As for deemed transfer income (minashi jodo shotoku) in Japan.
In the case you sell property and gain profit, it will produce “transfer income = jodo shotoku”. In the case business operator (assumed “vegetable store”) sells vegetable, it is not included in transfer income. It is business income = jigyo shotoku.
In the case you purchased a book at 100 yen and paid fee of 10 yen for broker. Then you sell the book at 150 yen ( at the time you sell the book, you pay fee of 5 yen for broker ).
In this case 150 yen – 100 yen – 10 yen – 5 yen = 35 yen is transfer income. And in the case you have owned the property for more than five years, 50% of 35 yen is taxable income. In the case you have owned the property for five years or less, 35 yen is taxable income. And amount of taxable income is less than 500,000 yen, you do not need to pay transfer income tax.
In the case you purchased a house at 10 million yen in 2011. After your purchase, market price of this real estate increased to 15 million yen ( capital increase of 5 million yen ). Then, end of 2012, you gifted this real estate to Mr.R. If Mr.R sells this real estate to Mr.B, this 5 million yen should be included in transfer income. So, taxable income of Mr.R should be increased. And you do not need to pay income tax.
Deemed transfer income is exception of above.
In the case of deemed transfer income, even if you have not received any profit, you are required to pay income tax.
Otherwise, you could avoid paying income tax easily.
In the case you gifted a property to legal entity, even if you have not received any selling price, you are deemed that you have received amount equivalent to market price and income tax shall be levied. Because in the case of legal entity, it does not need to pay income tax. ( of course, corporation tax may be imposed as far as the legal entity makes profit in its business ).