BIR Ruling [DA-293-05]

June 27, 2005 BIR RULING [DA-293-05] Mr. Eduardo L. Tintoc Pasig City S i r : This refers to your letter dated June 10, 2005 requesting on behalf of the heirs of the Late Concepcion Lim Tintoc for an extension of thirty (30) days within which to file the estate tax return and two (2) years within which to pay the corresponding estate tax due on the transmission of the said estate to the heirs pursuant to Sections 90(C) and 91(A) of the Tax Code of 1997. It is represented that the Late Concepcion Lim Tintoc, a former resident of No. 14 Ipil Street, Valle Verde III, Pasig City died intestate and the heirs have until June 24, 2005 within which to file the necessary return and pay the tax due thereon; that the estate tax return and payment thereof cannot, however, be filed and made on the due date owing to the following reasons, to wit: (1) The estate, which is composed of the family home and shares of stock in a family corporation, has an estimated net value of P5,000,000.00. The estate tax due thereon is substantial and more time is needed to secure the funds to pay the same. The estate at present has no cash or other property which can be sold without delay in order to meet the deadline; and (2) There is need to collate and prepare all the necessary documents for the settlement of the estate. Although the preparation and collation of documents (e.g.,the Certificate of Death and receipts for medical and funeral expenses) are ongoing, the same require time since documents are being procured from California, USA, the place of death of the decedent. In reply please be informed that pursuant to Section 90(B) of the Tax Code of 1997, the estate of the Late Concepcion Lim Tintoc is required to file the estate tax return within six (6) months from the time of his death or until June 24, 2005. However, in view of the aforestated justifiable reasons, your request for an extension of thirty (30) days or until July 24, 2005 within which to file the estate tax return of the said estate is hereby granted pursuant to Section 90(C) of the Tax Code of 1997. On the other hand, Section 91(B), supra ,provides that "(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 above-mentioned reasons, your request for extension of two (2) years or from July 24, 2005 to July 25, 2007 within which to pay the estate tax due thereon, is likewise granted. DTEcSa It shall be understood, however, that the estate shall be liable to the corresponding interest that have accrued thereon up to the time of the filing and payment of the estate tax due on the transmission of the said estate to the heirs pursuant to Section 249 of the Tax Code of 1997. ( BIR Ruling No. DA-285-98 dated June 29, 1998 ) Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service