Practice question
A person not engaged in real-estate business inherits a lot from a dealer. The heir does not use it in any trade or business. Under RR7-2003 Section3(f)(1), which classification applies in the hands of the heir?
- Capital asset
- Ordinary asset forever solely because the decedent was a dealer
- Inventory automatically because every inheritance is inventory
- No classification until the heir becomes a bank
- A security issued by the estate
Legal references
- NIRC RA8424, relevant provisions as amended: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html Section39(A)(1).
- RR7-2003: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/10/40237 Sections2(b),3(b)–(g).
- RA12214 CMEPA: https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html Section9 amending NIRC34(E)(2).
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