Ask a tax advisor on the topic of Inheritance tax

Estate liabilities in the tax return

May 23, 2011 | 30,00 EUR | answered by Michael Herrmann

Can the renovation material costs incurred during the apartment clearance, as well as the rent and electricity costs, be included as estate liabilities?

The deceased person was classified as needing care level 1 and was cared for by a home care service. Shopping and cleaning the apartment were taken care of by the niece (every 3 weeks for 4 hours). Can these services, expressed in numbers, also be reported in the inheritance tax statement?

Michael Herrmann

Dear inquirer,

First of all, thank you for your request, which I will gladly answer based on the information provided and in the context of your initial consultation. The response is based on the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.

According to § 1967 of the German Civil Code (BGB), estate liabilities include not only the debts owed by the deceased, but also the obligations that fall on the heirs themselves, in particular the obligations arising from compulsory portions, legacies, and conditions.

Therefore, only the liabilities that existed at the time of the deceased can be taken into account. The legal basis for the costs of apartment clearance and their necessity do not stem from the estate, as they only arose later. However, up to a lump sum of €10,300, funeral, grave care, and estate settlement costs can be deducted as estate costs per estate without individual proof. The minimum requirement for the lump sum is that the heir incurred costs in principle, but the exact amount cannot be proven (Federal Fiscal Court decision of January 21, 2005, BFH/NV 2005, 1092).

The care costs can only be considered as extraordinary expenses in the income tax return for the deceased if they have been paid. If there were liabilities for care costs on the day of death, they should be included as estate liabilities in the inheritance tax return according to the principles outlined above.

Unfortunately, I cannot provide you with a more favorable decision.

I hope that these explanations have given you a sufficient overview of the situation within the scope of your consultation, and I remain

Yours sincerely,

Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor