Whether this taxation is legitimate as the principal business income who runs a real estate sales business with a spouse’s transfer margin;

If the principal engaged in real estate sales business even if he/she gains from the transfer of real estate under the name of his/her spouse, the disposition imposed on him/her is legitimate.

Article 39 of the Income Tax Act, year to which the total amount of income and necessary expenses are reverted.

1. All of the plaintiff's claims are dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

1. Details of the disposition;

A. The plaintiff purchased 55 lots of land located in the same Gun from November 1, 1997 to October 2004 (hereinafter referred to as "the real estate in this case") from 000 on September 4, 1989 in the name of the plaintiff or the non-party's wife, and sold the real estate in this case under the name of the plaintiff or the non-party's wife's name for the period between March 2000 to December 2004.

B. On November 10, 2005, the Defendant: (a) deemed that the Plaintiff runs real estate sales business; (b) included the transfer margin of the instant real estate in the Plaintiff’s business income for each business year; and (c) imposed upon the Plaintiff each disposition of imposition of global income tax of KRW 56,861,780, global income tax of KRW 290,456,670, global income tax of the business year of 2003; and (d) global income tax of KRW 51,014,380, global income tax of the business year of 2004 (hereinafter “each disposition of this case”).

C. On January 24, 2006, the Plaintiff filed an appeal with the National Tax Tribunal on each of the dispositions of this case, but the National Tax Tribunal dismissed the appeal on November 2, 2006.

[Reasons for Recognition] Uncontentious Facts, Gap 1-1, 2, Eul 1-1-3, Eul 2, Eul 6, the purport of the whole pleadings

2. Determination on the legitimacy of each of the dispositions of this case

A. The plaintiff's assertion

(1) ① 1/3 shares in ○○○-gun, ○○-gun, ○○○-gun, ○○○-gun, 6,241 square meters (hereinafter “○○-ri,” hereinafter) and ② 7,388 square meters in ○○-ri, ○○-gun, ○○-ri, ○○○-ri, ○○-ri, ○○-ri, ○○○-ri, ○○○-do, hereinafter “○○-ri, ○○○-ri, ○○○-do, ○○-gun, ○○○-gun, ○○-ri, ○○○, ○○-ri, ○○, ○○-ri, ○○, ○○-do, ○○-ri, ○○, ○○-ri, ○○-do, and the Plaintiff’s total disposition was made on April 15, 2003.

(2) In rendering each of the instant dispositions, the Defendant did not reflect the reduction of gains from transfer due to the reduction of sales price in calculating the business income related to the transfer of ○○-ri Forest, and did not reflect the reduction of gains from transfer due to the reduction of sales price. The Defendant erred by misapprehending the tax base by failing to reflect necessary expenses, such as measurement expenses related to the transfer of ○○-ri Forest, and transfer expenses related to the transfer of the instant real estate.

(3) The ○○○-gun, one of the instant real property, ○○○-gun, ○○○○-gun, ○○○○○-gun, 26,050 square meters (hereinafter “○○-ri, ○○○-do”) was incorporated into ○○○-ri Coastal Zone and acquired through consultation with ○○-Gun, and the transfer of ○○○-ri forest cannot be deemed as for profit-making purposes and continuity necessary to recognize business feasibility. Therefore, the Defendant’s disposal of each of the instant real property was unlawful to add gains from transfer due to the receipt of compensation for losses to business income.

(4) In transferring the instant real estate, the Plaintiff spent KRW 180,980,00 as a brokerage commission. The Defendant’s disposal of the instant real estate was unlawful that it was not included in the necessary expenses.

B. Relevant statutes

The entry in the attached Form shall be as follows.

C. Determination

(1) Whether the Plaintiff acquired real estate under the name of ○○, among the instant real estate

(A) The registration of ownership transfer was completed on September 30, 202 with respect to 1/3 shares of 00 of 00 ○○-ri Forest, and the acquisition value of the above real estate was 15,33,333 won. ② The registration of ownership transfer was completed on July 3, 2003 with respect to 00 ○○-ri Forest, and the acquisition value of the above real estate was 20 million won at the time of the registration of ownership transfer was completed on July 3, 2003. The registration of ownership transfer was completed on January 27, 2003 with respect to 6,446/42,645 shares out of 00 ○○-ri Forest, which was ○○-ri, ○○○-ri Forest, and thus, the acquisition value of the above real estate was 100 million won or was 100 million won among the parties, and it should be proved that the Plaintiff acquired the above real estate under the name of ○○-ri, as a whole real estate.

