Whether capital expenditures are deducted in the calculation of gains on transfer based on the standard market price (affirmative)

In the calculation of gains from transfer in order to impose transfer income tax, even if the transfer value and acquisition value are calculated by the standard market price, the capital expenses prescribed in Article 94 of the Enforcement Decree of the Income Tax Act shall be deducted from the transfer

Article 45 (1) 3 of the Income Tax Act, Article 94 (3) of the Enforcement Decree of the same Act

Supreme Court Decision 88Nu1646 Decided June 28, 1988

Plaintiff

Director of the tax office

Seoul High Court Decision 87Gu8 delivered on May 18, 1988

The appeal is dismissed.

The costs of appeal shall be assessed against the defendant.

In the calculation of capital gains tax in order to impose capital gains tax, the capital expenses as prescribed by Article 94 of the Enforcement Decree of the Income Tax Act shall be deducted from the transfer value, considering the necessary expenses, even if the transfer value and acquisition value are calculated based on the actual transaction value, and even if they are based on the standard market price (see Supreme Court Decision 88Nu1646 delivered on June 28, 198).

However, according to the court below's decision, the defendant transferred the land to the non-party on June 20, 1985 and made the preliminary return on the transfer margin on August of that year, and submitted the evidential documents with the acquisition value and the transfer value based on the standard market price and the amount of 37,64,37 won as the suspension cost. In such a case, if the suspension cost based on the evidentiary documents is deemed consumed, the defendant should deduct it from the transfer value as necessary expenses and impose the tax base after deducting it from the transfer value. In such a case, it is clear that the defendant imposed the tax without deducting it from the view that it cannot be deemed necessary expenses. Thus, the defendant's taxation procedure is unlawful

The revocation of the defendant's disposition by the court below is justifiable in accordance with the purport of the above party members' decision. The appeal cannot be accepted.

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 Yong-sung (Presiding Justice)