BIR Ruling [DA-194-00]

March 30, 2000 BIR RULING [DA-194-00] 24 (D) (1); 196; 188 068-98 DA-194-2000 Villanueva Quinones Law Firm & Associates Rm. 210 J & C Bldg. II, Nueno Avenue Imus, Cavite Attention: Atty . Gavina P . Punzalan Gentlemen : This refers to your undated letter requesting on behalf of your client, Lilia Medina Aquino and Juanita Medina Ocampo, for exemption from the payment of capital gains tax as well as documentary stamp tax on the swapping of real properties to correct a mistake resulting from the inadvertence of the Registry of Deeds of Trece Martires City, Cavite. It is represented that Lilia Medina Aquino married to Constantino Aquino and Juanita Medina Ocampo married to Alberto Ocampo are daughters of the late Artemio Medina; that both of them are registered owners of two parcels of land under Transfer Certificate of Title Nos. 653909 and 653911 respectively, issued by the Registry of Deeds for the Province of Cavite; that the abovementioned parcels of land were inherited by the two daughters from their late father; that as indicated in the subdivision plan, Lot No. 2122-B-3 belongs to Lilia Medina Aquino while Lot No. 2122-B-1 belongs to Juanita Medina; that the house of spouses Lilia Medina Aquino and Constantino Aquino was constructed on Lot No. 2122-B-3 since 1950 even before the death of their father while Lot No. 2122-B-1 which is allotted to Juanita Medina Ocampo is a vacant lot; that Lot No. 2122-B-3 belong to Juanita Medina Ocampo as appearing under TCT No. 653911 while Lot No. 2122-B-1 under TCT No. 653909 belongs to Lilia Medina Aquino; that the Deed of Donation executed by the heirs reveals that Lot No. 2122-B-1 belongs to Lilia Medina Aquino while Lot No. 2122-B-3 belongs to Juanita Medina Ocampo; and that no amount shall be paid by Juanita Medina Ocampo to Lilia Medina Aquino on the exchange of their respective lots. In reply, please be informed that since the exchange transaction is without any monetary consideration, and considering further that the execution of the Deed of Exchange is merely to correct the mistake resulting from the inadvertence of the Registry of Deeds of Trece Martires City in identifying the lots which are for your respective ownership, the same is not subject to the capital gains tax, imposed under Section 24(D)(1) of the Tax Code of 1997, nor to the withholding tax imposed under Revenue Regulations No. 2-98. Furthermore, the said exchange of real property is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgment to the said deed is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-068-98 dated March 2, 1998) This ruling is issued on the basis of the foregoing representations. 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.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)