CPAR_TAX7411_Estate Tax with Answer (1).pdf

ESTATE

D

1.

D

2.

rAxArlON

cPA Revieur

ttffilij.tfte

xlera Crwz r rle vera tr,opez 6,21,28,29,31,32*,33,34,36,37,42,43,48,49,50

This is not part of the coryugal properly a. Those acquired by onerous title during the maniage at the expense of the ccrnmon frrnd b. Those acquired by industry or work of either ofthem c. The fruits, rents or interests received or due during the marriage coming from the oonjugal property or from the exclusive properties of the spouses. d. Those acquired during the marriage by gratuitous title This is not part ofthe gross estate of the decedenl

property b. Community property

c. Share of the surviving spouse d, Exclusive property of the surviving spouse

a. Conjugal

C

3. Under the absolute comrnunity of property, jewelry f,or personal & ex.clusive

wife shall belong to the yung personal stuff ni wife, exclusive yun except jewelries..

a.

D

4.

wife

b.

husband

c. husband and

The estate should be valued at the tirne a. The heirs are ascertained

5.

The estate may slaim a standard deduction a. b.

PI,000,000

use of the

wife

d. children

c. The estate is ready for dislribution to the heirs d. Cf dr:ath,sf tire dscedent

b. The esta{e tax is paid

A

PhtirFprnes

of

P2,000,000

d. P500i000

c, F200,000

I

B

6. A made the foilowing

Cost

transfers inter-vivos: Ts

B.

transfer Consideration received FMV time of death of A

FMV, time of

Pi00,000 140,000 100,000 120,000

rqe

lbD

P100,0S0 P100,CI00

160,00t1

A

7. Medical

C

8.

The medical expense shall in no case exceed a. P200,000 b. P400,000

9.

C

10. One

90,000

d. P110,000

d. Pi,000,00

o. P500,000

The amount of funetai expense that nray be,leducted- korn ti,e;t,:s.: estale i:; a. 5o/o of the gross estate or P200,000 whichever is lovrer b. Actual funeral expense or P200,000 whichever is lower c. 5Ya of tho gross estate or the acfual funerai expenses whichercr is lr.rwer d. 5% of the gloss estatc or the actual funeral expenses or P200,r100 wluE;krever is the lowest

ofthe following is not an exemption or exclusion trom ihe gross estate

a. Capitai or exclusive profrerly of the surviving spolrse b. Properties outside the Philippines of a non-resident Chinese Cecedent

c.

d. 11.

rr

of stock of San Miguel Corporation cf a rron-resident Msxican The merger of usulruct irr the owner of the naked title Shares

A died ieaving a fann land. In his wili, he transfbned ti:e orvnership tirerer:f trr il but subject to the condition that C will have the right to use the lancl for a period of ten years iusuiruct). ln the seventh year, however, C died and in C's will he surrendered his right over the land to B.

a. b. D

P100,000

I 80.000 i 10,000

experlses, to be deductible, must be incurred by the decedent witldn r.. Twc ycars pri.or to his rleeth a. One year prior to his death b. One year after his death d. Three years prior tr: his death

D

D

P100,000

L00,000 100,000 8C,00dJ i40,000 200,(t00 70,0(}0

The amount to be included in the gross estate of A is P c.Iji30,000 b.

a.

TP E

tax tax

The lransfer is subject to donor's The transfer is subject to estate

e. The fransf'eris botir an inclusion from the gross estate d. The abovr: is a tax'.exennpf tran:;fer

12. Gross estate includes all his property, real or personal, tangible or in'.angible rvherel'er situated, excep tl. Nau-resident alien b, No*-resident citizen c.. Resident a. Resident

citizen

alicrn

A

13.

Written notice shall be given to the CIR if the gross estate excecds a. P 20,000

b. P50,000

d. P150,000

c. F100.000

Items 14 through t7 pertain to the following infonnation: Proceeds of life insurance shall be included in the gross estate if the beneficiary designated is:

C

14. The estate and the designation is

b

a. Revocable

Irrevocable Partly cl. revocable, partly in'evocable

c. WheJher revoeable or irrevocable

C

15. The executor and the designation is a. Revocable

b, Irrel'ocable d Partly rovooable, paftly irrevooable

c. Whether revocable or irrevocable

C

16. The adminisffator and the designation is a. Revocable

c. Whether revocable or irrevocable

A

17.

h. lrrevocable d. Partiy revocable, partiy irrevocable

A person other than the estate, executor or adrdnistrator and the designation is a. Revocable b. Irrevocable c. Whether revocable or irrevocable d. Partly revocable, partly irrevocable l I

information:

Items 18 and i9 pertain to the following If it rvill causs undue bardship on the part of the estate, the estate tax may be paid

I

*ithl, I

D

A

18. In case the estate is settled through the courts a.2 years b. 3 years

i

i.

