Unplanned losses after a long surplus phase in rentals - risk of hobbyism

In principle, it is true that when a objective prospect of profit after Principles of economic efficiency aligned Rental activity the occurrence Unplanned losses not to deprive the income-generating ability or to Qualification as a hobby leads to. As loss-inducing Unforeseeable events This includes, in particular, unexpected investment requirements and unforeseen difficulties in managing inventory levels;, Catastrophe damage or Problems in finding new tenants. If these events occur within a reasonable time reacts Therefore, it will remain classified as a source of income.

Such Imbalances lying but according to prevailing opinion then not before, when the Losses arising from a typical operating risk. No uncertainties are, according to the case law, for example, higher maintenance measures for reasons of monument protection or a general Price decline in the real estate market, which leads to a corresponding (sustainable) loss situation. It is therefore from this point onwards from Hobby to proceed when despite the hopelessness of success from the recognition of this situation Operation not set will be. This also applies then, when long-standing positive results have previously been achieved and also in a Overall view still a Total profit These principles have been adopted by a recent BFG decision reaffirmed (BFG of 16.3.2018, GZ RV/2101106/2015). In the present case, the poor development on the local market for business premises in the city center led to the fact that – in order to avoid a tenant eviction – the Rent reduced had to be done and given the existing Fixed costs No real chancen more on achieving a positive tax result have passed.

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