Speculation tax
August 2, 2011 | 30,00 EUR | answered by Dr. Yanqiong Bolik
In December 2002, my wife and I purchased a single-family house on a 2149sqm plot of land for 125,000 euros. The paid price for depreciation purposes was divided as follows to the tax office: 75,000 for the house and 50,000 for the land. The house was subsequently renovated, so that in the end the tax office recognized 110,840 euros for depreciation as production costs. The house was then rented out. In 2008, the municipality took away 1331sqm from us for a new residential area and paid us 39,930 euros. In the 2008 income tax return, we declared a speculative profit of 8957 euros, which was the difference between the purchase price of 30,273 euros and the selling price of 30.00 euros per sqm for the 1331 sqm. Since the purchase of the property, we have claimed a total of 23,651 euros in depreciation. At the time of purchase of the property, we paid a total of 7,737 euros for notary, real estate transfer tax, and court costs. We now want to sell the house within the 10-year speculative period without making a profit. This means that the selling price, including the previously sold part of the land, should not exceed the acquisition costs.
My question: Can I request a refund of the speculative profit of 8957 euros that I declared to the tax office upon the sale of the partial land in 2008? If so, how? In my opinion, there is no longer any profit. I would appreciate any advice. Thank you.
With kind regards,
Dear inquirer,
Thank you for your inquiry. Based on the information provided, I am happy to answer your inquiry within the scope of an initial consultation, taking into account your efforts and the rules of this platform. The opinion is based on the facts presented. Missing or incorrect information regarding the actual circumstances can affect the tax result.
1. According to your statement, two real estate transactions are to be considered: the sale of land of 1331 sqm in 2008 and the possible sale of the remaining property in 2011. Both transactions will be assessed for tax purposes separately.
2. If losses are incurred from the second real estate transaction, you can use the losses in two ways:
i) You can offset the losses with profits from real estate sales in the current assessment period (in 2011) or in the immediately preceding assessment period (in 2010). In your case, loss offsetting is not possible because the capital gain of 8957 EUR was from 2008.
ii) You can deduct the losses in the following assessment periods, if any, from future profits from real estate transactions. You should have the losses determined separately for this purpose.
I regret that I cannot provide you with immediate loss offsetting information, and I hope that I have given you an overview of the situation within the scope of this initial consultation and based on your information.
For further questions, I am available for a personal conversation.
Yours sincerely,
Dr. Yanqiong Bolik
Tax consultant
Bildstöckle 6, 70567 Stuttgart
Email: info@zdbz.de
