BIR Ruling [DA-383-04]

July 13, 2004 BIR RULING [DA-383-04] Section 24 (D) (1) DA-309-2004 Angela Management & Trading Corporation Midland Plaza Apartment-Hotel Adriatico Street Ermita, Manila Attention: Mr. Michael L. Recto President Gentlemen : This refers to your letter dated June 29, 2004 requesting exemption from the payment of capital gains tax and documentary stamp tax relative to the reconveyance of the properties previously donated to the Sent of God Foundation, Inc. It is represented that the Sent of God Foundation, Inc. (FOUNDATION) is a non-stock and non-profit religious organization registered with the Securities and Exchange Commission under Registration No. 50163; that the FOUNDATION was a recipient by way of donation of two parcels of land with improvements owned by Angela Management & Trading Corporation, thru its President, Michael L. Recto where the St. Joseph Cottolengo Hospice was located and are covered by Transfer Certificates of Title No. 47769 and 47770, both of the Register of Deeds of Paraaque City; that as a condition stated in the Deed of Donation, the DONEE shall use the improvement for the benefit and use of the Foundation; that in the event that said properties will be of no use by the DONEE, the same shall have to be returned to the DONOR; that the President of the FOUNDATION informed the members of the Board about the need for relocating the operation of the hospice from Paraaque to another place where the FOUNDATION could be of better service to residents of blighted areas in the provinces; that the FOUNDATION will have no further use of said property and envisions no use for the same in the near or distant future; that pursuant to a Board Resolution dated April 15, 1987 and the condition stated in the Deed of Donation, that in the event that said properties will be of no use by the DONEE, the same shall have to be returned to the DONOR; and that the reconveyance was not intended to defraud any creditor. In reply, please be informed that the execution of the Deed of Reconveyance has the effect of reconveying the aforesaid real property in favor of Angela Management & Trading Corporation thru Michael L. Recto, and being only a formality of restoring title to the said property in the name of its previous owner, the same is not subject to the donor's tax or capital gains tax imposed under Section 24(D)(1) of the Tax Code of 1997, nor to the documentary stamp tax imposed under Section 196 of the same Code.Lastly, the notarial acknowledgement to the said deed is subject to the documentary stamp tax of P15.00 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 as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service