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PROGRAM
CAPITAL GAINS TAX
JHON CARLO M. CATU, CPA
• Capital Assets
Capital Gains from Sale of Shares of Stock not Traded in the Stock
Not over P100,000 5%
On any amount in excess of P100,00 10%
Capital Gains from sale of Real Property- six percent (6%) based on the gross
selling price or current fair market value as determined in accordance with
Section (E) of this code.
Capital gains presumed to have been realized from the sale or disposition of their
principal residence by natural persons, the proceeds of which is fully utilized in
acquiring or constructing a new principal residence within eighteen (18) calendar
months from the date of sale or disposition, shall be exempt from the capital gains tax
imposed under this Subsection: Provided,
a. )That the historical cost or adjusted basis of the real property sold or disposed
shall be carried over to the new principal residence built or acquired:
b. ) That the Commissioner shall have been duly notified by the taxpayer within thirty
(30) days from the date of sale or disposition through prescribed return of his
intention to avail of the tax exemption herein mentioned .
c. ) Exemption can only be availed every ten (10) years.
QUESTION NUMBER 1
A sold his principal residence at a selling price of P5M but with a FMV of P6M.
The property sold was acquired for P3M. He purchased his new principal
residence at a cost of P7M. The capital gains tax is _______
QUESTION NUMBER 2
A sold his principal residence at a selling price of P5M but with a FMV of P6M.
The property sold was acquired for P3M. He purchased his new principal
residence at a cost of P7M after one year. The capital gains tax is _______
Answer: Zero
If the proceeds from the disposition of principal residence are fully utilized in
acquiring or constructing a new principal residence within 18 months from the date
of disposition (date of notarization), the transaction is exempted from capital gains
tax subject to conditions.
QUESTION NUMBER 3
A sold his principal residence at a selling price of P5M but with a FMV of P6M.
The property sold was acquired for P3M. He purchased his new principal
residence at a cost of P7M. How much is the basis (cost) of the new principal
residence?
QUESTION NUMBER 3
A sold his principal residence at a selling price of P5M but with a FMV of P6M.
The property sold was acquired for P3M. He purchased his new principal
residence at a cost of P7M. How much is the basis (cost) of the new principal
residence?
Answer: P5M
Basis of the New Principal Residence Formula:
Answer: P 86,400
Capital Gains Tax if Proceed is partially utilized
Selling Price P5,000,000
Fair Market Value P6,000,000 (higher)
“Should Be” Capital Gains Tax (P6 M x .06)= P 360,000
Capital Gains Tax= ( Unutilized Proceeds/ Total Proceeds ) x “Should Be CGT”
or
Capital Gains Tax= [( Unutilized Proceeds/ Total Proceeds ) X Selling Price or
Zonal Value or FMV, whichever is higher] x 6%
Using the preceding number, the basis (cost) of the
new principal residence is ______________.
Using the preceding number, the basis (cost) of the new
principal residence is ______________.
Answer: P2,280,000