Points to note when transferring assets from an individual to a corporation

2025年7月29日 2025年7月29日

tsuzukizeirishi

There are cases where an individual transfers real estate or stocks owned by them to a corporation.

There are some points to keep in mind when doing this.

Gifts and transfers at less than half the market value are considerded as transfers at market value

Assets that qualify for capital gains (such as movable property, real estate, and stocks) transferred from an individual to a corporation by

are considered to have been transferred at market value.

The reasons for this are:

Corporations always conduct their economic activities with the goal of profit, it is reasonable to conduct transactions at market value.
When assets are transferred from an individual, income tax cannot be levied on capital gains.

You might be wondering whether gifts are subject to gift tax, but gift tax applies to the free transfer of assets between individuals.

How do we determine whether a transfer is low value when both land and a building are transferred simultaneously from an individual to a corporation?

In this case, the total transfer price of all assets is calculated to determine whether it is less than half of the market value.

For example, if a transfer is made from an individual to a corporation under the following conditions:

The transfer price of the building is more than half of the market value, so it is calculated using the transfer price.
The transfer price of the land is less than half of the market value, so it is calculated using the market value.

No.

The total transfer price is less than half of the market value, so both the building and the land are calculated using market value.

It's correct.