Professional Documents
Culture Documents
PROPERTY
Gains from dealings in property
-income derived from the sale or exchange of assets,
either ordinary or capital
-gains are taxable
-losses are deductible
Measurement of Gains & Losses
1.
Sale of Property
G or L = SP Cost & other expenses
2.
Exchange of Property
G or L = FMV of assets received Cost of
property issued
3.
4.
Holding period
-span of time where asset is
under custody of the taxpayer
-period from the date of
acquisition to the disposal
-GR: applicable on to individual
taxpayer
-only applies to capital assets
*short term- if HP is 12 months or
less
*long term- more than 1 year
Capital Assets
-properties held by the taxpayer, whether connected
or not to his business, which are not classified as
ordinary assets
Ordinary Assets
1.
Stock in trade or property of a kind that would
probably included in the inventory if on hand at
the end of the taxable year
2.
Property used in trade or business of a
character which is subject to the allowance for
depreciation
3.
Real property used in trade or business of the
taxpayer
3.
4.
5.
2.
Exchange
-organized domestic marketplace
or facility
-brings together buyers & sellers
-executes trade of securities or
commodities duly registered with
SEC
Subsequent Sale
Thru LSE
or 1%
Of SP
Outside LSE
5% - first
100k
10%- amt in
excess of
Original
Sale
7.
3.
By gift or donation
Cost = FMV @ time of donation OR Acquisition cost
of donor, whichever is lower
4.
2.
2%
over 25% but not over
33 1/3 %
3.
1%
over 33 1/3%
Installment Payment of Capital Gains Tax
Section 49 of NIRC allows an option to it on
installment basis subject to the ff conditions:
1.
Taxpayer is an individual
2.
Initial payment do not exceed 25% of
the gross SP
Initial Payment includes the following:
a. DP during the year of sale
b. Installment payment made during
the taxable year
c. Excess of mortgage assumed by
the buyer over the cost to the
seller
Contract Price may refer to the following:
a. The Gross SP
b. Gross SP mortgage assumed by
the buyer
c. Gross SP mortgage assumed by
the buyer + excess of mortgage
assumed over original cost of
property
Computation of installment amount of
capital gains tax
a. No mortgage or mortgage
assumed by buyer < cost of seller
Installment amount = (Collection /
Contract Price) x Capital Gains Tax
b. Mortgage assumed > cost of seller
For collection on the date of
sale:
IA = [(Collection + Excess) /
Contract Price] x Capital
Gains Tax
Wash sale
- sale-purchase transaction of stock or other
similar securities that have identical
characteristics or attributes and the
transactions happened within a 61-day
period
Identical characteristics
-nature of securities dispose is
significantly similar like selling and
purchasing common stock of the same
kind or exchanging a preferred stock
with another preferred stock
61 day period
Real Property
1.
16.
17.
18.
19.
20.