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CITY OF PHILADELPHIA BUSINESS PRIVILEGE TAX REGULATIONS - page 35 / 59

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    • (a)

      If losses are sustained from stocks, bonds, etc., sold, exchanged, paid at maturity, or redeemed, such losses may be offset against gains from such transactions but may not be offset against other receipts.

    • (b)

      For the purpose of determining the gross profit, the cost of stocks, bonds, etc., shall be deducted from the amount realized on sale, exchange, redemption or maturation.

    • (c)

      The amount realized shall consist of the gross receipts therefrom less any brokerage fees or commissions paid on the transfer.

    • (d)

      The costs shall consist of the purchase price of the property plus any brokerage fees or commissions paid on acquisition.

  • (2)

    Sale by issuing corporations. The proceeds derived by a corporation from the original sale of capital stock do not constitute gross receipts, within the meaning of the Business Privilege Tax Ordinance. However, profits realized from the sale of a corporation's own stock, after issuance and repurchase by the corporation, must be included in the measure of the tax.

  • (3)

    Retirement of bonds. When a corporation purchases its own bonds for retirement at a price less than the issuing price or less than face value, the difference between the purchase price and the issuing price or face value must be included in the tax base. Conversely, if a corporation issues bonds at their face value and purchases for retirement any of such bonds at a price in excess of the issuing price of face value, the difference between the issuing price and the purchase price may be deducted, but only to the extent of the profits realized on other securities transactions.

  • (4)

    Hedging transactions. Gains or losses realized on hedging transactions are gains or losses from securities transactions within the meaning of this section.

  • (5)

    U.S. Government and Pennsylvania Obligations. Profits made on the sale, exchange, redemption or payment at maturity of obligations of the United States or its possessions or any governmental agency created by act of Congress, or of the Commonwealth, any public authority, commission, board or other agency created by the Commonwealth, any political subdivision of the Commonwealth or any public authority created by such political subdivision shall be excluded from the tax base.

SECTION 324. SALE OF CAPITAL ASSETS.

Except as otherwise provided, the gains (not gross proceeds) resulting from the sale of capital assets, such as plant, machinery and equipment, furniture and fixtures, vehicles, etc., are to be included in the tax base if the property is located in Philadelphia at the time of the sale. Losses sustained on such sales may be offset against gains from other sales of capital assets, but may not be offset against gross receipts from other sources. In computing the gains or losses from the sale of a capital asset, the cost of the asset, less allowable depreciation, is deductible from the gross proceeds of the sale.

33

(Rev. 08/01)

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