BIR Ruling

November 7, 1975 Philippine Foundation for Cultural & Educational Development, Inc. Rm. 606 SMS Bldg., Buendia Avenue Makati, Rizal Attention: Mr . Pedro C . Dimaculangan General Manager Gentlemen : In reply to your letter dated October 17, 1975, I have the honor to inform you that a donor should value his donation in form of shares of stock of applying the fair market value thereof, which is arrived at by following the pertinent provisions of Section 3 of Revenue Regulations No 2-70 dated November 11, 1970 which reads thus: "Section 3. Meaning of 'gross value in money' . The term 'gross value in money' means the 'fair market value'. In the Case of shares traded thru the stock exchange, 'fair market value' shall consist of the actual price as certified by the stock exchange where the sale was effected. cdt "In the case of shares not traded through the stock exchange, but listed in one or more stock exchange, the highest closing price on the day when the shares are sold, transferred or exchanged shall be the 'fair market value'. Where no sale is made in any stock exchange, the highest closing price on the day nearest to the date of sale, transfer or exchange of the shares shall be the 'fair market value'. "In the case of sale, transfer or exchange of shares not listed in the stock exchange the fair market value shall be determined by considering the nature and history of the business, book value of the stock, earning and dividend paying capacity of the company, goodwill, and sales of both the stock to be valued and that of companies similarly situated." Very truly yours, (SGD.) EFREN I. PLANA Acting Commissioner of Internal Revenue TAN 1456-040-3