Business fortune is inherited

The taxpayer is selling a property she inherited from her father, which is independent.

The tax authorities consider that the building was part of the father's commercial assets and therefore the gain realised by the taxpayer is income from independent gainful activity (and taxed under income tax and social security).

The two cantonal authorities uphold the tax authorities' position.

Federal judges are examining whether the building was indeed part of the taxpayer's father's commercial assets, according to criteria developed by case law.
▶️ Systematic and planned behaviour
Frequent transactions
Short holding period
▶️ Major foreign funds
▶️ Specialised professional knowledge
Systematic reinvestment of profit

Each individual criterion is not strong enough on its own to tip the scales. They must be considered together and form a body of evidence.

The disputed property was acquired in three stages over about ten years. Two investment buildings were constructed on it. The cantonal judges saw this as systematic and planned behaviour. The federal judges refer to the specific circumstances of the phased purchase.

The father made 11 property purchases and 5 sales in 28 years. The cantonal judges saw this as an additional indication of professional trading. The federal judges note that all indicators must be considered.

The building was held for 19 years. Such a period of ownership is not in itself an indicator of private wealth. Professionals can indeed hold onto a building for a long period, until the market sufficiently increases its value.

👉 The debt ratio fluctuated from 811% to 891% and then to 73.451%. The cantonal courts saw this as a further indication of commercial activity. The federal courts have clarified that the debt ratio must be assessed at the time of acquisition, not retrospectively.

The father was an electrician, a secondary trade. However, buildings did not represent a significant workload for the company's activity.

The taxpayer's statements that the building was intended to provide for her parents do not hold water, as the property was transferred with the obligation to sell it within two years to pay off the debts of the electrician business. Furthermore, one can also secure one's old age with business assets.

Federal judges conclude that the property was indeed part of the taxpayer's father's private assets.

The tax office is covering the costs (CHF 8k).

The judgment is in German. It is a Zurich case.

Federal Tribunal, judgment 9C_126/2024, of 9 February 2026