determined tax will be refunded to you.
Please also note that the deductible special expenses may change due to the loss carryback. In certain situations, this can have a tax disadvantage for you. If you expect larger losses in 2011 or had high special expenses in 2010, you should seek tax advice to avoid any disadvantages.
I hope my explanations have been helpful to you in the context of your inquiry.
Sincerely,
Oliver Burchardt
Tax advisor
