Spouses Silvino and Ginia Escudero

December 16, 2008 BIR RULING [DA-(I-044) 537-08] 24 (D) (1); 196; DA-173-03 Spouses Silvino and Ginia Escudero No. 164 Greenville Homes, Bayanihan Street Baesa, Caloocan City and Spouses Ramon and Normida Nelmida No. 237 New Bayanihan Street Baesa, Caloocan City Gentlemen : This refers to your letter dated October 23, 2008 requesting that the Deed of Exchange of real properties made to correct an inadvertence be exempted from the payment of the capital gains and documentary stamp taxes. The facts as contained in the Deed of Exchange dated December 15, 2008, are as follows: Spouses Silvino and Ginia Escudero are the registered owners of the real property covered by Transfer Certificate of Title (TCT) No. C-342794 of the Registry of Deeds of Caloocan City while Spouses Ramon and Normita Nelmida are the registered owners of the real property covered by Transfer Certificate of Title (TCT) No. C-391424, likewise, of the Registry of Deeds of Caloocan City; that the surveyor has committed a mistake in the process of titling the aforementioned properties, whereby the property supposedly belonging to Spouses Silvino and Ginia Escudero, in which they have erected their house, has been registered in the name of Spouses Ramon and Normita Nelmida; that on the other hand, the property supposedly belonging to Spouses Ramon and Normita Nelmida, in which they have also erected their house, has been registered in the name of Spouses Silvino and Ginia Escudero; that both parties are desirous of correcting the said inadvertence of the surveyor, thus, the execution of the above Deed of Exchange, without any monetary consideration. EHTCAa In support of your request you submitted photocopies of the following documents, viz. : 1) Deed of Exchange of Real Properties; 2) TCT Nos. C-342794 and C-391424; 3) Corresponding Tax Declarations; and 4) Vicinity Map. In reply, 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 is of the opinion as it hereby holds that the aforementioned exchange of realties between Spouses Silvino and Ginia Escudero and Spouses Ramon and Normita Nelmida, is not subject to the capital gains tax, imposed under Section 24 (D) (1) of the Tax Code of 1997, as amended, and the documentary stamp tax prescribed under Section 196 of the same Code. (BIR Ruling No. DA-173-03 dated June 3, 2003 citing BIR Ruling No. 469-93 dated December 1, 1993) cCSEaA 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service