Deducting Home Study with Minor Professional Use

Can costs for a home office be deducted to reduce one’s income when using the home study only in a minor scope to earn income? The Fiscal Court Rhineland-Pfalz decided this issue with its judgment of January 25, 2018 (re 6 K 2234/17).

Deducting Home Study with Minor Professional Use

Operational Expense –Home Study

A married couple are both breadwinners in a family. The husband also earns trade income from operating a photovoltaic installation. For the tax year 2010, he computed a tax loss of € 1,795 whereas 1,700 were for costs of the home office. Since the tax office denied his approach, he had to take the issue to court. The office saw no necessity in having an office for working purposes at home for passive income.

Deducting Costs of Study for Minor Use

The FG dismissed the case. Case law of the Federal Fiscal Court does not demand a „necessity“ of an office to be able to deduct the costs of an office. The costs of an office between deductible and non-deductible use; i.e. for private as well as vocational purposes cannot be deducted at all. Splitting the costs will not take place when the private use is more than purely inferior. Where the border between insignificant and significant private use lies is an open question.

Only Minor Vocational Office Use not Deductible

After considering all the facts of the case, the FG came to the opinion that vocational use of only a few hours a year does not qualify as a necessity to achieve income – even though the private scope of usage could be determined. There is no universal scope of fundamentality for determining use, but the eligibility for the deduction is to be denied when the office is only infrequently used. 

Related Articles:

Home Office – Which Spouse can Deduct?

Primer on how to Deduct Costs for a Home Office