Vorabpauschale + Loss Bucket — Optimally Offsetting Losses
Losses aren’t a pleasant topic, but they have a tax upside: they reduce future tax burden — including the Vorabpauschale. In Germany, this is organized through two separate loss-offset buckets at your broker: one for equities, one for everything else. Understanding the mechanics lets you push the VP to zero for years through targeted sale and roll trades. Here’s the complete 2026 strategy. Applies to investors with German tax residency.
Important: VP and losses must come from the same bucket. Equity-ETF VP is offset only against equity losses; bond-ETF VP only against “other” losses.
Germany’s Two Loss Buckets
| Bucket | What goes in | What it offsets |
|---|---|---|
| Equity bucket | Losses from individual stock sales, equity-ETF sales | Equity gains, equity-ETF VP, equity distributions |
| General bucket (“other”) | Losses from bonds, certificates, mixed funds, negative deposit interest, crypto ETPs | Interest, bond-ETF VP, mixed-fund distributions |
Cross-bucket offset is not allowed. Equity losses never reduce bond gains.
How the Equity Bucket Neutralizes the Vorabpauschale
Example: Mark holds a 80,000 € MSCI World ETF in 2026 plus a loser-ETF with −5,000 € unrealized loss. He sells the loser in November 2026.
The 2,602 € remainder is enough to neutralize the VP for 2027 (80,000 × 0.01125 = 900 €) and almost fully 2028 (~900 €). The loss thus eliminates VP for three full years.
In Practice: Building the Loss Bucket Deliberately
Three strategies to build the equity bucket on purpose:
- Tax-loss harvesting: roll loser ETFs into similar funds (iShares MSCI World → Vanguard FTSE Developed). Loss is realized, you stay in market.
- Single-stock losses consciously realized when you have equity gains the same year.
- Loss certificate from old broker before closing the account — otherwise losses vanish.
- Bond-ETF losses do not automatically roll into the equity bucket — they stay in “other”.
- Broker switch without loss certificate makes losses permanently lost.
- Watch the 30% PE haircut: 6,000 € book loss becomes only 4,200 € in the bucket.
- Identical ISIN sold + bought back same day may be flagged as “wash” by some brokers, loss not recognized.
Multi-Broker: How the Bucket Fragments
Each broker maintains its own loss bucket. With two brokers you have four buckets (two equity, two other). Consolidation only happens:
Practical tip: if you plan to close a broker, request the loss certificate before Dec 15. This lets you claim the loss against gains at your new broker via the German tax return.
Related Topics
FAQ
How long do losses survive in the bucket?
Indefinitely. Unused losses are automatically rolled forward by the broker until they can be offset against gains. They only vanish if you close the depot without a loss certificate.
Can I offset crypto losses against equity gains?
Direct crypto purchases: No — this falls under § 23 EStG (private sale transactions), not capital-gains tax. Crypto ETPs (e.g. WisdomTree Bitcoin): Yes — they go into the “other” bucket and can reduce e.g. bond-ETF Vorabpauschale.
What happens if I have only a loss and no gains?
The loss goes into the bucket and waits for future gains. You continue to pay Vorabpauschale (taxes), but as soon as gains come in subsequent years, the bucket is depleted before you pay tax again. Nothing is lost.
Where do I see my current bucket status?
At Trade Republic, Scalable Capital, comdirect, and ING in the broker’s tax overview. At DKB under “tax topics”. Status is updated daily — every realized loss fills the bucket immediately.
Is tax-loss harvesting actually worth it?
Often yes. If you have e.g. 5,000 € book loss in an equity ETF and 8,000 € equity gain realized the same year, the loss sale saves around 1,108 € tax. With a roll-sale into a similar ETF, you stay fully invested.
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