On March 18, 2021, Nicanor consulted you on the sale of his principal residence located in Recto, Manila last March 15, 2021. The following are the information he provided to you:Selling priceP 4,000,000Cost of the principal residence (property was acquired in 2000)2,000,000Fair market value of land as per tax declaration (based on the latest tax declaration)3,000,000Fair market value of house as per tax declaration (based on the latest tax declaration)2,000,000Zonal value of the land as determined by the CIR4,000,000Additional information:He acquired a new principal residence amounting to P 3,000,000 located in Sampaloc, Manila last March 17, 2021.His TIN is registered in Makati where he works as an employee of ABC Corp while the TIN of the buyer of his principal residence is registered in Caloocan. In what RDO will Nicanor file the capital gains tax return?Group of answer choicesa. RDO in Makatib. RDO in Manilac. RDO in Caloocand. RDO in Quezon City

When an investor sells an asset he is liable to pay capital tax on the profit earned. If the asset…

Answered: On March 18, 2021, Nicanor consulted…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On March 18, 2021, Nicanor consulted you on the sale of his principal residence located in Recto, Manila last March 15, 2021. The following are the information he provided to you:

Selling price	P 4,000,000
Cost of the principal residence (property was acquired in 2000)	2,000,000
Fair market value of land as per tax declaration (based on the latest tax declaration)	3,000,000
Fair market value of house as per tax declaration (based on the latest tax declaration)	2,000,000
Zonal value of the land as determined by the CIR	4,000,000

Additional information:

He acquired a new principal residence amounting to P 3,000,000 located in Sampaloc, Manila last March 17, 2021.
His TIN is registered in Makati where he works as an employee of ABC Corp while the TIN of the buyer of his principal residence is registered in Caloocan.

In what RDO will Nicanor file the capital gains tax return?

Group of answer choices

a. RDO in Makati

b. RDO in Manila

c. RDO in Caloocan

d. RDO in Quezon City

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

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