BIR Ruling [DA-650-04]

December 21, 2004 BIR RULING [DA-650-04] Mr . Erwin L . Reyes 27 Morning Star Drive Sanville Subdivision, Project 6 Quezon City S i r : This refers to your request for exemption from the payment of capital gains tax and documentary stamp tax, in behalf of your father, Victoriano S. Reyes, which was indorsed to this Office by BIR-CAR, Revenue Region No. 2, Baguio City, on August 3, 2004, relative to the acquisition of your father's land by the Department of Public Works and Highways Cordillera Autonomous Region (DPWH-CAR) thru a Deed of Quit Claim with Financial Assistance pursuant to Sec. 18 of Executive Order No. 1035, Series of 1985. It appears that Victoriano S. Reyes executed a unilateral Deed of Quit Claim with Financial Assistance in favor of the Republic of the Philippines over a portion of his parcel of land situated at Wangal, La Trinidad, Benguet, covered by Transfer Certificate of Title #11595 of the Register of Deeds for the Province of Benguet; that the acquired portion of 2591 sq.m. out of the total 24,877 sq.m. was utilized by the Republic of the Philippines through the DPWH-CAR, as road-right-of-way along the Pico-Lamtang Road, La Trinidad, Benguet; that your father, Mr. Victoriano S. Reyes was given a Financial Assistance pursuant to Section 18 of Executive Order 1035, in the amount of P340.00 per square meter or in the aggregate amount of P880,940.00. CTaIHE In reply, please be informed that pursuant to the above-cited Executive Order, Financial Assistance may be given inter alia to owners of lands acquired under CA 141, as amended, for the area or portion subject to the reservation under Section 112 thereof in such amount as may be determined by the implementing agency concerned, in consultation with the Commission on Audit and the Assessor's Office concerned. Anent thereto, the Financial Assistance received by the landowner, Mr. Victoriano S. Reyes, is subject to capital gains tax and documentary stamps tax pursuant to Sections 24(D)(1) and 196, both of the Tax Code of 1997. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group