Request for Exemption from Payment of Capital Gains Tax on Gains Realized from Sale of Real Property

September 27, 1985 BIR RULING NO. 170-85 34-h 163-83 170-85 Gentlemen : This refers to your letter dated May 29, 1985 in behalf of your clients Ermelinda Villanueva Vega and Virgilio Vega requesting exemption from the payment of capital gains tax under Section 34(h) of the Tax Code as amended by Batas Pambansa Blg. 37 on gains realized by Far East Bank and Trust Company arising out of the sale to your clients of a parcel of land with improvements located at 78 Bayani, Galas, Quezon City. In reply, I have the honor to inform you that Revenue Regulations No. 8-79 implementing Section 34(h) of the Tax Code, as amended by Batas Pambansa Blg. 37 is explicit that only natural persons or individuals are liable to the final capital gains tax prescribed therein. Such being the case, the gains derived by Far East Bank and Trust Co. from the aforesaid sale of its real properties are not subject to the final capital gains tax prescribed by Section 34(h) of the Tax Code, as amended but to the ordinary corporate income tax prescribed under Section 24(a) of the same Code, as amended. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner