BIR Ruling [DA-012-99]

January 8, 1999 BIR RULING [DA-012-99] Ms. Heidi I. Guinto 45 Poinsettia Street Tahanan Village Paraaque City M a d a m : This refers to your letter dated October 21, 1998 requesting for a ruling as to whether or not the transfer or exchange between you and Mr. Apolonio Delos Santos and Ms. Nora C. Delos Santos of your respective parcels of land located at Poinsettia Street, Tahanan Village, Paraaque City is exempt from capital gains tax. It is represented that in June 1995, you purchased a piece of land from Crisman Holdings, Inc. located at Poinsettia Street, Tahanan Village, Paraaque City covered by TCT No. 97650 issued by the Registry of Deeds for Paraaque containing an area of 280 square meters; that the property that was shown to you as the property being offered for sale was Lot 37, Block 13 which is owned by Mr. Apolonio Delos Santos and Ms. Nora C. Delos Santos covered by TCT No. 49023 issued by the Registry of Deeds for Paraaque and containing an area of 280 square meters; that in early 1996, you had constructed your house on Lot 37, Block 13 instead on Lot 41, Block 13; that you and Mr. Apolonio Delos Santos and Ms. Nora C. Delos Santos acknowledged the mistake or error and agreed to exchange the respective Transfer Certificates of Title by way of Deed of Exchange to reflect the true owners thereof to the end that the property presently covered by TCT No. 49023 is herein transferred and ceded unto you in exchange for the property covered by TCT No. 97650 which will now be transferred and ceded unto Mr. Apolonio Delos Santos and Ms. Nora C. Delos Santos. In reply, please be informed that since the exchange transaction in question is without any monetary consideration, and considering further that the execution of the Deed of Exchange is merely to correct a mistake, this Office is of the opinion as it hereby holds that the aforementioned exchange of properties between you and Mr. Apolonio Delos Santos and Ms. Nora C. Delos Santos is not subject to the capital gains tax imposed under Section 27(D)(5) of the Tax Code of 1997 nor to the creditable withholding tax imposed under Revenue Regulations No. 2-98. Furthermore, it is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgment to the said deed is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the said Code. (BIR Ruling No. 027-93 dated January 15, 1993 This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. cdtech Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)