Exceptional income - reduced tax rate
November 11, 2021 | 65,00 EUR | answered by Steuerberater Knut Christiansen
Dear Sir or Madam,
After the sale of a rented property (used as an educational institution), the GmbH & Co KG, which owned the property, will be liquidated. The proceeds from the sale will be distributed to the limited partners, who have reached the age of 55. Can the limited partners apply for a reduced tax rate according to § 34 paragraph 3 of the Income Tax Act? If so, will the additional income from employment be added to the extraordinary income for the calculation of income tax?
Best regards,
Sven Grünert
Good day and thank you for using frag-einen.com!
I would like to give you the following feedback on your question:
If the limited partners have reached the age of 55, they can apply for the reduced taxation according to § 34 para. 3 EStG. However, a prerequisite is that they have not previously submitted the application, as it can only be made once in a lifetime.
In the context of the income tax return, the income of the limited partners is generally added together. However, for the tax calculation, the tax is then divided. The income subject to reduced taxation is only taxed at 56% of the average tax rate. The relevant tax rate is the one that would apply if the gains from the activity/sale were fully taxable. The other income (remaining taxable income) is then taxed according to the tax brackets.
I hope this answers your question, but feel free to ask any follow-up questions free of charge.
I would like to point out that this forum cannot replace a comprehensive and personal tax consultation, but is primarily intended to provide an initial tax assessment. The legal assessment of your issue could differ if relevant information is added or omitted.
Best regards,
Knut Christiansen
Tax advisor
