BIR Ruling No. 103-82 Still Valid and Enforceable for Transactions Prior to January 1, 1986 When P.D. 1994 Took Effect

September 22, 1995 BIR RULING NO. 148-95 21 (e) 000-00 148-95 Philippine Stock Exchange, Inc. Phil. Stock Exchange Centre, Exchange Road Ortigas Center, Pasig City Attention: Atty . Eduardo delos Angeles President/Chief Executive Officer Gentlemen : In reply to your letter dated August 2, 1995, please be informed that BIR Ruling No. 103-82 dated May 5, 1982 stating that since the homelot given by the landowner to the tenant is part of the disturbance compensation payable by the former to the latter, pursuant to an Order of the Ministry of Agrarian Reform, no capital gain was derived by the landowner as a result of said transaction. Hence, the landowner is not liable to the capital gains tax" is still valid and enforceable for transactions prior to January 1, 1986 when Presidential Decree No. 1994 amending Section 21 (e) of the Tax Code, as amended, took effect. LLphil On the other hand, the sale or conveyance after January 1, 1986 of real property classified as capital asset shall be subject to the 5% capital gains tax based on the gross selling price or the fair market value of the property prevailing at the time of sale, whichever is higher. However, if the transaction was effected after June 28, 1988 when Republic Act No. 6657 otherwise known as the Comprehensive Agrarian Reform Law of 1988 took effect, the same shall be exempt from the capital gains tax pursuant to Section 66 of said law. cdt Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue