BIR Ruling [DA-285-98]

June 29, 1998 BIR RULING [DA-285-98] Mr. Fernando L. Gaspar 9/F Doa Salustiana D.T. Tower 104 Paseo de Roxas cor. Perea Street Legaspi Village Makati City S i r : This refers to your letter dated June 23, 1998 requesting on behalf of the heirs of the late Sandra Z. Gaspar for an extension of two (2) years within which to pay the corresponding estate tax due on the transmission of the said estate to the heirs pursuant to Section 91(B) of the Tax Code of 1997. It is represented that the late Sandra Z. Gaspar died on May 16, 1998 with last residence address at No. 44 Hercules St., Bel-Air, Makati City; that the decedent died almost suddenly from complications arising from aneurism, and left an estate consisting largely of real properties; that on the basis of unofficial valuations, it is roughly estimated that an amount of P1,000,000.00 is due in estate taxes; that you are constrained to make this request for the reasons that the estate has no liquid assets to answer for the anticipated taxes; that the heirs do not likewise have such cash requirement readily available; that it has become necessary to sell part of the decedent's estate in order to generate payment for the estate taxes; and that in selling a part of the decedent's estate, securing judicial consent shall be necessary in view of the fact that one of the heirs is still a minor. In reply, please be informed that Section 91(B) of the Tax Code of 1997 reads: "(B) Extension of Time. When the Commissioner finds that the payment on the due date of the estate tax or any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment as provided in Section 203 of this Code shall be suspended for the period of any such extension. xxx xxx xxx" Accordingly, in view of the aforestated justifiable reasons, your request for extension of two (2) years from November 16, 1998 to November 16, 2000 within which to pay the estate tax due thereon is hereby granted but the estate tax return should be filed within six (6) months from May 16, 1998. LLpr It shall be understood that the estate shall be liable to the corresponding interest that have accrued thereon up to the time of payment of the estate tax. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue