BIR Ruling [DA-541-06]

September 11, 2006 BIR RULING [DA-541-06] S-40 (C) (2); DA-467-2005 Midi Commercial Enterprises Corporation No. 2, Aquarius Street, Bel Air III Makati City Attention: Ms. Ma. Corazon N. Yamamoto President Gentlemen : This refers to your letter dated August 15, 2006 requesting for a modification and/or amendment of BIR Ruling No. S-40-105-2002 dated October 4, 2002 relative to the tax-free exchange between Spouses Emiliano and Constancia Nazario (the "Transferors") and Midi Commercial Enterprises Corporation (the "Transferee"), whereby the Transferors transferred a parcel of land to the Transferee in exchange for shares of stock of the latter. As a consequence of the exchange, the Transferors gained control of the Transferee by owning 66.20% of its total voting stocks. In the aforesaid ruling, the improvement on the land was inadvertently excluded in the transfer despite the fact that per the Subscription Agreement with Deed of Transfer executed between the parties, the improvement was included. cDTaSH Thus, to correct the said inadvertence, you are requesting that BIR Ruling No. S-40-105-2002 be amended or modified to reflect that the properties transferred by the Spouses Nazario are land and improvement. In reply, please be informed that your above request is hereby granted. BIR Ruling No. S-40-105-2002 is hereby amended or modified to the effect that the property transferred by Spouses Nazario in favor of Midi Commercial Enterprises Corporation includes the improvement over the land (TCT No. S-26187). Thus, the entries on the table in the description of the properties transferred by the Transferors to the Transferee found in page 2 of said ruling are hereby modified as follows: Property Location Area Fair Market Zonal Value Acquisition Value Cost Land-TCT Makati City 570 sq. P13,680,000.00 P36,571.55 No. S-26187 m. Improvement Makati City P155,330.00 P69,900.00 Improvement Makati City P127,730.00 P57,480.00 P283,060.00 P13,680,000.00 P163,951.55 ========== ============= ========= 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service