,+

c.

]rear';

19. In case the estate is settied rvithout court's intervention a. 2 years b. 3 years c. 4 years

)

years I

d. 5 yeais i

B

,

20. From the time of death, notice of death should lre given within a. One month b. 2 months c. 3 months

d. 6 nnohths

B

21. As a rule, estate tax return shouid be filed under oath. if the gross estatr exceeds a. P 100,000 d. P1,000,000 b. P200,000 c. P500.000

D

22.If

Kapag 200K-filed under oath.. 2M-duly certified by a CPA.. oonsists cf, registrable property, such as real propers, rnctor velucle, shares of stook or other similar properly frcrn 'uhieh a ctrearance frcm the BiR" i.s required as a cc,nditicin for the transfer of o*n"rrhip, an estrrte tax retum should be filed under a. If tbe gross estate exceeds P200,000 c. If the gross estate *xceed*q Pl,000,000 b. If the gross estate exceeds P500,000 d. R.egarcllesr of the value of the $oss estate t&re estate

oath

I

i

B

23. The estate tax retr-rrn shall be supported with a statenterrt duly o*rii{iert by a CPA if thelgross estate exceeds a. P1,000,000 b. P2,000,000 d. Pi0,000,000 c. P5,000.000

C

24. From the decesjents' deatir" the estate tax retrrrn shall bs fi"lsd w.thilr. a. 2 montls b.3 months c. 6 rnonths

A

25. The CIR, in meritrrrious ca$es may g-rent a reasonal:le extension to frl* a. 30 days b. 60 days c. 3 months 26.

ql. 18 months xh"e

retum, not exceeding d. 6 months

F Fruits and incomr: of,exclusive propery*, shall belong to ttre sp$r.rses only if Conj.Partn.of Gains F- Donations made by the deeedent during triferime but to take effect upon iris death shall be exempt from estate tax. a. True, true

b. T'rue, false

c. Falsc,

true

d. F"alse, false

F 27. - Property brought to the urarriage by either spouse shall belcng to both spouses. only if Abs.Community T -- The share of r"lre surviving spouse in the conjugel properSr is pari.'cf th* gross estate of the decedent a. True, true

b. True, false

c. Iialse, true

d. False, false

D

28. Which of the following statements is not correot in succession? Legitimate children share equally in their legitime of % of the net distributable estate b. When the spouse survives with one legitimat€ child, the legitime of the spouse is % of the net distributable estate c. Wtien the spouse sunives rvitir wo iegitirua-te children, the legitime of the spouse is % of the net distributable estate d. The legitimes of the legitimate and illegitimate ohildven take precedence over the legitime of the

t.

surviving spouse

D

distribution of the Taxation of the estate shall b,e governed by the statute or law in force at the time of XXXXXXX XXXX estate to the heirs at the time of DEATH of the DECEDENT.. determination of the respective share of the heirs in the estate of the - Succession takes place upon the XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX F decedent upon death.. d. False, false c. False, ffue b. True, false a. True, true

29F. -

30.

T - The family home includes the holrse and the lot where the house stands F -- The value of the house and the lot where it stands, if a Family Home is deductible ftom the estate of the dEoedent deductible only upto 1M b. True, false

a. True, true 31.

c. False, true

d" False, false

F of th9 spouses Abs.Comnty - When exclusive property is sold during the mamage, the proceeds become property F .. The tegal heirs df td. decedent must bi detenrdned first before the correct estate tax can be ascertained True, true a.

b. True, false

c. False, true

d. False, false

F

Under the absolute ccrnnnnurrity' of property, prorterfy acquired before marriage by either spouse including fruits and income, if any shall belong to botlt spouses only if no former marriage.. of the wake, F-- The cost of burial ploi, tombstone, monument or mausoleum, mourning apparel, exFenses and notices are deeluctible'{iom gross estate as funeral expenses only upto 200K d- False, false c. False, true b.'irue, false a. True, true

32.

-

F Expenses incurred for the performance of the rites and ceremonies incident to interment and those before incurred XXX after interment, such as prayers, masses and entertainment are part of funeral expense' showing the disposition of the proceeds of the loan F-- The administator or eNecutor shall submit a statementXXXXXXX if the claims against the estate rvas contracted withjn five years before the death of the decedent' within 2 d. False, false c. False, true years.. b. True, false a. True, true Kapag >2 yrs na, dapat may substantiation.. F before marriage it vrill belong to both spouses while if it is inherited during 34. - If the property is inherited ___________ marriage it is exclusive. both spouse if Abs.Community -Unless stipulated, the properiy relations shall be govemed by conjugal parhrership of gains for marriages F on Aug. 3, 1988 = ABC celebrated_________ on or before Aug. 3, 1988.

33.

b. True, false

a. True, true

before Aug 2, 1988 = CPG

c. False, true

d- False, false

Unless stipulated, the propertv reiotions shatl be go'verned by absolute community of property for after August 3, 1988 marriages celebrated on or____ use of either F -- Under tl* ,"gr*" of absolute .o**lnrity of property, property for personal and exclusive spouses except jewelry shall belong to both spouses' d. False, false e. False, true b. '['rue, false True, true a.

T

35.

-

it 36. Statement 1 The court may authorize the distribution of estate, to an heir if irl its sound discretion F believes that the heir badly rreeds his share. of BIR withdraw T Statement 2 The adnninistrator or any of his heirs, may however upon authorization from tfle decedent's bank deposits P20g00 without the riquired certification that the estate tax has been paid. d" False, false c. False, true b. True, false a. True, tnre

-

-

Unpaid mortgage indebtedness is deductible from the gross estate provided the said property net of the mortgage indebtedness' F r"bJ".t t" th. inde|tedness ii included in the gross estote, XXXXXXXXXXXXXXXXXXXXXXX inter-vivos by the dicedentto the Fhilippine government few months before his F Statement 2- A donation ________ donation mortis causa is included in GE. death is a XXXXXXX deduction from the gross estate d. False, false c. False, true b. True, false a. True, true

37. Statement

I-

38' Statement I * A died grving B power to appoint & persotr who will inherit A's house and lot. B however only choose among C, D, E and F. B decided to transfer the property to C, in B's will when he F can ___ was old already. The hansfer from B to C is subject to estate tax limited 'to $tatemenl 2 * During A's lifetime, he decided to give B as gift his car subject to the condition tl,t if B F does not bscome a CPA within three years, A shall ievoke t&e-transfer. In the second year however, A died. The car can no longer fomr part of A,s gross estate. a. True, b. True, c. False, d. False, false

true

false

true

B 39. A decedent left the following properties: NRC Land in Italy (with PIM unpaid mortgage) P 2,000,000 + Land in Laguna, philippines LOWER AMT. 500,000 ** Franchise in USA 100,000 + Receivable from debtor in philippines 70,000 + Receivable from debtor in USA 100,000 + Bank deposits in USA 90,000 + Shares of stocks of PLDT, philippines 75,000 + Shares of stocks ofABC, foreign corporation 7-co af tnebusiness in the philippines 125,000 + Other personal properties assume w/in the Philippines 300,000 +

NRA

NRAw/o

+

+ +

+

Zonal value of the land in Laguna + + HIGHER AMT.750,000 + If the decedent is a ______________ 3600 1195 1050 non-resident c*izeqhis gross estate is a. b. c. F2,500,000 P2,650,000 all properties worldwide tapos tax d.credit na lang yung iba..

P3,650,000

P3,600,000

A 40. Using the above data, if the decedent is a non-resident alien, his gross estate is a.

P1,195,000

b.

p94S,000

c.

p1,320,000

d. p1,070,000

A 4i. If in 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

B 42' 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

** pSb. The gross should show the "itute P200,000 d. P0 = 250K

shares. Its retained eamings was P2,000,000, par value per share said shares at If FV is missing, use BV.. a. Still at P75,000 b. P250,000 c.

