January 26, 2010
BIR RULING [DA-(JV-006) 014-10]
Section 22 (B); DA-450-2004
Pulcena Realty Development Corporation
Barangay Pinagtipunan, General Trias
Cavite
Attention: Mr. Virgilio C. Patam
President
Gentlemen :
This refers to your letter dated February 15, 2009 requesting a confirmatory ruling to the effect that the Joint Venture Agreement (JVA) With Authority to Mortgage between Juliana G. Cabingan and Leonida Garcia Vergara, the landowners and Pulcena Realty Development Corporation, will have the following tax consequences:
1. The JVA will not create a separate taxable joint-venture within the meaning of Section 22 (B), in relation to Section 27 (A) of the Tax Code of 1997, as amended; and
2. Since the JVA will not create a separate taxable joint-venture, the subsequent division and allocation of ownership of the developed property between the parties will not be subject to income tax.
It is represented that Juliana G. Cabingan and Leonida Garcia Vergara are the owners of parcels of land located at Brgy. Paradahan, Cavite, with a total area of 7,727 square meters and more particularly described under TCT Nos. T-114344 and T-114343 issued by the Registry of Deeds...
