Installment Payment of

Capital Gains Tax

(CGT)
 Installment payment of CGT is applicable
only to sale of shares of stock not traded
in the local stock exchange and real
asset considered as capital asset
provided that initial payment is not more
than 25% of selling price.
 Initial Payment – Total Payments received in cash or
property by the seller upon or before the execution of
the instrument of sale during the taxable year of the
disposition of the real property.
 Contract Price is usually the Selling Price
 Selling Price is reduced by the mortgage assumed by
the buyer on the property that he purchased or it
increase by the excess of mortgage assumed by the
buyer over the cost of the seller
Example of Computation of initial payment,
Contract Price, Selling Price,% of IP over SP and
Capital gains tax due

 Case A : Contract Price = Selling Price

A Taxpayer sold his residential house under the ff terms:
Cash received, January 10, 2018 P100,000
Amount received, June 10, 2018 100,000
Installment due, June 10, 2019 600,000
Cost 150,000
 Case A : Contract Price not equal to Selling Price (Real Property)
A Taxpayer sold his residential house under the ff terms:
Cash received, January 10, 2018 P200,000
Amount received, June 10, 2018 100,000
Installment due, June 10, 2019 600,000
Cost 150,000
Mortgage assumed by the buyer 200,000