Dennis Augusto A. David, M.D.

May 14, 2009 BIR RULING [DA-(I-017) 226-09] 24 (D) (1); 196; DA-127-2001; DA-158-2001; DA-155-2002; DA-159-2002 Dennis Augusto A. David, M.D. No. 10 Apitong St., Maywood Village I Paraaque City Sir : This refers to your letter dated March 30, 2009 requesting for exemption from the payment of capital gains tax and documentary stamp tax on the swapping of real properties to correct a mistake and without consideration. It is represented that Belina L. Cancio is the owner in fee simple of a parcel of land with improvements with an area of 288 square meters, situated in Bo. San Dionisio, Paraaque City and covered by Transfer Certificate of Title (TCT) No. 143132; that on the other hand, you are the owner in fee simple of a parcel of land with improvements with an area of 288 square meters, situated in Bo. San Dionisio, Paraaque City and covered by TCT No. 142190; that you and your contractor had a mistake in identifying the lot when you constructed your house therein back in December 2002; that your house was constructed on the lot covered by TCT 143132 which was actually registered in the name of Belina L. Cancio; and that due to the foregoing mistake, you and Belina L. Cancio executed a Deed of Exchange on June 26, 2008 to rectify the above error wherein the parties have mutually agreed to exchange their respective properties. In reply, please be informed that since the exchange transaction is without any monetary consideration, and considering further that the execution of the Deed of Exchange is merely for the purpose of correcting the mistake above-described, the exchange of realties by and between Belina L. Cancio and Dennis Augusto A. David is not subject to the capital gains tax imposed under Section 24 (D) (1) of the Tax Code of 1997, as amended, nor to the Withholding Tax imposed under Revenue Regulations No. 2-98, as amended. Furthermore, the said swapping of real properties is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended. However, the notarial acknowledgment of the said deed is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling Nos. DA-159-2002 dated September 12, 2002 and DA-155-2002 dated September 11, 2002) 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. CTIDcA Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service