A. Method of calculating capital gains under the former Income Tax Act (amended by Act No. 3098 of Dec. 5, 1978)

(b) Necessary expenses for the acquisition in calculating transfer income from transfer of inherited real estate; and

A. In light of the provisions of Articles 23(5) and 45(1)1 of the former Income Tax Act (amended by Act No. 3098, Dec. 5, 1978); Articles 170(3) and 170(4) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 922, Dec. 30, 1978); in calculating capital gains for the imposition of capital gains tax, the transfer value and acquisition value shall be based on the current market price if it is based on the current market price, or if the actual market price is unclear, it shall be based on the current market price unless the actual market price is revealed.

B. According to Articles 112(1) and 131(1) of the Local Tax Act, the acquisition tax rate is 20/1,000 of the value of acquired articles; registration tax is 8/1,000 of the value of acquired articles; and registration tax is 8/1,00 of the value of the real estate in the case of acquisition of ownership due to inheritance; thus, if inherited real estate is transferred, necessary expenses for acquisition shall be 28/1,00 of the acquisition

A. Articles 23(5) and 45(1)1 of the former Income Tax Act (amended by Act No. 3098 of Dec. 5, 1978); Article 170(3) and (4)(b) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 922 of Dec. 30, 1978)

Plaintiff 1 and one other

Head of Suwon Tax Office

Supreme Court Decision 85Nu238 Decided February 24, 1987

Seoul High Court Decision 87Gu394 delivered on March 31, 1988

The part of the judgment below against the defendant against the plaintiff 2 shall be reversed, and that part of the case shall be remanded to the Seoul High Court.

The appeal against the plaintiff 1 is dismissed.

The costs of appeal against the dismissal of an appeal shall be assessed against the defendant.

We examine the grounds of appeal.

With respect to the first place (as to the Plaintiff 1):

In the calculation of transfer income amount for imposition of transfer income tax, in principle, its transfer value and acquisition value shall be based on the actual transaction value in light of the provisions of Articles 23(5) and 45(1)1 of the Income Tax Act (amended by Act No. 3098 of Dec. 5, 1978; hereinafter the same shall apply) and Article 170(3) and (4) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 922 of Dec. 30, 1978; hereinafter the same shall apply), which was enforced at the time of the transfer of the assets of this case, if the actual transaction value is unclear, the transfer value and acquisition value shall be based on the actual transaction value. However, if the actual transaction value is unclear, it shall not be calculated based on the market price (amount of appraisal) on the ground that the actual transaction value is unclear, and therefore, it shall not be deemed that the provisions of Articles 170(8) and (9) of the former Enforcement Decree of the Income Tax Act are unclear.

With respect to the second point (as to the Plaintiff 2):

According to the facts established by the court below, the plaintiff 2 acquired the real estate in this case by inheritance on August 3, 197 (the transfer registration certificate No. 8-1 and No. 2 is recognized to have been transferred on May 30, 197). However, according to Articles 112 (1) and 131 (1) of the Local Tax Act, the acquisition tax rate is 20/1,000 of the value of the article acquired, and the registration tax is 8/1,000 of the value of the article acquired by inheritance. Thus, the necessary expenses for acquisition in this case should be 28/1,000 of the acquisition value.

However, according to the plaintiff 2's calculation table attached to the judgment below, the court below seems to have calculated 5% (50%) of the standard market price in deducting necessary expenses. Thus, the court below should be deemed to have calculated the plaintiff's necessary expenses by mistake.

Meanwhile, according to Article 46 (1) of the former Enforcement Decree, the special deduction rate for capital gains refers to 10/100 per annum. However, if the increase rate of wholesale products as determined by the Ordinance of the Ministry of Finance and Economy exceeds 10/100 per annum, wholesale products shall be the increase rate within the scope not exceeding 20/100 per annum. According to Article 18 of the former Enforcement Rule of the Act, the rate of increase in wholesale products means the rate calculated by index with wholesale products surveyed by the Bank of Korea, and the Commissioner of the National Tax Service shall notify it publicly. According to the calculation schedule, the court below applied the special deduction for capital gains for the same plaintiff in this case where the holding period of the same real estate is less than one year, and without disclosing the calculation basis, it shall be deemed that this part of the court below's reasoning cannot be exempted, and therefore, this part of the judgment below is justified.

Therefore, among the judgment of the court below, the part against the defendant against the plaintiff 2 is reversed, and that part of the case is remanded to the court below, and the appeal against the plaintiff 1 is dismissed, and the costs of appeal against the dismissal of appeal are assessed against the defendant who is the losing party, as per the Disposition

Justices Kim Young-ju (Presiding Justice)