Pm Reyes Bar Reviewer on Taxation II

PM REYES BAR REVIEWER ON TAXATION II (Based on the 2013 Bar Sya!"s and #$dated %&th the Re'ent BIR Iss"an'es and theatest S"$re)e *o"rt and *TA +"r&s$r"den'e as o, +an"ary 31- 2013. PIERRE MARTIN MARTIN /E EON REYES Pae 1 o, 1Ateneo a% Bat'h 2013 ast #$dated 30 +"y 201 3 (43. Th&s &s the se'ond &nsta)ent o, )y t%o5$art re4&e%er on ta6at&on7 It 'o4ers 8 to$&'s- na)ey (1. Estate Ta6 (2. /onor9s Ta6 (3. Ta6 Re)ed&es (. Oran&:at&on and;"n't&ons o, the BIR (<. o'a =o4ern)ent Ta6at&on(. Rea Pro$erty Ta6at&on (>. Tar&,, and *"sto)s*ode? (8. +"d&'&a Re)ed&es (*TA.7 It &s a 'onso&datedand "$dated 4ers&on o, )y re4&e%ers &n Ta6 2 andTa6at&on a% Re4&e%7 Th&s re4&e%er &s !ased on notes,ro) Atty7 Montero and Asso'7 /ean =r"!a and the!oo@s and re4&e%ers o, Atty7 Ma)aateo and Atty7/o)ondon7 I aso added so)e st",, ,ro) Atty7 M&'@ey Ines9 re4&e%er and +"st&'e /&)aa)$ao7 ;or thetrans,er ta6es- I added st",, ,ro) Sta rr We&and9s notes7 Re,eren'es ha4e aso !een )ade to the 2013Bedan Red Boo@ and the 2012 #P Ta6 Re4&e%er7;"rther- I added the re'ent and ree4ant re4en"ere"at&ons and other BIR &ss"an'es (es$e'&ay those&ss"ed &n 2012. and the atest S* and *TA "r&s$r"den'e (as o, +an"ary 31- 2013.7 Most o, thed&ests %ere so"r'ed ,ro) /" Baadad andAsso'&ates andAsso'&ates (B/B a%. a nd ,ro) Ban&"ed CBan&"ed7 CBan&"ed7 The re4&e%er % & )a@e re,eren'e to 'oda$ro4&s&ons7 Th"s- I re'o))end that yo" read th&s %&tha 'o$y o, the NIR* and other a%s *oda (2012ed&t&on. !y Atty7 Sa'adaan5*asasoaPossessors )ay re$rod"'e and d&str&!"te )yre4&e%er $ro4&ded )y na)e re)a&ns 'earyasso'&ated %&th )y %or@ and no aterat&ons &n the,or) and 'ontent o, )y re4&e%er are )ade7 Nosta)$&n $ease7May th&s re4&e%er $ro4e "se," to yo"7 I, &t does-$ease share &t to others7 Da$$y st"dy&n - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - - - - -- - - - - - - - - - - - - - --- - - - - - - TABE TABE O; *ONTENTS - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - - - - -- - - - - - - - - - - - - - --- - - - - - - II7 NIR*B7 Estate Ta6 7777777777777777777777777777777777777777777777777 2 *7 /onor9s Ta6 777777777777777777777777777777777777777777777 18/7 Va"e5Added Ta6 777777777777777777777777777777777777 2V7 +"d&'&a Re)ed&es (*TA. 7777777777777777777777777 1<2 - - - -- - - - - -- - - - -- - - - -- - - - - -- - - - -- - - - - -- - - - - -- - - - -- - - - - -- - - - -- - - - -- - - - - -- - - - -- - - - - -- - - - --- - - - N o t e : Before we discuss Estate Tax, let us discuss theconcept of Transfer Taxes. Q : W h a t a r e t r a n s f e r t a x e s ? Transfer taxes are those taxes imposed upon theprivilege granted by the state to the taxpayer so thathe may transfer properties, real o r personal, withoutconsideration. Q : W h a t i s t h e n a t u r e o f t r a n s f e r t a x e s ? Transfer taxes are excise or privilege taxes that areimposed on the act of passing ownership of propertyand not taxes on the property transferred. Q : W h a t a r e t h e k i n d s o f t r a n s f e r t a x e s a n d d e f i n e e a c h ?  At present, the kinds of transfer taxes are:1. Estate ta6  – a tax that is levied, assessed,collected and paid upon the transfer of the netestate of a decedent to his or her heirs.. /onor9s ta6 ! is an excise tax levied, collected,and paid upon the privilege of transferringproperty gratuitously by way of gift

inter vivos byany person, resident or non!resident N o t e : n !"#$, aside fro% estate and donor&s tax,inheritance and donee&s tax were i%posed. nheritance taxes are i%posed on the ri'ht of the heirs to receive  propert( upon death of the decedent. )onee&s taxes are i%posed on the ri'ht 'iven to the done to receive propert( fro% a donor durin' his lifeti%e. *) No. +" aolished these two transfer taxes. Toda(, the recipient of propert( ( inheritance or donation is no lon'er liale for transfer taxes. Q : ) i f f e r e n t i a t e e s t a t e t a x from donor’s tax.

Estate Ta6 /onor9s Ta6 Ta6 Tax Tax on the privilege totransfer property upon one"s death # %ortiscausa  Tax on the privilege totransfer property during one"s life time # inter vivos $%aximum tax rate of estate tax is &' on netestates exceeding (hp1& million and the first(hp &&,&&& is exempt%aximum tax rate is1)' on the net giftsexceeding (hp 1& millionand the first (hp1&&,&&& is tax exempt