3 PROPERTY REGIMES

1. Conjugal Partnership of Gains

2. System of absolute community of property
3. Complete separation of property
2 SEPARATE PROPERTIES
1. Husband’s capital – exclusive property of husband
2. Wife’s paraphernal - exclusive property of wife
CONJUGAL PARTNERSHIP OF GAINS
Exclusive:
1. Properties brought to the marriage as his or her own – before marriage
2. Property acquired during marriage by gratuitous title
 Inherited or donated
3. Property acquired by right of redemption by barter or by exchange using the property
belonging to one spouse
 Exchange of properties
4. Property purchased using exclusive money of either spouse
 Buy property, money used is by the exclusive property of the spouse

1. Car purchased before marriage – EXCLUSIVE

2. Apartment purchased before marriage – EXCLUSIVE
3. Income from the apartment earned during the marriage – CONJUGAL
4. Building purchased during the marriage from the income of the wife earned during the
marriage – CONJUGAL
5. Income from the building earned during the marriage – CONJUGAL
6. Car purchased during the marriage using the money earned before marriage – EXCLUSIVE

SYSTEM OF ABSOLUTE COMMUNITY OF PROPERTY

Exclusive
1. Property acquired by gratuitous title during the marriage including products, income and fruits
from such property unless the testator or grantor explicitly states that they shall form part of
communal property
2. Property from personal and exclusive use of either spouse jewelry shall form of communal
property
3. Property acquired before marriage by the spouse who has a legitimate decedent by a former
marriage

1. Car purchased before marriage – COMMUNAL

2. Apartment purchased before marriage – COMMUNAL
3. Income from the apartment earned during the marriage – COMMUNAL
4. Building purchased during the marriage from the income of the wife earned during the
marriage – COMMUNAL
5. Income from the building earned during the marriage – COMMUNAL
6. Car purchased during the marriage using the money earned before marriage – COMMUNAL
7. Building inherited during marriage – EXCLUSIVE
8. Income from the building 7 earned during the marriage – EXCLUSIVE
DEDUCTIONS FROM GROSS ESTATE
RC, NRC, RA Decedents
SPECIAL DEDUCTIONS
1. Standard Deduction
 Cant be found in the problem
 P5,000,000
 No requisite needed
2. Family Home
 Only 1 Family Home
 Requisites:
a. Certification from the Barangay Captain
b. Amount should not exceed P10,000,000 – deduction from Family Home
c. Family home is included in the Gross Estate
EXAMPLE
FMV at the date of death of family home
A P8,000,000 = Allowable Deduction is P8,000,000
B P12,000,000 = Allowable Deduction is P10,000,000
C Family Home is not included = Allowable Deduction is P0

3. Amount Received by heirs under RA 4817

 Receivable is included in the Gross Estate

ORDINARY DEDUCTIONS
1. Expense, Losses, Indebtedness, Taxes (ELIT)
A. Claims against the estate
 Debt instrument is notarized
 If the loan is contracted within 3 years prior to the date of death the executor or
administrator execute as one declaration how the proceeds of the loan was disposed
 Loan is not collateralized
B. Claims against insolvent persons
 Receivable is included In the gross estate
 EXAMPLE
A/R is P1,000,000
1. How much is included in the gross estate? = P1,000,000
2. If the debtor is 75% insolvent, how much is the allowable deduction? = P750,000
(1,000,000 x 75%)
3. If the debtor can pay 25% of his debt, how much is the allowable deduction? =
P750,000 (1,000,000 x 75%)
4. Assets : Liabilities is 1:4 = P750,000 (75% = ¾ x P1,000,000)
5. A/R is not included = P0
 C. Unpaid Mortgage
 Loan is Collateralized
 The asset used as a collateral for the loan should be included in the Gross Estate
D. Unpaid Taxes
 Accrue prior to the date of death
E. Casualty Losses
 Arising from earthquake (fortuitous event)
 Asset is included in the gross estate
 Not compensated by insurance or otherwise
 Not claimed for income tax purposes
 Loss must occur 1 year from the date of death and during the settlement of estate
 EXAMPLE
FMV P1,000,000 Car insured P300,000
1. How much is included in the gross estate? = P1,000,000
2. Deductions from casualty loss = P700,000

2. Transfer for Public Purpose

 Donation mortis causa to national or its political subdivisions
 The asset is included in the gross estate
3. Vanishing Deduction / Transfer for Public Purpose
 To lessen the impact of successive taxation on the same property
 Requisites:
a. The present decedent must have died 5 years from date of death of the prior decedent of date
of gift
b. Asset is included in the gross estate of the prior decedent or gross gift of the donor
c. The property must be located in the Philippines
d. The property can be identified as property inherited/ donated/ the one exchanged therefore
e. The estate tax/ donors tax on transmission must have paid finally determined and paid
f. The estate of the prior decedent has not claimed vanishing deduction