Declaration of Gains Derived by NHA from the Sale of Real Properties

August 16, 1988 BIR RULING NO. 394-88 21 (e) 000-00 394-88 Gentlemen : This refers to your letter dated February 8, 1988 requesting a working arrangement whereby our Revenue District Office will be allowed to issue Certificate of Authority to register documents of that Office on the guarantee that all taxes due to this Office will be paid within thirty (30) days from the issuance of the corresponding certificate of authority. It is represented that your tax exemption privileges granted under previous presidential issuances, the latest of which is P.D. No. 2013, has been withdrawn by Executive Order No. 93; that you are now subject to the payment of all taxes and fees required by this Office or the Register of Deeds incident to the registration of Deeds of Sale, Mortgages and Sheriff's Certificates of Sale executed by or in your favor; and that in view of the considerable number of documents of this nature which you have to register in the principal cities throughout the country to give the much needed impetus to the national shelter program, you find it difficult and expensive to effect the registration of these documents as it is necessary to obtain first from the Revenue District Office concerned, the exact amount due on the particular document to enable you to issue the corresponding checks payable to this Office. In reply, please be informed that your request cannot be granted for lack of legal basis. In the case of gains derived by NHA from the sale of real properties, the same should be declared, in the income tax return for the year they were derived. Since NHA is a corporation, no BIR clearance is required in order to effect the transfer of the real properties to the buyers. (Revenue Memorandum Circular No. 41-86) However, in cases where real property classified as capital asset is sold to you by an individual, including estates and trusts, no certificate authorizing transfer to you shall be issued unless the 5% capital gains tax prescribed by Section 21(e) of the Tax Code is paid. [Sec. 49(a)(4), Tax Code] Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner