BIR Ruling [DA-223-02]

November 25, 2002 BIR RULING [DA-223-02] 24 (D), 40 (A); 174-90 Mr. Ronald Borja 7405 Bernardino St., Guadalupe Viejo Makati City S i r : This refers to your letter dated October 9, 2001 requesting in effect for exemption from the payment of the capital gains and documentary stamp taxes in connection with your assignment of right over a parcel of land owned by Cityland Incorporated situated at Brgy. Anoling (As-isan), Tagaytay City and covered by Transfer Certificate of Title No. 35262, in favor of Segunda T. Javier. SEHaDI 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 you from and as a consequence of such assignment is subject to income tax, based on the graduated income tax rates under Section 24(A) of the Tax Code of 1997. The Deed of Assignment, however, is subject to the P15.00 documentary stamp tax imposed under Section 188 of the Tax Code of 1997. 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 from that as represented, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal & Inspection Group