With the beginning of 2009 a final withholding tax on the sale of stocksheld in private property came into force in Germany. Capital gains aregenerally subject to tax without any allowance. Under the tax system whichwas in force before the final withholding tax was introduced, capital gainsand losses were only tax relevant if the holding period did not exceedtwelve months. This raises different questions. Firstly, dividend paymentsare the basis for capital gains. While dividends should be taxed only oncefrom the systematical point of view, the taxation of capital gains causes adouble taxation, which is reduced by the offset of capital losses.Moreover, the tax relevance of stock impairments is highly limited in thesystem of the final withholding tax. Hence, the analyses with respect tothe tax system focused on the asymmetric effects caused by the restrictedoffset of capital losses. Secondly, rational investors consider tax aspectsin their decisions. Until 2008 they had the option to omit the taxrelevance of the sale of stocks. That’s why the added taxation of long termcapital gains raises the question regarding the change of the tax effectsin the investor’s decisions especially with regard to the expected futurestock price development.Thirdly, tax payments could be interpreted as thestate’s share on the economic activity of individuals. This allowsinvestors to pass on the risk of a stock investment partly to the state.Moreover, investment decisions are also influenced by risk considerations.Hence, the change of the risk distribution between investors and state dueto the introduction of the final withholding tax system is also part of theanalyses. Again, the restricted loss offset plays an important role in theanalyses.