Sale of Property on May 12, 1970 Seller is Not Required to File the Capital Gains Tax Return and Pay the Final Schedular Capital Gains Tax Under B.P. No. 37

November 3, 1987 BIR RULING NO. 343-87 21 (c) 289-82 343-87 M a d a m : This refers to your letter dated October 6, 1987 requesting a ruling to the effect that the first sale on May 12, 1970 of the parcel of land owned by Mr. Adelfo Maceda located in Marikina, Metro Manila, to Provident Securities Corporation is exempt from the payment of capital gains tax inasmuch as said property was sold prior to the effectivity of Batas Pambansa Blg. 37. It is represented that Mr. Adelfo Maceda sold a parcel of land covered by TCT No. 204730 with an area of 350 square meters located at Provident Village, Marikina, Metro Manila, on May 12, 1970 to Provident Securities Corporation for a consideration of P5,250.00; that said property was not transferred to the vendee because it was subsequently mortgaged to Provident Savings Bank; that on April 7, 1987, the said property was sold by Provident Securities Corporation to Mr. Ruben B. Mercado for the amount of P33,250.00; and that Mr. Ruben B. Mercado can no longer locate the whereabouts of the original owner of said lot. In reply, please be informed that Section 8 of Revenue Regulations No. 8-79 implementing then Section 34(h) of the Tax 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 transactions entered into on or after September 7, 1979. Moreover, a 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. aisadc Accordingly, and inasmuch as Mr. Adelfo Maceda sold his aforementioned property on May 12, 1970, he is not required to file the capital gains tax return and pay the final schedular capital gains tax prescribed by then Section 34(h) of the Tax Code, as amended by B.P. No. 37. However, proof must be submitted to the effect that Mr. Adelfo Maceda has included whatever gain he may have realized from the aforesaid sale of his property in his 1970 income tax return and the tax thereon, has been paid. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner