Practice question
After CMEPA applies, an entity duly licensed by the proper regulator to buy and sell securities holds securities that become worthless and are properly ascertained and charged off. It invokes an investment-account label to demand capital-asset treatment under the amended Section34(E)(2). Which answer follows RA12214?
- The amendment expressly treats the specified licensed-entity securities as ordinary assets and the qualifying worthless loss as ordinary
- Every accounting investment label overrides the amendment
- Licensed securities traders are categorically excluded from the ordinary rule
- Every worthless security must always be capital regardless of holder
- The statutory rule applies only to land
Legal references
- RA12214 CMEPA: https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html Section9 amending NIRC34(E)(2).
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