BIR Ruling

September 3, 1973 Messrs. Poblador, Nazareno, Azada Tomacruz & Paredes 575 Atlanta, Port Area Manila Attention: Atty . Cipriano Azada Gentlemen : This refers to your letter dated August 10, 1973 requesting a ruling on a query stated as follows: cdta "Suppose a taxpayer disposes of a capital asset which he has held for more than twelve months, but does not invest the gains realized, in any investment which would have exempted him from income tax under Sec. 34(b) as amended, may he take into account only fifty percent (50%) of the gain for the purpose of computing his taxable income? It should be noted that the taxpayer will file his income tax return in April, 1974 that is, after the effectivity of Presidential Decree No. 16-A shall have lapsed." In reply thereto, I have the honor to inform you that Presidential Decree No. 16 and 16-A did not intend to suspend the application of the 50% exemption on the long-term capital gains provided in Section 34(b) of the Tax Code. Accordingly, only 50% of the gains realized from the sale of property which held by a taxpayer for more than twelve (12) months shall be subject to income tax, even if such gains are invested in any preferred areas of productive undertaking enumerated by Revenue Regulations No. 7-72 dated October 28, 1972 as amended by Revenue Regulations No. 7A-72 dated November 16, 1972 implementing Presidential Decree Nos. 16 and 16-A. (see B.I.R. Ruling dated July 23, 1973) 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."