Mr. Dante F. Relopez

July 30, 2008 BIR RULING [DA-(I-010) 095-08] DA526-05 Mr. Dante F. Relopez 2242 F. Varona Street Tondo, Manila S i r : This refers to your letter dated April 11, 2008 stating that a proposed Deed of Exchange will be executed by Dante F. Relopez and Azucena F. Relopez wherein both parties are respectively the registered owners of two (2) parcels of land located at F. Varona Street, Tondo, Manila covered by TCT No. 237672 and 237671 issued by the Registry of Deeds for Manila; that you have constructed a residential house on the land of Azucena F. Relopez as evidenced by Tax Declaration No. C-008-00675 and C-008-0076 under your name; that Azucena F. Relopez likewise constructed a residential house on your lot as evidenced by Tax Declaration No. C-008-00677 and C-008-678 under her name; and that both parties have agreed, as they agree to exchange their respective parcels of land including the alley in favor of one another to rectify the error committed. Based on the foregoing circumstances, you now request for exemption from the payment of capital gains tax and documentary stamp tax relative to the exchange of the above-mentioned real properties to rectify an error, effected through a Deed of Exchange. In reply thereto, please be informed that considering that the exchange of the above-mentioned properties is without any monetary consideration, and considering further that the purpose of executing a Deed of Exchange is merely to correct a mistake inadvertently committed in designating the metes and bounds of the above-described properties, this Office holds that the said exchange transaction is not subject to the capital gains tax imposed under Section 24 (D) (1) or Section 27 (D) (5) of the Tax Code of 1997 nor to the creditable withholding tax imposed under Section 57 thereof, as implemented by Revenue Regulations No. 2-98, as amended. Furthermore, the Deed of Exchange is not subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended, but only to the P15.00 documentary stamp tax imposed under Section 188 of the said Code. ATCEIc 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. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service