Interest deductible for private loans
March 3, 2010 | 25,00 EUR | answered by Matthias Wander
Hello,
are interest expenses deductible when invoiced by a private individual (private loan) if this loan was used for a capital increase in a GmbH which has now filed for insolvency?
If so, where would this be to be carried?
Kind regards
Joerg Lindner
Dear inquirer,
thank you for your inquiry, which I would like to answer based on the information provided and in the context of your situation in an initial consultation.
If the loan can be assigned to one of the 7 types of income according to § 2 EStG, the interest can be tax deductible either as operating expenses for income from business activities or as advertising costs for income from other sources.
In your case, the loan was used for a capital increase in a GmbH. Therefore, it is (subsequent) acquisition costs for the participation.
If the participation is in private assets, expenses for the acquisition of the participation can be deducted as advertising costs for income from capital assets (Anlage KAP), but only if corresponding income (dividends from the GmbH) are also present and the flat-rate withholding tax does not apply. Under the flat-rate withholding tax, advertising costs are only deductible up to €801 for singles and €1,602 for married couples. Deducting actual costs is excluded.
If the participation is in business assets, the interest is deductible as operating expenses. The regulation on flat-rate withholding tax does not apply here.
The opening of insolvency proceedings against the GmbH does not change the assessment.
I hope this gives you an initial overview.
Best regards,
Wander
Tax advisor
