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Donation is an act of liberality , whereby a person disposes gratuitously of a thing or right in favor of
another who accepts it.
KINDS OF DONATION
1. Inter vivos made between living persons to take effect during the lifetime of the donor.
2. Mortis Causa made in the nature of testamentary disposition that is , it shall take effect upon
the death of the donor .
DONATION NOT SUBJECT TO DONORS TAX
1. Donation mortis causa is subject to estate tax as stated in the tax code because transfer was
made upon the death of the donor .
2. Donation Inter vivos amounting to 50,000 and below are exempt from taxes and not subject to
donors tax according to Tax Code.
MEANING OF GIFT TAX
Gift Tax imposed on gifts or the transfer without consideration of property between 2 or more persons
who are living at the time the transfer is made.
KINDS OF GIFT TAXES
1. Donors tax levied on the act giving ; it supplements the estate tax
2. Donnes tax levied on the act of receiving; it is formerly the counterpart of inheritance tax which
has been integrated into an estate tax.
NATURE OF GIFT AX
1. An excise tax. It is not a tax of property because its imposition does not rest upon general
ownership.
2. Tax imposed without reference to the death of the donor unlike in the case of estate tax.
PURPOSE OF GIFT TAX
1. The Gift Tax was enacted to supplement the inheritance and estate taxes by preventing their
avoidance by those who give away property in anticipation of death through the taxation of gifts
inter vivos without which the property would be subjected to the said taxes.
2. The donors tax is also intended to prevent the avoidance of income tax through the devise of
splitting the income to the donees with donor thereby escaping the effect of the progressive
rates of income taxation.
REQUISITES OF TAXABLE GIFT
1.
2.
3.
4.
To qualify taxable gift , the transfer of property genuinely gratuitous . Property received as gift does not
create taxable income to the done but any income derived from property after he becomes the owner is
taxable to him, under the income tax law .
TRANSFERS AND PERSONS SUBJECT TO DONORS TAX
1. The donors tax applies whether the transfers is in trust or otherwise, whether the gift is direct
or indirect, and whether the property is real or personal tangible or intangible.
2. Donors tax is levied and paid upon the transfer by any person , resident or nonresident , of the
property of gift .
The shall be
exempt
0
2,000
14,000
44,000
204,000
404,000
1,004.000
Plus
Excess over
2%
4%
6%
8%
10%
12%
15%
100,000
200,000
500,000
1,000,000
3,000,000
5,000,000
10,000,000