Liability of Heirs to the Corporate Income Tax

April 22, 1959 BIR RULING NO. 190-59 Mr. Antonio Perez 2139 Espaa, Manila S i r : Reference is made to your letter dated March 23, 1959, stating the following: "I am the owner of 1/3 of an hacienda in Davao, being one of the three heirs of this enterprise. The hacienda is operated jointly by the three heirs and profit is divided equally by the heirs at the close of one year business. It must be understood that the three heirs are separately and equally having Torrent Title of the property duly registered in their respective names, furthermore there was not additional capital invested in the operation of the hacienda; it is only managed by one man. After dividing the profit the share is declared as income and included with the other receipt in the Income Tax and paying the necessary Income Tax yearly." You now request information as to whether or not the heirs (including yourself) are liable to the corporate income tax. In reply thereto, I have the honor to inform you that since the hacienda is operated jointly by the heirs, contributing real properties registered in their names, and dividing equally the profits derived therefrom, the heirs are considered to have engaged in a joint venture, subject to the corporate income tax. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue