BIR Ruling [DA-195-00]

March 30, 2000 BIR RULING [DA-195-00] 24 (D) (1), 188, 196 DA-014-99 DA-195-2000 Mr. Jose M. Gabor 2-A Sta. Escolastica St. Pasay City S i r : 'This refers to your letter dated September 16, 1999 requesting in effect for exemption from the payment of capital gains tax on the transfer of a parcel of land by way of legal redemption. It is represented that you and your wife, Guillermina T. Gabor are the owners of a parcel of land with an area of 61,085 square meters covered by said TCT No. M-255565; that on November 14, 1985, you assigned a portion of 20,631 square meters of the said parcel of land in favor of Atty. Emiliano S. Samson married to Remedios B. Samson; that Atty. Emiliano S. Samson sold/assigned the said portion to Ma. Remedios P. Ramos married to Pacifico Ramos; that upon learning of the sale/assignment to the Ramos spouses, you offered to redeem the said share but the same was rejected; that as a result, you filed a complaint for legal redemption against the Ramos Spouses before the Regional Trial Court of Tanay, Rizal, Branch 80; that the said court rendered a decision dismissing your complaint, but on appeal, the Court of Appeals reversed the judgment of the lower court and a new decision was rendered allowing legal redemption and ordering the Ramos Spouses to execute the proper deed of conveyance transferring back to you the said portion of 20,631 square meters; and that due to the failure and refusal of the Ramos Spouses to execute the deed of conveyance, the RTC ordered the Branch Clerk to execute such deed. prcd In reply, please be informed that since the transfer of the subject property is in consonance with the decision of the Court of Appeals and is without consideration, the transfer of the said property in your favor 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 prescribed by Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997. Furthermore, it 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 of conveyance is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. 027-93 dated January 15, 1993) 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. prcd Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)