(B) However, comprehensively taking account of the overall purport of the arguments in Gap evidence No. 11, Eul evidence No. 2, Eul evidence No. 4, Eul evidence No. 9-1, and Eul evidence No. 2, the plaintiff entered into a marriage report on July 5, 2002. The plaintiff did not participate in the real estate transaction before marriage in the tax official's investigation process related to the transfer of the real estate in this case, but substantial transactions such as the receipt and payment of the transaction amount were conducted after marriage, but the plaintiff was responsible for the plaintiff. Such transactions were conducted for profit-making purposes. The plaintiff's decision was based on the time for share transfer related to the real estate transaction. The non-party No. 6,446/42, and Eul evidence No. 9-2, and the fact that the plaintiff completed the registration of ownership transfer from 000,000 won for non-party No. 15,000 won for non-party No. 1,000,000 won for non-party No. 1646,646.

According to the above facts of recognition, it is reasonable to view that real estate under ○○ was actually acquired by the Plaintiff under the name of ○○, the wife regardless of the registration title (the testimony of ○○○○ is not believed to the extent inconsistent with this). Thus, the disposition of this case by the Defendant imposing comprehensive income tax on the Defendant by deeming transfer margin of real estate under ○○’s name as the business income of the Plaintiff’s real estate sales business income.

(C) On this issue, the plaintiff asserts that ○○ has independent income to the extent that ○○ has purchased real estate before marriage with the plaintiff, and that ○○ real estate was also purchased by ○○○○. However, the plaintiff merely purchased real estate on behalf of ○○○○.

1) According to the statements in Gap's Evidence Nos. 12, 13, 19, Eul's Evidence Nos. 4 and 7, Ma○○ shall be recognized as the fact that between April 27, 1995 and December 31, 2001, Ma○○○-gun's ○○○○-ri's ○○○○○-ri's ○○○○○○-ri's ○○○○○-gun's ○○○ ○○-ri's 1,180 square meters (hereinafter referred to as "○○-ri ○○ ○○-ri 's ○○○ ')' and 1,180 square meters of shares on November 18, 1998 (hereinafter referred to as "the ○○ 30-ri ○ ○ ○ ○ 20-ri's ○ ○ 6,612/464,201.

2) However, comprehensively taking account of the overall purport of oral argument in evidence No. 1-2, No. 19-2, No. 19-2, No. 19-2, and No. 4, No. 5, and No. 7, the sales that ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ was reported to the National Tax Service was approximately 1.2 million in 1997, 1998, 1900, 13 million won in 2001, which is about 4,050,000 won in total, and there is no income from which the standard income rate was applied to the reported sales amount. The Plaintiff appears to have been approximately KRW 2080,000,000 won in terms of the fact that ○○○○○○○○○○○○○○○○○○○○○6 on June 2, 2001.

On the other hand, the sum of the acquisition value of real estate under the name of ○○○○ is the fact which is the 135,33,333.

3) Comprehensively taking account of the facts acknowledged in the above paragraph 2, it is difficult to see that ○○ was actually aware of the acquisition of the above real estate by ○○○○, such as the fact that ○○ had been operating the clothing retail business prior to marriage with the Plaintiff, and that ○○ had been offered as security for the Plaintiff’s obligation even the real estate acquired under the name of ○○○ prior to marriage with the Plaintiff. In light of these circumstances, in light of these circumstances, it is difficult to believe the witness’s testimony that conforms to the Plaintiff’s assertion, and the fact recognized in the above paragraph 1 is insufficient to recognize that ○○ acquired ○○○’s real estate by purchasing ○○○○ real estate, and it is insufficient to recognize that ○○ acquired ○○○’s real estate by purchasing ○○○ real estate under the Plaintiff’s name

