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A taxpayer inquired about calculating capital gains or losses when selling a property and subsequently selling the plots resulting from a subdivision. The Directorate General for Taxes (DGT) ruled that subdivision does not alter the asset's identity and that the acquisition value of the plots shall be that of the original property.
This ruling provides legal certainty for taxpayers regarding the tax treatment of subdivided land, ensuring that the original cost basis and acquisition date are preserved for capital gains tax purposes.
The tax team reviews your specific situation.
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