Donation in Favor of Trace Computer and Training School, Inc.

May 25, 1990 BIR RULING NO. 091-90 29 (h) (1) 94 (a) (3) 222-89 091-90 Gentlemen : This refers to your letter dated May 25, 1989 requesting a ruling as to whether your donation in favor of Trace Computer and Training School, Inc. consisting of a Basic Four computer and its peripherals by virtue of a Deed of Donation executed on May 2, 1989 is exempt from tax; and whether such donation is deductible from your gross income for income tax purposes. It is represented that the Trace Computer and Training School, Inc. a domestic corporation is a non-stock, non-profit educational institution duly recognized as such by the Department of Education, Culture and Sports, paying no dividends, governed by trustees who received no compensation and devoting all its income to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation. In reply, please be informed that pursuant to Section 94(a)(3) of the Tax Code, as amended, gifts in favor of an educational and/or charitable; religious, cultural or social welfare corporation or institution are exempt from donor's tax provided that not more than thirty per centum of said gifts shall be used by such donee for administration purposes. Moreover, Section 29(h)(1) of the Tax Code, as amended, provides that gifts actually paid or made within the taxable year to domestic corporations for educational purposes, among others, are deductible for income tax purposes only to an amount not in excess of 6% in the case of an individual donor and 3% in the case of a corporate donor of the donor's taxable income derived from business as computed without the benefit of said deduction. In view thereof, this Office is of the opinion as it hereby holds that your aforementioned donation is exempt from the payment of the donor's tax. Likewise, said gift is deductible in an amount not in excess of 3% of your taxable income derived from business as computed without the benefit of said deduction. Very truly yours, (SGD.) JOSE U. ONG Commissioner