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A taxpayer inquired whether Inheritance Tax and the Tax on the Increase in Value of Urban Land paid when inheriting a leased property are deductible. The DGT ruled that these are not direct expenses of the lease, but rather form part of the higher acquisition value of the asset.
This ruling clarifies that inheritance-related taxes cannot be deducted as direct expenses from rental income, as they must be incorporated into the asset's cost basis.
The tax team reviews your specific situation.
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