BIR Ruling [UN-031-95]

January 16, 1995 BIR RULING [UN-031-95] Mrs. Virginia L. Aprieto 6 Mystic Rose, Sanville Quezon City M a d a m : This refers to your letter dated October 10, 1994 stating that in connection with the estate of your late husband, Pacifico N. Aprieto, you are being assessed an additional amount of P40,026.67 after paying the amount of P573,351.00 on September 20, 1994; that among the properties is a road lot having an area of 150 square meters, the fair market value of which is being fixed at P2,700/sq.m, similar to a residential lot, instead of the P1,000/sq.m. you are proposing; that the said lot is classified and used as a lot or road right-of-way in the title and tax declaration; that you were informed by the examiner that valuation of real properties for tax purposes shall be based only on the zonal valuation of properties as determined by this Office which however, does not have any valuation for road lots; and that you countered that assuming that the balance of the estate tax due is P26,775.00 due to the increase in the fair market value of the road lot from P1,000/sq.m. to P2,700/sq.m. still you consider the compromise penalty of P6,000.00 to be unreasonable. cdtech Based on the foregoing representations, you are now requesting, in effect, for a ruling that the fair market value of the aforesaid road lot consisting of 150 sq.m. which is classified and actually used as road lot or road right-of-way, in the title and tax declaration, is P1,000/sq.m. instead of P2,700/sq.m., which is for residential lots. It is noted that the computation of the examiner of the deficiency estate tax due on the estate of your late husband, Pacifico N. Aprieto, particularly the interest due thereon was from September 21, 1994 to October 21, 1994. In reply, please be informed that under Revenue Audit Memorandum Order No. 2-91, in determining the tax base for sales, transfer or any disposition of real property in the case where the zonal valuation of the land has not been established, there shall be added to the market value per latest tax declaration one hundred percent (100%) thereof, provided, that if the property is classified as commercial, industrial and agricultural devoted to fishpond/prawn farm, one hundred fifty percent (150%) shall be added thereto. Accordingly, in determining the correct fair market value of the parcel of land in question, for estate tax purposes, there should be added to the market value appearing in the tax declaration of said parcel of land at the time of death of the decedent, Pacifico N. Aprieto, one hundred percent (100%) thereof, (BIR Ruling No. UN-294-94 dated October 17, 1994) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)