INTRODUCTION TO TRANSFER TAXATION

Types of transfers

1. Bilateral transfers - involve transmission of property for a consideration

ex. Sale, Barter

2. Unilateral transfers - involve the transmission of property by a person without consideration.

ex. Donation, Succession

3. Complex transfers - transfers for less than full and adequate consideration.

BILATERAL TRANSFERS If the seller is

engaged in business not engaged in business

Subject to

Consideration 1,000.00 Business Tax No Tax

Less: Cost of property

given up 600.00

Realized gain 400.00 Income Tax Income Tax

UNILATERAL TRANSFERS

1. Donation - gratuitous transfer of property from a living donor to a donee

- Donation Inter Vivos

2. Succession - gratuitous transfer of the properties of the deceased person upon his death to
his heirs.

- Donation Mortis Causa