commercial real estate trading
Dear tax advisor,
A) we would like to purchase a large, undeveloped plot of land with 2 built parcels and 1 undeveloped parcel for €600,000 for 2230 sqm. For financial reasons, we would like to sell one built parcel and one undeveloped parcel, and keep the last built parcel for ourselves, demolish the existing house and rebuild it.
The remaining house cannot be demolished as it is a listed building, it is in disrepair and can only be sold for an estimated €125,000 well below the market value for 810 sqm of land area. The undeveloped plot of land to be sold should cost €280,000 for 710 sqm. We would like to keep the last built plot of land with 710 sqm and would receive €195,000 if the sale goes through. The market value is €340/sqm. The demolition costs amount to €20,000.
Question: How does the tax office specifically calculate the profit we may realize? Using the market value, a market value appraisal (which we do not have yet) or through their own method?
B) Because we really want to live there and the property is only being sold as a single unit, we have already sold 2 other properties in 2008 (due to a job-related move) and in 2009 (for health reasons). With the above purchase/sale in 2011, we would sell 2 more properties. Therefore, our question is:
How can we avoid being classified as "commercially active in the real estate trade" (which we are not)?
If necessary, how much would this additional tax cost?
