HQ11 - Estate Taxation
HQ11 - Estate Taxation
HQ11 - Estate Taxation
TAXATION
TRANSFER TAXATION: ESTATE TAXATION
Vanishing Deduction
Requisites:
1. property is part of the gross estate of the present decedent situated in the Philippines
2. the present decedent acquired the property by inheritance or donation within 5 years
prior to his death;
3. the property subject to vanishing deduction can be identified as the one received from
the prior decedent, or from the donor, or can be identified as having been acquired in
exchange for the property so received;
4. the property acquired form part of the gross estate of the prior decedent, or of the
taxable gift of the donor;
5. the estate tax on the prior transfer or the gift tax on the gift must have been paid; and
6. the estate of the prior decedent has not previously availed of the vanishing deductions
Percentage of Vanishing Deduction:
- based on the interval of the death of the present decedent and the time of death of the prior decedent or
the date of gift whichever is relevant
More Not more Percenta
than than ge
- 1 year 100%
1 year 2 year 80%
2 year 3 year 60%
3 year 4 year 40%
4 year 5 year 20%
5 year - 0%
How to compute Vanishing Deductions?
1. Determine the initial value which is whichever is lower between the fair market
value of the property used in computing the first transfer tax paid (estate or donor’s
tax) and the fair market value of the property in the present decedent.
2. Compute initial basis by deducting from initial value any encumbrances or liens on
the property that are paid by the present decedent where such lien or encumbrances
are deductions on the prior decedents gross estate or on the donor’s taxable gift.
3. Compute the final basis by reducing the initial basis by an amount representing
what the initial basis bears with the gross estate to the expenses, losses, indebtedness
and taxes (ELIT) and transfer for public purpose.
To illustrate:
Initial Basis ELIT plus transfer for Prorated
x public purpose =
Gross Estate deduction to initial
basis
4. Determine the vanishing deduction by multiplying the final basis by the
corresponding rate that apply for the time period from the point the property was
transferred by the prior decedent (i.e.: point of death) or by the donor (i.e.: date of
gift).
Family Home
composed of the land and the dwelling house to which the decedent and his family
resides
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shall be included in gross estate at whichever is higher between its zonal value and
assessed value at the point of death of the decedent
Requisites:
1. death of the decedent shall be after July 28, 1992
2. total value of the family home must be included in gross income
3. the family home must be the actual residence of the decedent and his family at the
time of death, as certified by the Barangay Captain of the locality where the family
home is situated
4. deduction cannot exceed whichever is higher between the zonal or assessed value at
the time of death and P1,000,000.00
5. it is a deduction from either common or personal property or separate properties of
the decedent
Unmarried decedent
Real Properties P xx,xxx,xxx-
Personal Properties xx,xxx,xxx-
Gross Estate P xx,xxx,xxx-
Ordinary Deductions:
Funeral Expenses P xxx,xxx
Other Deductions xxx,xxx ( xxx,xxx)
Special Deductions:
Family Home P xxx,xxx
Standard Deductions 1,000,000
Medical Expenses xxx,xxx x,xxx,xxx-
Net Taxable Estate P xx,xxx,xxx-
Married Decedent
Ordinary
Deductions:
Funeral Expenses xxx,xxx.xx
Other Deductions xxx,xxx. x,xxx,xxx. ( x,xxx,xxx.
xx xx xx)
Net Estate after P P P
OD x,xxx,xxx.xx x,xxx,xxx.xx x,xxx,xxx.xx
Special
Deductions
Family Home ( xxx,xxx.x
x)
Standard ( 1,000,000.
Deductions 00)
Medical ( xxx,xxx.x
Expenses x)
Net Estate Px,xxx,xxx.xx
Less: Share of surviving spouse ( x,xxx,xxx.x
x½ x)
Taxable net Px,xxx,xxx.xx
estate
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d. The transaction is a transfer for insufficient consideration, hence, the amount of
the P500,000 shall be included in the gross estate.
