Offsetting of income with loss carryforwards
December 5, 2010 | 30,00 EUR | answered by Michael Herrmann
Dear Sir or Madam,
My question relates to the income tax return for 2009.
My wife and I are jointly assessed for income tax.
I have income from employment and annuities, while my wife does not (she is a homemaker).
Additionally, we had income from capital assets, which we split equally between husband and wife in the tax return.
In the separate determination of the remaining loss carryforwards as of December 31, 2008, both myself and my wife have loss carryforwards.
When the capital income for 2009 was offset against the remaining loss carryforward from 2008, the tax office only allocated the offset to me (the husband), leaving my wife's loss carryforward unchanged.
In the explanation of the assessment, the tax office states:
"The capital gains as well as the capital gains tax and solidarity surcharge are allocated only to the husband according to the receipts."
I am the account holder and am listed as such in the annual tax certificate submitted.
Now my question is:
If this allocation is correct, does that mean that my wife's loss carryforwards cannot be used anymore? Is it important whether it is an individual account or a joint account (spousal account)?
By the way: in the past, when the loss carryforwards were built up or used, the tax office did not make this distinction. It always involved individual accounts. We have always chosen joint assessment.
Kind regards,
Dear inquirer,
First of all, thank you for your inquiry, which I would like to answer based on the information provided and in the context of your commitment to an initial consultation. The response is made in accordance with the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.
The central issue of the question concerns the attribution of income from the individual deposit. Contrary to civil law ownership (husband), the deposit assets are mathematically attributable to the spouses.
In fact, the income is attributable to the deposit holder. Since the introduction of the flat-rate withholding tax, the bank keeps accurate records of the income and loss offset pots from the past, which can only be attributed to the deposit holder and are not transferable. The offsetting of the tax-determined loss carryforwards is done through the tax return.
For the future, you should consider opening a joint account. However, the old losses remain unaffected by the attribution. The transfer of half of the deposit assets to the wife when opening a joint account is a gratuitous transfer that can trigger gift tax above €500,000.
For the past, you should try to correct the loss determinations. After the finality of the loss determination notices, this is only possible within certain amendment provisions of the tax code.
I hope that these explanations have provided you with a sufficient overview of the situation within the scope of your commitment and remain
Yours sincerely,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor
