Deduction of maintenance expenses after the death of the owner

After the death of a property owner, the unrecognized portion of maintenance expenses spread over several years must be included in the decedent's tax return.

The owner can distribute the deduction for major expenses incurred in maintaining a rented property over a period of up to five years. If he or she dies during this period, the heirs were previously able to continue the unused deduction for income-related expenses over the selected distribution period. However, the Federal Fiscal Court sees no legal basis for this rule of the tax authorities and has instead ruled that the portion of the maintenance expenses not yet taken into account must be recognized in the decedent's tax assessment in the year of death. So far, the tax authorities have not reacted to the ruling, so that heirs can continue to try to obtain the more favorable option for them from the tax office for the time being, either by referring to the still existing regulation in the income tax guidelines or to the ruling.