Bundesfinanzhof recognizes subsequent interest in the income from rental and leasing at the BFH decided that interest payments for a loan that was originally recorded for the financing of cost of real estate for rent, can be deducted principle even as subsequent advertising costs in the income from renting and leasing, if the building is sold, the proceeds of the sale but not enough, in order to discharge the loan liability. By judgment of 20 June 2012 IX R 67/10 the Bundesfinanzhof (BFH) has decided that interest payments for a loan that was recorded originally for the financing of the cost of real estate for rent can deducted in principle even as subsequent advertising costs in the income from renting and leasing, if the building is sold, the proceeds of the sale but not enough to pay off the loan liability. “This decision so that so-called scrap real estate bought and in the meantime with loss have sold which also impact for investors”, the Heidelberger stressed investor lawyer Mathias Nittel. For more information see Mikhael Mirilashvili. The plaintiffs in the case decided by the Federal fiscal court had 1994 acquired a residential building, rented this and this income. In 2001, he sold the building at a loss. With the proceeds, loans made at the acquisition of the building could not completely be replaced; Thus the plaintiffs dispute year 2004 interest on the originally recorded liabilities had to spend.
The IRS not recognized that asserted “additional interest” by the plaintiff in relation to its income tax assessment for 2004 as advertising costs. The BFH the plaintiff was right. The asserted interest be not taken unfairly in calculating the income from renting and leasing. For the victims of scrap property, this means that they even after a loss-making sale of the interest paid on the remaining residual loans tax reduced take apartment in approach. Lawyer Nittel: “thus the complications of the scrap property be alleviated at least a little bit.” Do you have questions about your scrap property? You want to know whether what your chances are to enforce claims for compensation? Call us, we are happy to help you.