Deductibility of a Home Office When having a Double Household

When having the family in town A but one’s job in city B, you can generally deduct the room in B as a double household. But can you also deduct a home office in B, your double household? The Federal Tax Court passed a judgment on August 9, 2007 (re: VI R 23/05) and answered this question.

Minnie and Mickey acquire income from employment. Among other details, they wanted to deduct rental costs of DM 26,520 for double housekeeping for a three-room apartment in B, having a space of 92.73 m². Their tax office only accepted DM 17,136 on expenses because a 60 m² apartment suffices for a single person.

The Bundesfinanzhof judged that the tax office incorrectly conglomerated the rules for a double-household and the regulations for a home office. Generally, a home office can be deducted also in a double household setting for the apartment away from home §9 I cl. 3 no. 5 EStG). The general requirements have to be met and/or limits must not be passed. Depending on the individual circumstances, you might be able to deduct the second household but not a home office. In other situations, you might be able to take off the costs of double-householding and a home office. The rules for both deductions are to be tested separately.

Published on the old CMS: 2008/6/19
Read on the old CMS till November 2008: 2,746 reads