In case where land and buildings have been acquired together, and buildings have been removed and transferred as a site condition, whether the cost of removal or acquisition of buildings may be deducted from the transfer value by including the cost of removal or acquisition in necessary expenses in calculating gains on transfer.

In case where the relevant building is removed in order to concurrently use the land and buildings after its acquisition, and only the land is transferred in the state of a site, the acquisition value and removal expenses, etc. of the removed building shall be included in the necessary expenses of the transferred property which is included in the acquisition value of the relevant land, shall be limited to the case where it is deemed obvious that such acquisition is for the purpose of utilizing only the land by removing the building from the beginning thereof, within

Articles 23 and 45 of the Income Tax Act

Kim Young-il

The Director of Gangnam District Office

The plaintiff's claim is dismissed.

Litigation costs shall be borne by the plaintiff.

The Defendant’s disposition of imposition of KRW 3,810,250, and the defense tax amount of KRW 762,040, as of June 17, 1987 against the Plaintiff was revoked.

Litigation costs shall be borne by the defendant.

1. The transfer income tax of subparagraph 1 through 7, evidence Nos. 3 (Report on Preliminary Return, Evidence No. 1-4, evidence No. 1-2), evidence No. 6 (Evidence No. 1-1, No. 5-3, No. 5 (Calculation Statement, No. 2-6), and the transfer income tax base of the land of this case calculated by deducting the amount of the transfer income tax of this case from the original amount of 00 won to the plaintiff according to the tax base return No. 40, No. 70, No. 9, No. 1-2, No. 4, and the transfer income tax of this case to the plaintiff according to the annexed Table No. 7, No. 9, No. 1-7, No. 9, No.

2. The Defendant asserted that the portion of the tax amount remaining valid after a reduction or correction of the initial tax assessment (hereinafter referred to as the “instant tax assessment”) on the ground of the grounds of the grounds of the grounds of the above disposition and the applicable laws and regulations is legitimate. Accordingly, the Plaintiff sold the building in the site under the conditions that the building was demolished at the time of the transfer of the instant land, and accordingly delivered the said land after the removal of the said building. As such, in calculating gains on the transfer of the instant land, the acquisition value of the instant land to be deducted from the transfer value should be also included in the necessary expenses, while the Defendant did not include the acquisition value of the instant building in the necessary expenses, but calculated gains on the transfer of the instant land and assessed the tax amount accordingly, is unlawful.

On the other hand, Article 23 (2) of the Income Tax Act provides that capital gains shall be the amount calculated by deducting necessary expenses under Article 45 of the Act from the transfer value, and Article 45 (1) 1 of the same Act provides that when calculating gains from transfer, one of the necessary expenses to be deducted from the transfer value of the relevant property at the time of acquisition of the relevant property, the amount under the standard market price at the time of acquisition of the relevant property is added to the necessary expenses to only use the land after acquiring the land and buildings together, and only transfer the land in the state of the site, the acquisition value and removal cost of the removed building shall be included in the necessary expenses for the transferred property included in the acquisition value of the relevant land within the time limit of its acquisition in order to include the acquisition value and removal cost of the removed building in the transfer value of the building within the time limit of its acquisition, and thus, it shall be limited to the case where it is evident that the Plaintiff had no purpose of using the building in the above 2nd floor after deducting only the land from the original acquisition value of the building in this case.

If so, the plaintiff's claim seeking revocation is without merit on the premise that the taxation disposition of this case is illegal, and the costs of the lawsuit are assessed against the losing party and so decided as per Disposition.

Judges Nohn-Du (Presiding Judge)