BIR Ruling

March 22, 1974 Mr. Andres U. Apolinar #7 Athens, Marville Park Paraaque, Rizal S i r : This refers to your letter dated March 20, 1974, stating as follows: "1. In December 1973, I sold a house and lot for P207,000.00 which was acquired in the early part of 1972 at a cost of P177,850.46, thereby realizing a gross capital gain of P29,149.54. "2. If in the affirmative, what amount shall I invest, the gross gain of P29,149.54 or the total selling price of P207,000.00? "3. In the belief that I may still avail myself of the privileges granted by the decrees, I had invested the amount of P30,000.00 in Government Treasury Notes on February 22, 1973 as per attached self-explanatory xerox copy issued to me by the Central Bank." acd You now seek the opinion of this Office whether on the facts stated above, you may still or could no longer avail of the privileges granted under Presidential Decree No. 16 as amended by Presidential Decree No. 16-A and an advice from this Office as to the possibility of filing an amended income tax return on or before April 15, 1974. In reply, I have the honor to inform you that you can no longer avail of the privileges provided for under said Presidential Decree No. 16 as amended, granting exemption from the capital gains tax for the reason that the real property in question that you acquired in the early part of 1972 was disposed of in December 1973, which is more than one (1) year from the promulgation of said Decree on October 5, 1972. In other words, to avail of the exemption, the sale of capital asset must take place during the one-year period from October 5, 1972. Furthermore, since you sold your property in December 1973, it is obvious your investment of P30,000.00 in Treasury notes on February 22, 1973 did not come from the proceeds of the said sale. Since you are not exempt from the capital gains tax on the foregoing transaction, 50% of said capital gain should be reported in your income tax return to be filed on or before April 15, 1974. cdt Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."