(2) Whether the purchase price is reduced or not

(A) The Plaintiff asserts that the total purchase price for the transfer of shares of 6,446/42,645, among the ○○○○ Forest, ○○○○○○○, was reduced by 170 million won, and thus, should be reflected in the calculation of gains from transfer. Based on the sales price reduction, the Plaintiff’s construction of access roads to the forest of ○○○○○○ at the time of the above sales contract was additionally stated as the contractual terms and conditions, but the Plaintiff opened a access road with KRW 150 million, which was in violation of the relevant laws and regulations, and subsequently failed to perform the contractual terms and conditions.

(B) The above circumstance alleged by the Plaintiff is insufficient to recognize that the purchase price has been reduced. Rather, according to the Plaintiff’s statement No. 9, it can be acknowledged that Nonparty ○○, who purchased the forest of ○○○○○ from the Plaintiff in the course of the investigation into the violation of the Mountainous Districts Management Act in relation to the establishment of access roads, stated to the effect that Nonparty ○○, who purchased the forest of ○○○○○, was opening the access road to the Plaintiff, and that the access road was opened regardless of his/her intent, it is difficult to view that it was sufficiently recognized whether the establishment of the access road was the terms of the sales contract as alleged by the Plaintiff. The Plaintiff

(3) Whether the survey costs are paid or not

(A) According to each of the statements in the evidence Nos. 3-1 and 2, the fact that the head of the Korea Cadastral Corporation 00 military branch office issued the Plaintiff a copy of the receipt on May 31, 2004 to KRW 8,325,90 of the cadastral surveying fees for 00 ○○san Forest.

(B) However, according to the statements in Gap evidence Nos. 3-2 and Eul evidence Nos. 8, the person to whom the above copy was supplied is not the plaintiff but the high ○○○○, and the above high ○○○ is the business operator who registered his business with the trade name of ○○ Licensed Real Estate Agent on September 6, 2003 and engaged in real estate business. In light of the above, the facts acknowledged in the above paragraph (a) are insufficient to recognize that the plaintiff paid the above cadastral survey expenses in relation to the transfer of ○○○ ○○san Forest, and there is no other evidence to acknowledge them. Thus, this part of the plaintiff's assertion that the above expenses should be reduced as necessary expenses is groundless.

(4) Whether the cost of this Chapter should be included in the necessary expenses

(A) According to Gap evidence Nos. 4-1, 2, 17-1, 17-5, and Gap evidence Nos. 18-1 through 5, the plaintiff entered into a contract with ○○○○○○ on October 4, 2004 with ○○○○○○○○, ○○○○○, ○○○○, and ○○○○○, ○○○, and 5 million won on the same day (hereinafter referred to as “the former funeral service contract on October 4, 2004”), the plaintiff paid the remainder of 3 million won on the same day to ○○○○○○○ on the same day (1.5 million won among the plaintiff’s housing), and the remainder of 6 million won on the same day on April 6, 2005, the plaintiff paid the down payment to ○○○○○ on the same day (1.5 million won on the same day).

(B) First of all, Article 39 (1) of the Income Tax Act provides that the Health Center and the year to which necessary expenses for each year of a resident belong shall be the year to which the date on which the necessary expenses are determined, and Article 48 (5) of the Enforcement Decree of the Income Tax Act provides that the date on which the provision of services is completed with respect to the receipt of business income from construction, manufacturing, or other services. Thus, the expenses incurred by the Plaintiff through the above service contract shall be deemed to have been determined on the date on which the provision of services was completed. Thus, regardless of the date of conclusion of the contract, the expenses incurred by the Plaintiff through the service contract shall be deemed to have been reverted to the necessary expenses for the business year to which April 6,

Meanwhile, the down payment paid on the date of concluding the above Chapter service contract shall not be included in the necessary expenses, as prepaid expenses under Article 33(1)14 of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006) and are not included in the necessary expenses. Thus, the down payment paid on the date of concluding the above Chapter service contract cannot be included in the necessary expenses

(C) Next, regarding the transfer contract of June 18, 2005, since the date of conclusion of the above transfer contract of this Chapter and the date of completion of the provision of services is after the business year 2005, it cannot be included in the necessary expenses prior to the business year 2004.

