Mr. Ireneo Quijano

May 18, 2010 BIR RULING [DA-(I-006) 068-10] 24 (D) (1); 195; 008-95 Mr. Ireneo Quijano Culianan, Zamboanga City Sir : This refers to your letter dated February 17, 2009, which was referred to this Office by Revenue Region No. 15, Zamboanga City, by way of its 2nd Indorsement dated March 4, 2009, requesting that the Deed of Exchange of real properties executed to correct an inadvertence be exempted from the payment of capital gains tax and the corresponding documentary stamp tax. IaTSED It is represented that you are the absolute and registered owner of a parcel of land located in Culianan, Zamboanga City covered by TCT No. 152149 issued by the Registry of Deeds for Zamboanga City containing an area of 640 square meters; that the said property was subdivided into five (5) lots; that on March 22, 2007, a Deed of Absolute Sale was executed by you in favor of Margarita Lorenzo Alayon involving one of the five (5) subdivided property classified as Lot 2-D-3 consisting of 153 square meters; that upon registration of the subdivided properties it appeared that Lot 2-D-2 was registered to Margarita Lorenzo Alayon covered by TCT No. T-199575 instead of Lot 2-D-3 covered by TCT No. T-199576 which was registered in your favor; and that to correct the substantial error, the parties thereto agreed to exchange their respective properties by virtue of a Deed of Exchange whereby Margarita Lorenzo Alayon conveys and transfers by way of exchange to you the property covered by TCT No. T-199575 and you likewise convey and transfer by way of exchange to Margarita Lorenzo Alayon the property covered by TCT No. T-199576. In reply thereto, please be informed that since the above exchange transaction is without monetary consideration, and considering further that the execution of the deed of exchange is merely to correct a mistake, this Office holds that the aforementioned exchange of realties between you and Margarita Lorenzo Alayon is not subject to the capital gains tax imposed under Section 24 (D) (1) of the Tax Code of 1997 and the corresponding documentary stamp tax prescribed under Section 196, supra. However, the acknowledgment to the said deed of exchange is subject to the documentary stamp tax of P15.00 on certification pursuant to Section 188 of the Tax Code of 1997. 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. SAHaTc Very truly yours, (SGD.) MARISSA O. CABREROS OIC-Assistant Commissioner Legal Service