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 FC’s
102. Or TNE, all FC’s/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 FC’s 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 decedent’s death. 2.
When should the notice of death be filed? 114. Within two (2) months after the decedent’s 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 decedent’s 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 decedent’s 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 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. 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 decedent’s 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 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 mortgage. 16. _____________ The decedent’s administrator claims the following funeral expenses: 134.
Expenses of internment
136. Cost of the burial lot (paid ½ 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 decedent’s 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 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. 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 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 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 decedent’s 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 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 is subject to estate tax. 256. 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 should form part of A’s 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 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. 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 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: 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,
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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, ¼ 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
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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 gov’t 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 ½ 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 ½ 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 home’s lot. Actual funeral expenses amounted to P250,000 but ½ of which is non-deductible. Medical expenses reached P600,000 but ¼ 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 ½ 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
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P1.502A
