BIR Ruling [DA-027-97]

January 15, 1997 BIR RULING [DA-027-97] Mr. Florentino L. Seneca, Jr. 8432 Mayapis cor. Calantas St. San Antonio Village, Makati City S i r : This refers to your letter dated September 5, 1996 requesting for a confirmation of your opinion that in the buy-back of your foreclosed property on which the 5% final capital gains tax was already paid based on the sheriff's certificate of sale, you are no longer subject to the final capital gains tax hence, a tax clearance certificate should be immediately issues to you to effect the registration and transfer of title to you. cdt It appears that you have incurred a loan from Asia Trust Development Bank in the amount of P701,381.77; that having failed to pay your loan, the Bank foreclosed your property and sold the same at a public auction sale at the price of P1,200,000.00 representing the outstanding basic liability, plus increments from the date of foreclosure and public auction sale; that while the title was in the name of the Bank, you have remained in possession of the property because the place is both your residence and place of business; and that in the Petition for Writ of Possession filed by Asiatrust Development Bank, the Regional Trial Court of the National Capital Judicial Region, Branch 58 of Makati, the Court ruled to hold further proceedings in abeyance giving the parties a chance to settle their dispute amicably; and that on the basis thereof, Asiatrust allowed you to buy-back the same property at the cost of P2,500,000.00. In reply thereto, please be informed that the Deed of Conveyance executed by Asiatrust to you at the price of P2,500,000.00 shall be subject to the creditable withholding tax of 7.5% pursuant to Section 1 of Revenue Regulations No. 6-85 as amended by Revenue Regulations No. 12-94 implementing Section 50(b) of the Tax Code, as amended, and to the documentary stamp tax imposed under Section 196 of the Tax Code, as amended. A Tax Clearance Certificate (TLC) shall be issued by the Revenue District Office concerned after the payment of said taxes. (BIR Ruling Nos. 134-90 dated July 12, 1990; 202-88 dated May 10, 1988 and 138-87 dated May 27, 1987) aisadc Very truly yours, ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)