TAXATION

Estate Tax

MACMOD
MAY 2014

TAX TABLE
The estate tax shall be computed on the basis of the value of the net estate in accordance with following graduated rates
(effective Jan. 1, 1998)
If the net estate is:
Over
But not over
The tax shall be
200,000
0
P
200,000
500,000
5% of the excess over P 200,000
500,000
2,000,000
P
15,000 + 8% of the excess over
500,000
2,000,000
5,000,000
135,000 + 11% of the excess over 2,000,000
5,000,000
10,000,000
465,000 + 15% of the excess over 5,000,000
11,000,000
1,215,000 + 20% of the excess over 10,000,000

1. Basic Concepts:
1. _______________ a mode of transferring and
acquiring ownership, rights, interest and obligations
from a dead individual.
2. _______________ refers to all property rights and
obligations of a person which are not extinguished by
his death and also those which accrued thereto since
the opening of succession; subject matter of
succession.
3. _______________ a person whose property is
transmitted thru the succession whether or not he left
a will.
4. _______________ a person whose property is
transmitted thru succession with a will.
5. _______________ a person called to the succession
either by a will or by provision of law.
6. ______________ a person who inherits personal or
movable property by a will.
7. _______________ a document wherein in his
handwriting an individual makes known his wishes
concerning the disposition of his estate after his death.
8. _______________ the person to whom the property
or property rights is transferred.
9. _______________ a person appointed by a testator to
carry out the provisions of the will.
10. _______________ a person appointed by the court in
the absence of an executor.
11. _______________ one carried out according to the
wishes of the testator to express in a will executed in a
form prescribed by the law (voluntary).
12. _______________ one that takes place by operation
of law (involuntary).
13. _______________ succession affected party by will
and partly by operation of law.
14. _______________ tax imposed upon gratuitous
transfer of properties.
15. _______________ portion of the estate reserved to
the compulsory heirs.
2.
3. Formula for computation of TNE:
1.
4.
Decedent single
5.
6.
Gross estate
7. P xx
8.
Less:
Allowable
9.
xx
deductions
10.
Taxable net estate
11.
Pxx
12.
Estate tax due (0%13.
P

20%)
14.

xx

2.
15.
18.

Decedent married
Gross estate

16.
19.

17.
20.

21.

Exclusive of the decedent

22.
P xx
25.
xx
28.
31.
xx
34.
xx
37.

23.

24.
Common property of the
couple
27.
Allowable deductions
30.
From exclusive property
33.

From common property

36.
Net estate before share of
surviving spouse
39.
Less: Share of surviving
spouse
42.
Net estate before special
deductions
45.
Less: Deduction for family
home/medical exp./s.deductions

40.
43.
46.

26.
P xx
29.
32.
35.
xx
38.
xx
41.
xx
44.
xx
47.
x
x

48.

Taxable net estate

49.

51.

Estate tax due (0%-20%)

52.

50.
P xx
53.
P xx

54.

*Computation of the share of surviving

spouse
55.
Gross common property of 56.
57.
the H & W
P xx
58.
Less:
Deductions
from
59.
60.
common property

61.

Net

62.

64.

Divided by

65.

67.
Share
spouse
70.

of

the

surviving

68.

x
x

63.
xx
66.
2
69.
P xx

71.
72.

Your mind is a magnet. Continue to dwell on what you want with a strong belief and you will achieve it.
73.

- A. Matthews

74.
3.
75.

Estate tax due

76.
P xx
77.
*Deduct estate tax credit for the tax paid 78.
abroad
xx
79.
Estate tax still due
80.
P xx
81.
*Formula for estate tax credit:
82.
83.
Under Limitation (used it only 1 foreign country is
involved: By country limitation.)
84.
85.
86.
Actual E.T. paid to FC
87.
P xx
88.
Or TNE,FC/TNE, W x E.T. due in the Phil.
89.
xx
90.
Allowable tax credit (whichever is lower)
91.
92.
For the foreign country
93.
P xx
94.
Limitation B: (by total, used if 2 or more 95.
foreign countries

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96.
98.
100.

Are involved together with limitation A)

Total actual E.T. paid to all FCs

102.
Or TNE, all FCs/TNE, W x E.T. due in
Phil.
104.
Allowable tax credit (whichever is lower)

97.
99.
101.
P xx
103.
xx
105.
P xx

106.
107.
Note: If there are 2 or more FCs both limitations
(A &B) should be used, then get whichever is lower
between the two as the final allowable tax credit.
108.
EXEMPTIONS AND EXCLUSIONS FROM THE
GROSS ESTATE
A.

Under Sections 85 & 86, NIRC

1. Capital or exclusive property of the surviving
spouse.

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2.

Properties outside the Philippines of a NonResident Alien decedent

3. Intangible personal property in the Philippines of a
Non-Resident alien under the Reciprocity Law.
109.
B.
Under Section 87, NIRC
1. The merger of usufruct in the owner of the naked
title.
2. The transmission or delivery of the inheritance or
legacy by the fiduciary heir or legatee to the
fideiconussary.
3. The transmission from the first heir or legatee in
favor of another beneficiary in accordance with the
desire of the predecessor-similar to transfers
passing S.P.A.
4. All bequests, devises, legacies, or transfers to
social welfare, cultural, charitable institutions, no
part or the net income of which insures to the
benefit of any individual provided that not more
than 30% of the said bequests, devises, legacies,
or transfers shall be used by each institution for
administrative purposes:
110.
C. Under Special Laws
1. Benefits from GSIS by reason of Death
2. Benefits from SSS by reason of Death
3. Benefits from Philippines and US government for
war damages
4. Benefits from US Veteran Administration
5. Retirement benefits of officials/employees of
private firms
6. Life insurance proceeds on insurance policy upon
his own life, where the beneficiary is a third
person, and the designation is irrevocable
7. Life insurance proceeds on insurance policy (group
insurance) taken out by the employer on the
employees life regardless of who is the beneficiary
and the designation.
111.
112.
REVIEW ON ADMINISTRATIVE PROVISIONS
ESTATE TAX
1. What is a notice of death?
113.
It is a written notice from the executor,
administrator, or any of the legal heirs, as the case
may be, informing the Commissioner of the Internal
Revenue about the decedents death.
2.

When should the notice of death be filed?

114.
Within two (2) months after the decedents
death or within 2 months after the executor or
administrator shall have qualified.

3.

Is it required in all cases of death?

115.
No, only where the gross value of the
estate exceeds P20,000

4.

Is an estate tax return required to be filed in all cases?

116.
No, only where the gross value of the
estate exceeds P200,000

5.

How should the return be filed? What information

should be contained?
117.
It shall be filed under oath and in
duplicate. It should show the following:
a.
The value of the gross estate at the
time of the decedents death, or in case of non-

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6.

7.

resident alien decedent, that part of his gross

estate in the Philippines;
b.
The allowable deductions under
Section 86;
c.
Such other information as may be
necessary to establish the correct tax due.
118.
What is the additional requirement if the gross estate
exceeds P2,000.000?
119.
The estate tax return shall be accompanied
by a statement showing:
a. Itemized assets of the decedent with their
corresponding gross value at the time of his death,
or in case of non-resident alien decedent, that part
of his gross estate in the Philippines;
b. Itemized deductions from the gross estate allowed
under Section 86;
c. The amount of tax due whether paid or still due
and outstanding duly certified by a CPA.
120.
What is the time for filing of the estate tax return? It is
extendable?
121.
It shall be filed within six (6) months after
the decedents death. In meritorious cases, the BIR
Commissioner may give a reasonable extension of the
time, not exceeding 30 days.
122.

8.

Where and to whom it should be filed?

123.
The return shall be filed with the RDO,
collection agent or duly authorized treasurer of the
municipality (or city) in which the decedent was
domiciled at the time of his death, or if there be no
legal resident in the Philippines, the with the Office of
the BIR Commissioner.

9.

When should the estate tax be paid?

124.
At the time the return is filed by the
executor, administrator or the heirs. (Pay as you file
system)

10. May the time for payment be extended?

125.
Yes, in meritorious cases, if payment of
such tax should cause undue hardship upon the estate
or any of his heirs, the BIR Commissioner may extend
the time as follows:
a.

If the estate is settled through the

courts (juridically) 5years.
b.
If the estate is settled through extrajuridically 2 years.
126.
11. Who is liable to pay the estate tax?
127.
It shall be paid by the executor or
administrator before delivery to any beneficiary of his
distributive share of the estate. Such beneficiary shall
be subsidiary liable for the payment of such portion
estate tax as his distributive share bears to the value
of the total net estate.
12. What if there is no executor or administrator appointed
or qualified?
128.
Any person in actual or constructive
possession of any property of the decedent.
13. Is the tax a personal liability of the administrator or
executor?

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129.

Yes, under Section 85 of NIRC

14. May he be discharged from such personal liability?

How?
130.
Yes, by making a written application to the
BIR Commissioner for the determination of the estate
tax and his discharge from personal liability. He shall
thereafter be notified by the BIR Commissioner and
upon payment of the amount of which he is notified,
he shall be discharged from such personal liability and
shall be entitled to a receipt or writing showing such
discharge.
15. May a judge allow the execution or administrator to
deliver a distributive share to an heir at anytime?
131.
No, unless the executor or administrator
can show a certification from the BIR that the estate
tax has been paid.
16. What is the duty of a bank upon knowing of the death
of a person who maintained a joint account with
another?
132.
It shall not allow any withdrawal by a
surviving depositor from the said joint account unless
the BIR Commissioner has certified that the estate tax
has been paid. However, the administrator of the
estate or any one of the heirs of the decedent may
w/draw without such certificate an amount not
exceeding P20,000.00 upon authorization by the BIR
Commissioner.
133.

EXERCISES/PROBLEMS

A. State the amount of allowable deductions from the

gross estate in each of the following:
1. _______________ Gross estate of P8,000,000 and
funeral expenses of P250, 000.
2.

_______________ Unpaid taxes of the decedent P3M,

25% of w/c accrued after death already.

3.

_______________ Receivable of P75,000 from an

insolvent debtor whose ratio of assets to liabilities is
1:3

4.

_______________ Hospitalization expenses until

death: P3,000,000, 50% incurred 1 yr. Prior to death
but only of which is supported by receipts.

5.

_______________ Expenses for the probate of a will

including P10,000 facilitation fee for
a court
personnel, P100,000: amount paid to broker to convert
some property in the estate to cash as authorized by
the court P50,000.

6.

______________ P75,000 indebtedness with interest

at 20% p.a. contracted 3months before death, not
notarized and a deed of mortgage P20,000, contracted
6 months before death at 24% p.a.

7.

______________ P100,000 note payable notarized

earning 18% p.a. dated September 30, 2009.
Decedent died March 15, 2010.

8.

______________ A conjugal family house with FMV of

P900,000 and exclusive family lot worth
P500,00
owned by the decedent.

9.

______________ Loss by fire of building worth P1M 5

months after decedents death, 75% compensated by
insurance. Estate was settled in the 6th month.

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10. _____________ Funeral expenses of a NRA decedent

in the Phil. P85,000 gross estate worth P2,000.000
40% from Philippines.
11. _____________ Transfer for public purposes made
inter vivos, P1M.
12. _____________ A land worth P1M when inherited 4
years ago by the decedent from his father with
mortgage of P200,000, 60% of which was paid by the
decedent before he died . FMV of land upon
deathP1,500,000. Gross estate is P8M and deductions
reached P750,000 40% of which represents ELIT &
TPP. Compute for VD only.
13. _____________ Loss of car by theft, occurring 8
months after the decedent death, value of car
P300,000, 60% to be paid by insurance.
14. _____________ Transfer for public purposes donated
by the decedent to Manila City Hall (shown in the will)
P200,000.
15. _____________ Unpaid mortgage of P200,000 on a
P1,1000,000 house shown in the gross estate net of
the P200,000 mortgage.
16. _____________ The decedents administrator claims
the following funeral expenses:
134.

Expenses of internment

136.
Cost of the burial lot (paid
paid by friends & relatives
139.
Fees for performance of rites
incident to internment
142.
Mourning clothing of widow &
unmarried minor children
145.
Expenses during the wake before
burial (paid by uncle, 25%)
148.

Obituary notice

150.

Card of thanks

135.
P
40,0
00
137.
138.
2
0,00
0
140.
141.
1
0,00
0
143.
144.
5
,000
146.
147.
2
0,00
0
149.
3
,000
151.
2
,000

152.
153.
The allowable funeral expenses assuming the
decedents gross estate is:
154.
a.
P2,000,000
155.
b.
P1,500,000
156.
B. Determine whether the following properties are
conjugal/community or exclusive:
157.
158.
ACP
159.
CPG
1. Property acquired before
160.
162.
marriage
161.
163.
2. Property acquired during
164.
166.
marriage
165.
167.
a. By onerous Title
168.
169.
b. By gratuitous Title
170.
171.
3. Income from 2-a earned
172.
174.
during marriage
173.
175.
4. Income from 2-b earned
176.
178.
during marriage
177.
179.
5. Other income of the
180.
183.
couple earned during
181.
184.
marriage
182.
185.

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6.

Property acquired during

marriage thru exchange:
a. Using exclusive prop.
b. Using common
property
7. Jewelry acquired during
marriage
a. Using exclusive funds
b. Using common funds
8. Property for personal &
exclusive use of either
husband or wife
208.

186.
187.
190.
192.

188.
189.
191.
193.

194.
195.
198.
200.
202.
203.
204.

196.
197.
199.
201.
205.
206.
207.

C. Multiple Choice
1. It refers to a mode of transferring & acquiring
properties left by the decedent.
209.
a.
Estate transfer
c.
Donation
210.
b.
Succession
d.
Execution of a will
211.
2. The property, rights & obligations of a person which
are not extinguished by his death & those which have
accrued thereto since the opening of succession.
212.
a.
Inheritance
c. Estate
213.
b.
Capital
d. Devisee
214.
3. The estate tax accrues from the moment of:
215.
a.
The fixing of notice of death
216.
b.
Expiration of a months after death
217.
c.
The death of the decedent
218.
d.
The filing of estate tax return
219.
220.
221.
222.
223.
4. The gift tax paid on a donation mortis causa, if any:
a. Exempts the property from estate tax.
b. Has no effect since the gift will be subject to
another gift tax.
c. Shall form as a tax credit to be deducted from the
estate tax due.
d. Is invalid & the tax will not be credited at all.
224.
5. Which shall not form part of the gross estate of a
decedent:
a. Intangible personal property of non-resident alien
decedent without reciprocity law
b. Revocable transfer
c. Transfer passing special power of appointment
d. Life insurance where the executor is the
beneficiary & it is irrevocable
225.
6.

All of the following are considered intangible in the

Philippines, except:
a. Franchise which must be exercised in the Phil.
b. Shares obligations or bonds which issued by any
corporation or sociedad anonym organized or
constituted in the Philippines in accordance with it
laws.
c. Shares, obligations or bonds by any foreign
corporation 75%.of the business of which is
located in the Philippines.

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d.

e.

Shares, obligations of bonds issued by any foreign

corporation of such shares, obligations or bonds
have acquired a business situs in the Philippines.
Shares or rights in any partnership, business or
industry established in the Philippines.
226.

7.

A person who inherits personal property thru a will:

227.
a.
Devisee
c.
Heir
228.
b.
Legateed.
Successor
229.
230.
8.
A person who inherits real property thru a
will:
231.
a.
Devisee
c. Heir
232.
b.
Legatee
d.
Successor
233.
234.
9.
Succession wherein the decedent did not
leave any will:
235.
a.
Voluntary succession
c.
Mixed
succession
236.
b.
Legal succession
d.
Testamentary succession
237.
10. Which statement is false about succession:
a. The successor inherits all the transmissible
property of a decedent including his liabilities.
b. The successor can be made liable for the
obligations of the decedent beyond the value of the
asset he received.
c. In succession, fruits and credits maturing after the
death of the decedent pass to the heirs even if
they were not subjected to estate tax.
d. In succession, the successor can refuse the
inheritance.
238.
11. One of statement is false:
a. Estate tax is an excise tax.
b. Estate tax is transfer tax on donation mortis causa.
c. The object of estate tax is to tax the transfer of the
property from the dead to the living.
d. Estate tax is synonymous to inheritance tax.
239.
12. Which statement is wrong:
a. Claims against insolvent person should be included
in the gross estate even if uncollectible.
b. Transfer
passing
under
special
power
of
appointment is excluded from the gross estate.
c. Revocable transfers are includible whether or not
the right to revoke is exercised.
d. Transfer contemplation of death for adequate
consideration is still includible in the gross estate.
240.
13. Which statement is incorrect about funeral expenses
allowed:
a. The amount allowed is 5% of the gross estate or
the actual expenses which ever is lower.
b. The actual expenses must be paid from the estate
or chargeable to it.
c. The allowed deduction can never be more than the
actual expenses paid.
d. The expenses necessary for burial even if paid by
friends are also allowed as deduction.
241.

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14. Which statement is incorrect about claims against

insolvent persons?
a. They must be included in the gross estate even if
uncollectible.
b. They must be duly notarized.
c. The deduction is only the uncollectible portion.
d.
The insolvency of the debtor must be established.
242.
15. One of the following is incorrect:
a. Taxes to be deductible must accrue before the
decedents death.
b. Losses must occur also before the decedents
death to be deductible.
c. Medical Expenses must be incurred within 1 year
prior to the decedents death.
d. Transfer for public purposes order to be deducted
must be mortis causa in character.
243.
16. Which statement is false about vanishing deduction:
a. It pertains to a property presently found in the
gross estate.
b. The property must be previously subjected to a
transfer tax or income tax.
c. The property was received by the decedent within
5 years prior to his death.
d. The property must be located in the Philippines.
244.
17. A donation inter vivos but due to thought of death is;
a. Subject to donors tax
b. Subject to estate tax if for inadequate
consideration
c. Subject to estate tax a bonafide transfer
d. Subject to inheritance tax
245.
18. In filing the estate tax return , a CPA certificate is
required when:
a. Gross estate exceeds P2,000,000
b. Gross estate reaches P20,000
c. Gross estate exceeds P200,000
d. Gross estate reaches P2,000,000
246.
19. A died leaving a house and lot to B March 31, 2009
which was questioned by C and it is under litigation but
the parties have stated an extra-judicial settlement.
The last day for filing the estate tax return is
247.
a.
April 30, 2010
c.
September 30, 2009
248.
b.
April 30, 2013
d. October
30, 2009
249.
20. The last day for the payment of estate tax may be
extended, until;
a.
March 21, 20028
c. September 30,
2015
b.
September 30, 2011 d. April 30, 2013
250.
21. The taxpayer in estate tax is:
a. The decedent
b. The estate as a juridical entity
c. The heirs or succession
d. The administrator or executor
251.
22. The payment of estate tax is a personal liability of
a. The heirs or successors
b. The administrator in testamentary succession

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c. The executor in voluntary succession

d. The estate itself
23. 1st statement: The court may authorize the executor or
administrator to distribute the estate if in its sound
discretion it believes that the heir badly needs his
share.
252.
2nd statement: The administrator or any of
the heirs may however upon authorization of BIR
withdraw from the decedents bank up to P50,000 even
without required certification that the estate tax has
been paid.
253.
a.
True, True
c.
True,
False
254.
b.
False, False
d.
False,
True
255.
24. 1st statement: A died giving B power to appoint a
person who will inherit As house and lot. B, however
can only choose among C, D and F. B decided to
transfer the property to C, in Bs will when he was old
already. The transfer from B to C is subject to estate
tax.
256.
2nd statement:
During As lifetime, he
decided to give B as gift his (A) 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 should form part of As gross
estate.
257.
a.
True, True
c. True,
False
258.
b.
False, False
d. False,
True
259.
25. 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 Cs will be surrendered his over
the land to B.
a. The transfer is subject to donors tax
b. The transfer is subject to estate tax
c. The transfer is both an inclusion and exclusion
from the gross estate
d. The above is a tax-exempt transfer.
260.
26. The notice of death must be filed when:
a. Gross estate exceeds P200,000
b. Gross estate exceeds P20,000
c. Gross estate reaches P200,000
d. Gross estate reaches P2,000,000
261.
27. One of the following is not an exemption or exclusion
from the gross estate:
a. Capital or exclusive of the surviving spouse
b. Properties outside the Philippines of non-resident
Chinese decedent
c. Shares of stocks of San Miguel Corporation of a
non-resident Mexican.
d. The merger of usufruct in the owner of the naked
title
262.
263.
Questions 28 through 31 are based on the
following information:
264.
A decedent left the following
265.
properties:
266.
Land in Italy (with P1M unpaid
mortgage)
268.
Land in Davao City, Phil. (zonal
value 750,000)

267.

270.

P2,00
0,000

269.

500,0

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271.

Franchise in USA

272.

273.

Receivable from debtor in Phil.

274.

275.

Receivable from debtor in USA

276.

277.

Bank deposit in Phil.

278.

279.

Bank deposit in USA

280.

281.

Shares of stocks of PLDT, Phil.

282.

283.
Shares of stock of ABC, foreign
corporation
285.
75% of the business in the Phil.
287.
Other personal properties

284.

00
100,0
00
50,00
0
100,0
00
20,00
0
80,00
0
75,00
0
125,0
00

286.
288.

300,0
00

289.
28. If the decedent is a non-resident citizen his gross
estate is:
290.
a.
P3,650,00
c.
P2,500,000
291.
b.
P3,600,000
d.
P2,650,000
292.
29. If the decedent is non-resident alien his gross estate
is:
293.
a.
P1,195,000
c.
P1,250,000
294.
b.
P945,000
d.
P1,070,000
295.
30. If in the preceding number, reciprocity law can be
applied the gross estate is:
296.
a.
P1,050,000
c.
P1,250,000
297.
b.
P945,000
d.
P1,070,000
298.
31. Based on the original problem but assuming the PLDT
shares of stocks (PLDT) are not listed in the Local
Stock Exchange,& there are 1,000 shares at the time
of death, the companys outstanding shares were
10,000 shares. Its retained earnings was P2,000,000,
par value per share was P50/share. The gross estate
should show the said shares at:
299.
a.
Still at P75,000
c.
P200,000
300.
b.
P250,000
d. P0
301.
302.
Questions 32 & 33 are based in the following
information:
303.
Building, USA
304.
P5,00
0,000
305.
House & lot in Bulacan (500 sq.
306.
meters) zonal value is P10,000 per
307.
square meter
308.
4,500,
000
309.
Life
insurance
proceeds,
310.
beneficiary
is
the
wife,
the
311.
500,0
administratix, irrevocable
00
312.
Life insurance proceeds with
313.
another company beneficiary, his son,
314.
200,0
irrevocable
00
315.
Claims against a debtor who died
316.
a year ago (50% collectible)
317.
50,00
0
318.
Death benefits from US Veteran
319.
Administration
320.
100,0
00
321.
Death benefits from SSS
322.
40,00
0
323.
Paraphernal
property
of
his 324.
2,000,

Page 7 of 10

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surviving wife
000
325.
326.
He also transferred mortis causa the following:
327.
328.
330.
FMW
331.
FMV
329.
S
- Death
Price
Transfer
332.
Car,
333.
P
334.
P1,0
335.
P
Mla.
500,000
00,000
800,000
336.
Land
337.
1,50
338.
2,00
339.
1,00
, Mla.
0,000
0,000
0.000
340.
Land
341.
2,00
342.
1,80
343.
3,00
, USA
0,000
0,000
0,000
344.
32. If the decedent is a Filipino citizen, his gross estate is:
a. P10,850,000
c. P10,950,000
b. P12,900,000
d. P11,050,000
345.
33. If the decedent is a non-resident alien and his country
does not impose transfer tax on any intangible
properties left by a Filipino decedent, his gross estate
is:
a. P5,350,000
c. P6,500,000
b. P5,300,000
d. P6,000,000
346.
34. The gross estate of a non-resident alien is P2,000,000,
75% of which is from abroad. The actual funeral
expenses totaled to P80,000, of which was paid by
his employer. The deductible funeral expense is:
a. P25,000 c.
P6,250
b. P20,000 d.
P80,000
347.
35. Based on the preceding number (the same world G.E.)
but the decedent is a non-resident citizen, the
deductible funeral expense is:
a. P25,000 c.
P5,000
b. P60,000 d.
P80,000
348.
36. 1st statement: A note payable contracted 11 yrs. ago
is a deduction from the gross estate if notarized.
349.
2nd Statement: To be deductible, medical
expenses must be paid within one year period before
death.
a. True, True
c. True, False
b. False, False
d. False, True
37. 1st Statement: 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.
350.
2nd Statement: A donation inter vivos by
the decedent to the Phil. government few months
before his death is a deduction from the gross estate.
351.
a.
True, True
c.
True,
False
352.
b.
False, False
d.
False,
True
353.
354.
38. Purobuto, non-resident Japanese, died
leaving the following:
355.

Exclusive properties, Philippines

357.

Conjugal properties, Philippines

359.

Conjugal properties, Abroad

361.
363.

Deductions claimed:
Funeral expenses

365.

Judicial expenses

356.
P
560,00
0
358.
42
0,000
360.
1,8
20,000
362.
364.
10
0,000
366.
10

P1.502A

367.

Unpaid expenses

0,500
368.
15
0,500
370.
371.
12
0,000
373.
374.
18
0,000
376.
377.
1,0
00,000
379.
1,0
00,000

P600,000)

430.
1,50
0,000
431.
Transfer to the Govt, included 432.
30
above
0,000
372.
Donation mortis causa to Makati
433.
Death Benefits from Employer 434.
20
City Hall
0,000
435.
Family home (included above) 436.
2,00
375.
Family Home (inc. above),
0,000
located abroad
437.
The allowable varnishing deduction is:
438.
a.
P213,000 c.
378.
Standard deduction
P426,000
439.
b.
P626,000 d.
380.
P440,625
381.
The taxable net estate is:
440.
382.
a.
P210,000
c.
42. The taxable net estate based on the preceding number
P1,900,000
is:
383.
b.
P516,500
d.
441.
a.
P4,056,250
P2,100,000
c.
P3,974,000
384.
442.
b.
P5,555,300
385.
38-a. If decedent is a Filipino citizen, TNE is
d.
P4,175,000
__________
443.
386.
43. Mr. Dinakahinga, head of family died on January 15,
39. JR, administrator claims the following funeral expenses
2010, leaving the following properties and obligations:
for a decedent:
444.
Cash in bank, 50%, donated
445.
387.
Expenses of interment (paid by 388.
P
mortis causa to Natl Govt;50-% to Q.C.
446.
P
friend)
60,000
govt
300,000
389.
Cost of burial & tombstone 390.
447.
House and lot in Makati, F.
448.
1,50
(1/2 paid by relatives)
42,000
Home
0,000
391.
Other funeral parlor expenses
392.
449.
Personal properties
450.
1,5
36,000
00,000
393.
Expenses during the wake
394.
451.
Farm lot
452.
8
395.
Before burial
396.
25,000
13,000
453.
Claim against an insolvent debtor
454.
2
397.
Obituary notice
398.
25,000
7,500
455.
Transfer in contemplation of
456.
399.
Card of thanks
400.
death (gratuitous)
457.
1,50
3,500
0,000
401.
Mourning clothing of friends
402.
458.
Transfer passing special power of
459.
15,000
appointment
460.
75,0
403.
Mourning
clothing
of 404.
00
immediate family members
5,000
461.
Deduction claimed:
462.
405.
463.
Funeral expenses
464.
5
406.
If the gross estate is P1,000,000 the
75,000
allowable funeral expense is:
465.
Judicial expenses
466.
407.
a. P75,000
c. P174,500
67,500
408.
b. P82,500
d. P 50,000
467.
Donation mortis causa to Quezon
468.
409.
City government
469.
150,
40. Based on Number 39 but the gross estate is
000
P2,500,000 the allowable funeral expenses is:
470.
Unpaid mortgage on the farm lot
471.
410.
a. P75,000
c. P125,000
75,000
411.
b. P82,500
d. P93.500
472.
Medical expenses (included in the
473.
412.
funeral expense incurred within the 1
474.
41. Mr. Nabigla died on March 20, 2011 leaving a gross
year period with receipts)
475.
225,
estate of P7,800,000 including a land inherited from
000
his uncle on October 15, 2007 and a car donated to
476.
477.
him on April 20, 2005. The following data pertain to
478.
The farm lot was inherited 5 years by
the two properties:
the decedent before his death with a value then of
413.
414.
Unp 415.
FMV 416.
FMV
P575,000 and a mortgage indebtedness of P150,000.
aid
upon
upon
479.
The total deduction from the gross estate
Mortga
receipt
death
is:
ge
480.
a.
P1,867,500
417.
La
418.
P10 419.
P1,8 420.
P1,2
c. P2,092,500
nd
0,000
00,000
50,000
481.
b.
P867,500
421.
Ca
422.
50, 423.
300, 424.
400,
d.
P3,092,500
r
000
000
000
482.
425.
483.
44.
Based on the preceding number, the
426.
The decedent was able to pay of the
taxable net estate assuming the farm was inherited 5
unpaid mortgage on the land before his death. The
yrs ago:
deductions are:
484.
a. P3,982,500
c. P2,757,500
427.
Expenses,
losses, 428.
P1,200
485.
b. P4,982,500
d. P2,672,329
indebtedness, taxes (excluding the
,000
486.
unpaid
mortgages
above
but
45. Mr. Jose, Filipino, married died leaving the following
including actual funeral expenses of
estate:
P300,000 and medical expenses of
369.
Losses: occurring 3 mos. After
death due to fire

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429.

Standard Deductions

P1.502A

487.
Car acquired before marriage by
Mr. Jose

488.
489.
P
300,0
00
490.
Car acquired before marriage by
491.
Mrs. Jose
492.
45
0,000
493.
House and lot acquired during
494.
1,
marriage
500,0
00
495.
Jewelries of Mrs. Jose
496.
100,0
00
497.
Personal properties inherited by:
498.
499.
Mr. Jose during marriage
500.
250,0
00
501.
Benefits from SSS
502.
50,00
0
503.
Retirement benefits from a 504.
15
private firm
0,000
505.
Proceeds of group insurance
506.
taken by his employer
507.
7
5,000
508.
Land inherited by the wife during
509.
marriage
510.
1,
000,0
00
511.
Income earned from the land
512.
inherited by wife(25% of which was
513.
earned after death)
514.
20
0,000
515.
The gross estate under conjugal partnership of
gain is:
516.
a. P2,600,000
c. P1,950,000
517.
b. P3,600,000
d. P2,200,000
518.
46. Under the same problem, the gross estate under
absolute community of property is:
519.
a. P2,600,000
c. P1,950,000
520.
b. P3,600,000
d. P2,500,000
47. Mr. Malungkot died intestate on September 30, 2011.
He is survived by his wife. An inventory of the estate
showed the following:
521.
522.
FMV
523.
tax
524.
Zonal
declarati
Value
on
525.
Exclusive estate of Mr. Bayot
526.
Commercial land 700
527.
P
528.
P
sq. m.
850,000
900/sq.
m.
529.
Residential land 900
530.
580,
531.
1,000
sq. m.
000
/sq. m.
532.
Conjugal estate:
533.
534.
535.
Farm land, 800, sq.
536.
1,30
537.
700/s
m.
0,000
q. m.
538.
Residential house
539.
750,
540.
000
541.
Car, Toyota
542.
200,
543.
000
544.
Other property
545.
280,
546.
000
547.
Death benefits (RA
548.
200
550.
4917)
,000
549.
551.
On January 1, 2011, the commercial land was
mortgaged at the Phil. National Bank for P200,000 at 24%
per annum. The residential house (certified family home is
mortgaged with unpaid balance of P180,000 as of the date
of death). The 900 sq. m. residential land is the family
homes lot. Actual funeral expenses amounted to P250,000
but of which is non-deductible. Medical expenses
reached P600,000 but only was incurred with in 1 yr
before death. Judicial expenses reached P150,000.

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552.
The gross estate is:
553.
a.
P4,280,000
c.
P2,730,000
554.
b.
P4,480,000
d.
P4,160,000
555.
556.
48. The total deductions excluding share of
surviving spouse and special deduction is:
557.
a.
P655,000
c.
P855,000
558.
b.
P891,000
d.
P1,016,000
559.
560.
49. The deduction for family home is:
561.
a.
P1,000,000
c.
P900,000
562.
b.
950,000
d.
P750,000
563.
564.
50. The taxable net estate is:
565.
a.
P401,500
c.
P201,500
566.
b.
P326,500
d.
P101,500
567.
568.
51.
Assuming the commercial land was
received as donation by the decedent from his uncle 3
years ago, the TNE is __________
569.
52. Mr. Bombo, Filipino died on April 10, 2010 with
the following data:
575.
Es
570.
571.
573.
572.

576.

Philippines

580.
Foreign
country A

Gros
s Estate

577.
P
1,375,0
00
581.
300,
000

584.
Foreign
country B

585.

450,
000

588.
Foreign
country C

589.

600,
000

574.
D
educti
on
578.
P
75,00
0
582.
1
50,00
0
586.
5
25,00
0
590.
2
25,00
0

tate
tax
paid
579.
P
-

583.
3,750
587.

591.
18,00
0

592.
593.
The estate tax due still due is:
594.
a.
P13,500
c. P14,000
595.
b.
P9,000
d. P13,250
596.
597.
Mr. Tantor married under the regime of absolute
community of property. Survived by his wife, left
behind the following properties and charges upon his
estate:
598.
599.
Real property acquired during the marriage P
3,000,000
600.
Family Home, built using community fund
1,000,000
601.
Real property received as a gift during the
602.
Marriage
2,000,000
603.
Lot where family home was built, inherited
604.
During the marriage
400,000
605.
Funeral expenses
300,000
606.
Taxes and Losses
1,300,000
607.
Medical Expenses, with receipt, incurred
608.
within 1 year period
1,000,000
609.
53. The allowed family home deduction is:
610.
a. P1,000,000
c.
P900,000
611.
b. P1,400,000
d.
P700,000

P1.502A

612.
54. The deduction for share of the surviving spouse is:
a. P 2,500,000
c. P 4,000,000
b.

P 1,250,000

d.

P 1,500,000

613.

55. The net taxable estate is:

614. a.
615. b.
616.
617.
618.

P 1,250,000
P 2,500,000

c.
d.

P 1,500,000
P 4,000,000

619.
620.
621.
622.
623.
Einstein told us that time is just an illusion. When you understand and
accept that there is no time, you can see that whatever you want in the future already
exists. That is why when you write, imagine, or speak of your desire, you should use
the present tense. Radiate your desire in your mind, heart, and body, and see it as here
now.
624.
The Secrets by Rhonda Byrne

Page 10 of 10

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P1.502A