Tax Liability of Longa Hermanos

August 18, 1959 BIR RULING NO. 406-59 The Regional Director BIR Regional District No. 7 Cebu City S i r : This has reference to your 2nd Indorsement dated October 23, 1958, requesting a ruling as to whether or not the Longa Hermanos is an unregistered partnership, subject to the corporate income tax under section 24 of the Tax Code. Investigation disclosed that the Hacienda Sta. Monica, owned by the Longa brothers and sisters, remained undivided for more than ten years now and no attempt has ever been made to divide the same among the co-heirs. Investigation further shows that the said property is not under administration proceedings or held in trust. Under the foregoing facts, the said property should be considered as owned by an unregistered partnership and the income derived therefrom is subject to the corporate income tax of 20% in accordance with the provisions of Field Circular No. V-109 which reads: "Properties held by co-heirs or co-owners which are income-producing or profit-earning properties, except those belonging to duly organized copartnership, trusts or estates in the course of administration proceedings, should be considered as owned by unregistered partnership and the income derived therefrom should be held subject to the corporate tax of 20%." The records of the case are herewith returned to that office for assessment of the deficiency income tax due from the Longa Hermanos. casia Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue