BIR Ruling [UN-200-95]

May 31, 1995 BIR RULING [UN-200-95] Mrs. Encarnacion M. Celis 23-A San Pablo Road Philam, Quezon City M a d a m : This refers to your letter dated March 22, 1995 stating that Parkside Gasoline and Service Station, Inc., corner Mindanao & North Avenue, Quezon City has been dissolved as of December 31, 1970; and that the corporation owns a parcel of land covered by TCT No. R P- 5320 (140200) of the Registry of Deeds of Quezon City. cdtech In connection therewith, you are requesting opinion as to how the said property can be transferred in the name of the stockholders of the corporation which is the Celis Family. In reply thereto, please be informed that since the individual stockholders of the corporation will receive upon its liquidation all its assets as liquidating dividends, they will thereby realize capital gain or loss. The gain, if any, derived by the individual stockholders consisting of the difference between the fair market value of the liquidating dividends and the adjusted cost to the stockholders of their respective stockholdings in the said corporation (Sec. 66 (a); Sec. 256, Income Tax Regulations) shall be subject to income tax under Sec. 21 (f) of the Tax Code, as amended. Moreover, pursuant to Section 33(b) of the Tax Code, as amended, only 50% of the aforementioned capital gain is reportable for income tax purposes if the shares were held by the individual stockholders for more than twelve months and 100% of the capital gains if the shares were held for less than twelve months. (BIR Ruling No. 136-88 dated April 12, 1988) The Revenue District Officer, RDO 39 Quezon City (South), BIR Bldg., Quezon City shall issue the Certificate Authorizing Registration (CAR) after the payment of the tax under Section 21(f) of the Tax Code, as amended, so that the aforementioned property can be registered in the name of the stockholders of the corporation. This ruling is issued on the basis of the foregoing as represented. However, if upon investigation, it will be disclosed that the facts turned out to be different and/or any of the requirements of this letter is not complied with, then, this ruling shall be considered null and void. cdta Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)