Deduction of profit through new purchase Paragraph 6 of the Income Tax Act
March 9, 2015 | 50,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges
Dear Sir or Madam,
I would like an answer to the following question:
In 2012, I (a freelancer) sold a house that was 30% business property (owned for 8 years). In the same year, I bought a new house, of which 38% is rented out privately (VAT-free) - 62% is owner-occupied.
I deducted proportionally (38%) from the taxable profit according to §6 b of the purchase price. The tax office informed me over the phone that this deduction is not allowed because:
a) it is private property.
b) I did not calculate the profit according to § 4 paragraph 1 or § 5, but according to §21.
c) the sold assets did not belong to the fixed assets of a domestic business establishment (depreciation was done over 8 years).
The new house is used to generate taxable income at 38%. Anyone who calculates their profit according to § 4 paragraph 3 EStG can make this provision.
Thank you for your response.
Sincerely
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into account your input and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of the information can change the tax result. Please also note that this cannot replace individual comprehensive advice.
As a freelancer, you determine your profit through an income-expenditure account according to § 4 paragraph 3 of the Income Tax Act (EStG). In the calendar year 2012, you could only deduct the disposal gain proportionally (38%) from the acquisition costs of the newly acquired building as a business expense if you had also used the new building at least partially for business purposes (§ 6b para. 1 - 4 EStG in conjunction with § 6c EStG).
However, you partly use the new building for your own and partly for external residential purposes. Therefore, the new building belongs to your personal assets and no longer proportionally to the business assets of your company. You generate income from the part of the building rented out for external residential purposes as rental and leasing income according to § 21 EStG, which is calculated as the surplus of income over expenses (§ 2 para. 2 No. 2 EStG).
Since the new building does not belong to the business assets of your company, the profit-reducing deduction according to §§ 6b, 6c EStG in the calendar year 2012 is not permissible.
Kind regards,
Dipl.-Kfm. Frank-Olaf Illiges
Tax consultant
Am Wieksbach 55
33378 Rheda-Wiedenbrück
Phone: 05242/4055666
Fax: 05242/4055677
e-mail: office@illiges-steuerberatung.de
Internet: www.illiges-steuerberatung.de
