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    Gabriel Carumba
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    The document discusses two questions regarding real estate companies and tax implications of property transfers. For the first question, it states that Philippine law does not prohibit investing only in non-cash assets like real property and equipment to start a company, however cash is still important for daily operations. For the second question, it indicates that obtaining a BIR ruling is not required for a property transfer to be considered tax-free under Section 40C(2) of the Tax Code, and that BIR rulings only determine gain or loss on subsequent sales.

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    The document discusses two questions regarding real estate companies and tax implications of property transfers. For the first question, it states that Philippine law does not prohibit investing only in non-cash assets like real property and equipment to start a company, however cash is still important for daily operations. For the second question, it indicates that obtaining a BIR ruling is not required for a property transfer to be considered tax-free under Section 40C(2) of the Tax Code, and that BIR rulings only determine gain or loss on subsequent sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views5 pages

    Webinar

    Uploaded by

    Gabriel Carumba
    The document discusses two questions regarding real estate companies and tax implications of property transfers. For the first question, it states that Philippine law does not prohibit investing only in non-cash assets like real property and equipment to start a company, however cash is still important for daily operations. For the second question, it indicates that obtaining a BIR ruling is not required for a property transfer to be considered tax-free under Section 40C(2) of the Tax Code, and that BIR rulings only determine gain or loss on subsequent sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    1.

    Would the incorporator of a real estate company invest real property without any cash
    investment/s?

    No part of the Corporation Code of the Philippines and other related laws and rules and
    regulations prohibit investment of noncurrent assets only such as buildings, land and/or
    equipment to a company without any investment of cash. However, non-investment of cash is not
    a practice of the incorporators because money is very important to daily operations and
    transactions of a business. Cash are considered lifeblood of the business to fund day-to-day
    business operations and to pay the ongoing operating expenses. The real properties (non-current
    assets) are the company’s long-term investments for which the full value will not be realized
    within the accounting year while the cash (current assets) are realized on regular basis.

    2. Is a BIR ruling a condition to consider transfer of real property under Section 40C (2) of
    the Tax Code as tax free?

    The answer is NO. The BIR ruling prescribed under RR 18-2001 is simply for determining the
    gain or loss on a subsequent sale or disposition

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