Amending Revenue Memorandum Order No. 29-86 Dated September 3, 1986, Regarding Payment of Capital Gains Tax on Extrajudicial Foreclosure Sale Initiated by Banks, Finance and Insurance Companies

April 18, 1988 REVENUE MEMORANDUM ORDER NO. 16-88 SUBJECT : Amending Revenue Memorandum Order No. 29-86 Dated September 3, 1986, Regarding Payment of Capital Gains Tax on Extrajudicial Foreclosure Sale Initiated by Banks, Finance and Insurance Companies TO : All Internal Revenue Officers and Others Concerned SECTION 1 . In order to clarify the confusion brought about by the imposition of the 5% capital gains tax, prescribed under Section 21(e) of the Tax Code, as amended, on the purchase by banks, finance and insurance companies of real property classified as capital asset from individuals thru mortgage foreclosure sale, paragraph 2.2 of Revenue Memorandum Order No. 29-86 dated September 3, 1986 is hereby amended to read as follows: cd i "2.2 - The tax applies not only to ordinary sale transaction but also to pacto de retro sales and other forms of conditional sales. This accordingly, includes mortgage foreclosure sales, except extrajudicial foreclosure sale under Act No. 3135, as amended by Act No. 4118 wherein the tax shall become due only upon the consolidation of title in the name of the financial institution (banks, finance and insurance company) concerned." SECTION 2 . Effectivity. This Revenue Memorandum Order shall take effect immediately. aisa dc (SGD.) BIENVENIDO A. TAN, JR. BIR Commissioner