Loss offsetting
Investment losses reduce your tax, but not without limits: the law sorts them into separate loss offset pots (Verlustverrechnungstöpfe, § 20 Abs. 6 EStG). Losses from selling shares can only be offset against share gains; all other losses – including from options and futures – against all capital income. Whatever is left over is carried forward to the next year. capi.tax keeps the pots separate for you and shows what remains at year-end.
Which loss pots are there?
For private investors there are two pots today:
The share loss pot (§ 20 Abs. 6 S. 4 EStG). Losses from selling shares may only be offset against gains from selling shares. Dividends, interest or option gains do not reduce them. According to the BMF decree of 14 May 2025, losses from shares being derecognised as worthless also belong in this pot (from 2025, line 23); check such cases yourself.
The general pot (§ 20 Abs. 6 S. 1–3 EStG). Everything else goes here: interest, dividends, fund income (after partial exemption), gains and losses from bonds, options and futures, option premiums and losses from written options. These results offset each other freely.
The rule is one-sided: only share losses are ring-fenced. Share gains left after deducting share losses flow into the general pot and can be reduced there by other losses – for example by option losses.
One limit applies to both pots: capital losses may not be offset against other kinds of income such as your salary (§ 20 Abs. 6 S. 1 EStG).
Examples: how the pots are offset
All amounts are example values in euros.
1. Share loss meets share gain. Share gains €3,000.00, share losses €2,000.00. The share pot comes to +€1,000.00; €1,000.00 is taxable.
2. Share loss meets option gain. Option gains €3,000.00, share losses €2,000.00. The share losses may not reduce the option gain. €3,000.00 is taxable, and €2,000.00 is carried forward in the share pot.
3. Option loss meets share gain. Share gains €3,000.00, losses from derivatives €2,000.00. The share gain flows into the general pot, where the option loss is deducted. €1,000.00 is taxable.
4. A mixed year for an options trader.
| Item | Amount |
|---|---|
| Share gains | €1,500.00 |
| Share losses | −€2,500.00 |
| Option premiums and option gains | €6,000.00 |
| Losses from bought options | −€4,000.00 |
| Dividends | €400.00 |
- Share pot: 1,500.00 − 2,500.00 = −€1,000.00 → nothing taxable, €1,000.00 carried forward in the share pot.
- General pot: 6,000.00 − 4,000.00 + 400.00 = €2,400.00 taxable (before the saver's allowance).
The order in which the trades happened during the year makes no difference. Offsetting uses the annual totals.
What changed for derivatives in 2024?
From 2021, derivatives (Termingeschäfte) – bought options, futures, CFDs – had their own loss pot: losses could only be offset against derivative gains and option premiums, and only up to €20,000 per year (§ 20 Abs. 6 S. 5 EStG old version). A similar cap applied from 2020 to losses from the default of capital claims.
The Annual Tax Act 2024 (Jahressteuergesetz 2024) abolished both restrictions without replacement – in all cases still open (§ 52 Abs. 28 S. 25 and 26 EStG). The legislator was responding to constitutional doubts raised by the Federal Fiscal Court. For you this means:
- Losses from derivatives belong in the general pot and offset without limit against all capital income, including share gains and dividends.
- This also applies to 2021, 2022 and 2023, as long as the assessment for those years can still be changed. A final assessment is not automatically reopened.
capi.tax calculates every supported tax year without the €20,000 cap. An example: with no other capital income, a €5,000.00 gain and a €50,000.00 loss from derivatives give €0.00 taxable and a €45,000.00 carryforward in the general pot – uncapped.
One quirk remains when filling in the forms: the forms for 2021 to 2024 still have separate lines for derivative gains and losses (lines 21 and 24). capi.tax fills them separately for those years. That is data collection only; the offsetting itself is uncapped. From the 2025 form onwards these lines are gone.
Loss carryforward: what happens to remaining losses?
If a loss remains in a pot at year-end, it doesn't expire and isn't paid out. It is carried forward to the next year and offset there against gains in the same pot (§ 20 Abs. 6 S. 2 and 3 EStG). A share loss therefore stays a share loss in the following year. There is no carryback to earlier years for capital income, and the carryforward has no time limit.
With a foreign broker, the carryforward runs through the tax office: it formally determines the remaining losses per pot in a separate notice (§ 20 Abs. 6 S. 3 EStG in conjunction with § 10d Abs. 4 EStG) and applies them automatically the next year. This requires that you declared the losses in the Anlage KAP. A loss that appears in no return cannot be carried forward.
What capi.tax does – and doesn't:
- In the results under
Loss Carryforward Pots, capi.tax shows which loss from the uploaded year remains in each pot. - You cannot enter a loss carryforward from the previous year in capi.tax. The tax office knows it from its determination notice and applies it itself. The reference tax in capi.tax can therefore be higher than the actual tax.
Where do I enter gains and losses in the Anlage KAP?
With a foreign broker, you enter everything in the block for capital income not subject to German withholding – gains and losses separately, not netted in advance. capi.tax outputs the lines for your tax year. For the 2025 assessment:
- line 19: foreign capital income in total, including results from shares and derivatives,
- line 20: of which gains from share sales,
- line 22: losses excluding share losses, for options traders mostly derivative losses, plus losses from bonds,
- line 23: losses from share sales.
For 2021 to 2024 add: line 21 for option premiums and derivative gains, line 24 for derivative losses. Losses from written options go on line 22 in those years, because option writing was not a derivative transaction under the old rule – except for a cash settlement paid by the option writer (for example on an exercised index option), which counts as a derivative loss and belongs on line 24 (BFH VIII R 55/13). capi.tax cannot tell such a cash settlement from a closing trade and books it on line 22; check such cases yourself. Fund losses belong in the Anlage KAP-INV.
If you also have an account with a German bank: its loss pot is kept internally. To offset a loss remaining there against gains from your foreign account, you need a loss certificate (Verlustbescheinigung) from the German bank, which you have to request by 15 December (§ 43a Abs. 3 S. 4 and 5 EStG). The request is irrevocable: the loss is then no longer carried forward in the bank account. More on the forms under Anlage KAP, KAP-INV & SO.
Related questions
- Does the €20,000 cap on forward transactions still apply?
- Can I offset share losses against dividends?
- Are ETF losses share losses?
- Does the US wash-sale rule apply to me?
- How do loss offsetting and the saver's allowance interact?
Want to see how your own losses fall into the pots? Upload your export – the calculation runs entirely in your browser.
See also: Where the pot figures go on the forms: Anlage KAP, KAP-INV & SO. Where you see them in the tool: Understanding your results.