OLARTE, CHRISTHEA C.

CHAPTER 13:
True of False 1
______1. The list of properties of the decedent existing at the point of death must be
established in determining gross estate.
______2. Gross estate consists of all real properties and tangible personal properties
wherever situated at the point of death.
______3. The gross estate of non-resident citizen includes tangible properties
wherever situated.
______4. The gross estate of non- resident alien includes only tangible properties
situated in Philippines.
______5. The gross estate of resident alien includes only real properties wherever
situated.
______6. The list of properties of the decedent must be counted at the date of death.
______7. Properties owned by the decedent which are exempted by law are initially
included in gross estate but are removed by way of deduction from gross
estate.
______8. Properties not owned by the decedent may be included in gross estate.
______9. Taxable transfers consist of properties passed to other persons before
death but are still owned by the decedent at the point of death.
______10. The motives of the donation shall be the basis of its taxation.
______11. Properties valued at the higher of the fair value and acquisition cost.
______12. Newly acquired properties are valued at acquisition cost.
______13. Where the law or regulations do not prescribe for fair value rules, fair
value rules of generally accepted accounting principles may be sought.
______14. Listed stocks are valued at their par value.
______15. Non-listed common stocks are valued at their book value.
Chapter 13-A-Estate Tax: Gross Estate
True or False 2
______1. Transfers inter-vivos made before death are included in gross estate.
______2. Income earned after death are included in gross estate.
______3. Income earned before death are included in gross estate.
______4. The payment for obligations and expenses after death is added back to the
amount of gross estate.
______5. Taxable transfers are included in gross estate.
______6. Properties held by the decedent as a trustee must be included in gross
estate.
______7. Properties held by the decedent which must be transmitted to an heir in
accordance with the desire of a predecessor are excluded in gross estate.
______8. The proceeds of an irrevocable life insurance is included in gross estate.

______9. Properties held by the decedent as a fiduciary heir are included in gross
estate.
______10. The proceeds of life insurance which is revocably designated must be
included in gross estate.
______11. The proceeds of life insurance which is included in gross estate if the
beneficiary is the estate, the executor or administrator.
______12. The separate properties of the surviving spouse are excluded in gross
estate.
______13. Transfers made for adequate considerations are excluded in gross estate.
______14. The merger of usufruct in the owner of the naked title is a transfer
excluded in gross estate.
______15. The gross estate includes only the person separate properties of the
decedent.
______16. The proceeds of group insurance is included in gross estate.
______17. The proceeds of GSIS policy and SSS benefits are included in gross estate.
______18. Benefits from the USVA are exempt from estate tax.
______19. Donations mortis causa to accredited non-profit institutions are exclusions
in gross estate.
______20. Transfers in contemplation of death are included in gross estate.
______21. If the fair value of the property transferred mortis causa for an inadequate
consideration decline below the amount of the consideration at the date of
death, no amount is included in gross estate.
______22. Revocable transfers and conditional transfers are included in gross estate
at the fair value of the property at the date of their transfer to the
transferees.
______23. Properties passing under special power of appointment are included in
gross estate.
______24. The gross estate is valued at the point of death.
______25. If a consideration is paid by the transferee in a taxable transfer, the
amount to include in gross estate shall be the excess of the fair value of the
property at the date of death over the consideration given.

Chapter 13-A-Estate Tax: Gross Estate

Multiple Choices Theory: Part 1

1. The gross estate of resident or citizen decedents do not include

a. Properties located abroad
b. Properties located in the Philippines
c. Intangible personal property located abroad
d. Properties not owned
2.

Gross estate means

a. Properties, whether or not owned by the decedent, existing at the point of
death.
b. Properties owned by the decedent at the point of death
c. Present properties in the possession of the decedent at the point of death
d. Any of these

3.

As a rule, all decedents are taxable on world estate, except

a. non-resident alien.
b. non-resident citizen.
c. resident alien.
d. non-residents.

4.

As a rule, the gross estate of non-resident alien decedents includes

a. Intangible personal properties located abroad
b. Real properties located abroad
c. Intangible personal properties located in the Philippines
d. Tangible personal properties

5.

Which reciprocity exemption?

a. Resident alien
b. Non-resident alien
c. Non-resident citizen
d. All of these

6.

Which property is covered by the reciprocity exemption?

a. Intangible personal property abroad
b. Intangible personal property in the Philippines
c. Tangible personal property abroad
d. Tangible personal property in the Philippines

7.
Which of these properties may be excluded in gross estate by reason of
reciprocity?
a. Cash
c. Paintings
b. Car
d. Land
8.
Which is not deducted from the inventory list of properties in arriving at the
gross estate?

a. Properties held as a trustee

b. Properties held as fiduciary heir
c. Properties held under a general power of appointment
d. Properties held under a special power of appointment
9.
If inventory taking of properties conducted after the death of the decedent,
which is deducted from
the inventory list?
a. Income accruing after death
b. Expenses paid after death
c. Income accruing before death
d. Expenses paid before death
10. Which is not added to the inventory list of properties in computing gross estate?
a. Transfer in contemplation of death
b. Revocable transfers
c. Transfers under general power of appointment
d. Merger of the usufruct in the owner of the naked little
11. Which is a correct statement?
a. The merger of the usufruct in the owner of the naked title is a transmission
subject to estate tax.
b. The transfer from the first heir to the second heir in accordance with the
wishes of a predecessor is a taxable transfer subject to estate tax.
c. The proceeds of life insurance taken by the decedent for his own life is always
included in gross estate if the beneficiary is the estate, executor or
administration.
d. The trustor need not include a property transferred in a revocable trust in his
gross estate.
12. Which of these transfers is subject to estate tax?
a. Transfer of properties for a full consideration
b. Transfer of the inheritance from the fiduciary heir to the fideicommissary
c. Transfer of the property held in trust by a trustee to the beneficiary
d. Transfer mortis causa for the less than full and adequate consideration
13. Which of these properties is subject to estate tax
a. Properties which were initially transferred in revocable trust but were revoked
by the decedent
before his death
b. Properties transferred under revocable trust which the decedent failed to
revoke at the time of
this death
c. Properties transferred under conditional donations where in the death has not
yet fulfilled the
terms of donations at the date of death of the
decedent
d. All of these

14. The proceeds of life insurance designated by the decedent to his child is
included in gross estate
a. if the designation is revocable.
b. if the designation is irrevocable.
c. without regard to the designation as
d. in all circumstances.
15. The proceeds of life insurance designated by the decedent to his estate is
included in gross estate
a. if the designation is revocable.
b. if the designation is irrevocable.
c. without regard to the designation as revocable or irrevocable.
d. in all circumstances.
16. The proceeds of life insurance designated by the decedent to his wife is
excluded in gross estate
a. if the designation is revocable.
b. if the designation is irrevocable.
c. without regard to the designation as revocable or irrevocable.
d. under no circumstances.
17. The proceeds of life insurance designated by the decedent to his executor is
excluded in gross estate
a. if the designation is revocable.
b. if the designation is irrevocable.
c. without regard to the designation as revocable or irrevocable.
d. under no circumstances.
18. Which is an inclusion in gross estate?
a. Separate properties of surviving spouse
b. Common properties of the spouses
c. Separate properties of the heirs
d. Properties acquired from the group insurance
19. Which is not included in gross estate?
a. Revocable transfers
b. Transfers in contemplation of death
c. Transfer under special power of appointment
d. All of these
20.Which is not included in the gross estate of the husband?
a. Capital properties
b. Common properties

c. Paraphernal properties
d. All o these
21.Which is not included in the gross estate of the wife?
a. Capital properties
b. Common properties
c. Paraphernal properties
d. All o these
22.Which of the following donations in the last will and testament is excluded in
gross estate of the decedent?
a. Donation to a favorite child
b. Donation to an ex-girlfriend
c. Donation to a charitable institution
d. Donation to the government
23.Which proceeds of insurance is included in gross estate of the decedent?
a. Proceeds of life insurance irrevocably designate to the decedents child
b. Proceeds of group insurance
c. Proceeds of property insurance
d. All of these
24.Which is not an exclusion in gross estate?
a. Accruals from SSS
b. GSIS benefits
c. War damage payments
d. Private retirement benefits
25. Which of the following bequest to social welfare or charitable institutions is
subject to estate tax?
a. Bequests to be used for administrative purposes
b. Bequests restricted by the decedent for program expenses of the institution
c. Bequest to accredited non-profit institution
d. All of these
26.Statement 1: For taxable transfers, the value to include in gross estate shall be
the fair value of the property at the point of death.
Statement 2: For taxable transfers made for an insufficient consideration, the
total fair value of the property at the point of dearth shall be included in gross
estate.
Which is correct?
a. Statement 1
b. Statement 2

c. Both statements
d. Neither statement

Multiple Choice Theory: Part 2

1. Mr. A devised in his will a piece of land to Mrs. B. Mrs. B shall pass usufructuary
right over the property and shall pass the same to Mr. C upon her death.
Who shall include the property in his or her gross estate upon death?
a. Mr. A
c. Mr. C
b. Mr. B
d. Mr. A and Mr. C
2. Mrs. A appointed Ms. B as fiduciary heir over an agricultural land which Ms. B
shall turn over to Mr. C upon Ms. Bs death.
Which is incorrect?
a. The land must be included in Mrs. As gross estate upon her death.
b. The land must be excluded in Ms. Bs gross estate upon her death.
c. The land must be excluded in Mr. Cs gross estate upon his death.
d. None of these
3. Mr. A designated his wife as the revocable beneficiary of the proceeds of his life
insurance
Which is incorrect?
a. The proceeds must be included in the gross estate of Mr. A.
b. The proceeds must be excluded in the gross estate of Mrs. A upon her death.
c. The proceeds must be treated as donation subject to donors tax.
d. The proceeds must be excluded in the gross estate of Mr. A.
4. Mr. A designated Mr. K, the executor of his estate, as his irrevocable beneficiary
to the proceeds of his life insurance.
Which is correct?
a. The proceeds of the life insurance policy shall be included in the gross estate
of Mr. A.
b. The proceeds of the life insurance policy shall be excluded in the gross estate
of Mr. A.
c. The proceeds of life insurance is a donation subject to donors tax.
d. The proceeds is exempt from both donors tax and estate tax.
5. Which of the following is excluded in the gross estate of Mr. X?
a. Separate property of Mr. X
b. Common property of Mr. and Mrs. X
c. Separate property of Mrs. X
d. B and C

6. Mr. A made an irrevocable donation in trust in favor of Mr. C. Mr. C died two years
after receiving
the donation.
Which is correct?
a. The property shall be included in the gross estate of Mr. C.
b. The property shall be included in the gross estate of Mr. A.
c. The property shall be excluded in the gross estate of Mr. C.
d. None of these
7. What is a best way to minimize estate tax exposure?
a. Invest your money in a corporation
b. Donate the properties to relatives before death
c. Understate your gross estate and do not pay estate tax
d. Invest property in life insurance and make the designation of the beneficiary
as irrevocable
8. Which of these transfer mortis causa will more likely to be included in gross
estate of the decedent?
Fair value at transfer
death
a.
b.
c.
d.

P
P
P
P

100,000
150,000
200,000
300,000

Selling price at transfer

P150,000
P150,000
P150,000
P200,000

Fair value at
P
P
P
P

200,000
300,000
140,000
280,000

9. Which is excluded in gross estate?

a. Fringe benefits
b. De minimis benefits
c. GSIS benefits
d. Philhealth benefits
10.
Which of the following properties is present at the point of death but is
excluded from gross estate?
a. Revocable transfer
b. Conditional transfer
c. Transfer by bona fide sale
d. Proceeds of group insurance
11.

Which may be exempt from estate tax?

a. Proceeds of building fire insure
b. Proceeds of car insurance
c. Proceeds of crop insurance
d. Proceeds of life insurance

12.Which is not included in gross estate?

a. Decedent interest to properties
b. Taxable transfers
c. Proceeds of life insurance irrevocably designated to the estate
d. Income of properties of the decedent after death
13.

The decedent owns an agricultural land with the following values;

Zonal value
P
2,000,000
Assessed value
1,500,000
Independent appraised value
3,200,000
Offer price of a willing buyer
4,000,000
The agricultural land shall be included in gross estate at
a. P 1,500,000
c. P 3,200,000
b. P 2,000,000
d. P 4,000,000

14.
The decedent owns 200,000 shares of Saint Peter Corporation, a listed
company.

Book value per share

Closing price
Average trading price

Date of death
P 23.50
P 48.20
P 48.00

Date of interment
P 23.55
P 49.50
P 49.60

The 200,000 shares shall be included in gross estate at

a. P 4,700,000
c. P 9,600,000
b. P 9,640,000
d. P 9,900,000
15.The decedent had $ 2,000 in his possession at the date of his death on
November 2, 1014. He was buried on November 12, 2014.
The following were the exchange rates:
November 2 2014
P 42.50: $1
November 2 to No 12, 2014 average rate P 43.25: $1
November 12, 2014
P 42.75: $1
At what amount shall the $2,000 be included in the gross estate of the
decedent?
a. P 86,500
c. P 85,000
b. P 85,500
d. P 0
Multiple-Choice Problems: Part 1

