1.

BIR Ruling 159-89:

Alba spouses donated real property to the parents of Virginia, the
wife. The BIR said that the parents-in-law of donor Alba is
considered a donation to a stranger, subject to the tax rates of a
stranger.
2. Tong Ho v. BTA:
Donation of shares of stock to 13 children considered as donation by
father alone if not signed by the mother (Tang Ho) as well even if it
comes from the conjugal property.
It is taxable solely on the husband and not as conjugal and the law
doesnt presume that a donation made from the conjugal property is
taxable on both shares.
3. BIR Ruling 204-81
A donation mortis causa was made by Silveria Cabacungan of real
properties to take effect upon her death to Philippine Central
Conference of the United Methodist Church and a ruling was requested to
consider the donation as exempt from donors tax. The BIR held that
it is subject to estate tax rather than donors tax given that it is
made in contemplation of death and the property is part of the gross
estate. Also, the BIR said that the acquisition of Philippine Central is
not exempt from estate tax.
4. BIR Ruling 081-98
Carino gave by donation mortis causa properties to her sister which
is to take effect on her death. In this case, the BIR considered the
disposition as not subject to donors tax, rather, is considered as
part of the gross estate and subject to estate tax since it falls within
the purview of a disposition in contemplation of death.
5. CIR v. Abello (CA case but the facts are as related in the
SC decision when the CA case was elevated to it)
During the 1987 national elections, the partners in ACCRA
contributed P882,661.31 each to the campaign funds of Senator
Angara, then running for the Senate. The BIR assessed each of the
petitioners P263,032.66 for their contributions. Abello et al
questioned the assessment through a letter to the BIR. They claimed
that political or electoral contributions are not considered gifts under
the National Internal Revenue Code (NIRC), and that, therefore, they
are not liable for donors tax. In ruling in favor of the BIR, the CA
ruled that the donations were indeed in the nature of a gift in
accordance with a BIR ruling which considers political contributions
as gifts.
6. RR 6-2008

(c.3.1.3) Acquired by Gift. If the property was acquired by gift,

the basis shall be the same as it would be in the hands of the donor
or the last preceding owner by whom it was not acquired by gift,
except that if such basis is greater than the fair market value of the
property at the time of the gift, then for the purpose of determining
the loss, the basis shall be such fair market value.
Illustration. Assume that Mr. Era bought shares of stock in 1970
at a cost of Php 100,000. He donated these shares to Mr. Aio on
January 1, 1998, during which time, the said shares has a fair
market value of Php 1,000,000 and on the basis of such fair market
value, Mr. Era paid the corresponding donors tax. Mr. Aio, the
donee, sold the shares on January 1, 1999 for a consideration of PhP
2,000,000. In this case, the basis of Mr. Aio in computing his gain
from the sale shall be at the historical cost basis thereof in the
hands of Mr. Era, the donor, or at Php 100,000. The gain from the
sale in the hands of Mr. Aio is Php1,900,000 (i.e., selling price of
Php 2,000,000 less historical cost thereof in the hands of Mr. Era
the donor, at Php 100,000 equals gain from the sale made by Mr.
Aio in the amount of Php 1,900,000.
(c.3.1.4) Acquired for Inadequate Consideration. If the property
was acquired for less than an adequate consideration in money or
moneys worth, the basis of such property is the amount paid by the
transferee for the property.
Illustration. Assume that Mr. Esq sold to Mr. Nma, shares of
stock for a consideration of Php 1,000,000. At the time of the sale,
its fair market value is Php 3,000,000. If Mr. Nma later on sells this
property and he is taxable on his gain derived from the sale, his gain
from the sale shall be determined by deducting from the amount of
consideration received his purchase price thereof at Php 1,000,000.
However, at the time of sale by Mr. Esq to Mr. Nma, the former
should pay Capital Gains Tax and Documentary Stamp Tax on the
over-the-counter sale transactions of shares and at the same time
Donors Tax on the indirect gift which is the difference between fair
market value of shares/stocks sold and the actual consideration for
the sold shares of stock.
7. BIR Ruling 67-98
This refers to redemption and sale to agricultural lessees, the
Solomon spouses, in relation to the Comprehensive Agrarian Reform
Law. In this case, the BIR ruled that such disposition is exempt from
taxes on land transfers, including capital gains taxes.
8. BIR Ruling 100-98
Tenants were relocated due to the Science Park of the Philippines
wanting to occupy their land for its own use and in exchange, they
will be given another piece of land. The BIR ruled that the donation

of new homelots and construction of new houses are within the

purview of the Comprehensive Agrarian Reform Law, making them
exempt from donors tax among other taxes on land transfers.
9. BIR Ruling 42-80
The Auction House organizes auctions and receives 15% of the
selling price as its fee. It requests for a ruling for it to be considered
as an independent contractor. The BIR ruled that Auction House is to
be considered as a broker, subject to the 6% brokers tax based on
the 15% compensation that it gets as well as a 1000 pesos fixed tax.
10. BIR Ruling 101-80
A donation of 100,000 pesos was made by the British community to
the Cultural Center of the Philippines for the performance of one of
its ballet groups. The BIR ruled that the donation was exempt from
donors tax since it was made in favor of a cultural organization, the
CCP.
11. BIR Ruling 085-82
This involves a transfer of a land in trust held by Bernabe to the
beneficiary Gomez when the latter reached the age of 25 years old
in the form of executing a Deed of Transfer of Trust. The BIR held
that the transfer was of the nature of a termination of trust, hence,
it is not subject to Capital Gains Tax since no capital gain was
received by the beneficiary.
12. BIR Ruling 107-82
A donation was made to the Fraternity of Freemasons and ruling was
requested to hold such donation as fully exempt from donors tax. It
is represented that the organization is a fraternal, charitable and
beneficiary Society in the form of a private non-stock corporation. The BIR ruled
that while the organization is a charitable organization, the fact that it is a fraternal
and beneficiary organization doesnt make it fully exempt from donors tax. The
Tax Code doesnt provide donors taxes for fraternal and beneficiary
organizations. It is however subject to the full exemption with respect to income
taxes.

13. BIR Ruling 220-83

Spouses Lichauco decided to dissolve their conjugal partnership and the husband
executed a deed of quitclaim with respect to his share in the property in favor of
the wife. The BIR ruled that the deed of quitclaim doesnt equate to a donation
since the Article 133 of the Civil Code prohibits donations between husband and
wife during the marriage, hence, is not liable for donors tax.
14. BIR Ruling 440-93

The Christ the King CCF Homeowners Association raffled parcels of

land to its members as part of their socialized housing program. The
BIR ruled that the disposition was not subject to donors tax since it
is in essence a socialized housing program conducted by the private
sector which is encouraged by the government. However, it is
subject to Documentary Stamp Tax.
15. BIR Ruling 455-93
Repudiation in favor of first-born grandchildren is subject to donors
tax because it is not a universal disposition, rather, only affects
certain heirs.
16. BIR Ruling 145-98
Posadas heirs executed an agreement where in they would
exchange lands in order to get their preferred share in a parcel of
land left to them. The BIR ruled that it is in essence a partition of
land or a termination of co-ownership and not a barter since there is
no capital gain to be had, making them not liable for Capital Gains
Tax. However, the estate of the decedent Posadas is still subject to
estate tax for the parcel of land that was left to them.
17. BIR Ruling DA-499-98
A memorandum of agreement for the dissolution of co-ownership
was executed by the spouses Rodriguez, Antonio and Carino in a
parcel of land co-owned by them. The BIR ruled that dissolution of
co-ownership / partition is not subject to capital gains, donors and
documentary stamp taxes.
18. BIR Ruling DA-065-97
A memorandum of agreement for the construction of a
condominium is executed between Ayala Land and Davao Motors
Sales Company. Davao requested a ruling if the conveyance of land
to the joint venture will be subject to Documentary Stamp Tax. The
BIR ruled that such conveyance, a deed of partition of shares in the
floors in the condominium and the parking lot, is not subject to DST
since it is not in relation to a sale.
19. BIR Ruling 192-90
The donor is assessed 1.6 million in donors taxes for his donation of
parcels of land in favor of his daughter. He asked for a ruling if he is
allowed to revoke the donation given this large amount. The BIR
ruled that the donation is revocable only if the donee should
consent to the revocation. Also, if the donation is real property, then
it should be in a public instrument.