Ask a tax advisor on the topic of Other questions to tax advisors

Any obligation to fill out a form for an inheritance from my grandmother that is below the threshold and how to handle it.

March 28, 2013 | 30,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges

In 2011, my grandmother passed away, and the inheritance was renounced by all other heirs (children and grandchildren) and only accepted by me as a grandchild. A certificate of inheritance was issued to me as the sole heir, so a separate reporting obligation is not necessary to the best of my knowledge.

The "inheritance" essentially consisted of "work" and was well below the tax-free allowance for grandchildren. It was more or less a break-even game (the remaining money was used to settle outstanding debts), and the household inventory was disposed of as it was no longer modern and therefore not sellable. The funeral expenses were covered by other family members, not me. However, I did bear the costs of the obituary and grave decorations, as well as a portion of the grave care costs (which I continue to cover partially). This would actually put the inheritance slightly into the negative. Costs were also incurred for the disposal of furniture (mileage).

I am currently completing my income tax return for 2011 (and it is somewhat urgent), and I am now wondering whether I need to declare this inheritance (the estate itself) anywhere on the tax return or if I need to fill out a separate form for it (and if so, which one). I am also considering whether it would be advisable to claim the incurred costs described above before the tax authorities (in the sense that an inheritance that falls below zero could potentially be tax deductible from certain minimum amounts, and if such a threshold exists, what it would be), and whether as the sole heir, I can continue to claim the grave care costs for the subsequent tax years (starting from 2012, etc.) (and in which line of which form this should then be entered). Thank you in advance for your efforts, I would be very grateful for a prompt response.

Dipl.-Kfm. Frank-Olaf Illiges

Dear inquirer,

Thank you for your inquiry, which I am happy to answer taking into account your contribution as well as the rules of this platform.

Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of information can alter the tax result.

In general, you can claim the deduction of expenses incurred for the funeral of a family member in your income tax return as extraordinary expenses, provided that these expenses are not covered by the value of the estate or an insurance benefit (e.g. burial benefits, life insurance) (§ 33 para. 1 Income Tax Act (EStG)).

Funeral costs include expenses for the funeral home, expenses for the coffin, flowers, wreaths, expenses for death notices, as well as expenses for the burial site and gravestone.

However, extraordinary expenses are reduced by your reasonable burden. This depends on the amount of your total income, your marital status, and the number of your children (§ 33 para. 3 EStG). For example, for a single person without children, the reasonable burden is between 5% - 7% of the total income.

In conclusion: Only when the costs of the funeral of your grandmother that you have taken over exceed your personal reasonable burden after deducting the value of the estate and insurance benefits, these expenses will reduce your income tax as extraordinary burdens.

Best regards,
Dipl.-Kfm. Frank-Olaf Illiges
Tax advisor
Am Wieksbach 55
33378 Rheda-Wiedenbrück

Phone: 05242/4055666
Fax: 05242/4055677
e-mail: office@illiges-steuerberatung.de
Internet: www.illiges-steuerberatung.de