Surplus sales after years of losses
May 26, 2019 | 100,00 EUR | answered by Steuerberater Bernd Thomas
In 2008, I acquired a rented apartment building and now want to sell it. From 2008 to 2017, the property had significant tax losses, with minor surpluses from rental and leasing income (V+V) since 2018. If I make a profit from the sale now, will the losses from V+V from the last 10 years be deducted first? Or will the profit from the sale itself be taxed?
Dear inquirer,
I am happy to answer your inquiry based on the information provided in a preliminary consultation on frag-einen.com. The response is based on the information you provided. Missing or incorrect information may affect the legal outcome.
I assume that the property is part of your private assets. If the property is part of business assets, the legal assessment will change significantly, so please inquire again in that case.
The sale of the rental property is tax-free, as the ten-year speculation period according to § 23 EStG has already been exceeded.
Therefore, profits do not need to be taxed, but on the other hand, losses from the sale cannot be claimed.
Losses from renting and leasing can be claimed as long as there was an intention to generate income. The tax office focuses on a total profit forecast, meaning that if a total profit was expected (in advance), the ongoing losses are deductible.
This does not change even if the forecast is not met.
In general, there will be no retroactive changes, unless the tax office had already included a provisional note according to § 165 AO on this issue in the tax assessments in the past (this should be evident in the explanations of the assessments).
In this case, you should try to achieve recognition of the losses in an appeal procedure.
If necessary, the tax office may disallow the losses from the point at which you decided to sell, especially in case of vacancy. If higher maintenance expenses were claimed before the sale, the tax office may also check whether these should be assigned to the sale (not deductible) or ongoing rental (deductible).
Best regards,
Bernd Thomas
Tax consultant
Dipl.-Kaufmann (FH) Bernd Thomas, Tax Consultant, Neustadtswall 85, 28199 Bremen, Email bernd.thomas@yahoo.de, VAT ID No. DE316948369, Member of the Hanseatic Chamber of Tax Consultants Bremen, Registration Number 111705, Professional liability insurance with R+V Allgemeine Versicherung AG, Mittlerer Pfad 24, 70499 Stuttgart, Insurance sum: 250,000 euros per individual claim; annual maximum benefit: 1,000,000 euros (for all damages in an insurance year), the professional regulations of the StBerG apply (https://www.gesetze-im-internet.de/stberg/).
