Order for Enforcement of the Income Tax Act

The amount calculated as prescribed by Cabinet Order as the portion corresponding to the amount equivalent to the value of the spouse's right of residence at that time prescribed in Article 60, paragraph (3), item (i) (Acquisition Costs of Assets Acquired as Gifts) of the Act is the amount calculated by multiplying the amount calculated as the acquisition cost of the building that is the subject of the spouse's right of residence prescribed in that item by the proportion that the value listed in item (i) accounts for in the sum of the following values:

the value of the spouse's right of residence that would be calculated under Article 23-2, paragraph (1) (Valuation of the Spouse's Right of Residence, etc.) of the Inheritance Tax Act (Act No. 73 of 1950) if the provisions of that paragraph were applied to the spouse's right of residence at the time of the commencement of the inheritance;

the value of the building that would be calculated under Article 23-2, paragraph (2) of the Inheritance Tax Act if the provisions of that paragraph were applied to the building at the time of the commencement of the inheritance.

The amount calculated, as prescribed by Cabinet Order, on the basis of the period during which the spouse's right of residence prescribed in Article 60, paragraph (3), item (i) of the Act continues is the amount calculated by multiplying the amount calculated under the preceding paragraph by the proportion that the number of years in the period from the time of acquiring the spouse's right of residence until the time when that spouse's right of residence is extinguished (a fraction of six months or more is treated as one year, and a fraction of less than six months is discarded) accounts for in the number of years of continuation of the spouse's right of residence prescribed in Article 23-2, paragraph (1), item (ii), (a) of the Inheritance Tax Act (if that proportion exceeds one, one).

The amount calculated as prescribed by Cabinet Order as the portion corresponding to the amount equivalent to the value of the right to use, based on that spouse's right of residence, the land (including rights existing on land; the same applies hereinafter in this Article) to be used as the site of the building that is the subject of the spouse's right of residence, at that time, prescribed in Article 60, paragraph (3), item (ii) of the Act is the amount calculated by multiplying the amount calculated as the acquisition cost of the land to be used as the site of the building that is the subject of the spouse's right of residence prescribed in that item by the proportion that the value listed in item (i) accounts for in the sum of the following values:

the value of that right that would be calculated under Article 23-2, paragraph (3) of the Inheritance Tax Act if the provisions of that paragraph were applied to that right at the time of the commencement of the inheritance;

the value of that land that would be calculated under Article 23-2, paragraph (4) of the Inheritance Tax Act if the provisions of that paragraph were applied to that land at the time of the commencement of the inheritance.

The amount calculated, as prescribed by Cabinet Order, on the basis of the period during which the spouse's right of residence prescribed in Article 60, paragraph (3), item (ii) of the Act continues is the amount calculated by multiplying the amount calculated under the preceding paragraph by the proportion that the number of years in the period from the time of acquiring the right to use, based on the spouse's right of residence, the land to be used as the site of the building that is the subject of the spouse's right of residence until the time when that right is extinguished (a fraction of six months or more is treated as one year, and a fraction of less than six months is discarded) accounts for in the number of years of continuation of the spouse's right of residence prescribed in Article 23-2, paragraph (1), item (ii), (a) of the Inheritance Tax Act (if that proportion exceeds one, one).

Where a Resident who has acquired a building that is the subject of the spouse's right of residence by the inheritance or bequest listed in Article 60, paragraph (1), item (i) of the Act transfers that building after that spouse's right of residence has been extinguished, the acquisition cost of that building is as prescribed below:

if there is an amount treated as the acquisition cost under Article 60, paragraph (3) of the Act for the extinguishment of that spouse's right of residence, that amount treated as the acquisition cost is to be deducted from the sum of the amount required for the acquisition of the assets prescribed in Article 38, paragraph (1) (Acquisition Costs Deducted to Calculate Capital Gains) of the Act and the amounts of equipment expenses and improvement expenses;

if that Resident has paid consideration for the extinguishment of that spouse's right of residence, the amount of that consideration is to be included in the sum of the amount required for the acquisition of the assets prescribed in Article 38, paragraph (1) of the Act and the amounts of equipment expenses and improvement expenses.

Where a Resident who has acquired, by the inheritance or bequest listed in Article 60, paragraph (1), item (i) of the Act, land to be used as the site of a building that is the subject of the spouse's right of residence transfers that land after the right to use that land based on that spouse's right of residence has been extinguished, the acquisition cost of that land is as prescribed below:

If there is an amount treated as the acquisition cost under Article 60, paragraph (3) of the Act for the extinguishment of that right, that amount treated as the acquisition cost is to be deducted from the sum of the amount required for the acquisition of the assets prescribed in Article 38, paragraph (1) of the Act and the amounts of equipment expenses and improvement expenses;

If that Resident has paid consideration for the extinguishment of that right, the amount of that consideration is to be included in the sum of the amount required for the acquisition of the assets prescribed in Article 38, paragraph (1) of the Act and the amounts of equipment expenses and improvement expenses.

Where a Resident who holds a spouse's right of residence acquired by the inheritance or bequest listed in Article 60, paragraph (1), item (i) of the Act subsequently acquires the assets listed in the following items and transfers those assets, the amount of capital gains is calculated as if that person had acquired those assets for the amount specified in each of those items according to the category of assets listed in those items.

The building that is the subject of that spouse's right of residence: the amount obtained by adding, to the acquisition cost of that building, the amount that would be treated as the acquisition cost of that spouse's right of residence if the provisions of Article 60, paragraph (3) of the Act were applied on the assumption that that spouse's right of residence was extinguished at the time of acquiring that building;

Land to be used as the site of the building that is the subject of that spouse's right of residence: the amount obtained by adding, to the acquisition cost of that land, the amount that would be treated as the acquisition cost of the right to use that land based on that spouse's right of residence if the provisions of Article 60, paragraph (3) of the Act were applied on the assumption that that right was extinguished at the time of acquiring that land.