„Old but not gold“ - or: How a real estate management company tried to foist classic cars on the tax office as a preferential investment. 

It's not just real estate that can appreciate in value over the years ... a real estate management company from Baden-Württemberg thought so and acquired two classic cars as an investment for its fixed assets. It took the view that holding the classic cars as a capital investment was part of its intended, tax-privileged asset management.

However, the Federal Fiscal Court (BFH) took a completely different view:
Valuable investment yes, but unfortunately the wrong garage.

The BFH clarified that holding classic cars in order to increase their value is a „harmful“ secondary activity that is not one of the permitted activities of a real estate company.

The result: An important trade tax benefit - the extended trade income or property deduction - was lost. The real estate company could have used this to achieve a trade tax exemption.

For the extended property reduction, pure property management is what counts. Movables are out of place here.

Practical tip: From a tax perspective, it would have been more favorable to keep the classic cars in the shareholders' private assets, as they would not have caused any damage for trade tax purposes. Their sale would also have been tax-free after the one-year speculation period had expired!

Well, yes. If the company had asked its tax advisor beforehand ... 😉

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#Oldtimer #Property tax reduction #Trade tax #BFH #Immobilien #Tax advice #WSB