> For the complete documentation index, see [llms.txt](https://help.immodio.app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.immodio.app/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/rechts-und-beratungskosten.md). # Legal and consultancy costs
You use this category for **lawyers' fees, legal advice and other advice costs** that are directly connected with a particular let property. Typical cases are, for example: * legal advice on a rental agreement, * enforcing rent arrears, * termination and eviction proceedings, * the costs of tax advice, * disputes about rental defects or rent payments, * the legal review of an operating cost statement, * disputes with tenants or service providers, * advice on legal questions concerning a specific let property, * and court and litigation costs, as far as the underlying dispute is directly connected with the letting activity. Legal and advice costs can be taken into account as income-related expenditure where there is an **economic connection with the letting activity and the income generated or sought from it**. Section 9 EStG is decisive. #### **Example: a lawyer because of rent arrears** A tenant owes you several months' rent and you therefore instruct a lawyer to enforce the claim out of court and later in court. * lawyer's costs: **€900** * court costs: **€300** Since the dispute concerns the **generation of your rental income** directly, the costs can in principle be attributed to the letting activity and posted to the **"**[**Legal and advice costs**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/rechts-und-beratungskosten.md)**"** category. #### **What is decisive is the subject of the advice or the dispute** Not every lawyer's invoice in connection with a property is automatically income-related expenditure. * **a dispute with a tenant about outstanding rent** → in principle a connection with the letting activity * **an eviction action against a tenant** → in principle a connection with the letting activity * **a dispute about deductible financing costs of the let property** → in principle a connection with the letting activity {% hint style="info" %} A **private** dispute, by contrast, has no connection with the letting activity. {% endhint %} #### **Unsuccessful legal action can also be deductible** For the classification for tax it does not decisively matter whether you win the dispute. What is decisive is rather **why** the costs arose. **Example** You sue a tenant for **€4,000 of rent arrears** and bear lawyer's and court costs of **€1,200.** Even if it later turns out that the rent claim cannot be enforced in full, the legal costs do not lose their connection with the letting activity. They arose in order to enforce or secure rental income. #### **Legal costs for financing a let property** Legal advice in connection with financing a let property can also belong in this category. The Federal Fiscal Court has in the past, for example, recognised lawyer's costs in connection with a legal dispute about a loan taken out to finance a let property as income-related expenditure, because the dispute concerned the deductible financing costs. #### **Examine legal advice on a property purchase separately** Care is required with advice and legal costs directly connected with **acquiring a property**. Costs that arise in order to acquire land or a building and bring it into your own control can belong to the **acquisition costs or incidental acquisition costs** and would then have to be posted, for example, to the category "[Purchase of land](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10081800-kauf-von-grundstuecken.md)". They are then not simply immediately deductible as running legal and advice costs. **Example** Before buying land you have the purchase contract and special acquisition conditions reviewed by a lawyer. The costs of that: **€2,000** Where that advice is directly connected with the successful acquisition of the land, the invoice should **not be posted to the "**[**Legal and advice costs**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/rechts-und-beratungskosten.md)**"** category without examination. It has to be examined whether it is part of the acquisition costs, in which case it has to be posted to the category "[Purchase of land](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10081800-kauf-von-grundstuecken.md)". Later legal advice on a current rental agreement for the property already acquired, for example, is to be distinguished from that. #### **Protecting your property is not automatically the letting activity** A particularly important difference exists between: * **securing the rental income** and * **merely securing or defending your property assets**. The Federal Fiscal Court has in the past, for example, held that lawyer's costs to prevent an encroachment on let land are in principle not income-related expenditure of the letting activity where the protection of the property and not the generation of income is primarily to the fore. #### **Tax advice costs only where there is a connection with the letting activity** The costs of a tax adviser can also in principle be income-related expenditure as far as they are directly connected with **determining your income from letting and leasing**. General private tax advice costs, by contrast, are not deductible as income-related expenditure of the letting activity, for example for merely preparing your private income tax return without a specific connection to determining income. **Example** A tax adviser's invoice totalling: **€1,000** Of that, according to the invoice: * **€400** for determining the income of a particular let property, * **€600** for other private tax matters. The full **€1,000** may then not automatically be posted to the **"**[**Legal and advice costs**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/rechts-und-beratungskosten.md)**"** category. The property-related share deductible for tax has to be separated accordingly. #### **Legal costs on selling a property** Legal and advice costs arising exclusively because of the **sale of a let property** in principle **no longer** belong to the running income-related expenditure of the letting activity. The economic connection is then with the **disposal** and not with continuing to generate rental income. #### **Lawyer's or litigation costs refunded** Where, for example, the following later refund part of your legal costs: * a tenant, * an insurer, * the losing party to the proceedings, * or another participant , that refund has to be recorded separately as **income** in the "[Legal and advice costs](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/rechts-und-beratungskosten.md)" category. #### **Assignment in Immodio** With this category the assignment is to the **property**. Select the let property to which the legal or advice service actually relates. Where an invoice concerns several properties, the amount should be allocated to the properties concerned using the invoice, the schedule of services or an appropriate key where possible. #### **Do not recover from the tenant** Legal and advice costs in principle belong to the owner's administration or the assertion of their rights and are not running operating costs of the building. Section 1 (2) BetrKV expressly excludes administrative costs from the recoverable operating costs. The **"Recoverable in the operating cost statement"** switch therefore has to stay **disabled**. #### **Which documents should you keep?** Keep in particular: * invoices from the lawyer or adviser, * proof of payment, * advice contracts or engagement agreements, * correspondence with the lawyer, the adviser or the other side, * statements of claim, orders for payment and court decisions, * records showing the subject of the dispute, * with several properties, a comprehensible split of the costs, * evidence of any cost refunds received, * and with unusual circumstances a short note on why the advice is connected with the letting of the specific property.