Cases where income from the sale and purchase of real estate is deemed business income;

Whether the income from the sale and purchase of a certain real estate belongs to the business income under the Income Tax Act or is subject to the transfer income tax, and it should be determined according to the ordinary social norms, taking into account whether the sale and purchase is aimed at profit and whether there is continuity and repetition of business activities to the extent that it can be seen as business activities in light of its size, recovery, mode, etc. Accordingly, if the Plaintiff continued to purchase and manage 30 lots of real estate in an area where the increase of land price is anticipated between 1973 and 1987, and the Plaintiff has operated a real estate rental business using ten lots of real estate, and if it is divided into 10 lots of real estate to be suitable for the housing site of 10 lots of real estate and sold it to 10 persons, the Plaintiff’s act of selling the above real estate constitutes the real estate sales business under Article 36 subparag. 3 of the Enforcement Decree of the Income Tax Act, and the income therefrom should be regarded as the business income.

Article 20 (1) 8 of the Income Tax Act, Article 36 subparagraph 3 of the Enforcement Decree of the Income Tax Act

Of course of study

Head of Namgu Tax Office

Daegu High Court Decision 89Gu665 delivered on December 27, 1989

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

According to the reasoning of the judgment below, the court below found, based on macroficial evidence, that the plaintiff continuously purchased and managed 30 lots of farmland, forest land, site, building, etc. located within Daegu-si, Gyeong-dong, Daegu-dong, 2-dong, 138, and 10 lots of real estate located within Daegu-si, Daegu-dong, and within 10 lots of land located within Daegu-dong, Daegu-dong, 2-dong, 138, and its ground building, and found that the plaintiff's real estate of 3 lots of real estate mentioned in attached Forms 2-1, 2, and 3 of the judgment of the court below among the real estate owned by the plaintiff to be suitable for the housing site from April 7, 197 to June 16, 1987, the court below held that the plaintiff sold the real estate of 10 lots of land to other third parties, such as the non-party Kim Jong-dong, Daegu-dong, 198, and that the plaintiff sold the real estate to other 3-dong-dong, 198.2,25.

In addition, the issue of whether the profit from the sale and purchase of a certain real estate is belonging to the business income under the Income Tax Act or is subject to the transfer income tax shall be determined according to the ordinary social norms, considering whether the sale and purchase is aimed at profit and whether the sale and purchase is continuing and repeated to the extent that it can be seen as business activity in light of its size, recovery, mode, etc. In light of all circumstances revealed in the facts recognized by the court below, such as the recovery and size of the real estate transaction conducted by the plaintiff and its attitude, the act of the plaintiff's above real estate sale and purchase constitutes the real estate sale business under Article 36 subparagraph 3 of the Enforcement Decree of the Income Tax

The judgment below to the same purport is just, and there is no error in the misapprehension of legal principles, such as theory of lawsuit.

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 on the bench.

Justices Yoon So-young (Presiding Justice)