BIR Ruling

August 9, 1967 Mr. Rafael Syjueco Certified Public Accountant Tinajeros, Malabon Rizal S i r : This refers to your letter dated July 25, 1967 requesting a ruling based on the following query: "I have the honor to request your opinion regarding the sale of real properties held for more than one year by a domestic corporation which is not engaged in the real estate dealer business. As a casual sale of such properties as mentioned above please advice me as to the income tax liabilities said corporation is liable to pay. Example P10,000.00 (Gross receipts or sale or real properties held for more than one year) 5,000.00 (Cost of sale) P5,000.00 Gross Profit ========= Question Is the derived profit of P5,000.00 subject to full income tax or only 50% thereof which is P2,500.00." In reply I have the honor to inform you that under Section 34 (b) of the Tax Code, for purposes of computing net capital gain, net capital loss and net income, the privilege of taking into account certain percentages of the gain or loss recognized upon the sale or exchange of a capital asset, does not extend to corporations. In other words, any gain derived by a corporation from the sale or exchange of a capital asset, regardless of the length of the holding period is taxable in full, accordingly, the entire profit of P5,000.00 realized by the domestic corporation referred to in your query is subject to full income tax. cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue