Donations of Real Properties to be Used by the Government in Its Priority Activities Shall be Deductible in Full from the Gross Income of the Estates

September 1, 1987 BIR RULING NO. 254-87 30-h-2-A 145-82 254-87 Gentlemen : This refers to your letter dated August 4, 1987 stating that the National Housing Authority (NHA), the Department of Education, Culture and Sports (DECS) and the Barangays have requested your clients, the Estates of Linnie Jane Hodges and Charles Newton Hodges to donate certain properties owned by both estates situated in the city and province of Iloilo, Bacolod, City, Negros Occidental and Antique for their use as roads, drainage, pathways, multi-purpose centers, school site and for other purposes for the benefit of their projects. In this connection, you now request a ruling as to whether the fair market value of the properties to be donated by the Estates of Linnie Jane Hodges & Charles Newton Hodges are deductible in full from its gross income. In reply thereto, I have the honor to inform you that since the contemplated donations of real properties will be used by the Government in undertaking priority activities in human settlements, education and in economic development, said donations are deductible in full from the gross income of the estates, provided that the same are in accordance with the national priority plan to be determined by the NEDA, in consultation with appropriate government agencies including its regional development councils, and private philanthropic persons and institutions [Sec. 30 (h)(2)(A), Tax Code, as amended by Batas Pambansa 45; Sections 3 and 4, BIR-NEDA Regulations No. 1-81 as amended by BIR-NEDA Regulations No. 1-82]. If such donations are not in accordance with said annual priority plan, deductibility from the estates gross income will be subject to the 6% or 3% limitations prescribed in Section 30(h) (1) of the Tax Code, as amended by Executive Order. No. 37. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner