BIR Ruling [DA-172-05]

April 19, 2005 BIR RULING [DA-172-05] KPMG Laya Mananghaya & Co. 22/F Philamlife Tower, 8767 Paseo De Roxas 1226 Makati City Attention: Atty. Francisco G. Tagao Head, Tax and Corporate Division Atty. Ronald L. Carreon Director, Tax and Corporate Division Gentlemen : This is in reply to your letter dated April 7, 2005, filed in behalf of your client Mercator Securities Corporation, seeking for a confirmation letter from this Office to request the Office of the Register of Deeds of Makati to correct/amend the annotation of the substituted bases of the properties covered by TCT Nos. 221107 and 221108 for purposes of complying with the requirements of Certification No. SN-3602004. Please be advised that for purposes of complying with Certification No. SN-360-2004, the annotation as presently inscribed on TCT Nos. (old 309791 [S-29686]) now 221107 and (old 420325) now 221108 should be corrected to reflect only the substituted basis of the specific property covered by the particular TCT. For your guidance, the annotation on the respective TCTs should be worded as follows: 1. For TCT No. 221107 (old 309791 [S-29686]) "The acquisition of the property described in this title is by virtue of a tax-free exchange pursuant to Section 40(C)(2) of the National Internal Revenue Code of 1997 per Deed of Assignment dated December 6, 2004. The substituted basis of the property transferred to Crans Montana Property Holdings Corporation pursuant to Section 40(C)(5) of the National Internal Revenue Code of 1997 is P328,311.00." 2. For TCT No. 221108 (old 420325) "The acquisition of the property described in this title is by virtue of a tax-free exchange pursuant to Section 40(C)(2) of the National Internal Revenue Code of 1997 per Deed of Assignment dated December 6, 2004. The substituted basis of the property transferred to Crans Montana Property Holdings Corporation pursuant to Section 40 (C)(5) of the National Internal Revenue Code of 1997 is P2,159,000." Please be guided accordingly. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group