Santo, Inc. acquired 30% of Nino Corp's voting stock on January 1, 2019 for P360,000. During 2019, Nino earned P150,000 and paid dividends of P90,000. Santo's 30% interest in Nino gives Santo the ability to exercise significant influence over Nino's operating and financial policies. During 2020, Nino earned P180,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000. Thereafter, Santo, Inc. designated the investment as FVTOCI. The remaining shares of Nino Corp. held by Santo, Inc. have a fair value of P220,000 at December 31, 2020. How much is the total amount to be recognized in Santo, Inc's 2020 profit or loss related to this investment? O P87.000 O P114.000 O P158.500 O P123.000

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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.