Whether the investment in kind of assets to a union constitutes the commercial transfer of assets that are taxable grounds for capital gains tax;

The assets invested in the partnership with the same business property are separate from the individual assets of the investors, and the investors acquire the status of the partnership members in return for the investment. Therefore, the investment in kind of assets to the partnership constitutes the transfer that is the taxable cause of the transfer income tax, as the investment in kind of assets.

Article 4 (3) of the Income Tax Act

Supreme Court Decision 84Nu392 Decided December 26, 1984 85Nu339 Decided November 12, 1985

Plaintiff

Head of Seogsan Tax Office

Daegu High Court Decision 85Gu129 delivered on November 8, 1985

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

Since assets invested in the partnership with the same business property are made separate from the individual assets of the investors, and the investors acquire the status of the partners as compensation for the investment, the investment in kind of assets in the partnership constitutes a transfer which is a taxable cause of capital gains tax as an onerous transfer of assets (see, e.g., Supreme Court Decision 84Nu392, Dec. 26, 1984; Supreme Court Decision 84Nu549, Feb. 13, 1985; Supreme Court Decision 84Nu680, Apr. 23, 1985; 84Nu545, May 28, 1985; 85Nu267,85Nu31, 85Nu339, Nov. 12, 1985). Accordingly, the court below's rejection of the Plaintiff's assertion that the ownership transfer registration in this case is non-titled with the title trust, is justified and there is no error in the misapprehension of legal principles as to the transfer margin.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Young-ju (Presiding Justice)