Capital asset means property held by the taxpayer (whether or not connected with his trade or business), but does not include –
a) stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year; or
b) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business; or
c) property used in the trade or business of a character which is subject to the allowance for depreciation provided in subsection (F) of Sec. 34 of the Code; or
d) real property used in trade or business of the taxpayer.(Excerpts from Source : http://www.bir.gov.ph/taxinfo/tax_capgin.htm)
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