Practice question
A manufacturer outside the real-estate business proves its formerly business-used lot has not been used in business for more than two years before the taxable disposition. It satisfies the RR7-2003 Section3(e) proviso. A real-estate dealer separately abandons an inventory lot but invokes only idleness. Which distinction is correct?
- The proved non-real-estate-business proviso can convert the first lot; idleness alone does not convert the dealer’s inventory
- Both lots automatically become capital on the first idle day
- Neither regulation contains any nonuse proviso
- The dealer necessarily qualifies for the non-real-estate-business proviso
- Only the color of the title controls
Legal references
- RR7-2003: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/10/40237 Section3(e).
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