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V0858-21 13 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Compensation for property damage in a fire is classified as a capital gain or loss

An industrial warehouse owner asks how to tax compensation received following a fire. The DGT rules that it is not exempt income for personal injury, but rather a capital gain or loss.

The question raised

Question posed: Method of calculating the capital gain or loss corresponding to the compensation received for industrial buildings and the fiscal year to which it must be imputed.

The DGT's ruling

Compensation for property damage to assets is computed as a capital gain or loss, calculating the difference between the amount received and the proportional part of the acquisition value of the damaged asset. No capital gain shall be computed if the compensation coincides with the repair cost, as no increase in the value of the assets would be derived.

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