Asset stock donations are those donations that are made to promote the assets to be received by a foundation. Your tax deductibility is regulated in § 10b paragraph 1a EStG. We explain when such donations are deductible.

1st Donations as special expenses

§ 10b EStG is the relevant norm for deducting donations as special expenses.

According to § 10b (1) EStG, grants, i.e. donations and membership fees for the promotion of tax-advantaged purposes within the meaning of §§ 52 – 54 AO, may be deducted in a limited amount as special expenses from the total amount of income.

§ 10b paragraph 1a EStG also promotes the asset building of foundations. So-called asset stock donations are to be distributed over ten years as part of the donation deduction and can be deducted up to an amount of EUR 1 million or EUR 2 million for spouses who are invested together. This includes both asset stock donations in the case of a new establishment and grants.

2nd Definition of Stock Donation

Asset stock donations are donations to the asset stock of a foundation. The asset stock of a foundation is the component of the foundation’s assets which, in accordance with the principle of preservation of assets, is to be maintained undiminished. Therefore, the foundation may not use these assets to fulfill the purpose of the foundation and must be kept separate from the other assets. Therefore, unlike a so-called promotional foundation, the foundation may not forward the grant to other corporations in accordance with § 58 no. 1 AO for the fulfilment of tax-advantaged purposes. This foundation capital is formed from the property given by the founder and from the grants.

Only those grants are favored which are paid into the assets to be received. On the other hand, such donations to mere consumer foundations are not favoured. In the case of consumer foundations, not only the proceeds of the foundation assets, but also the foundation assets themselves should be consumed over the life of the foundation for statutory purposes.

Asset stock donations are not limited to the statutory assets. Rather, they also exist if the donor makes it clear to the foundation that his contribution is intended for permanent equipment or increase of the foundation assets and thus not for consumption.

3. deductibility of the asset donation

Asset stock donation must meet the requirements of § 10b (1) EStG

The asset stock donation is tax deductible in accordance with § 10b paragraph 1a EStG. The conditions are therefore regulated there. For deductibility, reference is made to § 10b (1) sentences 2 to 6 EStG. The conditions laid down there must therefore also be met.

According to § 10b (1) sentence 2 EStG, donations to the assets of a public law foundation or a private law foundation exempt under § 5 (1) no. 9 KStG may be deducted up to an amount of EUR 1 million in addition to the maximum amounts according to § 10b (1) sentence 1 EStG. Furthermore, a grant confirmation from the receiving foundation is also required.

The use of the term “donations” clarifies that the grants to be supported cannot be membership fees. Foundations cannot have members. Destinataries also have no member rights.

The Foundation’s tax deduction is not excluded by the fact that the Foundation provides for the founder’s family to an appropriate extent in accordance with the will of the founder. According to § 58 no. 6 AO, however, the foundation may only use a maximum of 1/3 of its income to support the next members of the founder. A pension above this limit leads to income taxation according to § 22 no. 1 sentence 2 letter a EStG on the part of the beneficiary relatives.

3.2. Maximum amounts

During the assessment period of the grant and in the following nine assessment periods, donations up to a total amount of 1 million can be made. Euros are deducted. In the case of co-invested spouses, a total amount of 2 million applies. Euro. This can be claimed by spouses invested together, even if the benefit of one spouse was made from the property of the other spouse.

The maximum amount can only be claimed once within the ten-year period (§ 10b (1)a sentence 3 EStG). The annual deduction can be freely determined by the taxable person. The period begins with the investment period of the first asset stock donation. All other grants within this period will be combined until the maximum amount is reached. If the grant exceeds the maximum amount of EUR 1 million or if the taxable person does not wish to claim the entire grant under paragraph 1a, the balance referred to in paragraph 1 may be taken into account.

Any amount not used up after the expiry of the 10-year period shall not be forfeited. Rather, it comes into the general deduction of donations of paragraph 1.

3.3. Grant presentation possible

Remaining deductions are also to be determined separately within the framework of § 10b paragraph 1a EStG during the remaining term in accordance with § 10d paragraph 4 EStG. The corresponding amount can be carried forward, so-called grant carry forward.

3.4. Application

The tax deduction of the asset donation requires an application from the taxpayer. This must also indicate the period for which it is assessed and the amount of it in each year up to the total amount of EUR 1 million. Euro requests the deduction.

Taxable person's fourth choice

With this additional deduction amount, the legislature has created the possibility to deduct asset stock donations under both paragraph 1 and paragraph 1a. The taxable person may first of all choose to make the capital donation referred to in paragraph 1 or paragraph 1a. If he makes a division, he shall be bound by it until the end of the 10-year period.