The partnership of DBM, TRA and MDS become insolvent on December 31, 2018 and is to be liquidated. DBM, TRA and MDS have the following balances, respectively: P455,000, (P210,000), and (P28,000). After paying their personal liabilities, DBM has still P70,000 while TRA has P105,000 of their personal assets. However, MDS has unpaid personal liabilities amounting to P280,000 and his personal assets amounted only to P210,000. The partners share profits and losses equally. How much is the maximum amount that DBM can expect to receive from the partnership?

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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.