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Practical manual for Income Tax 2024. Volume 1
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Practical case

The community of property "X", whose NIF is E28000000, is made up of two commoners, each of whom has a participation percentage of 50%. The commoner "Y" is a taxpayer with the NIF and the commoner "Z" is a taxpayer with the Corporate Tax. The community property has obtained the following income in the year 2024:

  • 12,200 euros from the year-round rental of a home to a married couple. The property was acquired by the entity in 2000, with the acquisition cost paid by the entity amounting to 250,000 euros. The property's cadastral reference is 0052807VK4724A0003KI. The property's cadastral value in 2024 was €58,500, of which 40% corresponds to the land value.

    The expenses incurred throughout the 2024 financial year by the entity in relation to the property were as follows:

    • I receive community: 1,100 euros.
    • Receipt IBI : 360 euros.
    • Interest derived from the financing of the property: 1,300 euros.

  • 1,200 euros, in the form of interest derived from a fixed-term deposit of two years and one day. The settlement of the aforementioned interest occurred, at the expiration of the term, on October 2, 2024.

  • 1,800 euros, in the form of dividends from shares of an entity resident in Spanish territory. The administration and deposit fees for the shares amounted to 10 euros.

  • The community of property carries out a business economic activity whose net income is determined using the direct estimation method, normal modality. According to the company's accounting records and data, income for the year amounted to 50,000 euros, with deductible expenses, including tax-deductible amortizations, amounting to 20,000 euros.

  • On January 10, 2024, it sold on the stock exchange for €150,000, less the expenses inherent to said transfer paid by the entity, a block of shares acquired on October 1, 1999, for €100,000, including the expenses inherent to said acquisition paid by the entity.

  • On November 15, 2024, a property not used for economic activity was sold for €150,000.00, after deducting the expenses and taxes inherent to said transfer paid by the entity. The property had been acquired on October 1, 2001, for an amount equivalent to €100,000, including the expenses and taxes inherent to the acquisition paid by the entity. The property's cadastral reference is 9872023VH5797S0001WX and its cadastral value, which has not been reviewed since 2011, amounts to €30,500 in 2024. The property has been unoccupied since its acquisition.

  • The amount of withholdings and payments on account borne by the entity amounted to: 570 euros (228 euros on interest and 342 euros on dividends).

Determine the income attributable by the entity to each of its members and the amounts that each of them must include in the annual declaration corresponding to their personal tax.

Solution:

1. Determination by the entity of the income attributable to each commoner according to the rules of IRPF :

1.1. Real estate capital returns:

  • Total income: 12.200
  • Deductible expenses:
    • I receive community: 1,100
    • Receipt IBI : 360
    • Real estate financing interests: 1,300
    • Property amortization 3% of (60% x 250,000.00) = 4,500

    Total deductible expenses: 7,260.00

  • Net return (12,200 – 7,260) = 4,940
  • Income attributable to each community member (50% s/4,940) = 2,470

1.2 Investment income:

  • Net dividend yield (1,800 - 10) = 1,790
  • Performance attributable to each community member (50% s/1,790) = 895
  • Net interest yield: 1,200
  • Performance attributable to each community member (50% of 1,200) = 600

1.3. Economic activity returns:

  • Total income: 50,000
  • Deductible expenses, including depreciation: 20,000
  • Net return (50,000 - 20,000) = 30,000
  • Income attributable to each community member (50% of 30,000) = 15,000

1.4. Capital gains and losses (sale of shares):

  • Transfer value: 150,000
  • Acquisition value: 100,000
  • Capital gain (150,000 - 100,000) = 50,000
  • Income attributable to commoner "Y" (50% s/50,000) = 25,000
  • Income attributable to the commoner "Z" (50% s/50,000) = 25,000

1.5. Capital gains and losses (sale of property):

  • Transfer value: 150,000
  • Acquisition value: 100,000
  • Capital gain (150,000 - 100,000) = 50,000
  • Income attributable to commoner "Y" (50% s/50,000) = 25,000
  • Income attributable to the commoner "Z" (50% s/50,000) = 25,000

1.6. Imputed real estate income (vacant property):

  • Attributable income (2% of 30,500) x (317 ÷ 365) = 529.78
  • Income attributable to each commoner (50% s/ 529.78) = 264.89

1.7. Withholdings and payments on account:

  • Attributable to each of the commoners (50% s/570) = 285

2. Income tax return attributed by the commoner "Y" taxpayer of IRPF :

2.1 Real estate capital performance:

  • Net attributable return: 2.470
  • Reduction in housing rent (60% s/2,470) = 1,482(1)
  • Computable net income (2,470 - 1,482) = 988

2.2. Net return on movable capital to be included in the taxable savings base:

  • Dividends
  • Full amount: 900
  • Deductible expenses attributable to: 5
  • Interests:
    • Net attributable return: 600

    Total computable net income from movable capital (900 + 600 – 5) = 1,495

2.3. Performance of economic activities:

  • Net attributable return: 15,000

2.4. Capital gains to be included in the taxable savings base: (2)

  • Attributable income (25,000 + 25,000) = 50,000

2.5. Imputed real estate income:

  • Amount allocated: 264.89

Note to example:

(1) It is assumed that the contract was entered into prior to 26 May 2023, and therefore the thirty-eighth transitional provision of the Personal Income Tax Law applies, introduced by Law 12/2023 of 24 May on the right to housing, according to which the positive net income from real estate capital derived from residential rental contracts entered into prior to 26 May 2023 will be subject to the reduction provided for in section 2 of article 23 of this law in its wording in force on 31 December 2021. Therefore, in the case presented, 60% corresponds to the part of the obtained yield. If a contract was entered into after May 26, 2023, the 50% reduction will apply as the requirements for applying the increased reduction percentages have not been met.(Back)

(2) Since both cases involve gains obtained from the transfer of assets (sale of shares and property), their amount is included in the taxable savings base. Regarding the gains and losses that make up the taxable savings base, see Chapter 11 . (Back)