on Deductibles

Correctness of Log Book in Spite of Minor Faults

2008-12-21T12:48:10+01:00

Correctness of Log Book in Spite of Minor Faults

The Federal Tax Court, BFH with decision of April 10, 2008 (re VI R 38/06) brought some more clarity to how “faulty” a log book may be that it still passes as a valid, i.e. orderly, log book for taxation matters.

Deducting Presents for Xmas / Chanuka

2009-12-25T17:24:24+01:00

Deducting Presents for Xmas / Chanuka

Deducting the Expenses for an Internet Address

2009-02-05T15:48:19+01:00

Deducting the Expenses for an Internet Address

When starting or running a business, not only the physical but also the internet address can play a crucial role. Can you deduct the costs for purchasing a domain from a person or company already using the name? The BFH made a final decision between the tax office and the tax payer (October 19, 2006 III R 6/05, published on February 14, 2007).

Deductions Permitted for Sold Real Estate

2009-02-02T17:54:06+01:00

Deductions Permitted for Sold Real Estate

When you have sold real estate and have signed the contract in front of the notary public then this is a clear scenario for your tax office. You have given up you interest in achieving income. The consequence of this loss is that you cannot deduct any expenses anymore. Well, no rule without an exception as the decision of FG Hessen (re 3 K 1524/04) shows.

Dispute on Intension to Build an Accruing Reserve

2009-02-02T16:12:13+01:00

Dispute on Intent to Create an Accruing Reserve

You can create an accruing reserve fund to write off money for expenditure that you in fact defer for up to two years. In other words, a reserve fund of money can be depreciated for tax write off purposes even where the depreciating purchase is first made after two year’s time. This contested issue is regulated under §7g III 3 Einkommensteuergesetz (= Income Tax Act) but was rejected by the tax office on the grounds that the tax payer showed no advance intention to ultimately purchase anything with the accruing reserve. The dispute was brought before the FG Düsseldorf with decision made on October 26, 2006 (re 15 K 1096/05 E).

Full Deduction of Costs for Entertaining Freelancers

2009-02-04T16:17:24+01:00

Full Deduction of Costs for Entertaining Freelancers

Normally, a business person may deduct for entertainment 70% of the expenses as operational costs. However, as the Finanzgericht (= Tax Court ) Rhineland-Palatinate (re 1 K 1962/05). shows again there is no rule without an exception.

Life Insurance as Financial Instrument Deductible

2009-11-27T11:53:36+01:00

Life Insurance as Financial Instrument Deductible?

When financing the purchase of a real estate or something else likewise costly, a life insurance can be an item needed to secure your loan from the bank. Normally, costs of a life insurance are only a personal deductible and have no influence on your profit from business or the surplus of your income over the expenses from renting. The Federal Tax Court gave its decision to this issue on February 25, 2009 (re IX R 62/07).

Rules for a Driver’s Log Book

2009-02-02T17:25:40+01:00

Rules for a Driver’s Log Book

The Bundesfinanzhof has set rules for an orderly driver’s log book. Such log book will only be accepted if it was kept up-to-date and the entries cannot be easily altered.

Teachers Books as Business Expenses

2010-11-06T09:16:24+01:00

Teachers Books as Business Expenses

Can the tax office really deny the deduction of books, magazines, etc. which he needed for class? Is your Finanzamt really correct when it considers such expenses as belonging to the private sphere and therefore not deductible? Well, the Federal Fiscal Court told the tax office in its judgment of May 20, 2010 (re VI R 53/09) whether or not.

Unusual Financing Requires Proof of Intention of Acquiring Income

2009-02-02T16:29:29+01:00

Unusual Financing Requires Proof of Intention of Acquiring Income

On May 10, 2007, the Federal Tax Court (re IX R 7/07) clarified the taxpayer’s duty that he needs to prove his intention to acquire profit when using unusual financing strategies.