BIR Ruling

September 6, 1967 Mr. Sabino Padilla, Jr. 6th Floor, Shurdut Bldg. Muralla, Manila S i r : This refers to your letter dated August 31, requesting a ruling as to the tax consequence of the proposed exchange of property between your client, the Roman Catholic Archbishop of Manila (hereinafter referred to as the Archbishop of Manila) and the Susana Realty, Inc. cdta It is represented that the Archbishop of Manila owns two contiguous, vacant parcels of land situated in Intramuros, Manila, containing a total area of 4,306.4 sq. meters more or less; that the property was the former site of the Santa Isabel College, a catholic school for girls and an instrumentality of the Archbishop of Manila; and that it is presently used as a playground of the Immaculate Conception Academy in Intramuros, Manila. As the Santa Isabel College, Taft Avenue, Manila is in need of a school space, the Archbishop of Manila is contemplating to exchange the aforementioned property with a parcel of land of the same area situated behind the said college and owned by the Susana Realty, Inc. In reply thereto, I have the honor to inform you that under Section 35(c) of the Tax Code, all exchanges of property are taxable, except in cases of merger and consolidation or when a taxpayer exchanges his property for another property of a like kind that, is, the subject matter of the exchanges are substantially identical properties. (Section 140 Income Tax Regulations) In view thereof, this Office is of the opinion that no taxable gain or loss will be recognized in the proposed exchange of the two lots of the Archbishop of Manila in Intramuros, Manila for a lot of the same area located behind the Santa Isabel College, it appearing that the parties will not as a result of the contemplated exchange, get something fundamentally and essentially different from what they already had prior to such exchange. This Office may, however, reverse or modify this ruling if, upon investigation, it will appear that the facts are different from those represented. cdt Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue