Sale of a commercially oriented GmbH and Co. KG - Calculation and taxation of the proceeds from the sale.
August 12, 2021 | 100,00 EUR | answered by Steuerberater Knut Christiansen
How is the disposal proceeds calculated when selling a commercially shaped limited partnership (GmbH & Co. KG) held in private assets:
The KG was founded in 2021 and acquired a co-ownership interest in an apartment building for 500 TEUR from the sole limited partner's private assets. Still in 2021, the KG converted the co-ownership interest into several condominiums. Now the GmbH & Co. KG, including these condominiums, is to be sold for 500,000 EUR to a third party. In the balance sheet of the KG, the property is listed on the asset side at 500 TEUR, and on the liability side is a shareholder loan to the limited partner from the sale of the co-ownership interest (also 500 TEUR). The limited partner's capital contribution is 100 EUR.
What disposal proceeds will be achieved in EUR upon the sale of the KG (acquisition ancillary costs, depreciation, interest and repayments, etc. are disregarded for simplification purposes) from the limited partner's perspective, and what must he declare for tax purposes?
Good evening,
the capital gain/loss is determined by the purchase price you receive for the transfer of shares in the partnership (500,000 EUR) minus the capital account or equity (value of the business assets).
The value of the business assets is determined by the difference between the assets and liabilities. If in your case the total assets amount to 500,000 EUR and the liabilities also amount to 500,000 EUR, the value of the business assets is 0 EUR. If you receive 500,000 EUR as a private individual, the profit would be 500,000 EUR.
It is unclear to me whether the buyer will completely take over the loan, resulting in a total payment of 1 million euros (500,000 EUR purchase price plus assumption of the loan of 500,000 EUR). Based on your information, I would assume this, as he is taking over the entire co-ownership stake in the partnership.
Ultimately, the sale will dissolve the hidden reserves, which would then be subject to taxation. These hidden reserves arise from the difference between the purchase price and the balance sheet values of the transferred assets.
I hope this answers your question. Feel free to reach out if anything remains unclear. Please note that a comprehensive consultation cannot be provided within the scope of an online consultation. In particular, incomplete information may alter the legal outcome.
Best regards,
Knut Christiansen
Tax advisor
