TAXATION Handout No. 002
ESTATE TAX 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 P 200,000 500,000 2,000,000 5,000,000 11,000,000
But not over 200,000 500,000 2,000,000 5,000,000 10,000,000
The tax shall be 0 5% of the excess over P 200,000 P 15,000 + 8% of the excess over 500,000 135,000 + 11% of the excess over 2,000,000 465,000 + 15% of the excess over 5,000,000 1,215,000 + 20% of the excess over 10,000,000
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 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 expressed 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.______________ tax imposed upon gratuitous transfer mortis causa.
Formula for computation of TNE: 1) Decedent single Gross estate Less: Allowable deductions Taxable net estate Estate tax due (0%-20%)
P xx xx P xx P xx
“Your mind is a magnet. Continue to dwell on what you want with a strong belief and you will achieve it.” - A. Matthews
ESTATE TAX 2) Decedent married Gross estate Exclusive of the decedent P xx Common property of the couple xx Allowable deductions From exclusive property xx From common property xx Net estate before share of surviving spouse Less: Share of surviving spouse Net estate before special deductions Less: Deduction for family home/medical exp./s.deductions Taxable net estate Estate tax due (0%-20%) *Computation of the share of surviving spouse Gross common property of the H & W P xx Less: Deductions from common property xx Net xx Divided by 2 Share of the surviving spouse P xx
P xx xx xx xx xx xx P xx P xx
3) Estate tax due P xx *Deduct estate tax credit for the tax paid abroad xx Estate tax still due P xx *Formula for estate tax credit: Under Limitation (used it only 1 foreign country is involved: By country limitation.) Actual E.T. paid to FC P xx Or TNE,FC/TNE, W x E.T. due in the Phil. xx Allowable tax credit (whichever is lower) For the foreign country P xx Limitation B: (by total, used if 2 or more foreign countries Are involved together with limitation A) Total actual E.T. paid to all FC’s P xx Or TNE, all FC’s/TNE, W x E.T. due in Phil. xx Allowable tax credit (whichever is lower) P xx Note: If there are 2 or more FC’s both limitations (A &B) should be used, then get whichever is lower between the two as the final allowable tax credit.
EXEMPTIONS AND EXCLUSIONS FROM THE GROSS ESTATE A. Under Sections 85 & 86, NIRC 1. Capital or exclusive property of the surviving spouse. 2. Properties outside the Philippines of a Non-Resident Alien decedent 3. Intangible personal property in the Philippines of a Non-Resident alien under the Reciprocity Law. 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:
C. Under Special Laws 1. Benefits from GSIS by reason of Death 2. Benefits form 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.
REVIEW ON ADMINISTRATIVE PROVISIONS – ESTATE TAX 1. 2. 3. 4. 5.
What is a notice of death? 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 decedent’s death. When should the notice of death of death be filed? Within two (2) months after the decedent’s death or within 2 months after the executor or administrator shall have qualified. It is required in all cases of death? No, only where the gross value of the estate exceeds P20,000 Is an estate tax return required to be filed in all cases? No, only where the gross value of the estate exceeds P200,000 How should the return be filed? What information should be contained? 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 decedent’s death, or in case of non-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. What is the additional requirement if the gross estate exceeds P2,000.000? 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 What is the time for filing of the estate tax return? It is extendable? It shall be filed within six (6) months after the decedent’s death. In meritorious cases, the BIR Commissioner may give a reasonable extension of the time, not exceeding 30 days. Where and to whom it should be filed? 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. When should the estate tax be paid? At the time the return is filed by the executor, administrator or the heirs. (Pay as you file system) May the time for payment be extended? 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 extra-juridically – 2 years. Who is liable to pay the estate tax? 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 of the estate tax as his distributive share bears to the value of the total net estate. What if there is no executor or administrator appointed or qualified? Any person in actual or constructive possession of any property of the decedent. Is the tax a personal liability of the administrator or executor? Yes, under Section 85 of NIRC
14. May he be discharged from such personal liability? How? 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? 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? 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.
EXERCISES/PROBLEMS A. State the amount of allowable deductions from the gross estate in each of the following: _______________ 1. Gross estate of P500, 000 and funeral expenses of P75, 000. _______________ 2. Gross estate of P3,000,000 and actual funeral expenses of P90,000 ½ of which was paid by friends. _______________ 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 ½ 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. died September 30, 2000. Decedent dated March 15, 2001. _______________ 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 decedent’s death, 75% compensated by insurance. Estate was settled in the 6th month. _______________ 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 ½ 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 mortgaged. ________________ 16. The decedent’s administrator claims the following funeral expenses Expenses of internment P40,000 Cost of the burial lot (paid ½ paid by friends & relatives, 50%) 20,000 Fees for performance of rites incident to internment 10,000 Mourning clothing of widow & unmarried minor children 5,000 Expenses during the wake before burial (paid by uncle, 25%) 20,000 Obituary notice 3,000 Card of thanks 2,0
The allowable funeral expenses assuming the decedent’s gross estate is: a. P2,000,000 b. P1,500,000 B.Determine whether the following properties are conjugal/community or exclusive: ACP 1. Property acquired before marriage _______________ 2. Property acquired during marriage _______________ a. By onerous Title _______________ b. By gratuitous Title _______________ 3. Income from 2-a earned during marriage _______________ 4. Income from 2-b earned during marriage _______________ 5. Other income of the couple earned during marriage _______________ 6. Property acquired during marriage thru exchange: Using exclusive prop. _______________ 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 _______________
CPG _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________ _______________
C.Multiple Choice 1. It refers to a mode of transferring & acquiring properties left by the decedent. a. Estate transfer b. Succession c. Donation d. Execution of a will 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. a. Inheritance b. Capital c. Estate d. Devisee 3. The estate tax accrues from the moment of: a. The fixing of notice of death c. The death of the decedent b. Expiration of a months after death d. The filing of estate tax return 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. 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 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 anonime 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. d. Shares, obligations of bonds issued by any foreign corporation of such shares, obligations or bonds have acquired a business situs in the Philippines. e. Shares or rights in any partnership, business or industry established in the Philippines. 7. A person who inherits personal property thru a will: a. Devisee b. Legatee c. Heir d. Successor 8. A person who inherits real property thru a will: a. Devisee b. Legatee c. Heir d. Successor 9. Succession wherein the decedent did not leave any will: a. Voluntary succession b. Legal succession c. Mixed succession d. Testamentary succession
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. 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. 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. 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. 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. 15. One of the following is incorrect: a. Taxes to be deductible must accrue before the decedent’s death. b. Losses must occur also before the decedent’s death to be deductible. c. Medical Expenses must be incurred within 1 year prior to the decedent’s death. d. Transfer for public purposes order to be deducted must be mortis causa in character. 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. 17. A donation inter vivos but due to thought of death is; a. Subject to donor’s tax b. Subject to estate tax if for inadequate consideration c. Subject to estate tax a bonafide transfer d. Subject to inheritance tax 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 19. A died leaving a house and lot to B March 31, 2000 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 a. April 30, 2001 b. April 30, 2003 c. September 30, 2000 d. October 30, 2000 20. The last day for the payment of estate tax may be extended, until; a. March 21, 2002 b. September 30, 2002 c. September 30, 2005 d. April 30, 2002
21. The taxpayer in estate tax is: a. The decedent b. The deceased person’s estate c. The heirs or succession d. The administrator or executor 22. The payment of estate tax is a personal liability of a. The heirs or successors b. The administrator in testamentary succession c. The executor in voluntary succession d. The estate itself st 23. 1 statement: The court may authorize the executor or administrator if in its sound discretion it believes that the heir badly needs his share. nd 2 statement: The administrator or any of the heirs may however upon authorization of BIR withdraw from the decedent’s bank P10,000 without required certification that the estate tax has been paid. a. True, True b. False, False c. True, False d. False, True st 24. 1 statement: A died giving B power to appoint a person who will inherit A’s house and lot. B, however can only choose among C, D and F. B decided to transfer the property to C, in B’s will when he was old already. The transfer from B to C subject to estate tax. 2nd statement: During A’s 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 no longer form part of A’s gross estate. a. True, True b. False, False c. True, False d. False, True 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 C’s will be surrendered his over the land to B. a. The transfer is subject to donor’s 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. 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 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 Questions 28 through 31 are based on the following information: A decedent left the following properties: Land in Italy (with P1M unpaid mortgage) P2,000,000 Land in Davao City, Phil. (zonal value 750,000) 500,000 Franchise in USA 100,000 Receivable from debtor in Phil. 50,000 Receivable from debtor in USA 100,000 Bank deposit in Phil. 20,000 Bank deposit in USA 80,000 Shares of stocks of PLDT, Phil. 75,000 Shares of stock of ABC, foreign corporation 125,000 75% of the business in the Phil. Other personal properties 300,000 28. If the decedent is a non-resident citizen his gross estate is: a. P3,650,00 b. P3,600,000 c. P2,500,000 d. P2,650,000 29. If the decedent is non-resident alien his gross estate is: a. P1,195,000 b. P945,000 c. P1,250,000 d. P1,070,000 30. If in the preceding number, reciprocity law can be applied the gross estate is: a. P1,050,000 b. P945,000 c. P1,250,000 d. P1,070,000
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 company’s 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: a. Still at P75,000 b. P250,000 c. P200,000 d. PO Questions 32 & 33 are based in the following information: Building, USA P5,000,000 House & lot in Bulacan (500 sq. meters) zonal value is P10,000 per square meter 4,500,000 Life insurance proceeds, beneficiary is the wife, the administratix, irrevocable 500,000 Life insurance proceeds with another company beneficiary, his son, revocable 200,000 Claims against a debtor who died a year ago (50% collectible) 50,000 Death benefits from US Veteran Administration 100,000 Death benefits from SSS 40,000 Paraphernal property of his surviving wife 2,000,000 He also transferred mortis causa the following: S Price FMW- Transfer FMV - Death Car, Mla. P 500,000 P1,000,000 P 800,000 Land, Mla. 1,500,000 2,000,000 1,000.000 Land, USA 2,000,000 1,800,000 3,000,000 32. If the decedent is a Filipino citizen, his gross estate is: a. P10,850,000 b. P12,900,000 c.P10,050,000 d. P11,050,000 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 b. P5,300,000 c. P6,500,000 d. P6,000,000 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, ¼ of which was paid by his employer. The deductible funeral expense is: a. P25,000 b. P20,000 c. P6,250 d. P80,000 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 b. P60,000 c. P5,000 d. P80,000 36. lst statement: A note payable contracted 11 yrs. Ago is a deduction from the gross estate if notarized. 2nd Statement: A note receivable against an insolvent person contracted by the decedent before his death must be included in the gross estate in full even if only 50% is collectible. a. True, True b. False, False c. True, False d. False, True 37. lst 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. nd 2 Statement: A donation inter vivos by the decedent to the Phil. government few months before his death is a deduction from the gross estate. a. True, True b. False, False c. True, False d. False, True 38. Purobuto, non-resident Japanese, died leaving the following: Exclusive properties, Philippines P 560,000 Conjugal properties, Philippines 420,000 Conjugal properties, Abroad 1,820,000 Deductions claimed: Funeral expenses 100,000 Judicial expenses 100,500 Unpaid expenses 150,500 Losses: occurring 3 mos. After death due to fire 120,000 Donation mortis causa to Makati City Hall 180,000 Family Home (inc. above) 1,000,000 Standard deduction 1,000,000 The taxable net estate is: a. P210,000 b. P516,500 c. P1,900,000 d. P2,100,000
39. JR, administrator claims the following funeral expenses for a decedent: Expenses of interment (paid by friend) Cost of burial & tombstone (1/2 paid by relatives) Other funeral parlor expenses Expenses during the wake Before burial Obituary notice Card of thanks Mourning clothing of friends Mourning clothing of immediate family members
