On September 21, 2010, Piolo agreed to sell his only carabao to Sam and Sam agreed to pay the price of P25,000 if Sam will pass the October 2010 CPA Examination. The list of successful examinees was released on October 21, 2010 and Sam is one of those who passed the examination. As a result,   Piolo is entitled to the P25,000 price plus interest beginning September 21, 2010. Sam is entitled to the carabao and its fruits beginning September 21, 2010. Sam is entitled to the carabao beginning September 21, 2010 and to its fruits beginning October 21, 2010. Piolo shall deliver the fruits of the carabao and Sam shall pay the interest on the price beginning September 21, 2010

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.