Net Capital Gain from the Sale of Seat at the Manila Stock Exchange is Subject to the Income Tax Rates Prescribed Under Section 21(a) of the Tax Code

November 5, 1987 BIR RULING NO. 349-87 34 (a) (1) 000-00 349-87 Gentlemen : In reply to your letter dated October 12, 1987, please be informed that your seat at the Manila Stock Exchange is a capital asset within the purview of Section 34(a)(1) of the Tax Code. This conclusion finds support in that "An amount received by the holder of a minor baseball league franchise for the transfer of the exclusive right, within monopoly baseball, to play establishment baseball in certain areas, including the rights flowing from such privilege, is a sale of capital asset." [Hollywood Baseball Ass'n., 42 TC 234 (1964). Law of Federal Income Taxation, Martans, vol. 38, p. 61] In the instant case, your seat being sold is a privilege akin to a franchise to transact business as a stockbroker at the Manila Stock Exchange. Such being the case, your net capital gain from the sale of your seat is subject to the income tax rates prescribed under Section 21(a) of the same Code. atdc BIR clearance for transfer of title over the aforesaid seat at the Manila Stock Exchange is not necessary. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner