Can a Waiver be Requested for Payment of Capital Gains Tax Over a Property Taken Over by the National Irrigation Administration (NIA) for their Right of Way Payment of Which is Still Pending?

January 9, 1991 BIR RULING NO. 006-91 21 (e) 175-90 006-91 M a d a m : This refers to your letter dated September 13, 1990 requesting in effect a ruling on the following information: cdtech "Can we request for a waiver in the payment of capital gains tax over a property taken over by the National Irrigation Administration (NIA) for their right of way by way of a Deed of Absolute Sale dated 1988. Payment of the said property by NIA is still pending in that Office. If we are subject to capital gains tax, may we request that the basis of computation of the tax should be as per Deed of Sale to the NIA and not on market value, since this is negotiated sale and therefore what is set as consideration by the government should prevail for tax purposes. "May we be guided by your computation as to how much capital gains we shall pay. We believe no surcharge and interest should be imposed, since although the document of sale was made in 1988, we have not actually been paid by the government. "We are a resident of Quezon City and the property is located in San Jose, Nueva Ecija and we are seeking information on the matter so that we may be guided in our payments through courier." It appears from the document submitted that you and your husband, Mr. Bonifacio Munsayac, are the exclusive registered owners of two (2) parcels of land covered by TCT Nos. NT-4429(53872) and NT-183080 situated, respectively, at San Jose City, Nueva Ecija and Sto. Domingo, Nueva Ecija; that on March 9, 1988, you and your husband sold portions of said parcels of land in favor of the National Irrigation Administration (NIA), a government owned corporation created under R.A. No. 3601, for and in consideration of the respective amounts of P7,611.51 and P26,553.75; and that one of the real properties, the use of the actual considerations of P7,611.51 and P26,553.75 as bases in determining your capital gains tax liability as a consequence of the said sale of your properties, is hereby granted as an exception to the policy of this Bureau, in relation to Section 21(e) of the Tax Code. Hence, your capital gains tax liability on said sale of your properties should then be computed as follows: Gross selling price of lot Nos. 2021 & 1067 (P26,553.75 + P7,611.51) P34,165.26 multiplied by 5% capital gains tax .05 Capital Gains Tax due thereon P1,708.26 ========= Very truly yours, (SGD.) JOSE U. ONG Commissioner