Exceptional burden despite taxable compensation payment

Expenses deductible as extraordinary expenses are not to be reduced by a substitute benefit if the substitute benefit itself is taxable.

A taxable benefit that is intended to compensate for expenses that are deductible as an extraordinary expense does not lead to a reduction in the deductible extraordinary expense. With this decision, the Federal Fiscal Court clearly opposes a tax office which, on the one hand, took into account a death grant paid by the deceased mother's employer as taxable wages, but, on the other hand, refused to deduct the funeral costs as an extraordinary burden with reference to the death grant. The Federal Fiscal Court rightly regarded this reduction in funeral costs as unconstitutional double taxation. A reduction is only possible for tax-free compensation payments.