Tax Consequence of Proposed Sale of One (1) Golf Club Propriety Membership Share of the Capitol Hills Golf and Country Club, Inc.

August 9, 1996 BIR RULING NO. 089-96 21 (d) (1) 176 000-00 089-96 Mr. Horacio D. Etorma 53 Derby Street, White Plains Quezon City S i r : This refers to your letter dated April 19, 1996, in effect, requesting for a ruling as to the tax consequence of the proposed sale of your one (1) golf club propriety membership share of the Capitol Hills Golf and Country Club, Inc. In reply thereto, please be informed that under Section 2 of B.P. Blg. 178 otherwise known as the Revised Securities Act, proprietary or non-proprietary membership certificates are securities which mean shares of stock in a corporation, association or joint-stock company. (see also Sec. 20(1) and (t), tax Code). Such being the case, the net capital gains to be realized by you from the sale of your unlisted one (1) golf club proprietary membership share shall be subject to a scheduler capital gains tax of 10% on the first P100,000.00 or less, and 20% on any amount over P100,000.00 pursuant to Section 21 (d)(1) of the Tax Code, as amended. Moreover, the Agreement to Sell shall be subject to the documentary stamp tax prescribed under Section 176 of the Tax Code, as amended. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue