IX.

ORDINARY ASSETS AND CAPITAL ASSETS

A. Capital Asset v. Ordinary Asset

- Secs. 24(D), 39, NIRC
- Secs. 132-135, Revenue Regulations No. 2
- Revenue Regulations No. 7-2003
- Tuazo vs. Lingad, 58 SCRA 170
- Calasanz vs. CIR, G.R. No. L-26284, Oct. 9, 1986
- Ferrer vs. Collector, 5 SCRA 1022
- Roxas vs. CIR, G.R. No. L-25043, Apr. 26, 1968
B. Treatment of Sale or Exchange of Ordinary Assets
C. Treatment of Sale or Exchange of Capital Assets which are not Real Property
- Secs. 39(A), 40, NIRC
- Calasanz vs. CIR, 144 SCRA 664
Net Capital Gain and Net Capital Loss
Holding Period
D. Treatment of Sale or Exchange of Capital Assets which are Real Property
Capital Tax on Presumed Gain
- Secs. 6(E), 24(A), 24(D)(1), NIRC
E. Foreclosure Sales of Real Property
- Revenue Memorandum Order Nos. 29-86, 16-88, 27-89 and 6-92
- Revenue Regulations No. 4-99
Redemption period

X. TAX-FREE EXCHANGES AND OTHER TAX-EXEMPT TRANSACTIONS

A. In General
- W.C. Ogan and Bohol Land Transportation Co., G.R. No. 49102, May 30, 1949
- Revenue Regulations No. 18-2001, Nov. 13, 2001
- Revenue Memorandum Order 32-2001, Nov. 28, 2001
B. Merger or Consolidation
- Sec. 40(C)(2) and (6)(b), NIRC
- CIR vs. Rufino, 148 SCRA 42
- BIR Ruling No. 383-87, Nov. 25, 1987
- BIR Ruling 515-2012, August 3, 2012
De Facto Merger
- Revenue Memorandum Ruling 1-2002, Apr. 25, 2002
C. Exchange of Property for Shares of Stock
- Sec. 40(C)(2), NIRC
- Liddell & Co., Inc. vs. Collector, 2 SCRA 632
- Revenue Memorandum Ruling No. 1-2001, Nov. 29, 2001
- BIR Ruling No. 228-12, March 29, 2012
- BIR Ruling 515-202, August 3, 2012
D. Other Tax-Exempt Transactions
Sale of Principal Residence
- Sec. 24(D)(2), NIRC
- Revenue Regulations Nos. 13-99 and 14-2000
Community Mortgage Program
Socialized Housing
– Secs. 19, 20, 32, RA 7279
- Secs. 93, 188, NIRC
Deeds of Trusts
Transfers by Mistakes
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- Sec. 196, NIRC

Transfers of Rights
Rescinded Contracts
Equitable Mortgage
Condominium Corporations
Miscellaneous Exempt Transactions
- Sec. 24(D), NIRC
- RA 6657
- Revenue Regulations No. 7-2011, February 16, 2011
- Revenue Memorandum Circular No. 32-2012, July 16, 2012
E. Administrative Requirements
- Revenue Memorandum Order No. 32-2001, Nov. 29, 2001

XI. ACCOUNTING PERIODS AND METHODS

Calendar Year v. Fiscal Year

- Secs. 22, 43-47, NIRC
- Secs. 51-53, 166-172, Revenue Regulations No. 2
Recognition of Income
Long Term Contracts
- Sec. 48, NIRC
Installment Sales
- Secs. 49-50, NIRC
Termination of Leasehold
- Sec. 49, NIRC
- Consolidated Mines v. CTA, GR L-18844, Aug. 29, 1974
- Perez v. CTA, GR L-10507, May 30, 1958
- Collector v. Reyes, GR L-11534, Nov. 25, 1958
- Filipinas Synthetic v. CA, 316 SCRA 480
Recording of Income and Expenses/Keeping of Books
- Secs. 175-179, Revenue Regulations No. 2
- Revenue Regulations Nos. 17-13, 4-14
- CIR v. Wyeth Suaco, 202 SCRA 135
- Consolidated Mines v. CTA, G.R. No. 18843, August 29, 1974; 58 SCRA
618
- CIR v. Isabela Cultural Corp., G.R. No. 172231, Feb. 12, 2007
- CIR v. Lancaster, G.R. No. 183408, July 12, 2017

XII. WITHHOLDING OF TAXES

- Secs. 57-58, 78-83, NIRC

- Revenue Regulations Nos. 2-98, as amended
- RR 11-2018, RR 14-2018, RR 1-2019, and RR 7-2019
- CIR v. Wander Philippines, GR L-68375, Apr. 15, 1988
- Filsyn v. CA, GR 118498, Oct. 12, 1999
- CIR v. Procter and Gamble, 160 SCRA 560
- CIR v. Procter and Gamble, 204 SCRA 377
- Marubeni v. CIR, 177 SCRA 501
- CIR v. CA, GR 127105, June 25, 1999 and Aug. 30, 1999
- Republic v. Lim Tian, 16 SCRA 584
- Banco Filipino Savings and Mortgage Bank v. Court of Appeals, 548 Phil 32
(2007)
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- CIR v. Mirant (Phils.) Operations Corp. 652 SCRA 80

- Philam Asset Mgt. Inc. V. CIR, 477 SCRA 761
- Asiaworld Properties Phil.Corp. v. CIR, G.R. No.171766, July 29, 2010
- CIR v. PAL, 504 SCRA 90
- Benguet Corp. v. CIR, 492 SCRA 133
- CIR v. BPI, G.R. No. 178490, July 7, 2009
- Citibank NA v CA, GR No. 107434, Oct 10, 1997
- Phil Guaranty Co Inc v CIR, GR No. L-22074, Sep 6, 1965
- BDO v Republic, GR No. 198756, Aug 16, 2016
- CIR v. La Flor dela Isabela, GR No. 211289, Jan 14, 2019

XIII. RETURNS AND PAYMENT OF TAXES

a. In General
- NIRC, secs. 24-28, 33, 51-52, 55, 74-77
- RMC 31-2019
b. Individuals
c. Corporations
- CIR v. TMX Sales, 205 SCRA 18
- ACCRA Investment v. CA, 204 SCRA 957
- San Carlos Milling v. CIR, 228 SCRA 135

See ADDENDUM in the next page

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ADDENDUM

(Part of General Principles of Taxation)

Organization and Functions of the Bureau of Internal Revenue (BIR)

1. Rule-making authority of the Secretary of Finance

2.Jurisdiction , Power and Functions of the Commissioner of Internal Revenue

NIRC, Secs. 244-246

NIRC, Secs. 2, 4-7,21
Vitug, pp. 51-58
Valencia, pp. 75-82
CIR v. CA, CTA, and Fortune Tobacco Corporation, 261 SCRA 236 (1996),
Philippine Bank of Communications v. CIR, 203 SCRA 241 (1999)
Sierra Madre Trust v. Hon. Secretary of Agriculture, 121 SCRA 384
Espanol v. Chairman, PVA, 137 SCRA 319
Misamis Oriental Association of Coco Traders, Inc. v. Department of
Finance
Secretary, et al., 238 SCRA 63
Tuazon v. Lingad, 58 SCRA 170
Connel Bros. Com. Phil. v. Collector of Internal Revenue, 40 SCRA 469
ABS-CBN Broadcasting Corporation v. CTA, 108 SCRA 142
Mitsubishi Corporation-Manila Branch v. CIR - G.R. No. 175772 (2017)
CIR v. Hedcor Sibulan, Inc. - G.R. No. 209306 (2017)
Oceanic Wireless Network v. CIR - G.R. No. 148380 (2005)
Mitsubishi Corporation-Manila Branch v. CIR - G.R. No. 175772 (2017)
CIR v. Hedcor Sibulan, Inc. - G.R. No. 209306 (2017)
Oceanic Wireless Network v. CIR - G.R. No. 148380 (2005)

POWER OF COMMISSIONER OF INTERNAL REVENUE TO INTERPRET TAX LAWS

AND DECIDE TAX CASES; WEIGHT OF OPINION OF COMMISSIONER OF
INTERNAL REVENUE

Section 2-18, NIRC

AFISCO v CA, GR No. 112675, Jan 25, 1999
Mitsubishi Cor-Manila Br. V CIR, GR No. 175772, Jun 5, 2017
Misamis Oriental Association of Coco Traders v. DOF, GR No. 108524, Nov 10, 1994

*Other powers of Commissioner

Eastern Telecommunications Phils, Inc. v CIR, GR No. 183531, Mar 25, 2015
CIR v Traders Royal Bank, GR No. 167134, Mar 18, 2015; Marcos v CA, 339 Phil 253,
271-273 (1997)
Secretary of Finance v La Suerte Cigar, GR No. 166498, June 11, 2009

NON-RETROACTIVITY OF RULINGS OF THE COMMISSIONER OF INTERNAL

REVENUE
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CIR v. CA and Alhambra Industries, Inc., G.R. No. 117982. February 6, 1997
Sec. 246, NIRC

ADMINISTRATIVE ISSUANCES MUST BE CONSISTENT WITH THE LAW;

JUDICIAL REVOCATION OF ADMINISTRATIVE ISSUANCES:

Phil. Bank of Communications v. CIR & CA, G.R. No. 112024. January 28, 1999
Sec. 244, NIRC

JURISDICTION OF THE COURT OF TAX APPEALS

Republic Act No. 9228

CIR v. General Foods (Phils) Inc., GR No. 143672, Apr 24, 2003
Eastern Telecommunications Phils v. CIR, GR No. 183531, Mar 25, 2015
Nippon Express (Phil) Corp v. CIR, GR No. 185666, Feb 4, 2015

INFORMER’S REWARD

Penid v. Virata, G.R. No. L-44004. March 25, 1983