1. Mrs. Dely Cado died on November 1, 2014. An inventory of her properties was
conducted for estate tax purposes on January 1, 2015. On that date, she had
properties with aggregate fair values of P7,000,000. This amount includes
P300,000 income received by the estate since her death and is net of P600,000
expenses used during her funeral.
What is the amount of gross estate?
a. P 7,900,000
c. P 7,000,000
b. P 7,300,000
d. P 6,000,000
2. Mr. Tio died leaving the following properties:
Purchase cost
Fair value
Car, registered in his name
P
800,000
P 400,000
Family home
2,000,000
5,000,000
Other properties
400,000
350,000
Compute the gross estate.
a. P 2,750,000
b. P 3,200,000

c. P 5,750,000
d. P 6,200,000

3. Mr. Bacleito had the following properties with their respective fair values in his
possession at the date of his death:
Agricultural land, held in trust
P
200,000
Car, registered in the name of his brother
300,000
Motorcycle
80,000
Residential lot
900,000
Other personal properties
70,000
Compute the gross estate.
a. P
950,000
b. P 1,050,000

c. P 1,250,000
d. P 1,550,000

4. The heirs of Mr. Masigasig identified a total P 12,000,000 in properties which

were existing at the date of his death. A total of P 500,000 was used during his
wake up to the point of his interment. His heirs also used P 400,000 of this
amount to pay off obligations of Mr. Masipag. An investment in the estate of Mr.
Masipag also earned P 50,000 in dividends which the heirs reserved for payment
of his estate tax.
What is the gross estate?
a. P 12,900,000
b. P 12,850,000

c. P 12,500,000
d. P 12,000,000

5. A decedent died in October 2012. His properties had aggregate fair value of P
12,000,000 at that time. His heirs failed to pay his estate tax. In March 2014, his
heirs prepared a list of the decedents properties which now had a value of P
13,500,000 which excludes a car worth P 1,500,000 which was stolen on January
2014.
What is the gross estate?
a. P 0
c. P 13,500,000
b. P 12,000,000
d. P 15,000,000
6. A resident decedent died leaving the following properties:
An orchard, held as usufructuary
P 1,200,000
A motorcycle, borrowed from a friend
80,000
Cash, proceeds of his bank loan
500,000
A ranch, acquired for P 1,000,000 in 1990
2,500,000
Cattles
600,000
House and lot
800,000
Compute the gross estate.
a. P 2,400,000
b. P 3,900,000

c. P 4,400,000
d. P 5,680,000

7. A citizen decedent died leaving the following:

Properties, inherited from his father
P 1,200,000
Properties, donated by brother
800,000
Cash, from his salary savings
400,000
Cash, income of properties before death
200,000
Receivables, income of properties after death 100,000
What is the gross estate?
a. P 600,000
b. P 700,000

c. P 2,600,000
d. P 2,700,000

8. A resident Japanese decedent died with the following properties:

A house and lot in Japan
Bank deposit, in the Philippines
A car in the Philippines
A residential lot in the USA

2,000,000
800,000
1,000,000
1,500,000

Compute the amount to be included in gross estate.

a. P 0
b. P 1,800,000

c. P 2,000,000
d. P 5,300,000

9. A non-residential alien decedent died leaving the following:

A building in Korea
P 8,000,000
A car in Hongkong
2,000,000
Shares of stocks in Malaysia
4,000,000
Cash in the Philippine banks
800,000
Investment in bonds of domestic corporations 400,000
Compute the gross estate.
a. P 0
b. P 800,000

c. P 1,200,000
d. P 11,200,000

10. A Korean citizen, residing in the Philippines, died in the Philippines:

An agricultural land in Korea
A house and lot in Korea
A condominium unit in the Philippines
A business interest in the Philippines
Car in the Philippines
Cash in Japanese banks

P 12,000,000
4,000,000
2,000,000
3,000,000
1,200,000
1,800,000

What is the amount to include in gross estate?

a. P 0
c. P 6,200,000
b. P 3,200,000
d. P 24,000,000
11. A Filipino citizen died while residing in the USA. He had the following properties
at the date of his death:
Shares of domestic corporations
Cash in US banks
Car in the US
House and lot in the Philippines

P 2,000,000
5,000,000
3,000,000
4,000,000

What is the amount to include in gross estate?

a. P 0
c. P 6,000,000
b. P 4,000,000
d. P 14,000,000
12.A Mexican citizen died in Tokyo, Japan. He had the following properties:
House and lot in Mexico
House and lot in Japan

P 12,000,000
18,000,000

Car in Japan
Shares of stock in a domestic corporation
Interest in a Philippine-based business

2,000,000
4,000,000
2,000,000

What is the amount to include in gross estate?

a. P 0
c. P 26,000,000
b. P 6,000,000
d. P 38,000,000
13.In the immediately preceding problem, what is the amount to include in gross
estate assuming that the reciprocity condition applies?
a. P 0
c. 26,000,000
b. P 6,000,000
d. 38,000,000
14. A non-resident alien decedent had the following interests at the point of death:
Interest in a business partnership organized abroad
P 300,000
Shares in a foreign corporation 75% of the business
Of which is situated in the Philippines
400,000
Claims from resident debtors
1,200,000
Compute the amount of properties considered situated in the Philippines.
a. P 800,000
c. P 2,000,000
b. P 1,200,000
d. P 2,400,000
15.Mr. Masipag died leaving a commercial land as part of his estate. The land was
purchased in 2010 at an acquisition price of P 11,000,000. An interested buyer
tendered a P 15,000,000 offer to buy the property. The land had an independent
appraisal of P 16,000,000, assessed value of P 12,000,000 and a zonal value of P
14,000,000.
What is the amount to be included in gross estate?
a. P 11,000,000
c. P 14,000,000
b. P 12,000,000
d. P 15,000,000
16.Mr. Imbestor died with a significant stock holdings as follows:

1,000 Globe preferred stocks with P 1,000 par value per share
40,000 San Miguel common shares with par value of P 100 per share
80,000 stocks of Carmen Corporation with par value of P 50 per share

Book
values
Globe preferred

P1,000

PSE closing
price
at date of
death
P1,000

San
Miguel
common
shares
Carmen common shares

250

300

45

What is the total amount to include in gross estate?

a. P 13,000,000
c. P 16,000,000
b. P 15,000,000
d. P 17,000,000
17. A decedent died with the following properties:
Purchase cost
Newly purchased jeepney
P 1,200,000
An old model Ford Expedition
1,500,000
Land, mortgaged to a bank for P 1,000,000
3,000,000
500 grams pure gold
850,000
The Ford Expedition was refurbished by the decedent making it readily saleable
at P 1,800,000 in the second market. The land had zonal of P 4,000,000 and
assessed value of P 2,500,000. The Bangko Sentral ng Pilipinas (BSP) is buying
gold at P 1,800 per gram at the date of death of the decedent.
Compute the total amount to be included in gross estate.
a. P 6,550,000
c. P 4,280,000
b. P 400,000
d. P 4,400,000
19. A decedent owns 25,000 stocks in a closely held corporation which had the
following equity structure at the date of death of the decedent:
Common stocks (1,000,000 outstanding shares) P
Additional paid in capital
Retained earnings
Total Shareholders equity
P

5,000,000
2,000,000
1,000,000
8,000,000

What is the value of the stocks to be reported in gross estate?

a. P 0
c. P 175,000
b. P 125,000
d. P 200,000
20.Mr. Canuto was hospitalized on April 8, 2014 but died on Apirl 12, 2014. Its was
buried on April 21, 2014. Mr. Canuto had $124,000 prior to hospitalization.
$24,000 was spent for his hospitalization while $10,000 was used for his funeral.
The following were the exchange rate between the Peso and the Dollar:
April 8,

April 12,

April 21,

Peso-Dollar
exchange
rate

2014

2014

2014

P 42.30

P 42.50

P 42.45

Compute the amount to be included in gross estate.

a. P 4,245,000
c. P 5,270,000
b. P 4,250,000
d. P 5,695,000
Multiple-Choice Problems: Part 2
1. Ms. Ma. Katie Pero died bankrupt. She had the following properties and
obligations at the date of her death:
Cash
Agricultural land
Family home
Debts and obligations
Compute the gross estate.
a. (P 2,800,000)
b. P 0

200,000
3,000,000
2,000,000
8,000,000

c. 5,000,000
d. 5,200,000

2. Mrs. Candida died. In his last will and testament, he indicated the following:
House and lot, to his adopted son and only heir P 5,000,000
Land, to a public school
1,000,000
Cash, to ABS-CBN Foundation
500,000
The legacy to ABS-CBN Foundation is intended to Bantay Bata 163, a non-profit
social welfare program of ABS-CBN Foundation.
Compute the gross estate.
a. P 5,000,000
b. P 5,500,000

c. P 6,000,000
d. P 6,500,000

3. The heirs of a decedent received the following insurance proceeds upon the
decedents death:
Source
Amount
Insurance A - designated to wife as revocable beneficiary
P 400,000
Insurance B - designated to son as irrevocable beneficiary
500,000
Insurance C - group insurance proceeds
200,000
Insurance D designated to executor as irrevocable beneficiary
400,000
Compute the insurance proceeds to be included in gross estate.
a. P 200,000
c. P 800,000
b. P 400,000
d. P 900,000

4. In his will, Anton transferred a life usufruct in favor of Cendong and thereafter to
Bentong, who is the owner of the naked title. Cendong eventually died resulting
in the transfer of the property to Bentong. Bentong also died few years later.
Which is correct?
a. The property shall not be included in the gross estate of Anton.
b. The property shall be included in the gross estate Cendong.
c. The property shall not be included in the gross estate of Bentong.
d. The property shall be included in the gross estate of Anton and Bentong.
5. D devised in his will an agricultural land with life usufruct to E and naked title to
F. All parties eventually died. The land had a value of P 1,500,000 on Ds death, P
1,000,000 on Es death and P 2,000,000 on Fs death.
Which is correct?
a. The land shall be valued at P 1,000,000 in the gross estate of D.
b. The land shall be valued at P 1,500,000 in the gross estate of E.
c. The land shall be valued at P 2,000,000 in the gross estate of F.
d. None of these
6. Mr. X devised in his will a commercial land to be given to Z, his favorite
grandchild. Since Z is a minor, Mr. X designated Mrs. Y as the fiduciary heir who
is entrusted the obligation to transfer the property to Z upon her death.
Which is correct?
a. The transfer of the property from Mr. X shall be subject to donors tax not to
estate tax.
b. The transfer from X to Z is subject to estate tax not to donors tax.
c. The transfers from X and Y is not subject to any transfer tax.
d. The transfer from Y to Z is subject to donors tax.
7. In his will, Mr. Curandang appointed Matito as first heir over a business. Matito,
however, is bound to transfer the property to either Elsa or Donna. In his will,
Matito designated Donna as beneficiary of the business.
Which is true?
a. The transfer from Mr. Curandang to Matito is subject to estate tax.
b. The transfer from Matito to Donna is subject to estate tax.
c. The transfer from Mr. Curandang to Matito is subject to donors tax.
d. None of these
8. Mr. Cabayo is the chief executive officer of Payaman Power Multilevel Marketing
Corporation (PMMC). Mr. Cabayo died in a car crash.

Which must be included in the gross estate of Mr. Cabayo?

a. Proceeds of life insurance taken by Mr. Cabayo with his eldest son as
irrevocable beneficiary
b. Proceeds from Mr. Cabayos car insurance
c. Proceeds of the life insurance over Mr. Cabayos life taken by PMMC with
PMMC as the
beneficiary.
d. None of these
9. Mrs. Malou Phet is the beneficiary of a revocable donation consisting of two
commercial buildings. Mrs. Phet himself is also designated by his father as a
fiduciary heir over a commercial lot which is to be transferred to his younger
sister, Mabaet. Mrs. Phet died in action as a military servicewoman.
Which is correct?
a. The buildings and the commercial lots shall be included in the gross estate of
Mrs. Malou Phet.
b. The two buildings shall be included in the gross estate of Mrs. Malou Phet.
c. Only the commercial lot shall be included in the gross estate of Mrs. Malou
Phet.
d. The buildings and the commercial lot shall be excluded in the gross estate of
Mrs. Malou Phet.
10.Mr. Dino Jones died leaving the following properties:
Car, purchased using GSIS retirement benefits
P 500,000
Interest in a joint venture business
3,000,000
Hose and lot, separate property of his wife
2,000,000
Proceeds of insurance, revocably designated to wife
1,500,000
Total
P 7,000,000
Compute the amount to be included in gross estate?
a. P 2,000,000
c. P 4,500,000
b. P 3,500,000
d. P 7,000,000
11.An inventory total of the properties of Mrs. Tina Taray and his widower is shown
below:
Separate property of Mrs. Taray
Separate properties of Mr. Taray
Value of family business
Other properties owned jointly by Mr. and Mrs. Taray

