Professional Documents
Culture Documents
Atty. Macmod
ESTATE TAX
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
P 200,000
500,000
2,000,000
5,000,000
11,000,000
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 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 expressed 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.______________ tax imposed upon gratuitous transfer mortis causa.
P xx
xx
P xx
P xx
Your mind is a magnet. Continue to dwell on what you want with a strong belief and you will achieve it. - A. Matthews
ESTATE TAX
2) Decedent married
Gross estate
Exclusive of the decedent
P xx
Common property of the couple
xx
Allowable deductions
From exclusive property
xx
From common property
xx
Net estate before share of surviving spouse
Less: Share of surviving spouse
Net estate before special deductions
Less: Deduction for family home/medical exp./s.deductions
Taxable net estate
Estate tax due (0%-20%)
*Computation of the share of surviving spouse
Gross common property of the H & W
P xx
Less: Deductions from common property
xx
Net
xx
Divided by
2
Share of the surviving spouse
P xx
Page 2
P xx
xx
xx
xx
xx
xx
P xx
P xx
ESTATE TAX
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6.
7.
8.
9.
10.
11.
12.
13.
ESTATE TAX
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EXERCISES/PROBLEMS
A. State the amount of allowable deductions from the gross estate in each of the following:
_______________ 1. Gross estate of P500, 000 and funeral expenses of P75, 000.
_______________ 2. Gross estate of P3,000,000 and actual funeral expenses of P90,000 of which was
paid by friends.
_______________ 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 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. died September 30, 2000. Decedent
dated March 15, 2001.
_______________ 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 decedents death, 75% compensated
by insurance. Estate was settled in the 6th month.
_______________ 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 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 mortgaged.
________________ 16. The decedents administrator claims the following funeral expenses
Expenses of internment
P40,000
Cost of the burial lot (paid paid by friends & relatives, 50%)
20,000
Fees for performance of rites incident to internment
10,000
Mourning clothing of widow & unmarried minor children
5,000
Expenses during the wake before burial (paid by uncle, 25%)
20,000
Obituary notice
3,000
Card of thanks
2,0
ESTATE TAX
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The allowable funeral expenses assuming the decedents gross estate is:
a. P2,000,000
b. P1,500,000
B.Determine whether the following properties are conjugal/community or exclusive:
ACP
1. Property acquired before marriage
_______________
2. Property acquired during marriage
_______________
a. By onerous Title
_______________
b. By gratuitous Title
_______________
3. Income from 2-a earned during marriage
_______________
4. Income from 2-b earned during marriage
_______________
5. Other income of the couple earned during marriage
_______________
6. Property acquired during marriage thru exchange:
Using exclusive prop.
_______________
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
_______________
CPG
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
C.Multiple Choice
1. It refers to a mode of transferring & acquiring properties left by the decedent.
a. Estate transfer b. Succession c. Donation
d. Execution of a will
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.
a. Inheritance
b. Capital
c. Estate
d. Devisee
3. The estate tax accrues from the moment of:
a. The fixing of notice of death
c. The death of the decedent
b. Expiration of a months after death
d. The filing of estate tax return
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.
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
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 anonime 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.
d. Shares, obligations of bonds issued by any foreign corporation of such shares, obligations or
bonds have acquired a business situs in the Philippines.
e. Shares or rights in any partnership, business or industry established in the Philippines.
7. A person who inherits personal property thru a will:
a. Devisee
b. Legatee
c. Heir
d. Successor
8. A person who inherits real property thru a will:
a. Devisee
b. Legatee
c. Heir
d. Successor
9. Succession wherein the decedent did not leave any will:
a. Voluntary succession
b. Legal succession c. Mixed succession d. Testamentary succession
ESTATE TAX
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ESTATE TAX
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ESTATE TAX
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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 companys 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:
a. Still at P75,000
b. P250,000
c. P200,000
d. PO
Questions 32 & 33 are based in the following information:
Building, USA
P5,000,000
House & lot in Bulacan (500 sq. meters) zonal value is P10,000 per square meter
4,500,000
Life insurance proceeds, beneficiary is the wife, the administratix, irrevocable
500,000
Life insurance proceeds with another company beneficiary, his son, revocable
200,000
Claims against a debtor who died a year ago (50% collectible)
50,000
Death benefits from US Veteran Administration
100,000
Death benefits from SSS
40,000
Paraphernal property of his surviving wife
2,000,000
He also transferred mortis causa the following:
S Price
FMW- Transfer
FMV - Death
Car, Mla.
P 500,000
P1,000,000
P 800,000
Land, Mla.
