Facts
The spouses [A.X.] and [B.X.] acquired a property in [R.] /GR in 2006 and renovated it. They sold the property in 2008 at a profit. The Tax Office of the Canton of Zurich and the Administrative Court of the Canton of Zurich assumed that the spouses had engaged in an independent gainful activity in the form of commercial real estate trading with the sale of the property and subjected the profit to income tax.
The spouses filed a complaint with the FSCA and argued that they had not acquired and renovated the property with the intention of making a profit, but had sold it due to their professional and financial situation.
Considerations
The FSCA examined the question of whether the spouses had engaged in an independent gainful activity in the form of commercial real estate trading with the sale of the property. It found that the spouses had taken on significant business risk by financing the renovation of the property with 80% debt capital.
The court concluded that the spouses had acquired, renovated, and sold the disputed property with the intention of making a profit. It considered the use of labor and capital to be fulfilled and certified that the spouses had a…