Gains Derived by Private Educational Institution from Sale of Real Property Not Subject to Final Capital Gains Tax

November 21, 1986 BIR RULING NO. 259-86 24-b 159-85 259-86 S i r : In reply to your letter dated September 30, 1986 to the Regional Director, Revenue Region No. 3-A, San Fernando, Pampanga, I have the honor to inform you that Section 21(e) of the Tax Code, as amended by Executive Order No. 37 is explicit that only natural persons on individuals are liable to the final capital gains tax prescribed therein. Such being the case, the gains derived by your client, St. Scholastica's Academy of Pampanga of San Fernando, Pampanga from its sale of four (4) parcels of land with improvement located at San Jose, San Fernando, Pampanga, on September 30, 1986 are not subject to the final capital gains tax prescribed under Section 21(e) of the Tax Code, as amended. However, since your client is a private educational institution, the gains derived by your client from the above transaction are subject to the corporate income tax applicable to said institution under Section 24(b) of the Tax Code, as amended by Executive Order No. 37. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue