Midterms

Quiz 1

Problem 1
A decedent died single, leaving a family home which consists of a piece of a piece of land that he
inherited 3-1/2 years ago (with value at that time of P600,000) with a fair market value of
P800,000 at the time of his death, and a house thereon which he built at a cost of P650,000, and a
fair market value at the time of his death of P450,000. Other properties in his gross estate have a
fair market value of P550,000. Unpaid obligations at the time of his death amounted to
P300,000.

1. The vanishing deduction is equal to___________.

2. The total deduction for family home is____________.

Problem 2
Mr. Javier, single, a non-resident, not a citizen of the Philippines, died leaving a gross
estate in the Philippines of P1,000,000 and a gross estate outside the Philippines of P3,000,000.
His expenses and transfers were: Funeral expenses outside the Philippines of P100,000,
mortgage of property outside the Philippines of P200,000 and in the Philippines of P50,000 and
transfer to the Philippine Government of property outside the Philippines of P100,000.

1. The allowable deduction from the Philippine gross estate is ____________.

2. The net taxable estate in the Philippines is ____________.

Problem 3
Mr. Alana inherited property on November 1, 2001, with a fair market value and a
mortgage, at that time, of P200,000 and P100,000, respectively. He married on January 10,
2002. On March 5, 2002, he borrowed P200,000 from a bank and mortgaged the same property.
Mr. Alana died without paying any of the mortgage indebtedness. Disregarding accrued interest
on the mortgage indebtedness, deduction against exclusive property amounts to ____________.

Problem 4
Mr. Benetiz died on June 30, 2003, leaving, among others, the following charges and
obligations: Real property tax for the calendar year 2003 – P20,000; On an interest-bearing
promissory note (notarized): face value of the note – P10,000; accrued interest on the note at the
time of death – P600; and interest to accrue on the note from the date of death to the date of
maturity – P400. The deduction from the gross estate is ____________.

Problem 5

Mr. Juanito Mendoza, a citizen and resident of the Philippines, died on June 1, 2003, survived by
his wife. The property relationship in the marriage was the conjugal partnership of gains. He
left the following properties and charges thereon:
Fair
Cost Market Value
Family home:
Residential house, constructed during the marriage P400,000 P900,000
Residential lot, TCT # 318, inherited 10 years ago 200,000 450,000
Furniture and appliances in the residential house 600,000 490,000
Receivable from insolvent friend 10,000
Cash, owned before the marriage 150,000
Other properties owned before the marriage 1,000,000
Actual funeral expenses 100,000
Judicial expenses 120,000
Unpaid mortgage 50,000
Unpaid taxes 20,000
Legacy (per will) of P50,000 cash to DSWD 50,000
Loss of household furniture and appliances on December 9, 2003 12,000

1. The deduction for family home amounts to ____________.

2. The net taxable estate is equal to____________.

Problem 6

Mr. Dencio Cayetano, a citizen of the Philippines, single, died a resident of the United States,
leaving the following properties:

Real property in the United States, inherited from the father one and one-half years ago
P2,000,000
Personal property in the Philippines inherited from the father 1,600,000
Family home in the United States 1,400,000

and incurred/paid the following expenses:

Actual funeral expenses paid in the United States 100,000

Other obligations contracted within the last two years 250,000

1. The taxable gross estate is ____________.

2. The allowable deduction for family home is equal to ____________.
3. The deduction allowed for property previously taxed is: ____________.
4. The net taxable estate is ____________.

Problem 7

The decedent is a citizen and resident of the Philippines:

Gross estate P10,000,000

Claims against the estate 3,000,000

1. How much is the net taxable estate if the decedent was single?
 2. How much is the net taxable estate if the decedent was married and under the conjugal
partnership of gains or absolute community of property and the conjugal/community
property was P3,900,000?