(D) Therefore, since the need to pay for each of the above services contracts is irrelevant to the tax base of each of the instant dispositions, the Plaintiff’s assertion on this part is groundless.

(5) Whether the transfer margin of the real estate acquired by consultation constitutes the business income

(A) Even if part of the land previously owned was expropriated during a real estate sales business, barring any special circumstance, barring any special circumstance, the said land is already transferred as part of the real estate sales business, and thus income accrued therefrom shall be deemed as income accrued from the real estate sales business (see, e.g., Supreme Court Decision 95Nu9778, Jul. 8, 197).

(B) According to the statements in the evidence Nos. 2 and 6, the plaintiff acquired ○○○-ri forest from the non-party 164,201,149 on Jan. 15, 1999, and he received 1,068,050,50 won as compensation for expropriation of the above land on May 28, 2003 when the plaintiff acquired ○○-ri forest from the non-party 1 to the non-party 164,201,149 on Oct. 15, 199. Meanwhile, it is acknowledged that the plaintiff acquired ○-ri forest from the non-party 1 to the non-party 100,500 on May 28, 2003, the plaintiff acquired ○-ri-ri forest from the non-party 1 to the non-party 204,500 on Oct. 31, 197 or the plaintiff's sale of the above land under the name of the plaintiff 1 to 300.

(C) Comprehensively taking account of the above facts acknowledged, it is reasonable to view that the Plaintiff engaged in real estate sales business by purchasing and transferring land for profit-making purposes even around May 28, 2003, which was around the time when ○○○-ri Forest was acquired through consultation. In accordance with the legal principles of the above Paragraph (a) above, ○○-ri Forest was transferred through consultation, but it was transferred as part of the real estate sales business as well as other real estate among the instant real estate, and thus income accrued therefrom is also deemed as income accrued from the real estate sales business. Accordingly, each of the instant dispositions related thereto is lawful, and the Plaintiff’s assertion on this part is groundless.

(6) Whether the commission is paid or not

Since there is no evidence to prove that the plaintiff paid the brokerage commission, this part of the plaintiff's assertion is without merit.

(7) Sub-committee

Therefore, each disposition of this case is legitimate, and all the plaintiff's assertion is groundless.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

Relevant statutes

○ Calculation of necessary expenses under Article 27 of the former Income Tax Act

(1) In the calculation of real estate rental income, business income, temporary property income, other income, or income from separation, the amount to be included in necessary expenses shall be the sum of expenses corresponding to the total amount of income in the relevant year, which is generally accepted.

(2) The expenses corresponding to the total amount of income before the current year, which are not appropriated as the necessary expenses before the current year, shall be considered the necessary expenses.

○ Non-Inclusion of Article 33 of the former Income Tax Act

(1) Of the amounts paid or to be paid by a resident in the current year, the following amounts shall not be included in necessary expenses in the calculation of real estate rental income, business income, temporary property income, other incomes, or forest income:

14. Prepaid expenses; and

○ Article 39 of the Income Tax Act for the year to which the total income amount and necessary expenses are attributed.

(1) The year to which the total income and necessary expenses of a resident are reverted shall be the year in which the total income and necessary expenses are determined.

(4) Matters necessary for the year to which the total amount of income and necessary expenses under paragraph (1) are reverted, calculation of acquisition value under paragraph (2), or deliberation of other assets, debts, etc. shall be prescribed by

Article 48 (Receipt Date of Business Income)

The receipt date of the total amount of the business incomes shall be the following dates:

5. Provision of construction, manufacturing, and other services (including contracting construction and reservation sales; hereafter referred to as "construction, etc." in this subparagraph);

The date of completing the provision of services (the date of delivery where objects are transferred): Provided, That where the contract period is not less than one year and the Ordinance of the Ministry of Finance and Economy prescribes, it shall be based on the rate of work progress as prescribed by the Ordinance of the Ministry of Finance and Economy (hereinafter referred to as the “rate of work progress”), and where the contract period is less than one year, it may be based on the