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A taxpayer inquired about the taxation of a land sale where the contract included a clause reducing the price by half if a building permit was not obtained. The DGT ruled that the transfer value is the total contract amount and that any subsequent refund constitutes a capital loss.
This ruling clarifies that conditional price reductions occurring after the sale do not reduce the initial transfer value for tax purposes, potentially increasing the taxable capital gain at the time of sale.
The tax team reviews your specific situation.
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