Loss from short sale not deductible as forward transaction

The short sale of foreign exchange does not give rise to a deductible loss from a forward transaction if the short sale and the subsequent subsequent purchase are not clearly linked.

Income from capital assets also includes the profit or loss from forward transactions. However, if a forward exchange transaction is not a transaction but a short sale in which the foreign currencies are subsequently purchased to fulfill the delivery obligation, both transactions must be linked in such a way that the intention of the parties to the contract to realize a difference from the opening and counter transaction is evident. It is not sufficient for the Federal Fiscal Court that the opening transaction is only followed by an offsetting transaction that serves to fulfill it. It therefore did not allow the loss from the short sale of foreign currencies in 2011 to be deducted.