Capital Gains

Question 1

Four Rules applicable to other Capital Gains (from other capital assets) explain!

Answer 1

1. Holding Period Rule:
   NOT more than 12 mos - 100%
   MORE than 12 mos - 50%
   Note: not applicaple to corpo and sale of stocks subject to 15% CGT
2. Limitation on Capital Losses:
   Deductible only to the extent of capital gains from same type of transaction during same period
   Exception: banks and trust companies
3. Net Capital Loss Carry Over:
   *Applicable only to asset held for not more than 12 mos only!
   *Yung maki carry over na loss (from asset held not more than 12 mos) ay net capital.loss or net icome of such year whichever is LOWER!
   *This rule is not applicable to Corpo and Sale of Stocks subject to 15% CGT
4. Yun nga, Sale of share stock subject to 15% CGT. Not applicable ang holding period at Nte Capital Loss Carry Over

Question 2

Sale of Principal Residence(PR):
General Rule?

Answer 2

Sale of PR of natural persons, pag na FULLY UTILIZED ang proceeds sa aquiring or constructing NEW principal residence within 18 months from the date of disposition, NOT SUBJECT TO THE 6% CGT. Pero subject to the ff requirements:

1. Historical cost or adjusted real property sold or diaposed is carried over to the new PR
2. The exemption can only be availed once every 10 years
3. Should notify BIR within 30 days from the date of sale or diaposition

Question 3

Sale of Principal Residence(PR):
If not fully Utilized?
What is formula?

Answer 3

Yung tira, subject to the 6% CGT as follows:

Taxable amount= Unutilized Portion / Gross Selling Price × CGT base

CGT base=FMV or Selling Price which ever is HIGHER

NOTE THAT THE DENOMINATOR IS ALWAYS SELLING PRICE!

Question 4

Sale of Principal Residence or real property, subject to CGT?

1. Abroad and
2. PH

Answer 4

Abroad = Not subject to CGT
PH = CGT

Question 5

Sold shares of Domestic Corporation thru Local Stock exchange is subject to VAT

Answer 5

True