BIR Ruling No. 289-82

November 17, 1982 BIR RULING NO. 289-82 34-h 000-00 289-82 Mr. Perfecto Padua Taboc, San Juan La Union S i r : This refers to your letter dated August 18, 1982 requesting certification to the effect that the sale of your house and lot in Taboc, San Juan, La Union on October 25, 1978 is exempt from the filing of the capital gains tax return and payment of the corresponding capital gains tax under Section 34(h) of the Tax Code, as amended by Batas Pambansa Blg. 37. cdta It is represented that on October 25, 1978, you executed a Deed of Absolute Sale of a parcel of lot together with the residential house thereon situated at Barrio Taboc, San Juan, La Union in favor of spouses Atty. Minervino Espiritu and Mrs. Nieves Espiritu; that the acquisition cost of the lot in 1976 was P7,500.00; that the market value of the house at the time of sale was P20,000.00 and the expenses of the sale is P200.00 or a total of P27,500.00; and that the consideration of the aforesaid sale was P25,000.00 only. In reply, I have the honor to inform you that Section 8 of Revenue Regulations No. 8-79 implementing Section 34(h) of the National Internal Revenue Code as amended by Batas Pambansa Blg. 37 provides that the imposition of a final schedular tax on capital gains realized by citizens and resident aliens from sales or other disposition of real property shall apply to transaction entered into on or after September 7, 1979. Moreover, deed of conveyance of real property acknowledged before a notary public on or after September 7, 1979, shall be deemed to be a sale or disposition of real property on or after September 7, 1979. In view thereof, and inasmuch as you sold your house and lot on October 25, 1978 as evidenced by a Deed of Sale which is duly notarized, you are not required to file the capital gains tax return and pay the final schedular capital gains tax prescribed by Section 34(h) of the Tax Code, as amended by Batas Pambansa Blg. 37. However, if after investigation it is ascertained that you derived capital gains from the said transaction, you will be subject to the ordinary income tax rates prescribed by Section 21 of the Tax Code, in relation to Section 34 of the same Code prior to their amendment by Batas Pambansa Blg. 37 and 135. Very truly yours, RUBEN B. ANCHETA Acting Commissioner