RR 6-2013 Rules on the Taxation of Sale, Barter, Exchange or Other Disposition of Shares of Stock Held as Capital Assets

RR 6-2013 Sale of Stock as Capital Asset

Definition of "fair market value" of the Shares of Stock. — For purposes of this Section, "fair market value" of the shares of stock sold shall be:

In the case of shares of stock not listed and traded in the local stock exchanges, the value of the shares of stock at the time of sale shall be the fair market value.

 In determining the value of the shares,

Before RR 6-2013, We don't have to appraise the property of the corporation before we sell the shares of stock.

 the appraised value of real property at the time of sale shall be the higher of –

 (1) The fair market value as determined by the Commissioner, or
 (2) The fair market value as shown in the schedule of valued fixed by the Provincial and City Assessors, or
 (3) The fair market value as determined by Independent Appraiser.

Two things Corporations should understand why BIR issued RR 6-2013

1.  If your Corporation  has an old building, using the fair market value of the old building as the basis of the tax on the sale of shares of stock - The tax may not be that big.

2.  If your Corporation has a land that is located in a prime location, the fair market value of the land will increase annually.  Having a high fair market value of the land as the basis of the tax on sale of shares of stock - The tax on the sale of shares of stock  is bigger compared to sale of shares of stock before the RR 6-2013
 
RR 6-2013 Rules on the  Taxation of Sale, Barter, Exchange or Other Disposition of Shares of Stock Held as Capital Assets