BIR Ruling [DA-467-05]

November 18, 2005 BIR RULING [DA-467-05] 40 (C) (2) Republic Chemical Industries, Inc . 731 Aurora Blvd. Quezon City Attention: Ms. Lydia D. Salosa Accounting Manager Gentlemen : This refers to your letter dated August 5, 2005 requesting, in effect, for an amendment of BIR Ruling No. S-40-016-2001 dated March 30, 2001 where no gain or loss is recognized on the transfer of several properties by Republic Chemical Industries, Inc. (Republic for brevity) to RCI Ventures, Inc. in exchange for the latter's shares of stock in accordance with Section 40(C)(2) and (6)(c) of the 1997 Tax Code. The pertinent portion of the said ruling is quoted as follows: "that Republic Chemical Industries, Inc. is the owner of the following properties, viz: I. LAND xxx xxx xxx II. BUILDINGS & IMPROVEMENTS xxx xxx xxx III. CLUB SHARES No. of Acquisition Fair Market Registered Name Cert. No. Shares Par Value Cost Value )Phil. Columbian Assn. 3787 1 (without P25,000.00 P85,000.00 ) 4023 1 par value) 25,000.00 85,000.00 )Valley Golf Club, Inc. 1498 1 9,000.00 55,000.00 625,000.00 ) 2099 1 9,000.00 55,000.00 625,000.00 Sub-Total P160,000.00 P1,420,000.00" ========== ============ You noted that BIR Ruling No. S-40-016-2001 inadvertently omitted the club shares of Republic with the Metropolitan Club, Inc. covered by Certificate No. A-494; and that you now would like to include as part of the said ruling the afore-stated property acquired in the amount of P12,500.00 and whose fair market value is in the amount of P150,000.00. In view thereof, this Office hereby amends BIR Ruling No. S-40-016-2001 dated March 30, 2001 to include Certificate No. A-494 issued by Metropolitan Club, Inc. to Republic Chemical Industries, Inc. whose cost of acquisition is P12,500.00 and whose fair market value is in the amount of P150,000.00. However, all the conditional requirements mentioned in said ruling remain the same. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained 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