BIR Ruling [DA-477-A-99]

August 20, 1999 BIR RULING [DA-477-A-99] Ms. Erlinda Valle Raja Baguinda Street Daang Hari, Navotas, Metro Manila M a d a m : This refers to your letter dated July 15, 1999 requesting exemption from the payment of the capital gains tax in connection with your intention to assign your right over a one-bedroom condominium unit (Unit 2421) at Cityland Mega Plaza located at ADB Avenue corner Garner St., Ortigas Center, Pasig City, in favor of Eladio Sta. Maria, Jr. In reply, please be informed that assignment of rights in real property is not subject to the capital gains tax under Section 24(D)(1) of the Tax Code of 1997 because in assignment of rights, the assignee merely steps into the shoes of the assignor without acquiring a better right than what the assignor had in the property to which the right assigned pertains while the title or ownership thereof still remains with the developer. However, any gain realized by you from and as a consequence of such assignment is subject to income tax. The Deed of Assignment, however, is subject to the P15.00 documentary stamp tax imposed under 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 from that as represented, then this ruling shall be considered null and void. LibLex Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)