P 60,000 42,000 36,000 13,000 7,500 3,500 15,000 5,000
If the gross estate is P1,500,000 the allowable funeral expense is: a. P75,000 b. P82,500 c. P174,500 d. P93,500 40. Based on Number 39 but the gross estate is P2,500,000 the allowable funeral expenses is: a. P75,000 b. P82,500 c. P125,000 d. P93,500 41. Mr. Nabigla died on March 20, 2005 leaving a gross estate of P7,800,000 including a land inherited from his uncle on October 15, 2001 and a car donated to him on April 20, 1999. The following data pertain to the two properties Unpaid mortgage FMV upon receipt FMV upon death Land P 100,000 P1,800,000 P1,250,000 Car 50,000 300,000 400,000 The decedent was able to pay ½ of the unpaid mortgage on the land before his death. The deductions are: Expenses, losses, indebtedness, taxes (excluding the unpaid mortgages above but including actual funeral expenses of (P300,000 and medical expenses of P600,000) P1,200,00 Standard Deductions 1,500,00 Transfer for government entities 300,000 Death Benefits from Employer 200,000 Family home (included above) 2,000,000 The allowable varnishing deduction is: a. P213,000 b. P626,000 c. P426,000 d. P440,625 42. The taxable net estate based on the preceding number is: a. P4,056,250 b. P5,555,300 c. P3,974,000 d. P4,175,000 43. Mr. Dinakahinga, head of family died on January 15, 2005, leaving the following properties and obligations: Cash in bank, 50%, donated mortis causa to National Red Cross P 300,000 House and lot in Makati, F. Home 1,500,000 Personal properties 1,500,000 Farm lot 825,000 Claim against an insolvent debtor 225,000 Transfer in contemplation of death (gratuitous) 1,500,000 Transfer passing special power of appointment 75,000 Deduction claimed: Funeral expenses 575,000 Judicial expenses 67,500 Donation mortis causa to Quezon City government 150,000 Unpaid mortgage on the farm lot 75,000 Medical expenses (included in the funeral expense incurred within the 1 year period with receipts) 225,000 The farm lot was inherited 5 ½ years by the decedent before his death with a value then of P575,000 and a mortgage indebtedness of P150,000. The total deduction from the gross estate is: a. P1,867,500 b. P867,500 c. P2,092,500 d. P3,092,500 44. Based on the preceding number, the taxable net estate is: a. P3,982,500 b. P4,982,500 c. P2,757,500 d. P4,757,500
45. Mr. Jose, Filipino, married died leaving the following estate: Car acquired before marriage by Mr. Jose P 300,000 Car acquired before marriage by Mrs. Jose 450,000 House and lot acquired during marriage 1,500,000 Jewelries of Mrs. Jose 100,000 Personal properties inherited by: Mr. Jose during marriage 250,000 Benefits from SSS 50,000 Retirement benefits from a private firm 150,000 Proceeds of group insurance taken by his employer 75,000 Land inherited by the wife during marriage 1,000,000 Income earned from the land inherited by wife (25% of which was earned after death) 200,000 The gross estate under conjugal partnership of gain is: a. P2,600,00 b. P3,600,000 c. P1,950,000 d. P2,200,000 46. Under the same problem, the gross estate under absolute community of property is: a. P2,600,000 b. P3,600,000 c. P1,950,000 d. P2,500,000 47. Mr. Bayabas died intestate on September 30, 2004. He is survived by his wife. An inventory of the estate showed the following: FMV tax declaration Zonal Value Exclusive estate of Mr. Bayabas Commercial land 700 sq. m. P 850,000 P 900/sq. m. Residential land 900 sq. m. 580,000 1,000/sq. m. Conjugal estate: Farm land, 800, sq. m. 1,300,000 700/sq. m. Residential house 750,000 Car, Toyota 200,000 Other property 280,000 Death benefits (RA 4917) 200,000 On January 1, 2004, 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 home’s lot. Actual funeral expenses amounted to P250,000 but ½ of which is non-deductible. Medical expenses reached P600,000 but ¾ only was incurred with in the 1 yr. period. Judicial expenses reached P150,000. The gross estate is: a. P4,280,000 b. P4,480,000 c. P2,730,000 48. The total deductions excluding share of surviving spouse and special deduction is: a. P655,000 b. P891,000 c. P855,000 49. The deduction for family home is: a. P1M b. P950,000 c. P900,000 50. The taxable net estate is: a. P401,500 b. P326,500 c. P1,076,500 51. Mr. Bonito, Filipino died on April 10, 2000 with the following data: Gross Estate Deduction Philippines P 375,000 P 75,000 Foreign country A 300,000 150,000 Foreign country B 450,000 525,000 Foreign country C 600,000 225,000 The estate tax due after tax credit is: a. P13,500 b. P9,000 c. P14,000
***E N D *** “If ye have faith as a grain of mustard seed, Ye shall say unto this mountain, Remove hence to yonder place, and it shall remove; And nothing shall be impossible unto you.”
d. P4,160,000 d. P1,016,000 d. P750,000 d. P101,500 Estate tax paid P 3,750 18,000 d. P13,250