One-time claim for tax exemption when selling real estate?
October 5, 2020 | 45,00 EUR | answered by Steuerberater Knut Christiansen
I would like to sell my single-family home in exchange for a life estate and annuity. My practice is located in rooms that cannot be separated from the rest of the house (constituting 41.6% of the business assets within the entire house). After the sale, I would like to continue working in the same house to a lesser extent.
I am 75 years old and have not yet applied for the favorable tax treatment when selling a business property. Can I expect to receive the tax-free allowance of 45,000 EUR for the capital gain from the sale of the business portion of the house (amounting to approximately 100,000 EUR) upon application, even if I continue my practice in the same property, which I would then essentially be renting? The five-year spreading provision is likely not an issue and does not affect the question of continuing my business in a rented space, in my opinion.
Hello and thank you for using frag-einen.com!
I would like to answer your question as part of an initial consultation.
The consideration of the exemption limit according to § 16 para. 4 EStG (45,000 EUR) is only possible if you sell the business or declare the business closure. However, if you continue your activities, there is no business closure. Therefore, the tax office would not grant you the exemption limit. Also, the five-fifths rule will not be granted to you in this case without a business closure, as there is no business closure.
I am sorry that I have to give you a negative "forecast" here. But that's what this platform is for, to potentially include incorrect assumptions in your decisions in advance.
If you have any further questions, please feel free to contact me again.
Please note that this forum cannot replace personal advice, but only enables an initial tax assessment. Missing or incomplete information can alter the legal outcome.
Best regards,
Knut Christiansen
Tax consultant
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