Legal analysis: The income from the transfer of equity by an enterprise should be recognized when the transfer agreement takes effect and the equity change procedures are completed. The income from equity transfer is the income from equity transfer after deducting the cost incurred to acquire the equity.

Legal basis: "Notice of the State Administration of Taxation on Several Tax Issues Concerning the Implementation of the Enterprise Income Tax Law" 3. Regarding the recognition and calculation of income from equity transfers The income from the transfer of equity by an enterprise should be effective when the transfer agreement takes effect and the equity is completed. When the change procedures are completed, the realization of the income is recognized. The income from equity transfer is the income from equity transfer after deducting the cost incurred to acquire the equity. When calculating the income from equity transfer, the enterprise shall not deduct the amount that may be distributed based on the equity from the retained earnings of shareholders such as the undistributed profits of the invested enterprise.