Capital gains tax on the sale of several properties from inheritance?
November 3, 2020 | 25,00 EUR | answered by Steuerberater Knut Christiansen
Hello
The heir Hartmann inherited an undeveloped large piece of land from his father in 1974. Furthermore, he inherited additional land and additional undeveloped plots. He is the sole heir. Over the years, a residential area was developed for the large piece of land through urban planning. The heir Hartmann sold a part of the land facing the street to Mr. Meier, as well as another part to Mr. Schulze. The sales to Meier and Schulze took place in 2019 and 2020.
The heir Hartmann also sold another plot of land, also part of his father's estate, to the city in 2018.
Now, Mr. Hartmann wants to sell the remaining two large plots of land from the former inheritance to an investor.
Question: Does Mr. Hartmann have to pay capital gains tax on the sale of the inheritance and is it considered a commercial real estate trade? Are inheritance taxes to be considered?
Thank you for your information.
Hello and thank you for using frag-einen.com!
I would like to answer your question as part of an initial consultation.
In principle, Erbe Hartmann acquired the property through inheritance free of charge, so that the acquisition date of the father from 1974 can be attributed to him. Therefore, the 10-year speculation period has long expired, so there is no taxable disposal transaction (if the property has been private assets since 1974).
In my view, there is also no commercial real estate trade, because the mere sale of these properties held for a long time does not constitute commercial activity but rather belongs to private asset restructuring. Inheritance tax also does not apply, as this inheritance took place in 1974 and would have been subject to inheritance tax in that year.
I hope this answers your question, otherwise feel free to ask further questions free of charge.
I would like to point out that this forum cannot replace a detailed and personal tax advisory service, but is mainly intended to provide an initial tax assessment. By adding or omitting relevant information, the legal assessment of your issue could be different.
Kind regards
Knut Christiansen
Tax Advisor
