BIR Ruling [DA-172-02]

September 18, 2002 BIR RULING [DA-172-02] 24 (D), 40 (A); 174-90 Ms. Maria Olivia Dimalanta 1177 Villa Aragon A. Linao Street, Malate M a n i l a M a d a m : This refers to your letter dated August 1, 2001 requesting in effect for exemption from the payment of the capital gains and documentary stamp taxes in connection with the assignment by Mr. Ricardo David of his right over a condominium unit (Unit 815) at Cityland Wack Wack Royal Mansion located at Wack Wack Road, Mandaluyong City, in favor of Ma. Olivia L. Dimalanta and Albert G. Tan. In reply, please be informed that assignment of rights in real property is not subject to the capital gains tax under Section 24(D)(1) of the Tax Code of 1997 because in assignment of rights, the assignee merely steps into the shoes of the assignor without acquiring a better right than what the assignor had in the property to which the right assigned pertain while the title or ownership thereof still remains with the developer. However, any gain realized by the assignor from and as a consequence of such assignment is subject to income tax. The Deed of Assignment, however, is subject to the P15.00 documentary stamp tax imposed under Section 188 of the Tax Code of 1997. Thus 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 from that as represented, then this ruling shall be considered null and void. IDCHTE Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group