Mr. H may avail the exemption from capital gains tax on sale of principal residence by natural persons. Under the law, the following are the…

The question

Mr. H may avail the exemption from capital gains tax on sale of principal residence by natural persons. Under the law, the following are the requisites: (1) proceeds of the sale of the principal residence have been fully utilized in acquiring or constructing new principal residence within eighteen (18) calendar months from the date of sale or disposition; (2) The historical cost or adjusted basis of the real property sold or disposed will be carried over to the new principal residence built or acquired; (3) The Commissioner has been duly notified, through a prescribed return, within thirty (30) days from the date of sale or disposition of the person’s intention to avail of the tax exemption; and (4) Exemption was availed only once every ten (10) years. Interest income of a domestic commercial bank derived from a peso loan to a domestic corporation in 2010 is: (2012 Bar Question)

1. A.Subject to the 30% income tax based on its net taxable income;
2. B.Subject to the 20% final withholding tax;
3. C.Subject to the 7.5% final withholding tax;
4. D.Subject to 10% final withholding tax.

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