Non-application of Tax Exemption on Donation Mortis Causa

October 27, 1981 BIR RULING NO. 204-81 100-b 005-76 204-81 The Philippine Central Conference of the United Methodist Church 900 United Nations Avenue Ermita, Manila 2801 Attention: Mr . Cornelio Ferrer, Jr . Treasurer Gentlemen : This refers to your letter dated September 22, 1981 requesting exemption from the payment of donor's tax pursuant to Section 123(a)(3) of the Tax Code, on the donation mortis causa executed in your favor by the late Silveria L. Cabacungan of a parcel of land with buildings and improvements thereon, located in Quezon City, consisting of 349 square meters more or less and covered by Transfer Certificate of Title No. 67186 of the Register of Deeds of Quezon City, which donation took effect upon the death of the donor on July 10, 1981. In reply thereto, please be informed that since the above-named transaction is a donation mortis causa , the tax exemption provisions of Section 123(a)(3) of the Tax Code does not apply. Since said donation is in contemplation of death, the donated party forms part of the gross estate of the deceased subject to the estate tax prescribed in Section 99, in relation to Section 100(b), of the Tax Code, as amended by Section 16 of Presidential Decree No. 1705. Accordingly, for purposes of effecting the registration of the deed of donation with the Register of Deeds of Quezon City, it is necessary that an estate tax return be filed pursuant to Section 105 of the Tax Code, declaring therein as part of the gross estate of the decedent, the fair market value of the donated property, and the estate tax due, if any, paid, in accordance with Section 107 of the Tax Code, as amended. In this connection, please be informed also that the foregoing acquisition by that religious organization is not one of those exempt from the estate tax, in accordance with Section 102 of the Tax Code. Please be guided accordingly. Very truly yours, ROMULO M. VILLA Acting Commissioner