Ask a tax advisor on the topic of Income tax return

Turbo certificates

October 19, 2009 | 20,00 EUR | answered by Oliver Burchardt

Dear Sir or Madam,

A leveraged certificate that I purchased was knocked out early. Its current price is therefore 0.001 euros. Do I have to sell it at this price in order to deduct the loss for tax purposes, or does this happen automatically? In other words, if I ask my bank for a loss carryforward for the year 2009, will this loss be recorded there?

Thank you in advance.

Kind regards

Oliver Burchardt

Dear inquirer,

Thank you for your question, which I am happy to answer considering your contribution within the scope of an initial consultation.

Please note that the legal assessment depends on the information provided. Adding or omitting information can significantly affect the legal assessment.

I assume that you hold the certificate in your personal tax assets when answering the question.

In order to claim the loss for tax purposes, you must indeed sell the certificate.

However, the deductibility of the loss depends on the year in which you acquired the product.

If the acquisition date was before January 1, 2009, a further distinction is necessary. If the paper was acquired before March 15, 2007, the loss can only be taken into account for tax purposes in the so-called speculation period of 1 year. This is governed by § 23 (1) No. 2 EStG. If the acquisition takes place after March 15, 2007, the capital loss can be claimed in the tax return according to § 20 (2) sentence 1 No. 7 EStG.

However, if the acquisition took place after January 1, 2009, the regulation of § 20 (2) sentence 1 No. 7 EStG applies, meaning that the loss can be claimed against capital income. The flat tax rate of 25% applies in this case.

In summary: Since the speculation period of 1 year has likely elapsed in your case, the loss from the sale should be taken into account for tax purposes. Your bank holding the account will transfer the necessary information according to § 45a (3) EStG for the flat tax return.

I hope my explanation has been helpful to you.

Best regards,

Oliver Burchardt
Tax consultant