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SETTLEMENT OF ESTATES
By: ATTY. JAIME G. BALMAS, CPA, REB
National Treasurer, PAREB
President, 2014, Manila Board of Realtors, Inc.
What is an Estate?
An Estate comprised of the real and personal properties of a
decedent.
2. Where filed?
a. If the decedent was a resident of the Philippines at the time of
his death, the petition must be filed before the Regional Trial Court
in the place where he resided at the time of his death.
c. On the hearing date, the court will proceed with the probate of
the will and distribute the estate to the heirs/legatees accordingly.
3. DECEDENT LEFT NO WILL. If the decedent left no will, the steps
are the same as the above, except that the petition will pray for the
settlement of the estate of the decedent.
STEP 1: Fill out BIR Form 1904 (Application for Registration). All
parties that transact with the BIR should have a valid Tax
Identification Number (TIN). Normally, Form 1904 is used to verify
the TIN of the seller as well as the buyer. But in payment of estate
taxes, the estate of the deceased will have to have a separate TIN
from the seller-heirs.
In filling out Form 1904, here is what to do: (a) on the Taxpayer
Type, mark with an X the box indicating One-Time Taxpayer; (b)
on Classification, mark with an X the box indicating Nonindividual; and (c) on Sex, mark with an X the appropriate box
indicating gender of the deceased.
Next, write ESTATE OF [THE DECEASED PERSONS NAME] in the
space provided for the Taxpayers Name. On the Civil Status, mark
with an X the appropriate box indicating civil status of the
deceased. On the Date of Birth, write the date of death of the
decedent as it appears in the Certificate of Death. Write the Local
Address of the decedent in the space provided for. Take note that
the Local Address of the decedent should be the one indicated in
the death certificate.
If the person dies abroad and has no residence in the Philippines fill
out the Foreign Address by writing the address indicated in the
death certificate. In such a case, the filing of the Estate Tax Return
should be made at the BIR Revenue District Office (RDO) No. 39
(South Quezon City).
STEP 4: Pay the estate tax as computed. You can pay the estate tax
with an Authorized Agent Bank (AAB) of the RDO having jurisdiction
over the place of residence of the decedent at the time of his/her
death.
Cash is best to settle the estate tax. But if the tax due is a large
amount and security would be a problem for the one paying it then
the same can be paid by means of a Managers or Cashiers Check.
If payment is made through a Managers or Cashiers Check, the
following should be written as payee: [BANK, BRANCH] FAO
BUREAU OF INTERNAL REVENUE IFO [TAXPAYERS NAME] [TIN OF
TAXPAYER]. However, if you will pay the estate tax using a AAB that
is a government financial institution like Landbank of the
Philippines, then the payee may simply be BUREAU OF INTERNAL
REVENUE.
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