Purchase and Sale of Real Estate Partnership
January 7, 2014 | 30,00 EUR | answered by Michael Herrmann
In 2013, we founded a GbR and purchased 3 houses, each for 40,000 €. The houses had to be partially renovated. The houses will not be sold until 2014, resulting in a loss for the GbR.
1. Should the purchase prices be considered as costs to be booked, or will they be offset against the respective sales?
2. Is the loss from the GbR carryforwardable for 2014, or will the loss be taken into account in the personal tax return of the two partners?
Dear inquirer,
first of all, thank you for your inquiry, which I would be happy to answer based on the information provided and in the context of your involvement in an initial consultation. The response will be given according to the facts presented. Missing or incorrect information about the actual circumstances may affect the legal outcome.
In answering your question, I assume that the GbR is not engaged in commercial activities and that the shares are held in private assets.
It is not apparent from the facts that the houses are being used for income generation until they are sold. Therefore, no expenses can be claimed in 2013.
After the properties are sold, any profit from private sales transactions is subject to taxation. The income is the profit that results from the excess of the selling price minus the purchase and renovation costs.
The income is declared in a determination declaration. In the determination notice from the tax office, the income of each partner is determined, which is then taken into account in their respective income tax assessments.
I hope that these details have given you a sufficient overview of the situation in the context of your involvement and this initial consultation.
Kind regards,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor
