BIR Ruling No. 031-83
BIR Ruling No. 031-83 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Mar 1, 1983
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March 1, 1983 BIR RULING NO. 031-83 Gentlemen : This refers to your letter dated January 21, 1983 requesting a ruling for and in behalf of your client, RESINS, INC.,on whether or not a gain derived from sales or assignment of an option to buy machineries is an ordinary or capital gain. It is represented that Resins, Inc. is registered with the Board of Investments under R.A. 5186 and R.A. 6135 for the manufacture of different products; that it leased from Resins, Inc. Retirement Plan with option to buy certain tanks and tankers; that the option to buy was later assigned by Resins, Inc. to Chem Insurance Brokers Service Corporation; and that from said assignment of the option, Resins, Inc. realized a gain or profit. aisadc In reply, please be informed that an option is property which, in the hands of a taxpayer who does not deal in options like Resins, Inc.,may be considered a capital asset. Accordingly, the gain realized by Resins, Inc. from the assignment to Chem Insurance Brokers Service Corporation of an option to buy certain tanks and tankers is a capital gain. (BIR Ruling No. 71-023 dated October 15, 1971) Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue
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