142. Expenses For A Second Household

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The 1996 Tax Act imposed a time limit on tax recognition of expenses for a second household (see article no. 23, sec. 4.2.2). Such deductions were limited to a period of two years for each location (revised sec. 9 par. 1 sent. 3 no. 5 EStG), instead of the previous unlimited duration. Persons who had already claimed expenses for a second household for two complete years prior to 1996 were unable to claim further deductions in the future (new sec. 52 par. 11a EStG). This article reports on two recent related court decisions.

1. Federal Tax Court decision