Mr. Antonio C. Ocampo

October 30, 2008 BIR RULING [DA-(I-033) 371-08] DA526-05 Mr. Antonio C. Ocampo 103 B Private Road, Hulo Mandaluyong City S i r : This refers to your letter dated September 29, 2007, which was referred to this Office by Revenue Region No. 7, Quezon City, by way of its 1st Indorsement dated May 22, 2008, requesting for exemption from the payment of capital gains tax and documentary stamp tax relative to the swapping of real properties to rectify an error, effected through a Deed of Reconveyance and made without monetary consideration. It is represented that you have bought a house and lot identified in the Deed of Absolute Sale as Lot 34 located at 103 B Private Road, Hulo, Mandaluyong City from Leo B. Pamplona, as the Vendor; that the unit identified by the vendor which you are presently occupying is located according to its technical description under TCT No. 19842 issued to you as your property; that on the other hand, Ramon P. Mancilla (Mr. Mancilla) likewise bought a house and lot identified in the Deed of Absolute Sale as Lot 33 located at 103 D Private Road, Hulo, Mandaluyong City from Erlinda V. Pamplona, as Vendor; that the unit identified by the vendor which he is presently occupying is located according to its technical description under TCT No. 16661 issued to him as his property; that you have learned from the bank upon your application for a loan that the technical description of the TCT in your name does not match the actual location of your property; that upon verification of the TCTs at the City Assessor's Office using the tax map showed that the technical description of the title in your name describes the lot where the house and lot of Mr. Mancilla is located and that the technical description of the title in his name describes the lot where your house and lot is located; that on October 1, 2007, a Deed of Reconveyance was executed by you and Mr. Mancilla wherein the previous owners, Leo B. Pamplona and Erlinda V. Pamplona, committed an error in the assignment of lot numbers to the units in the application to transfer the TCTs to the respective house and lot purchased by you and Mr. Mancilla; and that by virtue of the error in the assignment of the TCTs, there is now need to rectify the said error through the execution of the said Deed of Reconveyance. AEcIaH In reply thereto, please be informed that considering that the swapping of the above-mentioned properties is without any monetary consideration, and considering further that the purpose of executing a Deed of Reconveyance 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 swap transaction is not subject to the capital gains tax imposed under Section 24 (D) (1) of the Tax Code of 1997. Furthermore, the Deed of Reconveyance 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, supra. 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