PLDT, a Philippine corporation. Keyrand, Inc., a Philippine corporation, sold through the local stock exchange 10,000 PLDT shares that it bought 2…

The question

PLDT, a Philippine corporation. Keyrand, Inc., a Philippine corporation, sold through the local stock exchange 10,000 PLDT shares that it bought 2 years ago. Keyrand sold the shares for P2 million and realized a net gain of P200,000.00. How shall it pay tax on the transaction? (2011 Bar Question)

1. A.It shall declare a P2 million gross income in its income tax return, deducting its cost of acquisition as an expense.
2. B.It shall report the P200,000.00 in its corporate income tax return adjusted by the holding period.
3. C.It shall pay 5% tax on the first P100,000.00 of the P200,000.00 and 10% tax on the remaining P100,000.00.
4. D.It shall pay a tax of one-half of 1% of the P2 million gross sales.

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