Facts
A., the owner of an agricultural estate, ceased his independent farming activities on December 31, 1995. As of January 1, 1996, he transferred his farming capital (livestock, machinery, etc.) and leased his estate - with the exception of a vineyard - to a third party for an initial period of fifteen years. He also requested the tax authorities to conduct an interim assessment with effect from January 1, 1996. The tax authorities subjected the capital gain corresponding to the profit realized upon the transfer of his farming capital, as well as the profit constituted by the accumulated depreciation as of December 31, 1995 on his leased agricultural real estate, to the full annual federal tax. The Cantonal Administrative Court upheld the taxpayer's appeal, considering that the agricultural real estate had not left his business assets. The tax authorities then appealed against this decision.Considerations
The Federal Tribunal upheld the appeal and confirmed the decision of the tax authorities. It considered that the leasing of the agricultural properties constituted an act of realization, resulting in the taxation of the accumulated depreciation on these properties pursuant to Art. 47 para. 1 LIFD. Contrary to the case law invoked by the Administrative Court, this situation did not allow for the application of a solution taking into account the difficulty of determining the moment when a real estate trader ceases his activity. Indeed, A. had never professionally engaged in real estate transactions and…