Spouses Ruden and Ethel Moreno

June 25, 2007 BIR RULING [DA-348-07] 24 (D) (1); 196; DA-173-03 Spouses Ruden and Ethel Moreno No. 1468-D Balagtas Street Makati City Gentlemen : This refers to your letter dated January 29, 2007 requesting that the Deed of Exchange of real properties made to correct an inadvertence be exempted from the payment of the capital gains and documentary stamp taxes. The facts as contained in the proposed Deed of Exchange are as follows: Rebecca M. Uy and you are owners of real properties situated in Nos. 1468-D (covered by TCT No. 182062) and 1468-B [covered by Transfer Certificate of Title (TCT) No. 182060], Balagtas Street, Makati City, respectively; that you bought your respective properties in October 1992; that recently, it was discovered by Rebecca M. Uy, when she sold her property to Wilson N. Agbayani, married to Gloria T. Agbayani, that the descriptions of the property titled in her name described the property you owned and that the title of your property described the property that was occupied by her; that on October 30, 2006, new title (TCT No. 222980), which still carries the same erroneous descriptions, was issued to Sps. Agbayani canceling the old TCT No. 182062; that in order to correct the said error, the new owner, Sps. Agbayani, and you agreed to exchange your properties without any consideration. In support of your request you submitted photocopies of the following documents, viz.: 1) Proposed Deed of Exchange of Real Properties; 2) TCT Nos. 182062, 182060 and 222980; and 3) Corresponding Tax Declarations. In reply, please be informed that since the above exchange transaction is without monetary consideration, and considering further that the execution of the deed of exchange is merely to correct a mistake, this Office is of the opinion as it hereby holds that the aforementioned exchange of realties between you and Spouses Wilson and Gloria Agbayani, is not subject to the capital gains tax, imposed under Section 24 (D) (1) of the Tax Code of 1997, as amended, and the documentary stamp tax prescribed under Section 196 of the same Code. (BIR Ruling No. DA-173-03 dated June 3, 2003 citing BIR Ruling No. 469-93 dated December 1, 1993) AaSIET However, the acknowledgment to the said deed of exchange is subject to the documentary stamp tax of P15.00 on certification pursuant to 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, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service