BIR Ruling

April 24, 1973 The President Research & Services Realty, Inc. Rm. 401 Campos Rueda Bldg. Tindal St., Makati Rizal S i r : This refers to your letter dated April 5, 1973 and in reply thereto, I have the honor to inform you as follows: Presidential Decree No. 16, as amended by Presidential Decree No. 16-A is effective until October 5, 1973 and not October 28, 1973. For purposes of the Decree, the gains from the sale, of capital assets on the installment basis are deemed realized upon receipt of each installment payment. This rule holds true regardless of the amount of the initial payment. Thus in the sale presented by you where 30 of the selling price is made as initial payment and the balance is payable in 18 months, the gains corresponding to the initial payment and installment payments received on or before October 5, 1973 are exempt from tax if said initial payment and installments are invested as provided by the Decree within 6 months from the time they are received. The gains corresponding to the installment payment received after October 5, 1973 shall not, however, be exempt from tax even if invested in accordance with the Decree because by that time the Decree shall have ceased to have force and effect. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue