True or false

1. succession takes place upon the death of the decedent

2. unpaid funeral expenses are nevertheless deductible from gross estate as part of claims
against the estate
3. estate tax is property tax
4. decedents interest includes revocable inter vivos transfers of properties until the death of the
donor
5. the share of the surviving spouse in the community property is not included in the gross estate
of the decedent spouse.
6. the proceeds of life insurance policies payable upon death of the decedent are exempt from
the payment of estate tax.
7. if the decedent sells properties because of an impending death, the difference between the
market values at the time of sale and at the time of death, if any, is subject to estate tax.
8. if there is reciprocity, the intangible personal property in the Philippines of the non resident
alien is subject to estate tax in the Philippines
9. a power of appointment is general if the donee is authorized to appoint a beneficiary named in
the will of the prior decedent.
10. a husband cannot donate his share in the community property to his surviving spouse.
11. winnings in gambling is conjugal property. However, losses thereon shall be borne exclusively
by the loser-spouse.
12. donations to charitable institutions are deductions from gross estate
13. death benefit from the GSIS is exempt from estate tax
14. the cost of the mourning apparel of a spinster daughter of the deceased is deductible as
funeral expense
15. unpaid accountants fees to an accountant who signed the CPA certificate is deductible as
claims against the estate
16. an unpaid loan contracted by the decedent spouse which is secured by a mortgage of a
community property is deductible as a claim against the estate and not as unpaid mortgage
17. in an accommodation loan, there is an addition to and a deduction from gross estate, thus
resulting to a zero balance in the net estate.
18. casualty losses are deductible from gross estate and from gross income
19. the family home of a non resident citizen is includible in the gross estate but not deductible
therefrom
20. the estate of a nonresident alien is not entitled to a vanishing deduction.
21. net taxable estate is another term for net distributable estate
22. only the estate of resident citizen can claim tax credit on estate taxes paid to foreign
countries
23. notice of death should be made within 30 days after the death of the decedent
24. filing of the estate tax return is required if the transfer is subject to estate tax regardless of
the value of the gross estate.
25. installment payment of estate tax maybe allowed if there are no available cash of the estate.

Answers to True or false

1
2
3
4
5
6
7
8
9
1

Tru
e
Fals
e
Fals
e
Tru
e
Fals
e
Fals
e
Fals
e
Fals
e
Fals
e
Fals

Funeral expenses, whether paid or unpaid, are deductible as funeral expense

It is an excise tax

The entire community properties of the spouses are included in the gross estate
Proceeds of life insurance shall be exempt only from estate tax if the designated
beneficiary in the policy is irrevocable and is not the estate, executor or administrator
The sale must be for an insufficient consideration
If there is reciprocity, the intangible personal property within is not taxable in the
Philippines
In that case, the power of appointment is special
The prohibition is applicable on inter vivos donations only. Thus, it is allowed if the

0
1
1
1
2
1
3
1
4
1
5
1
6
1
7

e
Tru
e
Fals
e
Tru
e
Fals
e
Fals
e
Fals
e
Tru
e

1
8
1
9
2
0
2
1
2
2
2
3
2
4

Fals
e
Tru
e
Fals
e
Fals
e
Fals
e
Fals
e
Tru
e

2
5

Tru
e

donation is to become effective upon the death of the donor-spouse

They are exclusions from gross estate but not deductions
All benefits from SSS and GSIS are exempt from INCOME and ESTATE tax
The daughter must be minor and unmarried
It is deductible as judicial expense
It is deductible as an unpaid mortgage rather than as claims against the estate
The amount of money borrowed is deductible as claims against the estate; however,
that same amount which was loaned to accommodate the financial needs of another
person should be included in the gross estate as a receivable of the estate on the
debtor.
It is deductible from either gross income or gross estate but not on both
To be deductible, family home must be situated in the Philippines
Vanishing deduction can be claimed provided that the subject property is situated in
the Philippines
Net taxable estate is the basis in computing the estate tax, while net distributable
estate pertains to the amount that will be distributed among the heirs.
Other than he resident citizens, the estate of non resident citizens and resident aliens
can also claim tax credit on estate taxes paid abroad
Notice of death must be made within 2 months after the decedents death, or within a
like period after qualifying as executor or administrator
Filing of estate tax return is required if the gross value of the estate exceeds 200,000
and regardless of value where the said real estate consists of registered or registrable
property
If the tax is paid by installment, a clearance shall be released only with respect to the
property the corresponding tax on which has been paid.

1. Which of the following is not an element of succession?

a. Decedent
c. Heir
b. Estate
d. Administrator
2.Inheritance does not include
a. property
b. public office
c. rights not extinguished by death
d. obligations not extinguished by death
3.Estate tax is
a. a property tax because it is imposed o the property transmitted by the decedent to
his heirs.
b. an indirect tax because the burden of paying the tax is shifted on the executor or
any of the heirs
of the decedent.
c. an excise tax because it is imposed on the privilege exercised by the decedent to
transfer ownership over the estate.
d. a poll tax because it is also imposed on residents of the Philippines whether Filipino
citizens or not.
4.Which of the following is not a distinction between estate tax and donors tax?
a. The tax imposed is an excise tax.
b. Extension for payment.
c. Effectivity of the transfer of property.
d. The exemption granted in the tax table.
5.Statement 1: The estate tax accrues at the moment of death of the decedent.
Statement 2: In estate taxation, the taxpayer is the decedent.
Which of the above statement is correct?
a. Statement 1 only.
c. Both statements
b. Statement 2 only.
d. Neither statements
6. In 2002, J. Cruz gave a loan of P150,000 to sexy, his secretary. In 2005, as an act of
generosity, J.Cruz condoned the debt of Sexy in his last will and testament. J. Cruz
died in 2008. The condonation of the debt of Sexy is

a. A donation inter vivos subject to donors tax.

b. A payment or compensation for the services rendered.
c. A deduction from the gross estate of J.Cruz.
d. A donation mortis causa subject to estate tax.
7. The following are the motives of a taxpayer that preclude the transfer in
contemplation of death, except one
a. To relieve the taxpayer of the burden of management.
b. To save income and property taxes.
c. To avoid payment of estate taxes.
d. To make dependents financially independent.
8. In default of testamentary heirs, the law determines who are to succeed to the
inheritance of the deceased. Which of the following ranks first in the order of
succession?
a. legitimate children
c. legitimate parents
b. surviving spouse
d. illegitimate children
9. H and W are married. They have legitimate children A and B. H died, survived by W,
A and B. He estate of P12,000,000 should be divided as follows:
W

Free

portion
a.
b.
c.
d

P3M
3M
None
2.25M

P 4.5M
3M
6M
4.5M

P 4.5M
3M

None
P 3M

6M
4.5M

None
2.25M

10. Based on the following data, how mush is the value of the decedents interest if he
died March 31,2008?
Cash in bank, joint account of the decedent
And his wife
P 254,000
Interest on the bank deposit ( January 1- June
30,2008)
9,000
Dividends from a domestic corporation:
60,000
Date of declaration- February 5, 2008
Date of record
- April 15,2008
Date of payment - May 15,2008
Share in 2007 net profit of partnership,
Distributed to partners on April 15
9,000
Winnings in lotto ( Bet, March 30; April 1, 2008
Draw)
500,000
a. P 383,750
c. P145,000
b. 138,000
d. 388,250
11. For estate tax purposes, the estate of the decedent shall be valued at the time
a. of the preparation of the estate tax return
b. the estate tax is paid.
c. of death of the decedent.
d. The estate is distributed to the heirs.
12. Mamo died leaving the following properties:
Stocks of Cruz Corporation (2,000 shares )- listed in the Phisex (highest- P 40;
lowest- P 39).
Common Stocks of Hemo Corporation ( 1,500 shares)- not listed in the stock
exchange. Cost- P 50 per share; book value- P45 per share.
Car ( cost- P 600,000; book value- P 350,000; market value P 400,000)
Real properties ( zonal value P 120,000; assessed value- P 72,000 )
The gross estate of Mamo isa. P 618,000
c. P 624,000
b. 867,000
d.
666,500
13.One of the following is subject to estate tax on properties situated within the
Philippines only
a. Resident citizen
c. Nonresident citizen
b. Resident alien
d. Nonresident alien
Items 14 through 16 are based on the following information:
Dina Mathay, Filipina, died in the United States with the following properties
Condominium unit in New York City
2,000,000

Shares of stock in a foreign corporation

600,000
Interest in a partnership, domestic
475,000
Bank deposit in a New York City bank
150,000
Car in Cebu, Donated inter vivos 5 years ago to her son
500,000
14.Which property should be included in the gross estate?
a. All the above properties.
b. Only the properties located in the Philippines
c. All the above properties except the car.
d. The properties located in the Philippines except the intangibles.
15.If the decedent was a nonresident alien ( with reciprocity), how much is the gross
estate?
a. P 3,725,000
c. P 500,000
b.
975,000
d. None
16. If the decedent was a nonresident alien ( no reciprocity ), how much is the gross
estate?
a. P 3,725,000
c. P 500,000
b.
975,000
d. 475,000
Whenever a decedent is a nonresident alien ( no reciprocity ), all properties situated in the
Philippines
( real property , tangible personal property and intangible personal property are included in his
gross estate.
17. Which of the following is an intangible personal property within?
a. Franchise exercised in the United States.
b. Shares or rights in a domestic business partnership.
c. Bonds issued by an American corporation.
d. Stocks issued by foreign corporation with business situs in the Philippines.
a. B only
c. All of the above properties
b. B and D
d. None of the above properties
18. An example of intangible personal property without is
a. Domestic shares of stock
b. Foreign shares, 85 % of the business of the corporation is in the Philippines.
c. Foreign shares with business situs in the Philippines.
d. Foreign shares, certificate of stock are kept in Makati.
19. One of the following donations is not included as part of gross estate.
a. revocable transfers
b. transfers with reservation of certain rights
c. transfers under special power of appointment
d. transfers in contemplation of death
In a special power of appointment, the decedent is considered only as a trustee to
the property. Hence, said property should not be a part of his estate.
20. Which of the following transfers is included in the gross estate?
a. transfer inter vivos
b. transfer under general power of appointment
c. transfer under special power of appointment
d. transfer for an adequate and full consideration
21. Decedent Kulot A. has the following data:
Value of the property at the time of sale
P 1,200,000
Value of consideration when sold
1,000,000
Value of property at the time of death
1,500,000
The amount includible in the gross estate is
a. P 300,000
c. P 200,000
b. 500,000
d. 1,500,000
22. When Albino was informed by his physician that he was about to die of cancer, he
sold his properties:
Market valueSelling
Market valueDate of sale
price
Date of
death
Land
P 2,700,000
P 1,500,000
P 2,700,000
Jewelries
500,000
300,000
300,000
Shares of stocks
200,000
220,000
250,000
Transfer under limited
Power of appointment
1,000,000
600,000
800,000

From among the data given, how mush should be included in the gross estate of Albino upon
his death?
a. P 1,200,000
b. 1,230,000

c. P 1,430,000
d.
1,400,000

23. On the belief that he was about to die of a liver cancer, Bongbong sold to Bengbeng
a property valued at P 1,100,000 for the same amount. Six months later, Bongbong
died of a car accident. At that time, the property had already a value of P 1,300,000.
For Philippine estate tax purposes, the amount includible in the gross estate of
Bongbong isa.P 1,100,000
c. P 200,000
b. 1,300,000
d. None
24. Amounts received by the estate of the deceased, his executor or administrator as
an insurance under policy taken by the decedent upon his own life isa. excluded from the gross estate.
b. part of the gross estate whether the beneficiary is revocable or irrevocable
c. part of the gross estate if the beneficiary is revocable.
d. part of the gross estate if the beneficiary is irrevocable
25. Case 1 Designation of the beneficiary is revocable.
Case 2-- Designation of the beneficiary is irrevocable.
Case 3Policy is silent as to whether the designation is revocable or irrevocable.
In which of the above cases will the proceeds be exempt from estate tax,
assuming that the beneficiary of the life insurance proceeds is neither the estate,
the executor nor the administrator of the estate?
a. Case 1 only
c. Case 2 only
b. Cases 1 and 3
d. All of the above cases
26. Proceeds of life insurance not payable to estate, executor or administrator shall be
excluded in the gross estate if the beneficiary appointed in the policy is
a. Revocable
c. Irrevocable
b. Revocable or irrevocable
d. the executor
27. Proceeds of life insurance includible in the taxable gross estate
a. Insurance proceeds from SSS and GSIS.
b. Amount receivable by any beneficiary irrevocably designated in the policy by the
insured.
c. Amount receivable by any beneficiary revocably designated in the insurance
policy.
d. Proceeds of a group insurance taken out by a company for its employees.
28. Which of the following proceeds of life insurance policies is exempt from estate
tax?
1. Life insurance policy on the life of Kristine, appointing her sister as the irrevocable
beneficiary.
11. Life insurance policy on the life of Kristine, appointing her brother as the
revocable beneficiary.
111. Life insurance policy on the life of Kristine, appointing her executor as the
irrevocable beneficiary.
1V. Life insurance policy on the life of Kristine, appointing her children as the
beneficiary. The policy is silent as to whether the appointment is revocable or
irrevocable.
a. 1 only
c. 11 and 111
b. 1 and 1V
d. All of them
29. The following are transactions and acquisitions exempt from transfer tax, except
a. Transmission from the first heir or done in favor of another beneficiary in
accordance with the desire of the predecessor.
b. Transmission or delivery of the inheritance or legacy by the fiduciary heir or
legatee to the fideicommissary.
c. The merger of usufruct in the owner of the naked title.
d. All bequests, devisees, legacies or transfers to social welfare, cultural and
charitable institutions.
30. A devised in his will a piece of land; naked title to B and usufruct to C for as long as
C lives, thereafter to B. the transmission from A to B and C is subject to estate tax
but the merger of the usufruct and the naked title to B upon the death of C is
exempt.

X devised in his will real property to his brother Y who is entrusted with the
obligation to preserve and transmit the property to Z, a son of Y, when Z becomes
of age. The transmission from Y to his son Z is subject to tax.
a. First statement is correct, second statement is wrong.
b. Both statement are not correct.
c. Both statement are correct.
d. First statement is wrong , second statement is correct.
31. One of the following is included in the gross estate.
a. Benefits received from GSIS
b. Benefits received from U.S Veterans Administration.
c. Benefits received from damages during world war 2.
d. Benefits received from a tax exempt employer as a consequence of death of the
employee.
32. Which of the following distinguishes conjugal property from community property?
a. Properties inherited during marriage.
b. Those acquired through occupation during marriage
c. Fruits of exclusive property.
d. Income earned by each spouse during marriage.
33. One of the following is a conjugal property of the spouses.
a. That which is brought to the marriage as his or her own.
b. That which each acquires during the marriage by inheritance.
c. The fruits of an exclusive property.
d. That which is purchased with the exclusive property of the wife.
34. One of the following is not a community property of the spouses
a. Property inherited by the husband before marriage.
b. Winnings in gambling.
c. Fruits of property inherited during the marriage.
d. Fruits of property inherited before the marriage.
35. Which of the following is not a part of the gross estate?
a. conjugal property
b. community property
c. exclusive property of the decedent
d. exclusive property of the surviving spouse
36. When a person dies and during the marriage the property relationship between the husband
and the wife was that of conjugal partnership of gains, the gross estate of the decedent
would include
a. His exclusive properties only.
b. His exclusive properties and one half of the conjugal properties.
c. All the properties of the husband and wife.
d. His exclusive properties and all conjugal properties.
37. A. Share of the decedent in the community property.
B. Share of the surviving spouse in the community property.
C. Exclusive property of the decedent.
D. Exclusive property of the surviving spouse.
Which of the above properties are included in the gross estate of the decedent?
a. A and B
c. A and C
b. A, B, and C
d. All of the above properties
38. Properties acquired by gratuitous title before the marriages are generally classified as:
A. Community properties under absolute community of property regime.
B. Conjugal properties under conjugal partnership of gains.
Which of the above statement is correct?
a. A only
c. B only
b. A and B
d. Neither A nor B

Numbers 39 through 42 are based on the following information.

Aldo died leaving the following properties:
a. Real property in Baguio City brought into marriage
b. Income of real property in Baguio
c. Real property in Cebu City, brought into marriage
by wife
d. Income of real property in Cebu City
e. House in Pili, Camarines Sur, acquired by Aldo during
marriage
f. Income of house in Pili
g. Real property in Iloilo City, earned by wife during marriage
h. Income of real property in Iloilo City
i. Tangible personal properties in Manila, inherited

P 300,000
60,000
240,000
25,000
375,000
50,000
225,000
80,000

by Aldo during marriage

j. Income of properties in Manila
k. Intangible personal properties in Singapore
inherited by wife during marriage
l. Income of intangibles in Singapore
m. Tangible personal property in Dagupan City,
inherited by Aldo before marriage
n. Income of property in Dagupan City
o. Intangible personal property in Canada,
inherited by wife before marriage
p. Income of personal property in Canada

500,000
175,000
430,000
85,000
20,000
10,000
350,000
85,000

39. under the conjugal partnership of gains, the total conjugal properties of the spouses is:
a. 1,170,000
b. 1,820,000
c. 1,990,000
d. 2,495,000
40. under conjugal partnership of gains, the gross estate of Aldo is
a. 1,170,000
b. 2,495,000
c. 1,990,000
d. 1,820,000
41. under absolute community of property regime, the total community property of the spouses
is:
a. 1,820,000
b. 1,990,000
c. 2,495,000
d. 1,170,000
42.under absolute community of property regime, the gross estate of Aldo is
a. 1,170,000
b. 2,495,000
c. 1,990,000
d. 1,820,000

Pepe married Pilar on January 20,1995 without any agreement in writing as to the system of
property relationship that will govern their properties when they are already married. Pepe
brought into the marriage an old Spanish house in Vigan, Ilocos Sur worth 2,000,000 while
Pilar brought with her a 200 hectare pineapple plantation in Bukidnon which she acquired
while she was still single.
As a consequence of her marriage, she received as gift from her parents another 200 hectare
banana plantation in Cagayan de Oro City on January 31, 1995.
Twelve years thereafter, she died of a car accident. The joint account deposit of the spouses
with Metrobank was 5,000,000.
She was insured with an insurance company for 2,500,000 with Pepe as the appointed
irrevocable beneficiary
For numbers 43 to 47, classify the properties identified above by choosing your answer from the
option below:
Options:

a. exclusive property of Pepe

b. exclusive property of Pilar
c. Conjugal property of Pepe and Pilar
d. Community property of Pepe and Pilar

43. the old Spanish house in Ilocos Sur

. Community property of Pepe and Pilar
44. the banana plantation in Cagayan de Oro
exclusive property of Pilar
45. the income of the banana plantation
exclusive property of Pilar
46. the deposit with metrobank
Community property of Pepe and Pilar
47. the proceeds of the insurance policy is
a. excluded from gross estate

b. included in the gross estate

c. deductible from gross estate
d. none of the above
DEDUCTIONS FROM GROSS ESTATE
48. an example of a funeral expense which is not deductible
a. most of coffin assumed by a family friend
b. funeral services paid out of decedents estate
c. mourning clothing of deceaseds unmarried minor children and surviving spouse
d. cost of tombstone
49. statement 1: the amount of funeral expenses within the 200,000 threshold, which are still
payable shall be allowed as a deduction from the gross estate
Statement 2: the unpaid portion of the actual funeral expenses incurred which is in excess of
the 200,000 threshold shall be allowed as deduction under claims against the estate
a. true, true
b. true, false
c. false, true
d. false, false
50. which of the following is included in the term funeral expenses
a. mourning apparel of a 40- year old legitimate child of the deceased
b. hospital bills during the last illness of the deceased
c. burial expenses defrayed by the relatives of the deceased
d. obituary notices to relatives and friends
51. the amount of funeral expenses that may be deducted from gross estate
a. 5% of the gross estate or actual funeral expenses or Php 200,000, whichever is lower
b. always 5 % of the gross estate
c. actual funeral expenses incurred
d. 5% of the gross estate or actual funeral expenses incurred whichever is higher
52. the deductible amount of funeral expense is 200,000 if the actual expenses and the gross
estate amount to
a. actual-195,000, gross estate-4,500,000
b. actual-210,000, gross estate-4,300,000
c. both A and B
c. neither a nor b
53. which of the following are requisites in order that claims against the decedents estate may
be deductible except
a. they must be existing against the estate
b. they must be reasonably certain as to amounts
c. they must have been prescribed
d. they must be enforced by the claimants
54. which of the following is not included in the value of the gross estate
a. judicial expenses
b. claims against insolvent persons
c. benefits received under RA 4917
d. the undiminished value of the property mortgaged
56. one of the following is deductible as claim against the estate
a. an obligation contracted by the decedent one (1) day before he died
b. an obligation of the decedent prescribed while the decedent was still alive
c. an obligation which was not reduced in writing under statutes of fraud
d. an obligation which shall be paid by the heirs
57. all of the following except one, are deductible from the gross estate of a decedent who died
September 30, 2006
a. income tax on income earned from January to September 29, 2006
b. gift taxes on donations given June 12, 2006
c. real property taxes payable during the last quarter of 2006
d. income tax on income earned during the last quarter of 2006
hint:

to be deductible, taxes must accrue before the death of the decedent. Real property taxes
accrue on the 1st day of January of every year although the payment is allowed in the
succeeding quarters of the year.
58. statement 1: if the proceeds of a mortgage loan is merely an accommodation loan, its
value must be included in the gross estate as a receivable amount and as a deduction
thereof.
Statement 2: if there is legal impediment to recognize the accommodation loan as receivable of
the estate, the unpaid mortgage payable shall not be allowed as a deduction from the gross
estate
a. true, false
b. true, true
c. false, true
d. false, false
59. the following expenses and obligations were left by Boning upon his death
Notes payable, not notarized
Loans payable, PNB
Accounts receivable, debtor not insolvent
Accounts receivable, debtor is insolvent
Death benefits from employer
Mortgage paid
Income taxes on income of decedents estate

30,000
300,000
40,000
60,000
200,000
50,000
7,500

The total amount deductible from gross estate is

a. 600,000
b. 550,000
c. 1,560,000
d. 560,000
HINT:
to be deductible, claims against the estate out of debt instrument must be duly notarized
(except for loans by financial institutions where notarization is not part of the business
practice or policy of the financial institution)
claims of the estate against other persons are deductible only if the debtor is declared insolvent
mortgages paid are allowed only as deduction from the value of the property in computing a
vanishing deduction. In computing the net estate, the deductible item is unpaid mortgage
taxes must have accrued before the death of the decedent. Taxes on income of properties which
accrued after death are not deductible
60. casualty losses are deductible from the gross estate if
Statement 1: such loss was incurred during the settlement of the estate
Statement 2: such loss was incurred not later than the last day for the payment of the estate
tax
a. false, false
b. false, true
c. true, false
d. true, true
61. Y, a Filipino resident, died on November 5, 2006 and his estate incurred losses due to
1st loss:
from fire on Feb 2, 2006 of improvements on his property; not compensated by
insurance
2nd loss: from flood on Feb 25, 2007 of household furniture; also not compensated by insurance
a. 1st loss is not deductible, second loss is deductible
b. both losses are not deductible
c. both losses are deductible from gross estate
d. 1st loss is dductible and 2nd loss is not
62. which of the following losses is deductible
a. destruction of a house by an earthquake which killed the decedent
b. shipwreck which occurred before the death of the decedent but was only discovered after his
burial
c. total wreckage of a car in an accident but was fully compensated by a comprehensive
insurance

d. theft which occurred during burial of the decedent

63. liza died on July 5, 2007 leaving the following data on deductions
Unpaid 2006 real estate taxes
40,000
Unpaid 2007 real property taxes
40,000
Inocme tax on income from Jan 1 to July 4, 2007
35,000
Losses from fire that occurred on July 3 (60 % was insured) 800,000
Casualty loss on september 2007
450,000
Building destroyed by earthquake on Feb 2007
1,300,000
Based on above data, The deduction from gross estate is
a. 1,365,000
b. 565,000
c. 845,000
d. 525,000
64. Che, a non resident alien, died leaving the following assets
domestic shares
1,000,000
foreign shares
3,000,000
tangible personal property, Philippines 6,000,000
Expenses (deductible)
1,200,000
Note: the country where she is a citizen and resident does not impose transfer tax on
transmission of intangibles of filipinos
The net estate subject to tax in the philippines is
a. 5,280,000
b. 3,800,000
c. 4,800,000
d. 4,280,000
65. Ta, a nonresident alien, single died leaving the following properties and deductions
Shares-domestic corporation
Shares-foreign corporation
Tangible personal properties
Deductible expenses

500,000
500,000
1,500,000
500,000

Assuming there is no reciprocity, the estate tax payable is

a. 1,600,000
b. 1,500,000
c. 103,000
d. 95,000
66-67 information
Mhar, a German residing in Munich, Germany had the following data at the time of his death
Expenses
Funeral expenses incurred in the philippines
25,000
Funeral expenses incurred abroad
?
Accountants fee and audit fees
5,000
Medical expenses -2 months before he died
50,000
Unpaid mortgage on his property loctaed abroad 40,000
Claims against the estate
25,000
Properties
Real property located in Japan
2,400,000
Lot in Davao City
1,000,000
Share of stock in Japanese Corporation
600,000
Other tangible personal properties-phils
1,000,000
66. gross estate on the estate of Mhar is
a. 5,000,000
b. 1,000,000
c. 2,000,000
d. 2,600,000
67. in number 66 above, if the total deductions allowed amount to 60,000, how much is the
amount of funeral expenses abroad
a. 100,000
b. 80,000
c. 145,000

d. 55,000
68. which of the following properties of Etang who died December 4, 2008 is subject to
vanishing deduction
Property 1-Car purchased 3 years ago from batangas city
Property 2- land inherited from her mother in 2005 the estate tax thereon have not been paid
Property 3-donation from a friend in 2004
Property 4-community property inherited december 2, 2003 or five days before marriage

a.
b.
c.
d.

Property 1
no
no
yes
yes

property 2
no
no
no
yes

property 3
yes
yes
no
no

property 4
yes
no
yes
no

69. which of the following is a multiplier deduction for purposes of computing vanishing
deduction
a. benefits received under RA 4917
b. medical expenses
c. standard deduction
d. transfer for public purpose
70. statement 1: vanishing deduction is always a deduction from the exclusive properties of the
decedent
Statement 2: a property is subject to vanishing deduction if it has been acquired thru exchange
with a property inhetrited within 5 years prior to the death of the present decedent
a. true, false
b. false, true
c. true, true
d. false, false
71. christopher died on October 5, 2006 leaving a parcel of land valued at 800,000 to his
nephew, mendell. On June 10, 2008, Mendell married Cristita, prior to the celebration of the
marriage, they orally agreed that they shall be governed by the conjugal partnership of
gains
Which statement is correct
a. the spouse shall be governed by the conjugal partnership of gains. Thus, if Mendell dies on
May 20, 2009 the vanishing deduction shall be classified as deduction from the exclusive
properties
b. the spouses shall be governed by the absolute community of property regime. Thus if cristita
dies on may 20, 2009 the land shall be subject to vanishing deduction of of its value.
c. the spouse shall be governed by the absolute community of property regime. Nonetheless,
the death of cristita on may 20, 2009 will not subject her share in the land to a vanishing
deduction
d. the spouse shall be governed by the absolute community of property regime. Thus, if mendell
dies on may 20, 2009 only his share in the land shall be subject to a vanishing deduction
72. all of the following, except one, are not deductible from the gross estate of a nonresident
alien
a. vanishing deduction
b. medical expenses
c. family home
d. standard deduction
73. Rodolfo, a filipino died testate on May 10, 2006. Among his gross estate are properties
inherited from his deceased father who died april 4, 2003. What percentage of deduction will
be used in computing the amount of vanishing deduction
a. 80% of the value taken as basis for vanishing deduction
b. 100 % of the value taken as basis for vanishing deduction
c. 60 % of the value taken as basis for vanishing deduction
d. 40% of the value taken as basis for vanishing deduction
74. van died on November 20, 2006. Some of the properties he left are the following

Asset

Mode of
acqui
sition

Date of
acqui
sition

Market
value
-date
acqui
red

Land

Donatio
n
Purchas
e

7-3-02

500,000

Market
value
deat
h of
Van
350,000

10-2-05

800,000

980,000

Car

Other info:
1. Gross estate of decedent amounts to 3,000,000
2. The land was mortgaged for 50,000 which was deducted in prior estate and van paid the same
before he died
3. The allowable deductions total 125,000, which includes medical expenses of 30,000. It excludes
bequest to a charitable institution in the amount of 50,000
The vanishing deduction is
a. 58,100
b. 57,500
c. 67,783
d. 67,083
75. in determining the net estate of the decedent, which of the following rules is correct
a. real estate abroad is included in the gross estate of a decedent who is a nonresident alien
b. shares of stocks being intangible property shall be included in the decedents gross estate
wherever situated
c. vanishing deduction must be subject to limitations
d. funeral expenses are deductible to the extent of 5% of the total gross estate but not
exceeding 100,000
76.pepe died on August 15, 2006. His data are as follows
Community properties
Exclusive properties of pepe
Exclusive properties of pepes wife
Deductions (except standard deduction)

2,000,000
3,000,000
1,000,000
700,000

Included in the 3,000,000 is a parcel of land worth 200,000 and a car worth 400,000
The land was donated to him by his uncle on May 4, 2004 with a value of 150,000. At the time
of donation, the land wasb mortgaged for 30,000 which was paid by his uncle. The car had a
avalue of 500,000 when it was paid by his uncle. The car had a value of 500,000 when it was
inherited by his Pepe from his mother 2.5 years ago and mortgaged for 50,000 which was
paid by Pepe before he died.
The vanishing deduction on the estate of Pepe is
a. 258,000
b. 262,520
c. 283,600
d. none
77. elopre, married June 5,2004 died on April 29, 2006 with the following data: Gross estate
community property, 3,000,000; exclusive, 2,000,000. Said amount includes a land which he
received as gift from his father a month before the marriage; valued at 540,000. His father
mortgaged the land for 20,000 which was paid by elopre. Elopre mortgaged also said land
for 50,000 but was able to pay only 20,000 until his death. Expenses claimed (excluding the
unpaid mortgage) amounted to 170,000.
The vanishing deduction is
a. 388,800
b. none
c. 384,000
d. 380,000
78. in number 77, the net taxable estate is
a. 2,016,000
b. 1,208,000
c. 3,416,000

d. 2,208,000
79. statement 1: unpaid loans contracted prior to death may be deducted even if not notarized
if notarization of contracts is not business policy of the creditor
Statement 2: for estate tax purposes several family homes may be deducted provided the
maximum amount is 1,000,000.
a. true, false
b. true, true
c.false, true
d. false, false
80. statement 1: an unmarried individual cannot constitute a family home
Statement 2: unpaid medical expenses at the time of death are deductible as claims against
the estate
a. true, false
b. true, true
c.false, true
d. false, false
81. mama, widow, a Filipino residing in Canada, died on December 20, 2007 leaving the
following properties
Real property (inherited from her husband on May 3, 2006 valued
then at 2,600,000)
Personal properties in Canada
Real and personal properties in the Philippines
Family home in Canada
Obligations:
Funeral expenses incurred in Canada
Other deductible expenses

a.
b.
c.
d.

2,960,0
00
1,300,0
00
670,00
0
2,500,0
00
250,00
0
850,00
0

The gross estate of mama is

7,430,000
7,070,000
6,760,000
670,000
82. in 81, the deduction for family home is
a. 2,500,000
b. 1,000,000
c. 1,250,000
d. none
83. in 81, the vanishing deduction is
a. 1,786,056.52
b. 1,772,059.20
c. 1,773,708.20
d. none
84. decedent died leaving a family home composed of the following: house, conjugal property
worth 800,000 and the land in which he exclusively owned valued at 400,000. He also owns
a vacation house in Baguio worth 700,000.

a.
b.
c.
d.

The deductible amount of family home

800,000
1,200,000
1,900,000
1,000,000
85. the decedent married, died leaving a family home valued at 1,500,000 composed of the
house which is 70% of the total amount (conjugal property) and the lot 30% of total amount
(exclusive property)

a.
b.
c.
d.

The amount deductible from gross estate is

1,500,000
1,000,000
975,000
525,000
86. bong, single and a resident citizen, died with properties constituting his gross estate of
4,000,000. Actual funeral expenses amounted to 150,000 and other charges against the
estate amounted to 210,000. The net taxable estate is
A. 3,640,000
b. 2,640,000
c. 3,740,000
d. 2,590,000
87. decedent, married in 1976, died leaving the following
Real properties
3,000,000
Family home
1,000,000
Other real properties, exclusive of
2,000,000
decedent
Family lot, exclusive of decedent
400,000
Funeral expenses
275,000
Medical expenses
650,000
Taxes and losses
1,300,000

a.
b.
c.
d.

The net taxable estate is

2,450,000
1,150,000
2,250,000
1,250,000
88.
Paid medical expenses for confinement at Tigok Hospital from May 15-23,
2007 (20,000 remain unpaid)
Hospitalizationexpenses (June 3-6, 2005)
Expenses for the settlement of the estate:
Acceptance fee, June 28,2007
Court fees, July 16,2007
Appearance of lawyer in court, 9-5-2007
Appearance of lawyer in court,11-29-2007

80,0
0
0
21,5
0
0
20,0
0
0
12,0
0
0
2,00
0
2,00
0

Based on above data, how much is the deductible medical and judicial expenses respectively if
the decedent died may 23,2007
a.
b.
c.
d.

80,000 and 36,000

100,000 and 36,000
80,000 and 34,000
100,000 and 34,000

89. statement 1: under the conjugal partnership of gains, the vanishing deduction is always a
deduction from exclusive properties
Statement 2: under the absolute community of property regime, the vanishing deduction is
deductible also against community property
a. true, true
b. true, false
c. false, false
d. false, true
90. the following data relates to Carl, married (2) years ago, died leaving the following:
Gross Estate
14,000,0
00

Land acquired by donation from his father

3.5 years ago:
Market value, date of donation
Market value, date of death
Funeral expenses
Judicial expenses
Unpaid mortgage on land at the time of
donation
Unpaid taxes
Losses
Transfer for public purposes
Medical expenses

200,000
300,000
35,000
15,000
100,000
10,000
25,000
35,000
45,000

Carl paid 60,000 to the mortgagee of the land a year before his death.
Assuming carl was under conjugal partnership of gains, the total ordinary deductions from
exclusive property is
a. 49,600
b. 89,600
c. 124,600
d. none
91. in problem 90, assuming that Carl was under absolute community of property regime the
total amount deductible from the community property is
a. 125,000
b. 134,600
c. 174,600
d. none
92. Alladin, Filipino, married, died January 1, 2006, leaving the following properties:
Inherited from his brother who died May 3, 2004:
Rice Land
Residential land
Inherited from his mother who died April 12, 2002 or five days after his
marriage:
Coconut land
Acquired thru Alladins wifes labor
Family home
Car
Commercial Land
Gold necklace(acquired by Aladdin during a previous marriage which had a
legitimate descendant)

1,000,0
00
2,000,0
00
420,00
0
2,000,0
00
500,00
0
1,000,0
00
80,000

The Riceland and the residential land were previously mortgaged for 350,000 when inherited
where 200,000 was paid by Alladin during his lifetime.
The coconut land was mortgaged for 94,000 of which 14,000 was paid before his death. Also,
Aladdin, by will, bequeathed to Marikina City the sum of 200,000 for exclusive public purpose.
The estate incurred the following expenses:
Funeral Expenses
Judicial Expenses
Portion of Family home destroyed by fire on
Jan 5, 2006
Medical expenses

140,0
00
80,00
0
100,0
00
40,00

0
The gross estate of Aladdin is
a. 3,500,000
b. 7,000,000
c. 5,250,000
d. 3,957,020
93. in number 92, the vanishing deduction is
a. 2,032,000
b. 220,980
c. 2,145,000
d. none
94. in number 92, the net taxable estate is
a. 2,217,500
b. none
c. 515,000
d. 535,000
95. Luis died leaving the following:
Exclusive properties
Conjugal properties
Judicial expenses
Funeral expenses
Notes payable (only is notarized)
Claims against insolvent persons (50 % is
collectible)
Proceeds of life insurance (beneficiary is wife
revocable)
Death benefits under RA 4917
Medical expenses (1/2 is not supported by
receipts)

2,000,0
00
2,500,0
00
45,000
150,00
0
100,00
0
120,00
0
200,00
0
180,00
0
550,00
0

The net taxable estate is

a. 1,892,500
b. 2,450,000
c. 1,520,000
d. 1,862,500
96. the following data is relates to the estate of Abandonado:
House and lot (family home) In Quezon City, zonal value (assessed
value, 1,150,000)
Personal properties
Benefits received from employer as a consequence of his death
Unpaid mortgage on Riceland with a value of 1,000,000
Claims against Dimalupig, insolvent

2,230,0
00
2,500,0
00
150,00
0
200,00
0
35,000

Based on above information, the value of the gross estate of Abandonado is:
a.
b.
c.
d.
97-99

5,915,000
4,835,000
4,685,000
5,730,000

On October 15, 2006, Benjamin, a Filipino citizen and resident of Manila, died intestate leaving
his wife, Diana and his two illegitimate children, Aubrey and Barbara. The estate of the deceased
consisted of the following:
Real property- conjugal
House and lot (family home) Manila. This property has an assessed value of 2,500,000 at
the time of death but valued in the zonal valuation of the BIR for 2,900,000.
Personal Property- conjugal
The total value was placed at 1,600,000.
Included in the 1,600,000 are proceeds of an irrevocable life insurance policy of 100,000
taken by Benjamin with Barbara as the beneficiary. The premiums were paid out of conjugal
property of the spouses.
The following deductions were claimed by the heirs:
Funeral Expenses
100,0
00
Unpaid loans, notarized
75,00
0
Losses incurred during the settlement of 25,00
the estate
0
97. the total gross estate of Benjamin is
a. 4,500,000
b. 4,100,000
c. 4,000,000
d. 4,400,000
98. the deductible amount of Family Home is
a. 2,900,000
b. 1,450,000
c. 1,000,000
d. none
99. the net taxable estate is
a. 100,000
b 150,000
c. 950,000
d. none
100. which of the following deductions cannot be claimed by a non resident alien
I. Vanishing deductions on a property situated in the Philippines
II. Funeral expenses incurred abroad
III. Family Home situated abroad
IV. Donation of a property for use by a foreign government
a.
b.
c.
d.

I only
I and II
III and IV
I and IV

101-103
Wilson died of a car accident. He died intestate on October 10, 2006, survived by his wife, Ging
and a son.
Exclusive Properties of Ging:
Car
Lot in Quezon City
Other real and personal properties
Exclusive properties of Wilson:
House and lot in Laguna, family house

400,00
0
2,000,0
00
800,00
0
1,900,0
00

Other personal properties

800,00
0
1,500,0
00

Other real properties

Conjugal properties of the spouses:
Cash on hand and in bank
Receivable as prize in a raffle sponsored by PICPA
Receivable from an insurance company where the son, Gino, was designated as a
revocable beneficiary. The premiums were paid out of the conjugal funds
The following deductions were claimed:
Funeral expenses
Judicial expenses
Claims against the estate, not notarized
Claims against insolvent persons
Unpaid mortgage on other real properties (contracted for the benefit of the conjugal
property)
Unpaid mortgage on house and lot in Laguna (the proceeds of which did not redound to
the benefit of the family)
Accrued income taxes
Income tax on income earned from October 11 to Dec 31, 2006

500,00
0
50,000
150,00
0
195,0
00
15,00
0
50,00
0
30,00
0
200,0
00
350,0
00
35,00
0
7,500

101. the gross estate is

a. 4,930,000
b. 4,900,000
c. 4,850,000
d. 8,130,000
102. the deductible share of surviving spouse is
a. 255,000
b. 127,500
c. 112,500
d. 2,227,500
103. the net estate subject to tax is
a. 1,962,500
b. 1,977,500
c. 112,500
d. 2,227,500
104. Alanis, a resident citizen, single but head of the family, died January 3, 2008. The following
are his data:
Properties:
Real Properties (excluding Family Home of
1,100,000)
House and Lot in Australia
Other personal properties
Deductions:
Funeral expenses
Claims against insolvent persons
Claims against the estate, not notarized
Unpaid mortgage on the family home

3,200,0
00
1,500,0
00
800,00
0
120,00
0
100,00
0
50,000
0
30,000

The personal properties do not include shares of stocks valued at 50,000 which were purchased
by the decedent from Astra Company one month prior to his death.
The house in Australia was inherited by Alanis from his father who died 2.25 years ago. Said
property was mortgaged for 200,000 which was paid by the decedent before his death.
The gross estate is
a. 4,050,000
b. 6,750,000
c. 6,650,000
d. 5,550,000
105. the total deductions (excluding standard deductions) is
a. 250,000
b. 300,000
c. 1,250,000
d. 2,001,111
Hint: the house in Australia is not subject to vanishing deduction because the property is situated
outside the Philippines. To be subject to the deduction, the property must form part of the gross
estate situated in the Philippines (Sec. 86 [ A,2], NIRC)
106. trillo, a resident of Quezon city, died on June 5, 2007 with the following data:
Property acquired by Trillo before marriage
1,500,0
00
Property acquired by his wife before marriage
1,000,0
00
Conjugal family house and lot, Quezon City, certified by Barangay
1,600,0
Chairman
00
House in Marbel City (exclusive of Trillo) , certified as family home by
1,000,0
barangay captain
00
Proceeds of life insurance, irrevocable, beneficiary is the estate
500,00
0
Claims against insolvent debtors (40 % uncollectible)
100,00
0
Inter vivos donations to City Government of Quezon
200,00
0
Actual Funeral expense (50 % paid by relatives)
300,00
0
Judicial Expenses
250,00
0
The net taxable estate is
a. 6,040,000
b. 1,580,000
c. 1,550,000
d. 1,370,000
Hint: house in quezon city is the true family home because it is the place where family resides.
107-110
Penduko married in 2005 under the absolute community of property regime, died on August 30,
2007. He left the following properties and obligations:
Properties:
Cash in bank
Residential lot inherited from his father on June 12,
2004
Family home:
house (community property)
Lot

(exclusive property of

Penduko)
Personal properties acquired by the spouses during
marriage

200,00
0
1,200,0
00
1,300,0
00
1,000,0
00
200,00
0

Receivable from his sister (insolvent)

Inter vivos donation from his mother on July 2007,
revocable
Receivable from SSS as indemnity for hospitalization
Deductions:
Unpaid mortgage on the residential lot contracted by
the father:
At the time of death of father
At the time of death of Penduko
Funeral expenses (40 % were shouldered by relatives)
Judicial expenses (30 % were incurred after 6 months)
Claims against the estate (includes unpaid medical
expenses of 12,000)
Unpaid mortgage on the house (loaned to pendukos
sister)
Casualty loss (50 % was indemnified by the Insurance
company)
Donation to Barangay Engkantao (verbal donation)

100,00
0
150,00
0
12,000

300,00
0
100,00
0
80,000
35,000
35,000
100,00
0
60,000
25,000

107. the gross estate on the estate of Penduko is

a. 4,062,000
b. 3,900,000
c. 3,962,000
d. 4,000,000
108. the vanishing deduction on the estate of Penduko is
a. 357,450
b. 375,540
c. 300,500
d. 367,450
109. the ordinary deductions from the community property of penduko is
a. 807,950
b. 582, 900
c. 782,950
d. 682,950
110. the net taxable estate is
a.
b.
c.
d.

None
46, 525
96,525
122,025

111. Eleanor, resident Citizen, married and under the absolute community of property regime,
died on August 20, 2007. The following are the data on properties and obligations:
Exclusive properties of Eleanor:
Personal properties
Family home
Community Properties:
Real properties
Personal properties
Funeral expenses
Judicial expenses incurred until Feb
20, 2008
Judicial Expenses incurred after Feb

2,500,0
00
2,000,0
00
1,400,0
00
1,750,0
00
220,00
0
30,000
20,000

20, 2008
Unpiad taxes
Medical expenses
Casualty loss incurred November 2,
2007
Casualty loss incurred March 5,
2008
How much is the net taxable estate
a. 3,268,500
b. 3,278,750
c. 3,238,000
d. 3,228,000
112. the net distributable estate is
a. 3,278,750
b. 3,483,750
c. 5,483,750
d. 5,418,750

12,500
550,00
0
350,00
0
130,00
0