BFH, Judgment of September 26, 2023, IX R 13/22
The judgment of the Federal Fiscal Court (BFH) on September 26, 2023 (case number IX R 13/22), dealt with the question of whether the paid acquisition of shares in an inheritance community is to be classified as the acquisition of real estate under § 23 of the Income Tax Act (EStG), which would lead to taxation upon sale.
In this specific case, the plaintiff had acquired the shares of the co-heirs in an inheritance community, which included real estate in the estate, and later sold these shares. The tax office treated this as a private sale transaction and taxed the event. However, the BFH ruled that the acquisition of the inheritance shares should not be considered as the acquisition of the real estate under § 23 EStG. The BFH based its decision on the requirement of “identicality,” meaning identity in the economic sense. Therefore, there is no taxable sale transaction if the heir later sells the real estate. This decision deviates from previous case law and the views of the tax authorities.
The ruling has far-reaching consequences for heirs, as it clarifies that no income tax is incurred on profits from the sale of real estate acquired through the purchase of inheritance shares.
Attention!
Now, in its statement of September 27, 2024, regarding the Annual Tax Act 2024, the Federal Council has proposed to amend § 23, paragraph 1, sentence 2 EStG accordingly, explicitly including the community of heirs. If this recommendation is followed, the legal situation will change in such a way that the transaction underlying the BFH’s judgment would be subject to income tax liability.