BIR Ruling [DA-097-97]

March 14, 1997 BIR RULING [DA-097-97] Roosevelt College Marikina City Attention: Mr . Romeo P . Dela Paz President Gentlemen : This refers to your letter dated February 7, 1997 requesting confirmation of your opinion to the effect that there is no tax consequence when your corporate existence expired on March 12, 1996 considering that there is no distribution and/or liquidation of your assets to your stockholders as you continued your business operations in the meantime that your extension/re-incorporation is in process. It is represented that you are a non-sectarian and non-partisan learning institution duly registered with the Securities and Exchange Commission on March 12, 1946; that your corporate life is for a period of fifty (50) years from the date of your incorporation; that your corporate officers inadvertently failed to file with the securities and Exchange Commission (SEC) a request for an extension of your corporate life prior to its expiration last March 12, 1996 and/or your re-incorporation; that you have now a request with the SEC for your re-incorporation for another fifty (50) years; that your corporate secretary, Mr. Leodegario R. Cruz in a sworn statement dated February 27, 1997 stated that "Roosevelt College, Incorporated has not conducted distribution/liquidation of assets as a result of the expiration of its corporate existence last March 12, 1996" and that in a report dated March 12, 1997 of Revenue Officer Myrna A. Flores and Group Supervisor Mario V. Gutierrez of RDO 45, Marikina City, they stated that no distribution and/or liquidation of your assets to your stockholders were made when your corporate life expired last March 12, 1996. In reply thereto, please be informed that where a corporation distributes all of its assets in complete liquidation or dissolution, the gain realized or loss sustained by the stockholder, whether individual or corporate is a taxable income or a deductible loss, as the case may be (Sec. 66(a) Tax Code, as amended; Sec. 256 Income Tax Regulations) Considering that your failure to request for an extension of your corporate existence prior to its expiration on March 12, 1996 and/or your re-incorporation was due to inadvertence and there was in fact no distribution of all your assets to your stockholders in complete liquidation/dissolution as reported by Revenue Officers Myrna A. Flores and Mario V. Gutierrez of RDO 45 Marikina City no tax consequence resulted thereby. Moreover, no tax consequence will likewise result upon the extension of your corporate life or upon your re-incorporation. (BIR Ruling No. 136-88 dated April 12, 1988) aisadc Very truly yours, ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)