BIR Ruling [DA-708-06]

December 13, 2006 BIR RULING [DA-708-06] 90 (C) & 91 (B) Mr. Arturo S. Obcena, Jr . No. 108, 18th Avenue Cubao, Quezon City S i r : This refers to your letter dated November 28, 2006 requesting on behalf of the heirs of the late Arturo Lising Obcena, Sr. an extension of thirty (30) days to file the Estate Tax Return of the decedent and an extension of one (1) year from December 1, 2006 or until December 1, 2007 to pay the full amount of the tax due on the transmission of the estate of the decedent to the heirs. It is represented that the decedent died on June 1, 2006 at the age of 84 years old; that one of the legal heirs, Cecile Salinas Obcena-Deogracias, an elder daughter of the deceased, a resident of San Diego, California, U.S.A., is set to return to the Philippines this 20th day of December 2006 to settle extra-judicially the estate; that two (2) properties, a seven-hectare agricultural land situated in Barangay Aduas, Paniqui, Tarlac need to be processed at the local Agrarian Office in order to transfer the titles registered in the name of both of your parents to your father and to you and the other siblings, as a result of the death of your mother, Cristeta Dimsen Salinas-Obcena, fifteen years ago or on February 12, 1991; that your father had been ill after the death of your mother, hence, you were not able to finish the transfer of titles of the above two properties; that the Certificate Authorizing Registration (CAR) for the two properties was issued on August 14, 1991; that the said CAR was revalidated last July 17, 2006; that since your sister will only be coming this 20th day of December, you will not be able to settle the estate of your father within the prescribed period, hence, this request for an extension of thirty (30) days within which to file the Estate Tax Return and an extension of one (1) year to pay the estate tax due thereon. In reply thereto, please be informed that under Section 90(B) and (C) of the Tax Code of 1997, estate tax return is required to be filed within six (6) months from the decedent's death, and in meritorious cases, a reasonable extension not exceeding thirty (30) days for filing the return may be granted by the Commissioner of Internal Revenue. The payment of the estate tax or any part thereof shall be made upon the filing of the return or on such date as fixed if an extension is granted by the Commissioner, but in no case to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially pursuant to Section 91(B) of the Tax Code of 1997. Based on the aforestated justifiable reason, your request for an extension of time within which to pay the estate tax is hereby granted pursuant to Section 91(B) of the Tax Code of 1997. Accordingly, the estate tax due on the estate of Arturo Lising Obcena, Sr. may be paid up to one (1) year counted from December 1, 2006 or until December 1, 2007. On the other hand, under Section 90(C) of the Tax Code, a thirty-day extension is granted within which to file the estate tax return. Thus, considering that the last day for filing the estate tax return on the estate of Arturo Lising Obcena, Sr. is on November 28, 2006, the period within which to file the same is hereby extended up to December 28, 2006. CHATEa Moreover, in view of the above favorable action on your request for an extension of one (1) year within which to pay the estate tax, this Office has decided to forego the imposition of the surcharge and penalties on the estate tax due on the transmission of the estate of Arturo Lising Obcena, Sr.. However, it shall be understood that the estate shall be liable for the corresponding interest that has accrued thereon up to the time of payment of the aforesaid estate tax pursuant to Section 249 of the Tax Code of 1997. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service