Waiver of rental income in a community of heirs
February 16, 2012 | 30,00 EUR | answered by RAin/StBin Henriette Regulla-Schiessl
Dear Sir or Madam,
After the death of my husband at the end of 2009, ownership of his rented condominium passed to me half and to each of my two daughters (both still in training in 2010 and 2011) one quarter due to the legal succession.
Since I manage the apartment alone and also receive the rental income (which was and is also in the interest of my daughters), the tax assistance has taken into account the entire rental income in my income tax return for 2010, as the daughters have not yet made their own tax return due to their low income.
Now the tax office does not recognize this, according to the notice, it assigns me a share of the rental income and has asked my daughters to submit their own tax return.
This would mean that the younger daughter would come above the income limit for child benefit with her share of rent of 500 euros through her training salary + orphan's pension, which would mean that I would have to pay it back completely for 2010 and until August 2011 (until the end of the training).
Since I am a civil servant, this would also change my entitlement to 50% instead of 70% of health insurance subsidy, so I would have to pay back not only the child benefit but also the remaining health insurance. Calculated for the 1.5 years, I would have to expect a total of around 6000 euros. In my opinion, this is disproportionate, because the tax office would receive its taxes from me, so it is not about saving any taxes.
Now to my question...what are the chances that the tax office would accept a written agreement from 2010 in case of an objection against the decision, which states that my daughters waive the rental income during their training?
Or do you see any other way to challenge this decision?
Thank you in advance for your efforts.
Dear questioner,
Thank you for your inquiry, which I am happy to answer in the context of an initial consultation, taking into account your input and the rules of this platform. The response is based on the description of your situation. Adding, omitting, or changing information, ambiguities, or inaccuracies in the facts can change the tax result.
From your description, I understand that the community of heirs still exists and has not been divided yet. In principle, the rental income from the apartment of the community of heirs flows to them. The heirs jointly realize the income according to § 21 EStG. The income generated is generally allocated to the heirs according to their share of inheritance.
In cases of the division of communities of heirs, a tax-neutral retroactive effect to the time of inheritance is recognized within narrow limits, generally for six months from the date of inheritance for the inheriting heir. However, this deadline has long passed in your case. A notarial division would have been necessary in your case.
Therefore, in your case, the income has flowed to all heirs according to their share of inheritance and is therefore tax-relevant. A non-notarial agreement will not change this. However, I would still try to present the agreement to the tax office. You would have had to make the agreement before the beginning of 2010.
Another approach could be to check whether all deductible expenses have been included in the rental income or whether all deductible expenses and social security contributions have been deducted in the determination of your daughter's income.
If you have further questions, please use the follow-up function. I am happy to represent you to your competent tax office. However, this is only possible on the basis of an explicit written mandate. If you wish to do so, please contact me by email regarding the next steps.
Best regards,
Henriette Regulla
Lawyer
Tax advisor
Specialist lawyer for tax law
