The co-heir of a two-family house wants to claim the repair costs incurred due to the leakage of heating oil from the oil tank of the heating system in the inherited property before the tax office in the inheritance tax. Accordingly, they are to be deducted as estate liabilities.
The tax authorities reject the claim under Section 10 (5) No. 1 of the German Inheritance and Gift Tax Act (Erbschaftsteuer- und Schenkungsteuergesetz - ErbStG), because repair costs are not considered deductible debts according to the authorities. The heir appeals against the decision of the tax authorities, but remains unsuccessful with his claim, even after appeal (AZ II R 33/15).
The German Federal Fiscal Court (Bundesfinanzhof, BFH) explains that the repair of damage to an inherited property that only occurs after the death of the owner is the decedent's debt and cannot be deducted as an estate liability. An exception is if the decedent was already required to remove them during his lifetime by public or private law.
Source: BFH
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