BIR Ruling [DA-002-03]

January 9, 2003 BIR RULING [DA-002-03] Ms. Rosario A. Arellano 49 Benito Soliven-I Loyola Grand Villas Marikina City M a d a m : This refers to your letter dated November 4, 2002 requesting for an extension of 12 months from January 16, 2002, within which to comply with the provisions of Section 24(D)(2) of the Tax Code of 1997, as implemented by Revenue Regulations No. 13-1999, as amended by Revenue Regulations No. 14-2000, requiring the taxpayer to have actually commenced with the construction of her new principal residence or has actually entered into a contract for the purchase of her new principal residence within eighteen (18) calendar months from the date of sale or disposition with the intention of using the entire proceeds of sale for the acquisition or construction of said principal residence, so that the sale of your principal residence remains exempt from the payment of capital gains tax under Section 24(D)(2) of the said Code. It is represented that on July 16, 2001, a Deed of Absolute Sale was executed by and between Spouses Antonio and Rosario A. Arellano (Spouses Arellano) and Spouses Wenifredo and Amelia Janet Mendoza (Spouses Mendoza) whereby the former transferred to the latter their principal residence located at Soliven Avenue I, Barangka, Loyola Grand Villas, Marikina City for and in consideration of P5,700,000.00; that Spouses Arellano have deposited the amount of P342,000.00 representing the 6% capital gains tax in escrow agreement with the authorized agent bank (AAB); that on October 24, 2002, a Deed of Absolute Sale was executed by Spouses Jose Dennis and Eileen Dela Cruz (Spouses Cruz) and Spouses Arellano whereby the former transferred to the latter a parcel of land located in Marikina covered by TCT No. 241729 issued by the Registry of Deeds for Marikina containing an area of 600 square meters for and in consideration of P3,500,000.00; and that to show positive proof that action was undertaken to utilize the proceeds for the acquisition or construction of your new principal residence, you now request for an extension of 12 months from July 16, 2001 due to health reason and that the architect whom, you have previously contracted went for abroad. In reply thereto, please be informed that in view of the justifiable reasons, your request for extension of twelve (12) months from January 16, 2003 i.e., January 16, 2004 within which to comply with the provisions of Section 24(D)(2) of the Tax Code of 1997, as implemented by Revenue Regulations No. 13-1999, as amended by Revenue Regulations No. 14-2000 is hereby granted. Accordingly, the certificate of exemption issued on July 16, 2001 by Revenue District Office No. 045, Marikina City of Revenue Region No. 007, Quezon City still holds true. ADCTac Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service