BIR Ruling [DA-137-01]

August 15, 2001 BIR RULING [DA-137-01] 24 (D) (1) DA-037-2001 3-14-2001 Mrs . Paulina L . Fugoso No. 35 Rizal Street Dinalupihan, Bataan M a d a m : This refers to the Indorsement of Mr. Gerardo R. Florendo, Revenue District Officer of Revenue District Office No. 39, South Quezon City relative to your request for exemption from the payment of the capital gains tax on the Deed of Exchange executed between you and Mr. Aniceto T. Orlino for the purpose of correcting a mistake inadvertently made by the surveyor of Filinvest Corporation. It is represented and documents submitted disclosed that you are the registered owner of a parcel of land identified as Lot 19, Block 13 of Pcs-04-000133, containing an area of 240 square meters situated at Barangay Batasan Hills, Capitol District, Quezon City and covered by TCT No. 316740 of the Registry of Deeds of Quezon City; that likewise, Mr. Aniceto T. Orlino, is the registered owner of a parcel of land adjacent to your property known as Lot 18, Block 13 of Pcs-04-000133, containing the same area and covered by TCT No. RT-101143 (345455) of the Registry of Deeds of Quezon City; that when you were about to construct your house on the above lot you bought from Filinvest Corporation you asked the latter to furnish you the correct location map but for some reason Filinvest was not able to provide the same, instead, a surveyor of said firm pointed to you the lot which is owned by Mr. Aniceto T. Orlino, as a result of which you constructed your house on his lot; that this mistake was only found out when Mr. Aniceto T. Orlino returned from abroad and was going to build a house on his lot; that you and Mr. Aniceto T. Orlino have mutually agreed to exchange your lots so that the lot covered by TCT No. RT-101143 (345455) will be transferred in your name and the lot covered by TCT No. 316740 will be transferred to his name; and that the foregoing exchange of lots were executed without any monetary consideration. In reply, please be informed that considering that the above exchange transaction is without any monetary consideration and considering further that the execution of the Deed of Exchange was merely to correct a mistake inadvertently committed by the surveyor in pointing to you the lot you had purchased from them, this Office is of the opinion that such exchange transaction is not subject to the capital gains tax imposed under Section 24 (D)(1) of the Tax Code of 1997 nor to the creditable withholding tax imposed under Section 57 (B) of the Tax Code of 1997. Accordingly, the Certificate Authorizing Registration (CAR) and/or Tax Clearance Certificate (TCL) may be issued by the Revenue District Officer concerned, authorizing the registration of the said properties in your respective names. Further, the Deed of Exchange is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997 but the same shall be subject only to the P15.00 documentary stamp tax imposed under Section 188 of the same Tax Code. [BIR Ruling No. DA-037-2001 dated March 14, 2001 citing DA-068-98 dated March 2, 1998]. 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, (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group