Can I offset losses from stock transactions in my tax return?
July 12, 2022 | 40,00 EUR | answered by Wolfgang Stricker
Dear Sir or Madam,
my name is Emma Hering and I have been involved in trading stocks for some time now. Unfortunately, I have incurred losses in my stock transactions in recent years and I am now wondering if I can offset these losses in my tax return.
Stock trading is an exciting way for me to invest my money and hopefully make profits. Unfortunately, things haven't been going well in recent years and I have experienced losses. These losses are weighing on me and I would like to know if it is possible to claim them on my taxes in order to at least offset some of the losses.
My concern is that I may not be able to include the losses from my stock transactions in my tax return and therefore be stuck with the losses. This would further burden my financial situation and I would like to explore all options to minimize my tax burden.
Could you please explain to me if and how I can offset losses from stock transactions in my tax return? Are there specific requirements that I must meet or specific forms that I must fill out? What documents do I need for this and what is the best way to proceed in order to claim the losses on my taxes?
Thank you in advance for your help and support.
Sincerely,
Emma Hering
Dear Mrs. Hering,
Thank you for your inquiry regarding offsetting losses from stock trading in your tax return. It is understandable that you are thinking about how to improve your financial situation and whether it is possible to claim losses for tax purposes. I am happy to explain to you how you can proceed in this case.
In principle, losses from stock trading can be offset in your tax return. These are called loss offsetting options. These losses can be offset against other capital income or even other income to reduce your tax burden.
In order to claim losses from stock trading for tax purposes, you must meet certain requirements. Firstly, the losses must have been realized, meaning that you must have actually sold the relevant stocks. Additionally, you must declare the losses in your tax return and be able to provide the necessary evidence.
In order to offset losses from stock trading in your tax return, you usually need the corresponding purchase and sale receipts of the relevant stocks to prove the loss. You also need to fill out the appropriate form in your tax return to declare the losses. This is usually the main form of the investment income attachment (Anlage KAP), where capital income is declared.
It is important that you carefully retain all required documents and correctly declare the losses in your tax return to avoid possible queries from the tax office. If you are unsure, I recommend seeking assistance from a tax advisor or tax consultancy firm to ensure that your tax return is correct and complete.
I hope that this information has been helpful to you. If you have any further questions, please feel free to contact me.
Best regards,
Wolfgang Stricker
