Individual income tax on an individual entrepreneur’s income from the sale of inherited immovable property
Question: An individual is an IE under a STR based on a simplified declaration inherited a share in commercial real estate. Following the registration of ownership rights, the commercial property is intended to be sold. What is the taxation procedure in this case?
Answer: The individual received the inheritance is an individual entrepreneur operating under a special tax regime based on a simplified declaration; therefore, the legal regulation of taxation issues is performed according to the provisions of Article 725 of the Tax Code.
The inherited share of commercial real estate, is recognized as income of the IE under the STR based on SD upon state registration of the ownership right, in the period when the state registration of ownership of the property was performed. Upon subsequent sale, taking into account the provisions of Article 390 of the Tax Code, the initial value for calculating capital gains will be the market value of the inherited share of the commercial real estate object as of the date the ownership right arose.