Taxability of Joint Donation on Account of Marriage by Parents to Their Children

October 10, 1967 BIR RULING NO. 039-67 The Director Revenue Region No. 7 P. V. Kalaw Bldg. Dasmarias, Manila S i r : This refers to your inquiry as to the proper interpretation of Section 112(a)(1) of the Tax Code regarding the amount of exclusion in case of gifts made on account of marriage (propter nuptias) by spouses in favor of their children, under the following situations: 1. Joint donation on account of marriage by the parents to one of their children; 2. Joint donation on account of marriage by the parents to two or more children; 3. Donation on account of marriage by one of the parents to one of the children; 4. Donation on account of marriage by one of the parents to two or more children. In reply, you are informed as follows: A gift to the children of conjugal partnership property is considered a single gift by the husband unless by common agreement the gift is made by both parents. In the first instance, only a single exemption can be claimed. In the second instance, each spouse is considered a donor of his or her half interest in the property and, therefore, each of them can claim separate exemption. (Tang Ho, et. al. vs. B.T.A., et. al., G.R. No. L-5949, prom Nov. 19, 1955) A gift to each child is considered a distinct and separate gift. Each of such gift is, therefore, entitled to the corresponding exemption to the extent of the first ten thousand pesos pursuant to Section 112(a)(1) of the Tax Code. A gift to the spouses of their separate properties are also treated as distinct and separate gifts. Therefore, each of such gifts are entitled to exemption to the extent of the first ten thousand pesos. aisadc Be guided accordingly. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue