If you own a donated property and want to sell it, there are some things you should know. There is a tax on the sale, in case they have not been completed 3 years from acquiring ownership of the property. But even if the deal date is approaching, there is a way to get out of the situation.
In all cases, as long as the 3-year period from the date of the donation of the residential property has not expired, tax on the sale is due the full selling price, states broker Mariana Toromanova. When selling after this period, the transaction is tax-free and the seller will not owe any tax on it.
It would be a big oversight for the brokerage agency that took over the deal not to notice this detail. According to the specialist, there is no obstacle for the parties to agree on something extension of time. And the broker is the intermediary who should assist.
There is a tax for donated property, confirms lawyer Milena Mitkova. The income from the sale or exchange of property acquired by inheritance and testament, as well as property restituted in accordance with a normative act, is not taxed.
Misleading is point 27 of Art. 13 of the Income Tax Act, where it is said that the property received by inheritance, will and donation, as well as the property received with restored ownership in accordance with the order of a normative act, are not considered income. That is, upon receipt of the donation itself, it is not considered to be income.
The tax can be reduced by the parties passing the deal on tax assessment, reveals the expert. This is in the seller's interest, but not the buyer's.
If a preliminary contract has already been signed, and there is little time left until the expiration of the 3-year term, it is most reasonable for the parties to come to an agreement. It can be invented transaction document, which for reasons beyond the seller's control (delay or administrative error) will not be ready before a given date. For this purpose, however, the buyer should be notified in writing.
The lawyer advises to negotiate some sort of exchange. For example, if the buyer has a request for a tax assessment transaction or other request, the seller must comply with it in exchange for an extension of the contract signing period.
The win-win strategy usually proves very successful in such negotiations.
source: Pariteni.bg