BIR Ruling [DA-164-02]

September 16, 2002 BIR RULING [DA-164-02] Sec. 90 (D); RR 11-96; BIR Ruling 123-96 Mr. Pedro A. Baris 49 Pantabangan Street, NIA Village Tandang Sora, Quezon City S i r : This refers to your letter dated February 19, 2001, requesting in behalf of your son, Rolando C. Baris, of 47 Pantabangan Street, NIA Village, Tandang Sora, Quezon City, a ruling as to whether or not a portion of a parcel of land which was sold to your son, Rolando C. Baris, by one of the heirs of the said property can be transferred in the name of your son without the payment of the estate tax and the capital gains tax. It appears from the records of the case that Esmeno, Emeterio and Maria, all surnamed Almazan, filed before the then CFI of Isabela a case against Segundino Saguid for the reconveyance of a parcel of land (Lot No. 6987) located at Daramugan, San Mateo, Isabela, containing an area of 74,302 sq. meters covered by TCT No. T-16370; that on October 1, 1975, the court rendered a decision which, among others, ordered Segundino Saguid to reconvey the land in question in favor of the Almazans within 30 days after the decision becomes final, and if the defendant fails to reconvey the same, the Clerk of Court will make the Deed of Reconveyance; that on December 28, 1998, a Deed of Extrajudicial Settlement, Reconveyance and Sale was executed by the Clerk of Court of Isabela reconveying the land in question to the Almazan's; that before the settlement or partition, the successors in interest of the abovenamed persons (already deceased) sold to your son Rolando C. Baris a portion thereof containing an area of 16,000 sq. meters; and that you sought the transfer of said portion in favor of your son Rolando but the BIR Regional Office at Tuguegarao, Cagayan refused to issue the corresponding tax clearance unless the fees (apparently estate and inheritance taxes and capital gains tax) were fully paid. In reply, please be informed that unless the corresponding estate tax, as well as capital gains tax, and documentary stamp tax, are paid by the heirs and a Tax Clearance from the Revenue District Officer issued therefor, the ownership of the portion of the property which was purchased by your son cannot be issued in his name in accordance with Sections 24(D) and 95 of the Tax Code of 1997. This is a condition precedent for the transfer of ownership of the property in the name of your son. DHIcET Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group