Tax Exemption of the "Congregation de Religiosas Dominicans de Santa Catalina de Sena"

February 18, 1960 BIR RULING NO. 092-60 Mr. Jose Galan P.O. Box 2011 M a n i l a S i r : This is with reference to your letter dated February 6, 1960, requesting on behalf of the "Congregation de Religiosas Dominicans de Santa Catalina de Sena", a religious corporation engaged in religious and educational activities, for an exemption from gift taxes the donation of a parcel of land executed by Mr. Ysidro A. Yaptinchay in favor of the said corporation on January 4, 1960. It appears from the "Deed of Absolute Sale", entered into and executed by Mr. Y. A. Yaptinchay (designated as "Vendor") and the above-named corporation, as represented by its Mother Beneral, M. Natividad Pilapil, (designated as the "Vendee") that the parcels of land sold, transferred and conveyed have a total area of 16,483 square meters which was sold for and in consideration of P8,000.00. However, it is likewise stated in the same deed of absolute sale that the 6,483 square meters, which is a part of the whole area (16,483 sq. m.) sold, is being transferred to the "Vendee" as a "Donation". Taking the facts as they are in the "Deed of Absolute Sale", as submitted, please be informed that the donor is exempt from the donor's gift tax, the donation of the parcel of land (6,483 sq. m.) being a gift in favor of an educational institution by virtue of Section 109 of the Tax Code, as amended. The donee, on the otherhand, may be exempt from the donee's gift tax only to the extent of the amount limited by Section 112 (a) (2) of the same Code which provides: "SEC. 112. Exemption of certain gifts . The following gifts or donations shall be exempt from the tax provided for in this Chapter: "(a) In the case of gifts made by a resident: "(1) . . . "(2) Gifts made in favor of persons other than the spouse and the legitimate, recognized natural, or adopted children to the extent of the first one thousand pesos a year, or five per centum of the net income of the donor during the preceding year, whichever is the greater, but in no case shall the amount of exemption allowed under this paragraph exceed five thousand pesos". In view of the foregoing, your request for an exemption on behalf of the "Congregacion de Religiosas Dominicans de Santa Catalina de Sena" from gift taxes the donation of a parcel of land executed by Mr. Ysidro A. Yaptinchay in favor of the said corporation will have to depend on the limitation imposed by Section 112(a)(2) of the Tax Code above-quoted. aisadc Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue