BIR Ruling [DA-399-04]

July 22, 2004 BIR RULING [DA-399-04] RR No. 12-89 DA-090-2000 Natalia Realty, Inc. SEB Commercial Center, Ortigas Avenue Extension Taytay, Rizal Attention: Ms. Susana L. Campipi Liaison Officer Gentlemen : This refers to your letter dated June 29, 2004 requesting in behalf of your clients namely: Alexander Aran Belicena, Joselito A. Penilla, and Edna B. Velasco for exemption from capital gains tax and other internal revenue taxes. It is represented that NATALIA REALTY, INC: sold individual lots to Alexander Aran Belicena, Joselito A. Penilla, and Edna B. Velasco covered by Transfer Certificates of Title Nos. 249452, 265946, and 245333 of the Register of Deeds of Marikina; that due to financial reasons, your clients are unable to pay the lots they purchased from you; that they executed a Deed of Reconveyance in your favor. In reply, please be informed that since the transaction is without any monetary consideration, and considering further that the execution of the Deed of Reconveyance was not for monetary consideration, the same is not subject to the capital gains tax, imposed under Section 24(D)(l) of the Tax Code of 1997, nor to the withholding tax imposed under Revenue Regulations No. 2-98. Furthermore, the said reconveyance of the real property is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgement to the said deed is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code of 1997. ( BIR Ruling No. DA 068-98 dated March 2, 1998 ) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it shall be ascertained that the facts are different, then this ruling shall be considered null and void. STcEaI Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service