BIR Ruling

November 23, 1966 Mr. Jacob E. Cabarrus President, Wack Wack Golf and Country Club Mandaluyong, Rizal S i r : Reference is made to your letter dated October 25, 1966, quoted as follows: "The Wack Wack Golf & Country Club is a non-profit stock corporation organized to foster and develop athletic exercises and sports, particularly the sport of golf. The association is composed of 400 proprietary members each of whom own one Membership Fee Certificate. Wack Wack does not and never had distributed dividends or profits amount its members. All its income is used to operate the Club, to pay salaries of personnel and to maintain and improve its clubhouse and golf courses. cdpr "Wack Wack owns a clubhouse, two golf courses, a driving range for practice, and a small putt-putt course, all located in the same in Mandaluyong, Rizal. Because of losses it has been incurring in operating the driving range and the putt-putt course, Wack Wack desires to lease them to a third party for a fixed monthly rental. Under the proposed lease agreement the lessee will defray all the expenses of operation of the driving range and putt-putt course and will get all the income, the Wack Wack will only receive the agreed monthly rental. The rental received will be used by Wack Wack in the same manner as its other income." In reply, I have the honor to inform you that based on the aforequoted facts, the Wack Wack Golf and Country Club is constituted a real estate dealer within the purview of Section 194(s) of the Tax Code, and, is therefore, subject to the graduated annual fixed tax prescribed in Section 182(A)(3)(s) of the same Code. The rentals received from said property, regardless of the purposes for which it will be used by the Club, is subject to the income tax under Section 27(e) of the Tax Code. prcd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue