The answer must be qualified. Section 99(C) of the NIRC explicitly provides that any contribution in cash or in kind to any candidate, political…

The question

The answer must be qualified. Section 99(C) of the NIRC explicitly provides that any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes shall be governed by the Election Code, as amended. On the other hand, Section 13 of the Republic Act No. 7166 specifically states that any provision of law to the contrary notwithstanding, any contribution in cash or kind to any candidate or political party or coalition of parties for campaign purposes, duly reports to the Commission on Elections (COMELEC) shall not be subject to the payment of any gift tax. Thus, if Mr. De Almacen reported his campaign contributions of Php 500,000.00 in cash, tarpaulins, t-shirts, umbrellas, caps, and other campaign materials to the COMELEC, then the BIR cannot impose donor’s tax on such contributions. Conversely, if Mr. De Almacen failed to report these campaign contributions to the COMELEC, such contributions would be subject to donor’s tax. The spouses Jun and Elvira Sandoval purchased a piece of land for P5,000,000 and included their two (2) minor children as co-purchasers in the Deed of Absolute Sale. The Commissioner of Internal Revenue (CIR) ruled that there was an implied donation and assessed donors' taxes against the spouses. Rule on the CIR's action. (2013 Bar Question)

1. A.The CIR is wrong; a donation must be express.
2. B.The CIR is wrong; financial capacity is not a requirement for a valid sale.
3. C.The CIR is correct; the amount involved is huge and ultimately ends up with the children.
4. D.The CIR is correct; there was animus donandi since the children had no financial capacity to be co-purchasers.

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