BIR Ruling

September 24, 1973 Mr. Cecilio F. Landas B. Gonez Street Bacoor, Cavite S i r : This refers to your letter dated September 18, 1973 requesting a ruling as to whether the capital gain derived from the sale of capital assets is exempt from the gains tax, under the following facts: A taxpayer sold capital assets, the proceeds of sale of which are payable in two (2) installments. The first installment was paid on January 28, 1973 while the second installment will be paid on or before October 4, 1973. The proceeds derived from the first installment were already invested in Central Bank Certificate of Indebtedness. The proceeds to be derived from the second installment will also be invested in Central Bank Certificate of Indebtedness by purchasing said certificates from an authorized bank which will issue a temporary receipt on October 4, 1973 pending the issuance of a permanent Central Bank Certificate of Indebtedness on October 16, 1973. In reply, I have the honor to inform you that under the foregoing facts, the gains to be derived from the second installment is exempt from the capital gains tax, pursuant to Presidential Decree Nos. 16 and 16-A, it appearing that the proceeds derived from the second installment will be invested in new issues of government securities within six (6) months from the date the gain is realized. 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."