Offset gains from real estate sales against losses from securities trading.
December 11, 2011 | 30,00 EUR | answered by Dr. Yanqiong Bolik
I have sold two properties at a profit within the 10-year speculation period. I reinvested the proceeds in the same year in several new rented properties, and also invested larger amounts in modernization and maintenance (taking into account the 15% limit for any acquisition-related production costs, there were favorable KfW loans).
Are the investments made for the modernization of the newly acquired properties (losses) offset against the profits from the sales in the overall calculation of losses from rental and leasing?
What tax rate (I am married) will be used in the event of a profit?
Thank you
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into account your input as well as the rules of this platform.
Please note that my explanation is based on the situation presented, and that adding, omitting, changing information, or the ambiguity of the information can change the tax result.
According to current law, if the sale of both properties does not involve commercial real estate trading, the gains from the sale are not taxable when the properties were used exclusively for own residential purposes between acquisition or completion and sale, or in the year of the sale and the two preceding years (§23 para. 1 sent. 1 no. 1 sent. 3 EStG).
If this rule does not apply in your case, the gains from private sales transactions are to be taxed as other income according to §22 EStG. When determining the taxable income, gains from private sales transactions and losses from leasing and renting are added up, as far as the leased properties are located in Germany.
If both you and your wife are subject to income tax and do not live permanently apart, you can choose between separate assessment and joint assessment. This means you have the choice between the tax rate according to the basic table and the tax rate according to the splitting table. In many cases, the splitting tariff for spouses is more favorable. However, it depends on your personal situation, so I cannot assess your exact tax rate from a distance. If you would like an assessment of your personal tax rate, I am happy to assist.
I hope this information has been helpful.
If you have any further questions on this matter, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax advisor
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 9332 2657
Email: info@zdbz.de
www.steuerberatung.zdbz.de
