William P. Po

July 10, 2008 BIR RULING [DA-(I-003) 021-08] 24 (D) (1), 196, 188; 045-98 William P. Po 121 V. Gullas St. Cebu City S i r : This refers to your undated letter as indorsed by the Chief, Legal Division, Revenue Region No. 13, Cebu City, requesting for an opinion as to the tax consequence of the transfer of a parcel of land without monetary consideration and in pursuance to a court decision. IAcTaC Documents submitted show that William P. Po is the owner of a parcel of land known as Lot No. 1-C of the subdivision plan, Psd-7-052396, containing an area of four hundred four (404) sq.m., more or less, per Tax Declaration No. 06932. The ownership of the aforestated property became the subject of a court litigation after Spouses Dale Dan and Aileen Bernadas had registered the same in their name. The case went on for years until the Regional Trial Court-Branch 19, 7th Judicial Region, rendered a judgment, the dispositive portion of which is quoted as follows: "WHEREFORE, judgment is hereby rendered. 1. Declaring the Deed of Absolute Sale dated April 17, 1996 and the Deed of Confirmation dated April 18, 200, * as annulled and without force and effect; 2. Declaring Transfer Certificate of Title No. 162057 and Tax Declaration No. 06932, likewise, as annulled and without force and effect; 3. Ordering the defendants to reconvey lot 1-C of the subdivision plan, Psd-07-052396, containing an area of FOUR HUNDRED FOUR (404) square meters, more or less, per Tax Declaration No. 06932 now in the name of the defendants; xxx xxx xxx SO ORDERED." aSTHDc After such favorable judgment had attained its finality, the Court issued a writ of execution and subsequently a deed of conveyance, transferring and reconveying the ownership of the property to its rightful and legal owner. In reply thereto, please be informed that since the conveyance of the above-mentioned property is in pursuance to the Court's Decision dated December 5, 2006 and is without consideration, the transfer of the said property in favor of William P. Po is not subject to the capital gains tax imposed in Section 24 (D) (1) of the Tax Code of 1997. Furthermore, the deed of conveyance is likewise not subject to the documentary stamp tax (DST) imposed in Section 196 of the Tax Code of 1997, as amended but only to the DST imposed under Section 188 of the same Tax Code, as amended. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service