Sec. 40(C)(2) tax-free exchange

Sec. 40(C)(2) tax-free exchange — the NIRC provision under which transferring property to a corporation in exchange for shares that give you control triggers no CGT at the transfer: the standard on-ramp for seeding a holdco with property you already own, executed with a CPA through the BIR’s confirmation process. It is also the boundary marker: the Philippines has no US-1031-style like-kind deferral — an ordinary sale pays the 6% CGT every time — so “swap into a bigger property tax-free” strategies from US books simply do not port.

First used in: 3.10 · RE tax and structures