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Offsetting loss carryforward from private sale against proceeds from sale of practice permit

January 28, 2012 | 30,00 EUR | answered by Oliver Burchardt

Hello,

my wife has generated income from the sale of a psychotherapeutic practice. The income consists proportionately of the value of the practice inventory as well as the intangible value of the practice. A few years ago, I incurred a loss from the private sale of a property, which I am carrying forward as a loss carryforward. My wife and I are jointly taxed. Question: Can my loss carryforward be offset against the income from the sale of the practice for tax purposes?

Best regards,

Oliver Burchardt

Dear Mr. Stensale,

Thank you for your inquiry, which I am happy to answer as part of an initial consultation.

Unfortunately, offsetting losses from private sales transactions is only possible against profits from private sales transactions. This is explicitly regulated in the law, § 23 para. 3 sentence 7 EStG. However, the sale of a professional practice is to be taxed as part of the income from self-employment under § 18 EStG.

I am sorry that I cannot provide you with a more favorable response.

Best regards,

Oliver Burchardt
Certified Public Accountant
Tax Advisor