BIR Ruling No. 132-10

December 1, 2010 BIR RULING NO. 132-10 24 (D) (1); 196; 188; BIR Ruling No. [DA-(I-033)371-08]; BIR Ruling No. [DA-(I-032)363-08]; BIR Ruling No. [DA-(I-022)011-08]; BIR Ruling No. DA-237-03; BIR Ruling No. DA-068-98 Mr. Geminiano T. Aquino No. 4 King Oscar Street Kingspoint Subdivision, Bagbag Novaliches, Quezon City Gentlemen : This refers to your letter dated February 22, 2010 requesting for exemption from capital gains tax and documentary stamp tax on the rectification and correction of entries in their respective titles to real properties. It is represented that Geminiano T. Aquino previously owned a parcel of land covered by Transfer Certificate of Title No. RT-114039 with an area of 340 square meters, more or less; that one-half portion, with an area of 174.50 square meters, more or less of the said parcel of land was sold to the Spouses Rodolfo L. Monreal and Joselita Cambal-Monreal, and the other 174.50 square meters was retained by Geminiano T. Aquino; that both parcels of land are currently covered by Transfer Certificates of Title No. N-173429 registered under the name of Geminiano T. Aquino, and the other TCT No. N-173430, registered under the name of the Spouses Monreal; that duplex units were constructed on both lots; that in 1997, it was discovered that the lot ownership of the constructed duplex units was erroneously interchanged; that the parties executed a Deed of Exchange dated June 10, 2005 to correct the mistake. In reply, please be informed that since the exchange transaction is without any monetary consideration, and considering further that the execution of the Deed of Exchange is merely to formalize the agreement between the parties that TCT No. N-173430, which is presently titled under the name of the Spouses Rodolfo L. Monreal and Joselita Cambal-Monreal shall be now under the name of Geminiano T. Aquino, and that TCT No. N-173429, which is presently occupied by Geminiano T. Aquino, shall be titled under the name of the Spouses Rodolfo L. Monreal and Joselita Cambal-Monreal, the same is not subject to the capital gains tax, imposed under Section 24 (D) (1) of the Tax Code of 1997, nor to the withholding tax imposed under Revenue Regulations No. 2-98. aSITDC Furthermore, the said exchange of real properties is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgement to the said deed is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. DA 068-98 dated March 2, 1998) This ruling is issued on the basis of the foregoing representations. 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, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue