(From Philippine Daily Inquirer)
Byline: Iryn S. Yap, SGV & Co.
(Continued from last week)
Capital and ordinary assets
UNDER the Tax Code, the term "capital assets" shall refer to property held by the taxpayer, whether or not connected with his trade or business, but does not include the following:
1. Stock in trade of the taxpayer; or
2. Other property of a kind which would properly be included in the inventory of the taxpayer, if on hand at the close of the taxable year; or
3. Property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business; or
4. Property used in the trade or business of a character which is subject to the allowance for depreciation provided in subsection (f) of Section 29 of the 1997 Tax Code; or
5. Real property used in trade or business
Taxpayers in real estate
RR No. 7-2003 defines who are considered taxpayers engaged in the real estate business. Included in this category of taxpayers are real estate dealers, developers, and/or lessors, and taxpayer whose Articles of Incorporation states that its primary purpose is to engage in the real estate business.
A real estate dealer is any person engaged in the …