Tax Imposed on the Deed of Absolute Sale

May 5, 1988 BIR RULING NO. 200-88 21 (e) 343-87 200-88 Gentlemen : This refers to your letter dated January 25, 1988 requesting a ruling as to whether a Deed of Absolute Sale executed by an individual owner in your favor which is duly notarized on May 4, 1970 is covered by the capital gains tax; and if not, the legitimate taxes to be paid and their computation. In reply, please be informed that Section 8 of Revenue Regulations No. 8-79 implementing then Section 34(h) of the Tax Code, as amended by Batas Pambansa Blg. 37 provides that the imposition of a final schedular tax on capital gains realized by citizens and resident aliens from sale or other disposition of real property shall apply to transaction entered into on or after September 7, 1979. Moreover, a deed of conveyance of real property acknowledged before a notary public on or after September 7, 1979 shall be deemed to be a sale or disposition of real property on or after September 7, 1979. Accordingly, and inasmuch as the original owner of your property (an individual) sold his property on May 4, 1970, he is not required to file the capital gains tax return and pay the final schedular capital gains tax prescribed by then Section 34(h) of the Tax Code, as amended by B.P. No. 37. However, proof must be submitted to the effect that the original owner of your property, the said individual, has included whatever gain he may have realized from the aforesaid sale of his property in his 1970 income tax return and the tax, therefore, has been paid, including the documentary stamp tax prescribed by then Section 233 of the Tax Code. aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner