Mr. Randy S. Gonzales

February 6, 2007 BIR RULING [DA-071-07] 24 (D) (1); 196; DA-656-2006 Mr. Randy S. Gonzales No. 72A Matatag Street Pinyahan, Quezon City S i r : This refers to your letter dated October 6, 2006 requesting for exemption from the payment of capital gains tax and documentary stamp tax on the swapping of real properties to correct a mistake and without consideration. It is represented that you bought a parcel of land located at Matatag St., Diliman, Quezon City from Ana Marie R. Mindanao; that likewise, the adjacent land was bought by Maria Concepcion Rosaldo Llantos from Juliana C. Besas; that you discovered that the properties were erroneously exchanged/swapped; and that a Deed of Exchange without any monetary consideration was executed by both parties to rectify the said error. IDAEHT In reply, please be informed that since the exchange transaction is without monetary consideration, and considering further that the execution of the Deed of Exchange is merely for the purpose of correcting the mistake above-described, the exchange of realty by and between Randy S. Gonzales and Maria Concepcion Rosaldo Llantos is not subject to capital gains tax imposed under Section 24 (D) (1) of the Tax Code of 1997, as amended, nor to the withholding tax imposed under Revenue Regulations No. 2-98, as amended. Furthermore, the said swapping of real property is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended. However, the notarial acknowledgment of the said deed is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code of 1997, as amended. (BIR Ruling No. 656-2006 dated November 7, 2006) ScAaHE 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service