Capital gains and losses.
Section 34
SEC. 34. Capital gains and losses.— (a) Definitions.— As used in this Title- (1) Capital assets.—The term "capital assets" means property held by the taxpayer (whether or not connected with his trade or business), but does not include stock in trade of the taxpayer or 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 property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business, or property used in the trade or business, of a character which is subject to the allowance for depreciation provided in subsection (f) of section thirty; or real property used in the trade or business of the taxpayer. (2) Net capital gain.—The term "net capital gain" means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges. (c) Limitation on capital losses.—Losses from sales or exchange of capital assets shall be allowed only to the extent of the gains from such sales or exchanges. If a bank or trust company incorporated under the laws of the Philippines, a substantial part of whose business is the receipt of deposits, sells any bond, debenture, note, or certificate or other evidence of indebtedness issued by any corporation (including one issued by a government or political subdivision thereof), with interest coupons or in registered form, any loss resulting from such sale shall not be subject to the foregoing limitation and shall not be included in determining the applicability of such limitation to other losses. (d) Net capital loss carry over.—If any taxpayer, other than a corporation, sustains in any taxable year a net capital loss, such loss (in an amount not in excess of the net income for such year) shall be treated in the succeeding taxable year as a loss from the sale or exchange of a capital asset held for not more than twelve months. (e) Retirement of bonds, etc. - For the purpose of this Title, amounts received by the holder upon the retirement of bonds, debentures, notes or certificates or other evidences of indebtedness issued by any corporation (including those issued by a government or political subdivision thereof) with the interest coupons or in registered form, shall be considered as amounts received in exchange therefor. (f) Gains and losses from short sales, etc.—For the pur pose of this Title— (1) Gains or losses from short sales of property shall be considered as gains or losses from sales or exchanges of capital assets; and (2) Gains or losses attributable to the failure to exercise privileges or options to buy or sell property shall be considered as capital gains or losses. (g) Gains from sale, barter, or exchange of shares of stock derived from sources within the Philippines shall be taxed under the following schedules: Rates Not over P10,000 10% Over P10,000 but not over P15,000 12% Over P15,000 but not over P20,000 14% Over P20,000 but not over 35,000 17% Over P35,000 but not over P50,000 20% Over P50,000 25% Provider however, That non-resident investors buying and/or selling shares of stock of Philippine corporations listed in the dollar or any acceptable foreign currency board of any stock exchange shall be subject only to the y± of 1% stock transaction tax.