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- Title
Zur Rechtsentwicklung und den Rechtsfolgen der Liebhaberei im Einkommensteuerrecht.
- Authors
Kanzler, Hans-Joachim
- Abstract
The article deals with the legal implications of hobby activities in income tax law. The author argues for a consistent categorization of hobby income with a restriction on loss offsetting. Various examples of professions are mentioned where the question of profit-making intent is discussed. The article also describes the development of case law on hobby activities by the highest courts and mentions the decision of the Grand Senate of the Federal Fiscal Court on the abandonment of the "Geprägetheorie" (theory of imprint). It is emphasized that the type of income must be clarified before examining hobby activities. Hobby activities refer to activities that outwardly resemble the characteristics of an income type but are neither capable of generating an overall profit nor have an intention to do so. It is also noted that the results of an activity classified as a hobby are not taxable and that reclassifying an income-generating business as a hobby business does not require the business to be discontinued. The article deals with the tax implications of business sales and discontinuations in connection with hobby businesses. The profit from the sale or discontinuation of a hobby business is only taxable to the extent that it relates to the income tax-relevant phase of the business. The text discusses the determination of hidden reserves when transitioning to hobby activities in German tax law. According to a ruling by the Federal Fiscal Court, the hidden reserves that exist at the time of the transition must be recorded and dissolved in subsequent profit-realizing transactions. The article deals with the tax implications of transitioning to hobby activities. The new regulation from 2023 is intended to reduce administrative burden. The text discusses the legal development and consequences of hobby activities in income tax law. It is noted that after transitioning from a profit-making business to a hobby activity, the obligation to keep tax records no longer applies. It is recommended to continue determining profits even after transitioning to hobby activities in order to control one's own activities and provide evidence of profit realization. The text deals with the topic of hobby activities in income tax law. It is explained that business changes during the hobby phase are only suitable for establishing a profit-making business in connection with a coherent business concept. It also discusses at what point a transition from hobby activities to profit-making activities is assumed. Furthermore, the legal consequences for surplus income types are explained. The article deals with the topic of hobby activities in tax law. It is explained that in the absence of a profit or surplus earning intent, there is a prohibition on offsetting losses.
- Subjects
GERMAN language; TAX laws; APPELLATE courts; JUDGE-made law; CITIZENS' associations; FEDERAL courts; LEGAL judgments; PHOTOVOLTAIC power systems; HOBBIES; POWER plants
- Publication
FinanzRundschau, 2023, Vol 105, Issue 6, p241
- ISSN
2567-4765
- Publication type
Article
- DOI
10.9785/fr-2023-1050602