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Does an LLC pay profit tax when buying and selling land?
Does an LLC pay profit tax when buying and selling land?
If a legal entity (LLC) is engaged in the buying and selling of land and records the purchased land on its balance sheet before selling it to an individual, this transaction is considered business income.
According to Article 104 of the Tax Code, the taxable base for resident enterprises is profit. Profit is defined as the difference between the total income earned by the enterprise and the expenses incurred to generate that income.
Therefore, when the LLC sells the land, it deducts the purchase cost of the land and other related expenses from the sales revenue, and the remaining amount is considered profit. At the end of the year, a profit tax return is filed based on this profit, and the შესაბამის tax is paid.
In other words, after deducting expenses from the income obtained from the sale of land, the LLC must pay profit tax on the resulting profit.
If a legal entity (LLC) is engaged in the buying and selling of land and records the purchased land on its balance sheet before selling it to an individual, this transaction is considered business income.
According to Article 104 of the Tax Code, the taxable base for resident enterprises is profit. Profit is defined as the difference between the total income earned by the enterprise and the expenses incurred to generate that income.
Therefore, when the LLC sells the land, it deducts the purchase cost of the land and other related expenses from the sales revenue, and the remaining amount is considered profit. At the end of the year, a profit tax return is filed based on this profit, and the შესაბამის tax is paid.
In other words, after deducting expenses from the income obtained from the sale of land, the LLC must pay profit tax on the resulting profit.