1,500,000
2,000,000
1,000.000
Land, USA
2,000,000
1,800,000
3,000,000
32. If the decedent is a Filipino citizen, his gross estate is:
a. P10,850,000
b. P12,900,000
c.P10,050,000
d. P11,050,000
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
b. P5,300,000
c. P6,500,000
d. P6,000,000
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, of which was paid by his employer. The deductible funeral expense is:
a. P25,000
b. P20,000
c. P6,250
d. P80,000
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
b. P60,000
c. P5,000
d. P80,000
36. lst statement: A note payable contracted 11 yrs. Ago is a deduction from the gross estate if notarized.
2nd Statement: A note receivable against an insolvent person contracted by the decedent before his death
must be included in the gross estate in full even if only 50% is collectible.
a. True, True
b. False, False
c. True, False
d. False, True
37. lst 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.
nd
2 Statement: A donation inter vivos by the decedent to the Phil. government few months before his death
is a deduction from the gross estate.
a. True, True
b. False, False
c. True, False
d. False, True
38. Purobuto, non-resident Japanese, died leaving the following:
Exclusive properties, Philippines
P 560,000
Conjugal properties, Philippines
420,000
Conjugal properties, Abroad
1,820,000
Deductions claimed:
Funeral expenses
100,000
Judicial expenses
100,500
Unpaid expenses
150,500
Losses: occurring 3 mos. After death due to fire
120,000
Donation mortis causa to Makati City Hall
180,000
Family Home (inc. above)
1,000,000
Standard deduction
1,000,000
The taxable net estate is:
a. P210,000
b. P516,500
c. P1,900,000
d. P2,100,000
ESTATE TAX
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39. JR, administrator claims the following funeral expenses for a decedent:
Expenses of interment (paid by friend)
Cost of burial & tombstone (1/2 paid by relatives)
Other funeral parlor expenses
Expenses during the wake
Before burial
Obituary notice
Card of thanks
Mourning clothing of friends
Mourning clothing of immediate family members
P 60,000
42,000
36,000
13,000
7,500
3,500
15,000
5,000
ESTATE TAX
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45. Mr. Jose, Filipino, married died leaving the following estate:
Car acquired before marriage by Mr. Jose
P 300,000
Car acquired before marriage by Mrs. Jose
450,000
House and lot acquired during marriage
1,500,000
Jewelries of Mrs. Jose
100,000
Personal properties inherited by:
Mr. Jose during marriage
250,000
Benefits from SSS
50,000
Retirement benefits from a private firm
150,000
Proceeds of group insurance taken by his employer
75,000
Land inherited by the wife during marriage
1,000,000
Income earned from the land inherited by wife
(25% of which was earned after death)
200,000
The gross estate under conjugal partnership of gain is:
a. P2,600,00
b. P3,600,000
c. P1,950,000
d. P2,200,000
46. Under the same problem, the gross estate under absolute community of property is:
a. P2,600,000
b. P3,600,000
c. P1,950,000
d. P2,500,000
47. Mr. Bayabas died intestate on September 30, 2004. He is survived by his wife. An inventory of the estate
showed the following:
FMV tax declaration
Zonal Value
Exclusive estate of Mr. Bayabas
Commercial land 700 sq. m.
P 850,000
P 900/sq. m.
Residential land 900 sq. m.
580,000
1,000/sq. m.
Conjugal estate:
Farm land, 800, sq. m.
1,300,000
700/sq. m.
Residential house
750,000
Car, Toyota
200,000
Other property
280,000
Death benefits (RA 4917)
200,000
On January 1, 2004, 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 homes lot. Actual funeral expenses amounted to P250,000
but of which is non-deductible. Medical expenses reached P600,000 but only was incurred with in the 1 yr.
period. Judicial expenses reached P150,000.
The gross estate is:
a. P4,280,000
b. P4,480,000
c. P2,730,000
48. The total deductions excluding share of surviving spouse and special deduction is:
a. P655,000
b. P891,000
c. P855,000
49. The deduction for family home is:
a. P1M
b. P950,000
c. P900,000
50. The taxable net estate is:
a. P401,500
b. P326,500
c. P1,076,500
51. Mr. Bonito, Filipino died on April 10, 2000 with the following data:
Gross Estate
Deduction
Philippines
P 375,000
P 75,000
Foreign country A
300,000
150,000
Foreign country B
450,000
525,000
Foreign country C
600,000
225,000
The estate tax due after tax credit is:
a. P13,500
b. P9,000
c. P14,000
***E N D ***
If ye have faith as a grain of mustard seed,
Ye shall say unto this mountain,
Remove hence to yonder place, and it shall remove;
And nothing shall be impossible unto you.
d. P4,160,000
d. P1,016,000
d. P750,000
d. P101,500
Estate tax paid
P
3,750
18,000
d. P13,250