BIR Ruling [DA-237-02]

December 16, 2002 BIR RULING [DA-237-02] Mr. Jose Del Rosario, Jr. Biang 1st, Bocaue Bulacan S i r : This refers to your undated letter stating that you and your wife Lourdes V. Tecson together with Rosalinda del Rosario and Carmelita del Rosario (co-owners) are the absolute and registered co-owners of a parcel of land located at Biang 1st, Bocaue, Bulacan (Biang Property) covered by TCT No. T-6297-P(M) issued by the Registry of Deeds for Meycauayan Branch containing an area of 317 square meters; that the said property was acquired by the above co-owners by virtue of inheritance from the late Jose del Rosario, Sr., who was then awarded by the then Bureau of Lands under a free patent law in 1974; that in 1990, Spouses Romeo and Patricia dela Cruz and Spouses Rogel and Leonisa Magno (applicants) have applied for a free patent title for their property in Sulucan, Bocaue, Bulacan (Sulucan Property) but their application was denied because the Lot No. and technical description intended for their application was already assigned erroneously to TCT No. T-6297-P(M) issued in the names of the co-owners; and that parties, in order to amicably settle the differences in the technical descriptions of the aforesaid properties, have voluntarily agreed to execute a Deed of Assignment to effect the corrections in the entry number of the transfer certificate of title as well as the technical description of the properties without any monetary consideration. Based on the foregoing representations, you now request for ruling that TCT No. T-6297-P(M) and its technical descriptions issued for the Biang Property to be exchanged and transferred to that of the Sulucan Property without any consideration is exempt from capital gains tax and documentary stamp tax. In reply thereto, please be informed that since the exchange transaction is without any monetary consideration, and considering further that the execution of the Deed of Assignment is merely for the purpose of correcting the mistake committed by the then Bureau of Lands, the exchange of the TCT No. and its technical descriptions issued for the Biang Property to that of the Sulucan Property by and among the co-owners and applicants in this case 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 in Revenue Regulations No. 2-98, as amended. HIETAc Moreover, the said exchange is likewise not subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgment of the said deed is subject to the documentary stamp of P15.00 pursuant to Section 188 of the said Code. ( BIR Ruling No. DA145-2000 dated March 10, 2000 ) 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. Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service