Filing of an Informational Return of Its Earnings, Profits, and Income

1960 BIR RULING NO. 150-60 Mr. Reynaldo de Luna 709 Catmon Street Makati, Rizal S i r : In reply to the queries contained in your letter dated March 9, 1960, I have the honor to inform you as follows: cdi 1) A duly registered general copartnership is required to file an informational return of its earnings, profits, and income, except income exempt under Section 29(b) of the Tax Code, setting forth items of gross income and deductions allowed by the said Code, and the names and addresses of individuals who would be entitled to the net earnings, profits and income, if distributed. (Section 49, Tax Code) The aforesaid partnership should declare in his income tax return, 50% of the gains or losses from the sales of its capital asset held for more than twelve (12) months. (Section 49, in relation to section 34 (b), Tax Code) 2) A net capital loss sustained by a duly registered general copartnership during a calendar year may be carried over to the succeeding year as a loss from the sale or exchange of a capital asset held for not more than twelve (12) months. (Section 34(d), Tax Code) 3) Capital losses sustained by a duly registered general copartnership cannot be deducted from its ordinary income, because capital losses are allowed only to the extent of capital gains and to the extent of such items allocable to each partner. (Section 34(c), Tax Code) 4) The full amount of dividends received by a duly registered general copartnership from a domestic corporation subject to income tax or from a domestic corporation engaged in a new and necessary industry, as defined under Republic Act No. 901, should be reported in its income tax return. (Section 24, in relation to Section 49, Tax Code) cdtech Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue