DEFINITION

CHARACTERISTICS

- All properties and interests in properties of

the decedent at the time of his death, shall be
included in his gross estate. (Crooks v.
Hasselson)
- The value of the gross estate of the decedent
shall be determined by including the value at
the time of his death of all property, real or
personal, tangible or intangible, wherever
situated: Provided, however, that in the case of
a nonresident decedent who at the time of his
death was not a citizen of the Philippines, only
that part of the entire gross estate which is
situated in the Philippines shall be included in
his taxable estate. (Section 85, NIRC)
Gross Estate Includes:
1. Decedents Interest,
2. Transfer in contemplation of death,
3. Revocable Transfer
4. Property passing under General Power of
Appointment
5. Proceeds of Life Insurance
6. Prior interests
7. Transfers of insufficient consideration
8. Capital of surviving spouse

EXAMPLES/MODELS

It includes:
1. Citizen and resident alien decedent:
a) Real property wherever situated,
b) Tangible
personal
property
wherever situated,
c) Intangible
personal
property
wherever situated.
2. Non-resident alien decedent:
a) Real property situated in the
Philippines,
b) Tangible personal property situated
in the Philippines,
c) Intangible personal property with a
situs in the Philippines, unless
exempted
on
the
basis
of
reciprocity. (Sec. 104, NIRC)
Purpose : To properly determine the estate
tax payable.
Characteristics:
-Valuation of Gross Estate : FMV at time of
death
-Still subject to allowable deductions, if
there are any.

Gross Estate

1. On April 1, 2016, A donated to B a

parcel of land. B has not yet accepted the
donation until April 5, 2016. B only came
to know that A died at the night of April 4,
2016 due to a car accident. Would the
parcel of land still be included in the gross
estate of A?
Answer: Yes, the said parcel of land
forms part of As gross estate because
a donation is only perfected when the
donor knows the acceptance by the
donee.
2. X, a Japanese citizen, held an executive
position in an IT company here in the
Philippines. After his retirement in 2010,
he decided not to go back to Japan and to
spend the rest of his lifetime inside the
country instead. In fact, he was granted a
permanent
resident
status
in
the
Philippines.
While visiting his friends in Orlando,
Florida last June 12, 2016, he died. He left
certain properties: (a) shares in the IT
company he worked for, (b) bank deposits
with Security Bank Cebu and Citibank
Tokyo, (c) condominium unit in Tokyo and
(d) house and lot in Talisay, Cebu. Are all
the properties included in Xs gross
estate?
Answer: Yes.
3. X bought ten sets of jewelry in 2005,
and she died in 2010. In Xs will and
testament, she bequeathed all sets of
jewelry to her daughter, Y. Should the

NON-EXAMPLES

1. A, 85 years old and is suffering from

cancer on its terminal stage, decided to
sell
for
valuable
and
sufficient
consideration, parcels of land to his
son, B, to pay off his medical bills. After
a few months, A died. For estate tax
purposes, BIR included these parcels of
land in As gross estate since the
transfer was allegedly in contemplation
of his death. Do the parcels of land
form part of As gross estate?
Answer: No. The parcels of land
should not form part of the As
gross estate. To qualify as transfer
in contemplation of death, such
transfer
should
be
for
an
insufficient consideration or without
consideration at all.
2. C owns a 205 hectares of land. On
June 10, 1994, the land was acquired
by
the
government
under
the
Comprehensive Agrarian Reform Law.
He died in June 30, 1994. Will the land
acquired by the government still form
part of Cs gross estate?
Answer: No, because at the time of
his death, the ownership of the land
no longer belongs to C.
Group 2: Lescabo, Edon; Tan,
Charmaine Lynn
EH 402