P 6,000,000
1,500,000
2,000,000
3,000,000

Total

P 12,500,000

Compute the gross estate of Mrs. Taray.

a. P 4,000,000
c. P 6,500,000
b. P 6,000,000
d. P 11,000,000
12.On September 30, 2014, Mr. Pogi Nalang died in an accident. Few hours later, his
wife, Maganda Nalang, died of heart-attack upon learning of Mr. Pogis death.
The spouses had a son who is the only heir to their properties.
The properties of the spouses on September 30 were:
Separate properties of Pogi
Separate properties of Maganda
Common properties of the spouses

P 3,000,000
5,000,000
8,000,000

Compute Matikas gross estate.

a. P 3,000,000
c. P 11,000,000
b. P 7,000,000
d. P 16,000,000
13.

In the immediately preceding problem, assume further that Mrs. Maganda

Nalang had the following:
Share in the net distributive estate of Mr. Nalang
Share in the net conjugal properties with Mr. Nalang

P 2,500,000
3,700,000

Compute Mrs. Nalangs gross estate.

a. P 5,000,000
c. P 8,700,000
b. P 7,500,000
d. P 11,200,000
14.

Mr. Willy made the following transfers mortis causa during his lifetime:
Transfer to Jaimee A revocable transfer involving residential lot valued at
P 2,000,000 at the date of transfer. Willy failed to revoke the same until
his death.
Transfer to Mr. Li A conditional transfer of business interest worth P
10,000,000 at the date of transfer. Mr. Li to meet the conditions before Mr.
Willys death.
Transfer to Mark A conditional transfer of car valued at P 1,500,000.
Mark fulfilled the condition before Mr. Willys death.
The properties had the following fair values at the death of Mr. Willy,
Residential lot

P 3,000,000

Business interest
Car
Total

9,000,000
1,200,000
P 13,200,000

Compute the amount to be included in Mr. Willys gross estate.

a. P 3,000,000
c. P 12,000,000
b. P 9,000,000
d. P 13,200,000
15.

Mr. Yakusa, a Japanese citizen residing in Tokyo, Japan, died with the following
properties in the Philippines:
P 2,000,000 car given to resident Filipino friend as revocable donation; Mr.
Yakusa waived his right to revoke the donation on his last visit in the
Philippines.
P 4,000,000 share investment on listed firms held by a Philippine stock
broker
P 5,000,000 interest in a partnership operating in the Philippines

16.

A decedent invested P 2,000,000 in the stocks of ABC Corporation by

purchasing stocks from an investor who sold the shares at P 125 per share.
At the date of the decedents death, the stocks were selling P 134 per share.
What is the value to include in gross estate?
a. P 2,000,000
c. P 134,000,000
b. P 2,144,000
d. P 268,000,000

17.

Mr. Mando Rucot owns 20% of the 1,000,000 outstanding shares of DEF
Corporation, closely held corporation. DEF Corporation had a book value per
share of P120 on its financial statement nearest to the date of death of Mr.
Rucot. DEF Corporation had several assets which exceeds their fair value by an
aggregate amount of P 14,000,000.
At what amount shall this investment be reflected in the gross of Mr. Rucot?
a. P 26,800,000
c. 120,000,000
b. P 53,600,000
d. 268,000,000

18.

In 2000, Mr. Cabalde died leaving a will which directed all real estate owned
by him not to be sold or disposed of for a period of 10 years after his death and
ordered that the property be given to Mrs. Yare after the 10-years period. In
2000, the estate had a fair market value of P 2,000,000. In 2012, the fair market
value of said estate increased to P 5,000,000 and the Bureau of Internal Revenue
(BIR) assessed thereon estate tax based on P 5,000,000.
Is the BIR assessment valid?

a. Yes. The assessment of the CIR is correct because on matters of assessment

he has the authority
to determine the value to be assessed;
b. No. The assessment of the CIR is incorrect. The assessment should have been
based on the fair
market value at the same time of death which is P
2,000,000;
c. Yes. The assessment of the CIR is correct because it was based on the value at
the time of
assessment;
d. No. The assessment of the CIR is incorrect because estate tax is not subject to
any assessment.