Tax Liability of a Purchaser of Real Properties at a Public Auction Sale

May 29, 1987 BIR RULING NO. 145-87 21 (e) 000-00145-87 S i r : This refers to your letter dated January 26, 1987 requesting a ruling as to whether you are subject to the capital gains tax under Section 21(e) of the Tax Code, as amended by Executive Order No. 37 as a purchaser of real properties at a public auction sale. It is represented that as a plaintiff-judgment creditor, you were the purchaser (being the highest bidder) at a public auction sale of real properties of Ms. Angelina Samson for the amount of P1,519,441.00 in partial satisfaction of the judgment amount mentioned in the writ of execution, and that the Deed of Conveyance was executed by the Provincial Sheriff of Cavite on September 28, 1982. In reply, please be informed that the net capital gains realized from the sale or other disposition of real property by citizens of the Philippines or resident alien individuals shall be subject to the final income tax at the rates prescribed by Section 34(h) of the Tax Code, as implemented by Revenue Regulations No. 8-79 prior to its amendment by P.D. No. 1994 and Executive Order No. 37. asiacd Based on the foregoing facts, Ms. Angelina Samson being the judgment debtor is subject to the capital gains tax at the rates prescribed by then Section 34(h) of the Tax Code on the net capital gains realized by her on account of the sale at public auction of her properties in your favor. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner