Depreciation possibility of a property after inheritance settlement
March 22, 2022 | 50,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
In the course of a notarial inheritance settlement agreement, I became the sole owner of a rented condominium. In order to become the sole owner, I made a compensation payment of 50,000 euros.
Depreciation by the community of heirs has not been possible in recent years, as the condominium was built over 50 years ago.
As the new owner, can I depreciate the property again? If this is not the case, can the mentioned compensation payment be depreciated, and at what percentage?
Dear Client,
Thank you for your inquiry, which I would like to answer as follows within the scope of an initial consultation:
In answering your question, I assume that the condominium belongs to your private assets.
The inheritance settlement is to be divided into a gratuitous and a remunerated part. The remunerated part amounts to 50,000 euros in this case.
For the gratuitous part, you step into the shoes of the deceased as their successor. According to § 11d para. 1 EStDV, you could depreciate the property with the same depreciation (AfA) that the deceased had made, if the depreciation has not been used up. In your case, the depreciation has been used up since the condominium is over 50 years old, so the depreciation deduction does not apply.
Regarding the compensation payment of 50,000 euros, there is a remunerated acquisition. In this case, a depreciation of 2% of 50,000 euros = 1,000 euros can be claimed, and the basis for depreciation can also include the notary fees for the inheritance settlement agreement, if you have borne these costs.
I hope that this information has been helpful to you.
Best regards,
Ulrich Stiller Tax Advisor