2000(RE) x 10% + 1K shares x 50 PV 43. A, Filipino, widower, died leaving the following:

GE 4000 1200 2000

a. Real properties

ELIT

GE 7200 P 4,000,000 b. Familyhome Unpaid exp -800 1,200,000 c. Personal properties Estate tax -344 2,000,000 d. _____ Paid medical pxpense Distributable = 6056 600,000 e. Allowable deductions -800 900,000 a) Determine the net estate subject to tax. b) Net distributable estate StdDeduc

3900K 6056K C 44" A, Filipino, married, died leaving the following: p 4,000,000 4000 a. Real property- cor{ugal

(A) (A) expenses cor{ugat estate

b. Real property - exolusive c. Family home - exclusive d. Unpaid medical e. Allowable dedugtions a) Determine the net ta:rable

a. Real properties

- coqiugal b. Real property - exclusive (C) c. Family home - exclusive (D) d, Allowable deduction- cor$ugal Deterrnine the net taxable estate

1,800,000 1,400,000 1"200,000 -1200

-500

2500

4210K

C P 4,000,000 4000

-1000

-1000 =7200 -800 -2500 = 3900 Net Estate E SplDeduc 344 Estate Tax

2,500,000 1200 I,200,000 600,000 -1400 1,400,000 =2600/2=1300 +3700 b) Net distributable estate

2500K 45. C, Filipino, married to D, died leaving the following:

SplDeductn

-1000 -500 -1000 Standard -2500 = 2500 Net 190 Tax

E

Spl Deduction

1800 X

X

=2800/2=1400 +1800

4000 +2500 +1200 estate -600 Due -1300* -190 =4210

-1000STD = 2200 Net Estate

46.8, Filipino, married ro Ii, dred leaving the following:

- corgugal b. Real property - exclusive @) c. Real property - exn:lusive @) (Lot where the fannily home stands) d. Family home- c*iljrlgal e. Allowable deductions - conjugal a. Real properties

Determine the net taxahle estate. 1900K 47.

G,Filipino, married to H, died leaving the following:

C 7000

- conjugal b. Real prope4y- exclusive (G) a. Real properties

c. Real property* conjugai (lot where the farnily home d. Family horne - exclusive

(G) e. A-llowable deductions - conjugal

stands)

C

E

P 5,000,000 5000 1,200,000

=4400/2= +2200 -500FH -400FH -1000STD P7, 000,000 = 1900 1,400,000

E 1400

800,000

800FH

1,800,000

1800

-2400 2,400,000 -5400/2= 2700 -1000FH - 1000STD = 3900

Determine the net tanable estate 3900K

48.IvIr. A, Filipino, married. died on January 1, 2011 survived by his wife and 2 legitimate children by former marriage and a legitirnate child with his present rruife, leaving the following:

il.

b.

a

Property inherited from lds father who died January 2,2A07. Exclsve P ;!.,800,000 1) Agricultural Exclsve 3,000,000 2) Residential Property inherited from his mother who died on Nov. 1, 2000, one day after Mr. A's marriage to his

land land

present

wife

pond 2) Jewelry l)

c.

1200 +400 FH

400,000 1,000,000 1000FH 1,600,000 -1600

Fish

Exclsve P 1,200,000 Exclsve 1,000,000

Properly acquired thru Mr. A's labor: 1) Residential house andlot used as fhmily home F 1,900,CI00 2) Motor 800,000 3) Commercial 4,000,000 4) 2,000,000 The agricultural land and residential land were previously mortgaged for P800,000 when inherited where P450,000 was paid by Mr. A during lifEtime. The ccrnmercial 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 exclusiveiy public pu{pose t}re suin of P200,000. The estate claimed the following expenses: a. Funeral P 250,000 e. Claims against the 150,000 b. Judicial 400,000 100,000 d Medical Determine the net taxable estate

vehicles land Cash

expenses ex.penses

49.

estate expenses

Z, a resident citizen. died leavingtho tbllowing: Net estate @etbre standard deduction):

Philippinr:s

usA

Austalia

Estate ta"x paid:

usA Austalia

=> 4.5M 3,000,000 => - 2.7M ____________ 2,000,000 => - 2M x3/10 = 319.5 vs 280 10M-1M=9M => 1065 x 2/10 = 213 vs 220

P 5,C00,0CI0

290,000 220,000

1065 -280 -213.33 =547.66

Determine the estate tax due after tax credit. 50. Mr. Y, an A,rnerican, single and residing in USA, 6i"6laving the following: Land in Makati (200 + 100 + 120) = 420 x 5/10 = 210 Land in Manila 1500 (lower) - 0= 1500 x (210+2000)/5000 Gross e$tate,

USA

P

=663

Deductions claime"d by the estate: 1500-663 = 837 x 20% 167.4 Vanishing deduction

2,000,000 3,000,000 5,000,000

2000 +3000

Actual frureral exp€ose 2400(lower) -400 =2000 Initial basis x 2210/5000 200,000 Judicial expenses 100,000 -210 =884 Claims against the estate 2000 - 884 = 1116 x 40% = 446.4 Vanishing deduction120,000 -2000 Transfer of the land in Makaii to the Philippine government (in decedent's will) 2,000,000 -167.4 -446.=2176.2 o The land in Manila wken inherited 3 L/zyearc ago had a vaiue of P2.400,000 $rith a mortgage thereon of P400,000 which was paid prior to lvIr. Y's death. r The land in Maka4 when inherite d4'/zyea* ago has a value of P1,500,000. Determine the net eslate subjecl to estate tffi" 2176.2

5l' Mr. A, Filipino, married to B with u&om he has two chiidren died on February 14,2011. The inventory of the properties of the spouses show the following: a, House and lot in Manila owned by A before the marriage b. Agricultural land ovrmed by B before the marriage c. Real property acquired during marriage d. Family home acquired during marriage e. Personal property acquired during marriage f. Commercial building in Makati inheritedhy A during marriage from his father who died on February 14,l9g7 g. Apartnent house inherited by B during merriage from her mother who

P 3,000,000

1,200,000 2,000,000 2,200,000 1,400,000 2,000,000

diedonFebruary 14,2003 h. Proceeds of life insurance where rhe estate of A was designated as the irrevocable beneficiary i' Proceeds of life insurance where B was designated as the irrevocable beneficiary Deductions claimed by the estate: L Legacy Stven in favor of Philippines goveiltment in decedent's 2. Claims against the 3. Unpaid mortgage on agricultural land (etter b 4. Funeral 5. Judicial SS = 2860 Determine the estate hx due and payable Net Estate = 5560

estate

above)

expenses expenses

52.

will

4,000,000 1,000,000 2,000,000

P300,000 100,000 400,000 1g0,000 600,000

Mr. O, Filipino, married, died on Dec. 31, 2012, tiuee years after his marriage to Mrs. O. He left the following:

Dec. 31, 2009 mrriage

Property Property c. Property d. Property e. Property

inherited by Mr. O from his father who died February 14,ZO07 inherited by Mrs. O from her father w'ho died February 14,200& inherikd by Mr. O from his motlr.er rlrrc died February 14,2009 inherited by Mrs. O from her mother *iro died February t4,2Al0 #52 Father F-inlaw Mother Marriage acquired thru the labor of '07 '08 '09 12.31.09 Mr. O 3M 1.2 1.8 Mri. O ACP C C C Mr. & Idrs. 0 (farnily home) CPG E E E Other personal property VD*TB =1.8 Deductions claimed by the estate: -18/123 x 1.130 a. Funeral expense =1,634,634 x 40% = 653,854 b. Unpaid mortgages on property in letters: b.300,000 c. 180,000 d.200,000 b is not included in CPG c. Claims against tle estate d. Acorued tores (before the death of Mr. O) Determine the net tmoble estate, assuming 1. conjugal partnership of 2. Absolute comrnunity of property a.

P3,000,000 1,200,000 1,800,000 1,400,000

b.

f.

a.

M-inlaw Death '10 12.31.12 2,000,000 14 1,500$oo E 2,400,000 E

1,600,000

220,044

500,000

170,000

80,000

gains

ESTATE TAX

If

the net estate is

Ovel

P 200,000

CPG GE

500,000 2,000,000 5,000,000 10,000,000 Excl

The tax shall

But not over 200,000 500,000 2,000,000 5,000,000 10,000,000

P

Comm 3 2+1.5 1.8 2.4+1.6 =4.8 + =7.5 Ord-ELIT -0.5 -0.2 -0.18 -0.17 Ord-VD -0.653804 -0.8 =3,466,146 + =7050K Spl-FH Spl-STD Spl-MED

Total

he

Plqs

Ofexcess over

Exempt

P 15,000 135,000 465,000 1,215,000

ACP GE

Tke End 12.3M Ord-ELIT Ord-VD 10,516,146 -1M -1M -3.525 = 4,991,146

Spl-FH Spl-STD Spl-MED

5% 8% llo/o 15% 2A% Excl

P

200,000 500,000 2,000,000 5,000,000 Comm 10,000,000 Total

3+1.2+1.8 2+1.5+2.4+1.6 =0 + =13.5 13.5M -0.5-0.2-0.18 -0.3-0.17-0.8 -0.858312 =0 + =11,211,688 11,211,688 -1M -1M -5.5605844 =3,605,844

'Tqt 1d

11 6