Facts
A., who was 19 years old at the time, acquired a property in U. in 2007 and financed the purchase through a loan from his mother and a mortgage. He lived in the attic and rented out the other apartments. In 2012, he divided the property into condominium units and sold them. The tax administration of Basel-City qualified the resulting gain as income from commercial real estate trading and assessed A. accordingly. A. unsuccessfully challenged this assessment up to the Federal Supreme Court.
Considerations
The Federal Supreme Court confirmed that A.'s activity since the acquisition of the property in 2007 is to be classified as commercial real estate trading. The property was to be attributed to the business assets. The gain realized from the sale of the condominium units is therefore to be treated as taxable income from self-employment.
However, the Federal Supreme Court partially overturned the contested decision, as the tax administration had not…