BIR Ruling

December 21, 1972 Mr. Macario Peralta, Jr. 20 Scout Tobias Quezon City S i r : This refers to your letter dated November 2, 1972 requesting information as to whether or not the gains derived from the sale or your piece of land in Limay, Bataan, on May 3, 1972, which gains were subsequently invested in the purchase of mining stocks on different dates within the month of October, 1972, are exempt from the capital gains tax pursuant to Presidential Decree No. 16, as amended by Presidential Decree No. 16-A, both dated October 5, 1972. cd In reply, I have the honor to inform you that Presidential Decree No. 16, providing for the non-recognition of gains realized in the sale, disposition or transfer of capital assets under certain conditions, states that the same shall be effective only for one (1) year from the date of promulgation on October 5, 1972. In other words, the tax exemption as provided in the said Decree covers only the capital gains realized during the said one-year period. Furthermore, only those capital assets sold, transferred, or exchanged within the said one-year period come within the purview of the Decree. Since the sale of your piece of land referred to in your query took place before the promulgation of Presidential Decree Nos. 16 and 16-A, the gains derived therefrom even if invested in mining stocks will not be exempt from the capital gains tax. cdt Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue