BIR Ruling [DA-516-98]

November 19, 1998 BIR RULING [DA-516-98] Ms. Annielyn M. Mamerga No. 9 Sampaguita Street Barangay Apolonio Samson Quezon City M a d a m : This refers to your letter dated February 19, 1998 requesting for a ruling as to whether or not the transfer or exchange by the Spouses Wilfredo and Annielyn Mamerga and Andrea Alix of their parcels of land located at Barangay San Bartolome, Sta. Lucia, Quezon City is exempt from the payment of capital gains tax and documentary stamp tax. aisadc It appears that on November 18, 1997, a Deed of Absolute Sale was executed by Ms. Andrea Alix in your favor whereby the former sold to you a parcel of land located at Lot 17B, Block 25, Barangay San Bartolome, Sta. Lucia, Quezon City, containing an area of 75 square meters and covered by TCT No. Rt-49259 (186402) issued by the Registry of Deeds for Quezon City for and in consideration of P100,000.00; that the remaining portion of the parcel of land from which the above-described portion was segregated is described as Lot 17A, Block 25; that the capital gains tax in the amount of P13,125.00 and documentary stamp tax in the amount of P3,940.00 have been paid as evidenced by Official Receipt Nos. 172640 and 172639, respectively; that the parties discovered that there was a mistake in the designation of the lot; that to rectify the same, a Deed of Exchange was executed on February 13, 1998 whereby your property identified as Lot 17B, Block 25 and covered by TCT No. N-186723 issued by the Registry of Deeds for Quezon City will be exchanged for Lot 17A, Block 25 covered by TCT No. N-186722 issued by the Registry of Deeds for Quezon City, in the name of Ms. Andrea Alix; that both parcels of land are identical to each other with an area of 75 square meters each; and that there was no consideration involved in the exchange. In reply, please be informed that since the exchange transaction in question is without any monetary consideration, and considering further that the execution of the Deed of Exchange is merely to connect a mistake, this Office is of the opinion as it hereby holds that the aforementioned exchange of realties between you and Ms. Andrea Alix is not subject to the capital gains tax imposed under Section 24(D) of the Tax Code of 1997. Furthermore, it is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgment to the said deed is subject to the documentary stamp of P15.00 pursuant to Section 188 of the said Code. (BIR Ruling No. 027-93 dated January 15, 1993) 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. cdta Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)