Criteria for determining whether the income from the sale of real estate belongs to the business income under the Income Tax Act, and whether to become the tax base of capital gains tax.

Whether the income from the sale and purchase of real estate belongs to the business income under the Income Tax Act or is subject to the transfer income tax, the purpose of whether the sale and purchase is the profit-making, and the continuity and repetition of business activities can be viewed as business activities in light of the size, frequency, mode, etc. shall be determined in light of social norms, considering the circumstances.

Articles 20(1) and 20(3) of the Income Tax Act, Articles 36 and 39 of the Enforcement Decree of the Income Tax Act

Supreme Court Decision 81Nu115 Delivered on September 14, 1982

[Defendant-Appellee] Plaintiff 1 et al.

The Head of the Maternization Tax Office

Seoul High Court Decision 81Gu621 delivered on January 20, 1983

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

We examine the grounds of appeal.

Article 20 (1) of the Income Tax Act lists the income generated from the real estate business which is subject to the income tax, and delegates the scope of business income to the Presidential Decree under paragraph (3) of this Article. Accordingly, Article 36 of the Enforcement Decree of the Income Tax Act provides that real estate business is real estate sales business. Article 39 of the Enforcement Decree of the Income Tax Act provides that the scope of this business shall be governed by the provisions of this Enforcement Decree and the Korean Standard Industrial Classification Table as of the end of the pertinent year publicly notified by the Director General of the Economic Planning Office. The above Korean Standard Industrial Classification Table is clear that real estate sales business is not subject to the classification of real estate (2) real estate transactions, including real estate transactions, real estate transactions, real estate transactions, purchase, sale, management and management services, real estate agents, real estate agents, and real estate agents and real estate agents and real estate agents and real estate agents, and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents and real estate agents.

Therefore, the issue of whether the profit from the sale and purchase of real estate belongs to the business income under the Income Tax Act or is merely a taxable object of capital gains tax should be decided in light of social norms by considering the circumstances such as whether the sale and purchase is for profit and the continuance and repetition of business activities can be seen as business activities in light of their size, recovery and appearance, etc. Therefore, according to the court below's lawful determination, the plaintiff acquired a lot of land, including the land stated in attached Table 1 (Attachment of the judgment of the court below) from 1968 to 1976, and neglected to acquire and leave the land as idle funds during the period from 1977 to 1977, and transferred this land to the state at the time of its acquisition. Thus, since the plaintiff's sale and purchase of this land was for the purpose of earning profits, it cannot be said that the accident continues to exist for a considerable period of time to view it as business activities, that is, the form and nature of the sale and purchase of the land, and the act of strike continued to be separated.

Ultimately, the Plaintiff’s income from the sale of real estate cannot be considered as business income under the Income Tax Act, so the lower court’s revocation of the Defendant’s disposition of global income tax, etc. on the same purport is justifiable and it cannot be said that there is any error of law like the theory of lawsuit. Therefore

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

Justices Lee Il-young (Presiding Justice)