Inheritance compulsory portion restructuring
September 14, 2014 | 25,00 EUR | answered by Anton Pernitschka
I inherited a completely dilapidated house from my brother, which he had been living in for more than 10 years, but had to pay out half as a compulsory share. I incurred a) clearance costs, b) I renovated the house. Now I want to sell the house. Will the price paid for the compulsory share be recognized as acquisition costs, so that I can sell the house at a profit and in return deduct the renovation costs?
How could one deduct the clearance costs?
Dear inquirer,
In the context of an initial consultation and your fee commitment, in accordance with the regulations of this forum, I would like to answer your question.
According to § 23 of the Income Tax Act (EStG), private sales transactions for real estate are considered to occur when the period between acquisition and sale does not exceed 10 years. Acquisition in this sense refers to the paid acquisition of an asset from a third party's assets. Profit from sales transactions is the difference between the selling price on one hand and the acquisition or production costs and advertising costs on the other hand.
In your case, the amount of the mandatory share paid represents acquisition costs, while for the other half of the household for you as the heir, no acquisition costs are assumed in this sense.
The costs of clearing out and renovating, as well as the selling price, are only to be considered for half.
The answer was provided based on the information you provided. Missing or incorrect information about the actual circumstances can affect the legal outcome.
Sincerely,
Anton Pernitschka
Tax consultant