22.One of the following is not a motive which precludes a transfer from category of one
made in contemplation of death.
a. To reward services rendered c. To settle family litigated and unlitigated
disputes
b. To save on donor’s and estate tax d. To relieve the donor from burden of
management
23.Which of the following proceeds shall be included in the taxable gross estate?
a. Insurance proceeds from SSS and GSIS
b. Amount receivable by any beneficiary, irrevocably designated in the policy by the
insured
c. Amount receivable by any beneficiary designated in the insurance policy
d. Proceeds of group insurance taken out by a company for its employees
24.The widow and children of a passenger who died in an airplane crash were paid
P3,500,000 by the airline. This figure was released after negotiation between the heirs
of the deceased and the insurer of the airline, the latter having received indubitable
evidence that the deceased had a net income of P350,000 at the time of his death and
that 10 productive years would have insured financial stability for his family. Should
the heirs declare this amount in the estate tax return?
a. No, the heirs should not declare the P3,500,000 in the estate tax return because
the amount is not part of the decedent’s properties at the time of death.
b. No. the heirs should not declare the P3,500,000 in the estate tax return because it
was a result of a negotiation between the heir and the airline company.
c. Yes. The heirs should declare the P3,500,000 in the estate tax return because the
designation of the beneficiary is not known, hence, negotiable.
d. Yes. The heirs should declare the P3,500,000 in the estate tax return because the
amount would have earned by the decedent if he did not die.
25.The following are transactions and acquisitions exempt from transfer taxes, except
a. Transmission from the first heir or donee in favor of another beneficiary in
accordance with the desire of the predecessor
b. Transmission or delivery of the inheritance or legacy by the fiduciary heir or
legatee to the fideicommissary
c. The merger of the usufruct in the owner of the naked title
d. All bequests, devises, legacies or transfers to social welfare, cultural and
charitable institutions
26.Which of the following exempt transactions will still require the inclusion of the
property in the gross estate?
a. Merger of the usufruct in the owner of the naked title
b. Bequest, devises, legacies or transfers to social welfare, cultural and charitable
institutions the administration expenses of which do not exceed 30% of such
bequest, devises, legacies or transfers
c. Transfer from the first heir to a second heir designated by the decedent
d. Death benefits received from SSS and GSIS
27.Case I – Y devised in his will a piece of land; naked title to B and usufruct to C for as
long as C lives, thereafter to B. The transmission from Y to B and C is subject to estate
tax but the merger of the usufruct and the naked title in B upon the death of C is
exempt.
Case II – Z devised in his will real property to his brother D who is entrusted with the
obligations to preserve and to transmit the property to E, a son of D, when he
becomes of age. The transmission from D to his son E is subject to tax.
a. Both statement as to the taxability and non-taxability of the transmissions are
correct
b. Both statement as to the taxability and non-taxability of the transmissions are
incorrect
c. Only the first statement as to the taxability and non-taxability of the transmissions
is correct
d. Only the second statement as to the taxability and non-taxability of the
transmission is correct
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28.X died in 1990 leaving a will which directed all real estate owned by him not to be
sold or disposed of for a period of 10 years after his death and ordered that the
property be given to Y upon the expiry of the 10-year period. in 1990, the estate left
by X had a fair market value of P1,000,000. In 2002, the fair market value of said
estate increased to P3,000,000 and the Commissioner of Internal Revenue assessed
thereon estate tax based on P3,000,000. Is the Commissioner’s assessment based on
P3,000,000 correct?
a. Yes. The assessment of the Commissioner is correct because on matters of
assessment he has the authority to determine the value to be assessed;
b. No. The assessment of the Commissioner is incorrect because the assessment
should have been based on the fair market value at the time of death which is
P1,000,000;
c. Yes. The assessment of the Commissioner is correct because it was based on the
value at the time of assessment;
d. No. The assessment of the Commissioner is incorrect because estate tax is not
subject to any assessment.
29.Which of the following value is not generally used for estate valuation purposes?
a. Fair market value at the time of death;
b. Fair market value at the time the return is filed;
c. Fair market value, assessed value o zonal value whichever is the highest in case of
real property;
d. Book value, in case of shares of stock not traded in the local stock exchange.
30.Real properties owned by the decedent at the time of death shall be valued at:
a. Zonal value or value per tax declaration whichever is higher;
b. Book value or acquisition cost, whichever is clearly determinable;
c. Acquisition cost;
d. Acquisition cost or fair market value whichever is higher.
31.Mr. X died. He was survived by his wife and children. The couple had exclusive and
common properties. The gross estate of Mr. X would include:
a. Common and capital properties;
b. Common and paraphernal properties;
c. Common, capital and paraphernal properties;
d. Common properties only.
32.In the absence of a marriage settlement, or when the regime agreed upon is void, the
property relations of the spouses who married on or after August 3, 1988 shall be
governed by:
a. Conjugal partnership of gains; c. Complete separation of properties;
b. Absolute community of properties; d. None of the choices.
33.Properties owned before marriage and brought into the marriage are generally
classified as:
I. Conjugal properties under conjugal partnership of gains;
II. Exclusive properties under absolute community of properties
a. Only I is correct; c. Both I and II are correct;
b. Only II is correct; d. Both I and II are incorrect.
34.The net fruits as well as the income received during the marriage from the exclusive
properties of the spouses are classified as:
I. Conjugal properties under conjugal partnership of gains;
II. Exclusive properties under absolute community of properties
a. Only I is correct; c. Both I and II are correct;
b. Only II is correct; d. Both I and II are incorrect.
35.The community properties shall include all properties owned by the spouses at the
time of the celebration of the marriage or acquired thereafter. One of the following,
however, is not a community property.
a. Properties inherited by the spouses before the marriage;
b. Properties acquired by the spouses as donation before the marriage;
c. Properties acquired using the salary of either spouse earned before the marriage;
d. Properties acquired before marriage by either spouse who had legitimate
descendants by a former marriage.
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36.During their last anniversary, the wife bought an expensive coat for his husband using
her salary earned during the marriage. Shortly thereafter, the husband died. For
Philippine estate tax purposes, the expensive coat shall be classified as:
a. Common property;
b. Exclusive property of the husband-decedent;
c. Exclusive property of the wife-surviving spouse;
d. Exclusion from the gross estate.
37.During the engagement ceremony before their marriage, the man gifted his woman an
expensive diamond necklace. The necklace was for the exclusive use of the woman.
How would this necklace be classified for Philippine estate tax purpose, assuming the
man died and was survived by the woman and they were under absolute community of
properties?
a. Communal property;
b. Exclusive property of the husband-decedent;
c. Exclusive property of the surviving spouse;
d. Excluded from the gross estate.
38.Which of the following is an exclusive property?
a. Properties acquired during the marriage using common fund for the exclusive use
of one of the spouses;
b. Properties acquired through occupation such as fishing or hunting;
c. Properties acquired during the marriage by gratuitous title;
d. Properties acquired by change, such as winning from gambling or betting.
39.Are properties owned by the spouses at the time of marriage presumed common
unless proven to be exclusive?
A. Yes, under conjugal partnership of gains;
B. Yes, under absolute community of properties.
a. Both answers are correct; c. Only A is correct;
b. Both answers are incorrect; d. Only B is correct.
40.A decedent left the following properties:
P
Land in Italy (with 1M unpaid mortgage) 2,000,000
Land in Laguna, Philippines 500,000
Franchise in USA 100,000
Receivable from debtor in Philippines 70,000
Receivable from debtor in USA 100,000
Bank deposit in USA 80,000
Shares of stocks of PLDT, Philippines 75,000
Shares of stocks of ABC, foreign corporation 75% of the business
in the Philippines 125,000
Other personal properties 300,000
Zonal value of the land in Laguna 750,000
If the decedent is a non – resident citizen, his gross estate is
a. P3,650,000 b. P3,600,000 c. P2,500,000 d.
P2,650,000
41.Using the above data, if the decedent is a non – resident alien, his gross estate is
a. P1,195,000 b. P945,000 c. P1,320,000 d. P2,650,000
42.If the preceding number reciprocity law can be applied, the gross estate is
a. P1,050,000 b. P1,195,000 c. P1,250,000 d.
P1,070,000
43.Based on the above problem but assuming that the PLDT shares of stocks are not
listed in the local stock exchange, and there are 1,000 shares at the time of death, the
company’s outstanding shares were 10,000 shares. Its retained earnings was
P2,000,000, par value per share was P50. The gross estate should show the said
shares at
a. Still at P75,000 b. P250,000 c. P200,000 d. P0
44.The estate should be valued at the time
a. The heirs are ascertained c. the estate is ready for distribution
to the heirs
b. The estate tax is paid d. of the death of the decedent
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Northern CPAR: Taxation – Estate Taxation
For items 45 to 48, choose from the following choices:
a. Revocable c. whether revocable or irrevocable
b. Irrevocable d. partly revocable, partly irrevocable
Proceeds of life insurance shall be included in the gross estate if the beneficiary
designated is:
45.The estate and the designation is __________
46.The executor and the designation is __________
47.The administrator and the designation is __________
48.A person other than the estate, executor or administrator and the designation is
__________
49.The amount of funeral expense that may be deducted from the gross estate is
a. 5% of the gross estate or P200,000 whichever is lower
b. Actual funeral expense or P200,000 whichever is lower
c. 5% of the gross estate or the actual funeral expenses whichever is lower
d. 5% of the gross estate or the actual funeral expenses or P200,000 whichever is
the lowest
Items 50 and 51 pertain to the following information
If it will cause undue hardship on the part of the estate, the estate tax may be paid within
50.In case the estate is settled through the courts
a. 2 years b. 3 years c. 4 years d. 5 years
51.In case the estate is settled without court’s intervention
a. 2 years b. 3 years c. 4 years d. 5 years
52.Written notice shall be given to the CIR if the gross estate exceeds
a. P20,000 b. P50,000 c. P100,000 d. P150,000
53.From the time of death, notice of death should be given within
a. One month b. Two months c. 3 months d. 6 months
54.As a rule, estate tax return should be filed under oath if the gross estate exceeds
a. P100,000 b. P200,000 c. P500,000 d. P1,000,000
55.This in not part of the gross estate of the decedent
a. Conjugal property c. share of the surviving spouse
b. Community property d. exclusive property of the surviving spouse
56.The following do not form part of the communal properties of the spouses, except?
a. Property acquired prior to the current marriage by either spouses who has
dependents by a prior marriage
b. The fruits of the properties mentioned in a.
c. jewelries
d. properties for personal use of either spouses
57.The following are included in the community properties of the spouses, except?
a. Donation during the marriage by the parent of either spouses designated by the
former for both the spouses
b. Properties acquired before the marriage and the fruits thereof
c. Properties acquired during the marriage and the fruits thereof
d. Properties acquired by the surviving spouse under right of redemption using only
his separate properties
58.Which of the following do not form part of the conjugal properties of the spouses?
a. Properties acquired before the marriage whether there are dependents in future
marriage or not
b. Fruits of the properties in a. after marriage
c. Fruits of properties acquired after marriage by donation or gratuitous title
d. Properties acquired by either spouses under rights of redemption using conjugal
properties
59.Which is correct concerning the property settlement of spouses?
a. Marriages before August 3, 1988 are presumed under the absolute community of
property
b. Marriages after August 3, 1988 are presumed under the conjugal partnership of
gains
c. Marriages after August 3, 1988 are conclusively presumed under the absolute
community of property
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Northern CPAR: Taxation – Estate Taxation
d. The spouses can stipulate the conjugal partnership of gains even after August 3,
1988
60.This in not part of the conjugal property
a. Those acquired by onerous title during the marriage at the expense of the
common fund
b. Those acquired by industry or work of either of them
c. The fruits, rents or interests received or due during the marriage coming from the
conjugal property or from the exclusive properties of the spouses
d. Those acquired during the marriage by gratuitous title
61.Under the absolute community of property, jewelry for personal and exlclusive use fo
the wife shall belong to the
a. a. wife b. husband c. husband and wife d.
children
62.A. Taxation of the estate shall be governed by the statute or law in force at the time of
distribution of the estate to
their heirs
B. Succession takes place upon the determination of the respective share of the heirs
in the estate of the decedent
a. True, true b. True, false c. False, True d.
False, False
63.A. The family home includes the house and the lot where the house stands
B. The value of the house and the lot where it stands, if a Family Home is deductible
from the estate of the
decedent
a. True, true b. True, false c. False, True d.
False, False
64.A. Property brought to the marriage by either spouse shall belong to both spouses
B. The share of the surviving spouse in the conjugal property is part of the gross
estate of the decedent
a. True, true b. True, false c. False, True d.
False, False
65.A. Fruits and income of exclusive property shall belong to the spouses
B. Donations made by the decedent during lifetime but to take effect upon his death
shall be exempt from estate tax
a. True, true b. True, false c. False, True d.
False, False
66.A. When exclusive property is sold during the marriage, the proceeds become
property of the spouses
B. The legal heirs of the decedent must be determined first before the correct estate
tax can be ascertained
a. True, true b. True, false c. False, True d.
False, False
67.A. Under the absolute community of property, property acquired before marriage by
either spouse including fruits
and income, if any shall belong to both spouses
B. The cost of burial plot, tombstone, monument or mausoleum, mourning apparel,
expenses of the wake, and
notices are deductible from gross estate as funeral expenses
a. True, true b. True, false c. False, True d.
False, False
68.A. Expenses incurred from the performance of the rites and ceremonies incident to
interment and those incurred
after interment, such as prayers, masses and entertainment are part of funeral
expense
B. The administrator or executor shall submit a statement showing the disposition of
the proceeds of the loan if
the claims against the estate was contracted within five years before the death of
the decedent
a. True, true b. True, false c. False, True d.
False, False
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Northern CPAR: Taxation – Estate Taxation
69.A. If the property is inherited before marriage it will belong to both spouses while if it
is inherited during marriage
it is exclusive
B. Unless, stipulated, the property relations shall be governed by conjugal partnership
of gains for marriages
celebrated on or before Aug 3, 1988
a. True, true b. True, false c. False, True d.
False, False
70.A. Unless stipulated, the property relations shall be governed by absolute community
of property for marriages
celebrated on or after August 3, 1988
B. Under the regime of absolute community of property, property for personal and
exclusive use of either
spouses except jewelry shall belong to both spouses
a. True, true b. True, false c. False, True d.
False, False
71.A resident alien has a gross estate of P5,000,000. The following are its items of
funeral expenses:
Cost of food and prayers services/masses during the P
decedents wake 80,000
Payments for burial plot, casket and interment services of 100,000
Eternal Gardens, Inc.
Cost of publication of notice of decedent’s death to relatives 10,000
Cost of thanksgiving cards and newspaper thanksgiving 20,000
publication
Cost of prayer services during the 30th and 40th day of the 10,000
decedent
How much is the deductible funeral expenses of the decedent?
a. P190,000 b. P180,000 c. P200,000 d. P250,000
72.The estate may claim a standard deduction of
a. P1,000,000 b. P2,000,000 c. P200,000 d. P500,000
73.Medical expenses to be deductible, must be incurred by the decedent within
a. One year prior to his death c. two years prior to his death
b. One year after his death d. three years prior to his death
74.The medical expense shall in no case exceed
a. P200,000 b. P400,000 c. P500,000 d. P1,000,000
75.Statement 1 – The court may authorize the distribution of estate, to an heir if in its
sound discretion it believes that the heir badly needs his share
Statement 2 – The administrator or any of his heirs, may however upon authorization
of BIR withdraw from the decedents bank deposits P20,000 without the required
certification that the estate tax has been paid
a. True, true b. True, false c. False, True d.
False, False
76.Statement 1 – A died giving B power to appoint a person who will inherit A’s house
and lot. B however can only choose C, D, E and F. B decided to transfer the property
to C, in B’s will when he was old already. The transfer from B to C is subject to estate
tax
Statement 2 – During A’s lifetime, he decided to give B as gift his car subject to the
condition that if B does not become a CPA within 3 years, A shall revoke the transfer.
In the second year however, A died. The car no longer form part of A’s gross estate
a. True, true b. True, false c. False, True d.
False, False
77.A died leaving a farm land. In his will he transferred the ownership thereof to B but
subject to the condition that C will have the right to use the land for a period of ten
years (usufruct). In the seventh year, however, C died and in C’s will he surrendered
his right over the land to B
a. The transfer is subject to donor’s tax c. The transfer is both an inclusion
from the gross estate
b. The transfer is subject to estate tax d. The above is a tax exempt transfer
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Northern CPAR: Taxation – Estate Taxation
78.One of the following is not an exemption or exclusion from the gross estate
a. Capital or exclusive property of the surviving spouse
b. Properties outside the Philippines of a non-resident Chinese decedent
c. Shares of stock of San Miguel Corporation of a non-resident Mexican
d. The merger of usufruct in the owner of the naked title
79.Statement 1: Unpaid mortgage indebtedness is deductible from the gross estate
provided the said property subject to the indebtedness is included in the gross estate,
net of the mortgage indebtedness
Statement 2: A donation inter – vivos by the decedent to the Philippine government
few months before his death is a deduction from the gross estate
a. True, true b. True, false c. False, True d. False,
False
80.If the estate consists of registrable property, such as real property, motor vehicle,
shares of stock or other similar property from which a clearance from the BIR is
required as a condition for the transfer of ownership, an estate tax return should be
filed under oath
a. if the gross estate exceeds P200,000. c. If the gross estate exceeds
P1,000,000.
b. if the gross estate exceeds P500,000. d. regardless of the value of the gross
estate.
81.The estate tax return shall be supported with a statement duly certified by a CPA. If
the gross estate exceeds
a. P1,000,000 b. P2,000,000 c. P5,000,000 d.
P10,000,000
82.From the decedent’s death, the estate tax return shall be filed within
a. 2 months b. 1 month c. 6 months d. 18 months
83.The CIR, in meritorious cases may grant a reasonable extension to file the return, not
exceeding
a. 30 days b. 60 days c. 3 months d. 6 months
84.A, Filipino, widower, died leaving the following:
a Real properties PHP 4,000,000
b Family home 1,200,000
c Personal properties 2,000,000
d Paid medical expense 600,000
e Allowable deductions 800,000
Required: determine the:
a. net estate subject to tax b. net distributable estate
85.A, Filipino, married, died leaving the following
P
a Real properties-conjugal 4,000,000
Real properties -
b exclusive (A) 2,500,000
Family home - exclusive
c (A) 1,200,000
d Unpaid medical expenses 600,000
Allowable deductions –
e conjugal 1,400,000
Required: Determine the:
a. net estate subject to tax b. net distributable estate
86.C, Filipino, married to D, died leaving the following:
a Real properties-conjugal P 4,000,000
Real properties - exclusive
b (C) 1,800,000
Family home - exclusive
c (D) 1,400,000
Allowable deductions -
d conjugal 1,200,000
Required: determine the net taxable estate
87.E, Filipino, married to F, died leaving the following:
a Real properties-conjugal P
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Northern CPAR: Taxation – Estate Taxation
5,000,000
b Real properties - exclusive (E) 1,200,000
Real property - exclusive (E) (Lot where the
c family home stands) 400,000
d Family home – conjugal 1,000,000
e Allowable deductions – conjugal 1,600,000
Required: determine the net taxable estate
88.G, Filipino, married to H, died leaving the following:
P
a Real properties-conjugal 7,000,000
b Real properties - exclusive (G) 1,400,000
Real property - conjugal (Lot were the family
c home stands) 800,000
d Family home - exclusive (G) 1,800,000
e Allowable deductions – conjugal 2,400,000
Required: determine the net taxable estate
89.Mr. A, Filipino, married, died on January 1, 2007 leaving the following
1. Property inherited from his father who died January 2, 2006:
1. Agricultural land P1,800,000
2. Residential land 3,000,000
2. Property inherited from his mother who died on Nov. 1, 1995, one day after Mr. A’s
marriage to Mrs. A
1. Fish pond P1,200,000
2. Jewelry 1,000,000
3. Property acquired thru Mr. A’s labor:
1. Residential house and lot used as family homeP1,900,000
2. Motor vehicles 800,000
3. Commercial land 4,000,000
4. Cash 2,000,000
The agricultural land and residential land were previously mortgage for P800,000
when inherited where P450,000 was paid by Mr. A during the lifetime. The
commercial land has a mortgage of P1,000,000 of which P600,000 was paid by Mr. A
before his death. Mr. A by will bequeathed to the City of Manila for exclusively public
purpose the sum of P200,000.
The estate claimed the following expenses:
a. Funeral expenses P 250,000
b. Judicial expenses 100,000
c. Claims against the estate 150,000
d. Medical expense 400,000
Required: Compute the taxable net estate.
90.Mr. A, Filipino, married to B with whom he had two children died on Feb. 14, 2007.
The inventory of the properties of the spouses show the following
House and lot in Manila owned by A before the P
a marriage 3,000,000
b Agricultural land owned by B before the marriage 1,200,000
c Real property acquired during marriage 2,000,000
d Family home acquired during marriage 2,200,000
e Personal property acquired during marriage 1,400,000
Commercial building in Makati inherited by A during
f marriage
from his father who died on February 14, 1987 2,000,000
Apartment house inherited by B during marriage from her
g mother who
died on February 14, 1998 4,000,000
Proceeds of life insurance where the estate of A was
h designated as the
irrevocable beneficiary 1,000,000
Proceeds of life insurance where the estate of B was
i designated as the
irrevocable beneficiary 2,000,000
16
Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA TAX – 6 Batch – HQ11-1
th
Northern CPAR: Taxation – Estate Taxation
Deductions claimed by the estate:
Legacy given in favor of Phils. Government is P
1 decedents will 300,000
2 Claims against the estate 100,000
Unpaid mortgage on agricultural land (letter b
3 above) 400,000
4 Funeral expenses 180,000
5 Judicial expenses 600,000
Required: Determine the estate tax due and
payable
91.Mr. O, Filipino, married, died on Dec. 31, 2006, four years after his marriage to Mrs.
O. He left the following:
a. Property inherited by Mr. O from his father who died February 14, 1995
P 3,000,000
b. Property inherited by Mrs. O from her father who died February 14, 1997
1,200,000
c. Property inherited by Mr. O from his mother who died February 14, 2005
1,800,000
d. Property inherited by Mrs. O from his mother who died February 14, 2006
1,400,000
e. Property acquired thru the labor of:
Mr. O 2,000,000
Mrs. O 1,500,000
Mr. and Mrs. O (family home) 2,400,000
f. Other personal property 1,200,000
Deductions claimed by the state:
a. Funeral expense 220,000
b. Unpaid mortgages on property in letters:
a. 500,000
b. 300,000
c. 180,000
d. 200,000
c. Claims against the estate 170,000
d. Accrued taxes (before the death of Mr. O) 80,000
18
Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA TAX – 6 Batch – HQ11-1
th