BIR Ruling [DA-331-04]

June 21, 2004 BIR RULING [DA-331-04] BP 37; 148-84 Mrs. Sylvia Cinco #663 Banawe, Quezon City M a d a m : This refers to your letter dated March 17, 2000 requesting for exemption from the payment of capital gains tax on the sale of real property by Cipriano Navarro, Sr. to Arthur N. Cinco, et al. on October 19, 1977; Jean N. Toledo et al. on February 1, 1977; Cipriano. G. Navarro, Jr. on July 18, 1977; and Tomas G. Navarro on December 8, 1977. It is represented that Cipriano Navarro, Sr. sold to Cipriano G. Navarro, Jr. a parcel of land located at Quiapo, Manila, consisting of One Hundred One (101) square meters, to Arthur N. Cinco, et al. a parcel of land located at Quiapo, Manila, consisting of One Hundred Fifteen (115) square meters, to Jean N. Toledo et al., a parcel of land located at Quiapo, Manila, consisting of One Hundred Fifteen (115) square meters, and to Tomas G. Navarro, a parcel of land located at Quiapo, Manila consisting of One Hundred Three (103) square meters; that all lands sold are covered by Transfer Certificate of Title (TCT) No. 20516 issued by the Register of Deeds of Manila; and that the vendees want to transfer the property in their own name, hence, the filing of this request for a certificate of exemption from the payment of capital gains tax. In reply, please be informed that the imposition of a final tax on capital gains realized by individuals from the sale or other disposition of real property started only on September 7, 1979, pursuant to Batas Pambansa Blg. 37, as implemented by Revenue Regulations No. 8-79. Accordingly, the sale or transfer of properties whose deeds of conveyance were executed and acknowledged before a notary public prior to such date are not subject to the final tax on capital gains; however, the gains realized therefrom are subject to the regular income tax imposed on individuals. (BIR Ruling No. 148-84 dated September 5, 1984) ITaESD Such being the case, the gain derived by the seller, Cipriano Navarro, Sr. on the sale of the abovementioned properties in favor of Arthur N. Cinco et al., Cipriano G. Navarro, Jr., Jean N. Toledo, et al., and Tomas G. Navarro in the year 1977 is not subject to the capital gains tax but subject to the income tax imposable at the time said transaction took place. cACTaI 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.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group