Ms. Julie R. Valera

July 30, 2008 BIR RULING [DA-(I-009) 087-08] DA 139-07 Ms. Julie R. Valera 36 Pisces Street Pamplona Park Subdivision Las Pias City Madam : This refers to your letter dated March 12, 2008 requesting that the Deed of Exchange of real properties made to correct an inadvertence be exempted from the payment of capital gains tax and the corresponding documentary stamp tax. HDATSI It is represented that in October 2003, you have bought a parcel of land from David Orense, Jr., a member of the Orense Family, located at Pamplona Street, Las Pias City which is identified as Lot 20, Block 7 of the cons.-subd. plan (LRC) Pcs-379, being a portion of the cons. of Lots A-3-A-1 to A-3-A-5 described on plan (LRC) psd-1943, LRC (GLRO) Record No. 3624, situated in the Barrio of Pamplona, Municipality of Las Pias containing an area of 308 square meters covered by TCT No. T-88184 issued by the Registry of Deeds for Las Pias City; that at the time of the sale, the lot pointed to mistakenly by the seller, a member of the Orense Family, to the buyer, as Lot 20, Block 7 covered by TCT No. T-88184 was actually Lot 18, Block 7 covered by TCT No. S-73512 also with an area of 308 square meters whose registered owner is Norma Orense, resulting thus in the construction of a residential house by you on Lot 18, Block 7 which is owned by Norma Orense; that in the interest of justice and fair play, and to correct substantial error, the parties hereto agreed to exchange their respective properties as follows by virtue of a Deed of Exchange whereby Julie R. Valera hereby convey and transfer by way of exchange to Norma Orense her property covered by TCT No. T-88184 and Norma Orense likewise convey and transfer by way of exchange to Julie R. Valera her property covered by TCT No. S-73512; and that both parties warrant unto the other full title and ownership over their respective real properties with the right to dispose of the same, free from all liens and encumbrances of whatever nature whatsoever. 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 Norma Orense 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. cSEAHa Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service