Gunong Paredes De Leon Mariñas Paredes Arevalo & Associates

January 29, 2007 BIR RULING [DA-045-07] Section 91 (B); DA-258-98 dtd. 06/29/98 Gunong Paredes De Leon Marias Paredes Arevalo & Associates 3/F Randa Bldg., 146 Mindanao Avenue Quezon City Attention: Jose Armando C. Arevalo Counsel Gentlemen : This refers to your letter dated April 17, 2006, in behalf of your client, Bernadette C. Basobas, et al., the heirs of the deceased Juan Velano Basobas, requesting that they be granted an extension of time to file and pay the estate tax return from May 6, 2006 to the maximum period allowed under the Tax Code of 1997, since the properties subject of the estate have not been fully transferred in the name of the decedent, and which transfer was not done during his lifetime; that aside from the difficulties in the registration of the residential properties in Quezon City and the agricultural properties in Pangasinan in the name of the decedent and the heirs of Mamerta C. Basobas (d. 1982), your clients have yet to extrajudicially settle the estate of Juan Velano Basobas; that moreover, your clients do not have sufficient cash to pay the estate tax, the payment in full of which would cause undue hardship upon the estate or the heirs. DcSTaC In reply, please be informed that pursuant to Section 91 (B) of the Tax Code of 1997, which provides, viz: "SEC. 91. Payment of Tax . xxx xxx xxx "(B) Extension of Time when the Commissioner finds that the payment on the due date of the estate tax or of any part thereof would imposed undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment as provided in Section 203 of this Code shall be suspended for the period of any such extension." Accordingly, in view of the aforesaid justifiable reasons, your request for extension of two (2) years from May 6, 2006 to May 6, 2008, within which to pay the estate tax due thereon is hereby granted. It shall be understood, however, that the estate shall be liable to the corresponding interest that have accrued thereon up to the time of payment of the estate tax due on the transmission by the said estate of the properties in favor of the heirs pursuant to Section 249 of the Tax Code of 1997. (BIR Ruling No. DA-285-98 dated June 29, 1998) Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service