BIR Ruling

June 22, 1970 Mr. Alex V. Wilson Chairman, Board of Trustees Church of Christ (World-Wide), Inc. P. O. Box 2635 1783 Quiricada St. Sta Cruz, Manila S i r : This refers to your letter dated June 15, 1970 stating, among others, that the Church of Christ (World-Wide), Inc. owns a Chevrolet Station Wagon, Model 1962, entered tax-free under the provisions of Republic Act No. 1916; that said car is now old and very dilapidated so that it is of little help to you; and that the cost of maintaining it in running condition is more than the worth of the car to you, so that instead of being a help to your work, it is a financial drain. On account of the foregoing circumstances, you have decided to sell the car to a non-exempt purchaser for which you now request that said purchaser be exempted from the payment of the corresponding internal revenue tax due on said car. In reply, I have the honor to inform you that considering that the aforesaid motor vehicle is an eight year old model; and considering that under Department Order No. 13-62, dated April 18, 1962 which published the guideline in determining the dutiable value of cars of U.S. brands and manufacture, a six year old model is entitled to an 80% depreciation allowance of its Red or Blue Book value, it is the opinion of this Office that the sale of the aforecited motor vehicle is a disposition of a fully depreciated asset. Such being the case, the same may be sold without the payment of internal revenue tax due thereon. cdti Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue