BIR Ruling No. 075-64

December 23, 1964 BIR RULING NO. 075-64 The General Manager Monark International, Inc. 287 E. de los Santos Avenue Mandaluyong, Rizal S i r : This refers to your letter of May 6, 1964 relative to your contemplated sale of shares of stock of the Republic Bank at 50% of par value in order to raise funds to settle your obligation with said Bank. You have, however, the option to repurchase the same shares at the same price plus 10% interest per annum. You now request opinion as to whether or not the price differential is a deductible loss in case you should fail to repurchase said shares. In reply thereto, I have the honor to inform you that should you fail to repurchase the shares of stock the price differential may be considered a loss from the sale of capital asset but allowed only to the extent of the gains from such sales. The loss shall be considered not in the year of sale but in the year following the expiration of the period to repurchase which as represented is five years. Should you be able to repurchase said stocks, the 10% addition to the selling price is deductible as interest. Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue