ASSIGNMENT NO. 3
Name: NALA, SHERREN MARIE F.
CBET-19 503P
Date: October 30, 2020
INCOME TAXTION
Submitted to: Nathelie Tumambing
CAPITAL GAINS TAX
A.
1. A resident citizen taxpayer sold a vacant lot (held as investment) in the Philippines.
Other data regarding the sale are as follows:
Selling price
P5,500,000
Fair market value
6,000,000
Zonal value
5,850,000
Expenses on the sale
275,000
Required: Compute the capital gains tax.
Computation:
Selling price
P5,000,000
Expense on the sale
(275,000)
Total
P4,725,000
Fair market value
CGT rate
Capital gains tax
P6,000,000
x
.06
P360,000
2. A resident citizen taxpayer sold a vacant lot (held as investment) in the Philippines.
Other data regarding the sale are as follows:
Gain on sale
P500,000
Zonal value
2,200,000
Cost
2,000,000
Expenses on the sale
150,000
Required: Compute the capital gains tax.
Computation:
Gain on sale
P500,000
Expense on sale
(150,000)
Total
P350,000
Zonal value
CGT rate
Capital gains tax
P2,200,000
x
.06
P132,000
3. A resident citizen taxpayer sold a residential house and lot (principal residence) in
the Philippines. Other data regarding the sale are as follows:
Selling price
P5,000,000
Fair market value
6,000,000
Zonal value
5,500,000
Expenses on the sale
275,000
Required: Determine the capital gains tax assuming the taxpayer purchased a new
principal residence worth P5,800,000 within eighteen months (18) from disposal of
the principal residence. The BIR was properly informed about the sale.
The Sale of principal residence is exempt to CGT because he/she fully utilized it
in acquiring or constructing a new principal residence.
ASSIGNMENT NO. 3
4. Using the same data in the preceding number, determine the capital gains tax
assuming the taxpayer utilized only 80% of the proceeds in acquiring his new
principal residence.
Computation:
Selling price
P5,000,000
x
.80
Total
P4,000,000
Taxable Income= P1,000,000/P5,000,000xP6,000,000
=0.2xP6,000,000
Taxable Income=P1,200,000
Taxable Income
CGT rate
Capital gains tax
B. Assume the following data:
Selling price of Building No. 1
Selling price of Building No. 2
Cost of Building No. 1
Cost of Building No. 2
Expenses on sale of Building No. 1
Expenses on Building No. 2
Fair market value of Building No. 1
Fair market value of Building No. 2
P1,200,000
x
.06
P72,000
P15,000,000
20,000,000
10,000,000
30,000,000
200,000
300,000
12,000,000
8,000,000
Required:
a. Compute the capital gains tax on Building No. 1
Computation:
Selling price of Building No. 1
P15,000,000
Expenses on sale of Building No. 1
(200,000)
Total
P14,800,000
Cost of Building No. 1
Fair market value of Building No. 1
10,000,000
12,000,000
Selling Price
CGT rate
Capital gains tax
P14,800,000
x
.06
P888,000
b. Compute the capital gains tax on Building No. 2
Computation:
Selling price of Building No. 2
P20,000,000
Expenses on Building No. 2
(300,000)
Total
P19,700,000
Cost of Building No. 2
Fair market value of Building No. 2
30,000,000
8,000,000
ASSIGNMENT NO. 3
Cost of Building No. 2
CGT rate
Capital gains tax
P30,000,000
x
.06
P1,800,000
c. Compute the capital gains tax on Building No. assuming the Building is situated
abroad.
0
The 6% capital gains tax on real properties sold are applicable only on real
properties “held as capital assets” situated in the Philippines. The property sold is located
abroad and classified as an ordinary asset.
C. The taxpayer is a resident citizen:
Selling rice at prevailing market value on a direct sale to buyer of shares of stock of a
domestic corporation – P600,000
Cost of the shares sold – 650,000
Required: Compute the capital gains tax.
Computation:
Selling price
P600,000
Cost of the shares sold
650,000
Total
-P50,000
It will not be subject to CGT because it will result to a capital loss.
D. The taxpayer is a resident alien:
Selling rice on a direct sale to buyer of shares of stock of a domestic corporation –
P310,000
Expenses on sale – 10,000
Cost of the shares sold – 200,000
Required: Compute the capital gains tax.
Computation:
Domestic corp.
P310,000
Expense on sale
(10,000)
Cost of the shares sold
(200,000)
Total
P100,000
CGT rate
x
.15
Capital gains tax
P15,000
E. The tax payer is a resident alien:
Selling rice on a direct sale to buyer of shares of stock of a domestic corporation –
P310,000
Expenses on sale – 10,000
Cost of the shares sold – 150,000
Required: Compute the capital gains tax.
Computation:
Domestic corp.
P310,000
Expense on sale
(10,000)
Cost of the shares sold
(150,000)
ASSIGNMENT NO. 3
Total
CGT rate
Capital gains tax
P150,000
x
.15
P22,500
F. The taxpayer is a nonresident alien engaged in trade or business:
Selling rice on sale of shares of stock of a domestic corporation through the local stock
exchange– P550,000
Expenses on sale – 50,000
Cost of the shares sold – 300,000
Required: Compute the capital gains tax.
P0
Subject to 6/10 of 1% stock transaction tax, not CGT.