Problem 8
Juan, married to Juana, died. The following properties were left upon his death:
a. Durian plantation in Davao, brought into marriage by H. - 3,000,000
b. Income of plantation in Davao earned during marriage - 250,000
c. Shares of stocks with Aga corp. earned by Juana during
marriage - 420,000
d. Dividends from Aga Corp. earned during marriage - 52,000
e. Bus in Cebu, inherited by Juan during the marriage - 760,000
f. Income of passenger bus earned during the marriage - 23,000
g. Riceland in Legazpi, inherited by Juana before marriage - 460,000
h. Income of Riceland in Legazpi earned during the marriage - 50,000
i. Underwear(panties, brassiere) of Juana brought into Juana - 85,000
j. Cash, unidentified when and by whom acquired - 55,000
k. Jewelries inherited by Juana during marriage from her mother - 320,000

Required:
1. The exclusive properties of Juan under conjugal partnership of gains ____________.
2. The gross estate of Juan if the spouse were under conjugal partnership of gains
____________.
3. The community property of the spouses under absolute community of property regime
____________.
4. The gross estate of Juan if the spouses were under the absolute community of property
regime ____________.

Problem 9
Mr. Alaberde, a citizen of the Philippines and a resident of the United States, under the
system of conjugal partnership of gains, died in the United States, and was shipped to and buried
in the Philippines. His estate had the following details:

Real property in the Philippines, inherited 3-1/2 years ago,

when its fair market value was P500,000 P 600,000
Real property in the U.S., used as family home 2,400,000
Tangible personal properties in the Philippines 200,000
Tangible personal properties in the United States 700,000

Funeral expenses in the United States, paid in cash from the estate 110,000
Funeral expenses in the Philippines, paid in cash from the estate 100,000
Medical expenses, incurred within 1 year prior to death
(P550,000 paid, the rest still payable) 900,000
Unpaid obligations (excluding portion of medical expenses) 600,000
Claim against an insolvent person in the Philippines 100,000
Estate tax paid in the United States 300,000

1. The gross estate is equal to ____________.

2. The net taxable estate amounts to ____________.

Problem 10

Mr. Antonio Mitras, a citizen and resident of the Philippines, died on October 5, 2003. He was
married and the property relationship during the marriage was the absolute community of
property. He left the following properties, with their market values, and obligations and charges
thereon:

Agricultural land P100,000

House and lot acquired by inheritance before the marriage and
4-1/2 years ago, used as family home (with a fair market value of
P420,000 and a mortgage of P120,000 when acquired; P20,000 was
paid by Mr. Mitras before he died) 500,000
Jewelry of Mrs. Mitras, acquired during the marriage
with the exclusive money of Mrs. Mitras 50,000
Clothes acquired during the marriage from income earned during
(P60,000 for use of Mr. Mitras, and P70,000 for use of Mrs. Mitras) 130,000
Cash on hand and in banks: income from unidentified sources 300,000
Cash in bank:
From sale at a loss of exclusive property 1,500,000
Received as gift six years ago and before the marriage (current account) 40,000
Other properties:
Owned before the marriage 90,000
Acquired during the marriage 20,000

Deductions and other information

Total funeral expenses of P300,000. Paid from the estate 58,000
Judicial expenses 120,000
Unpaid mortgage (already on the property at the time acquired):
On agricultural land 20,000
On house and lot 100,000
Other obligations 20,000
Legacy to the Government of the Philippines from the current account 10,000

1. The amount of allowable vanishing deduction is ____________.

2. The net taxable estate is ____________.
3. The estate tax is ____________.

Problem 11
Mr. Benjamin Contina, a citizen and resident of the Philippines, died on October 10, 2003,
leaving the following properties, rights, obligations and charges:

Conjugal properties (including a family home of P3,000,000 and amount receivable under R.A.
4917 of P200,000) P6,000,000
Exclusive properties (including cash of P500,000 inherited 4-1/2 years ago) 4,000,000
Medical expenses unpaid, January 2003 600,000
Funeral expenses 350,000
Judicial expenses 500,000
Other obligations 100,000

1. The deductible medical expenses amount to ____________.

2. The amount of deductible funeral expenses is ____________.
3. The family home allowed should be ____________.
4. The amount of allowable vanishing deduction is ____________.
5. The net taxable estate is ____________.

Problem 12
Mr. Armando Garcia, a citizen of the Philippines, died married, under the system of conjugal
partnership of gains, survived by the spouse, leaving personal and real properties, and
obligations, (condensed) as follows:
Mrs. Garcia:
Exclusive properties P1,000,000

Mr. Garcia:
Exclusive personal properties 1,000,000
Exclusive real properties:
Lot used for the family home:
Value when house was built 800,000
Value at the time of death 1,100,000
Others 900,000
Conjugal personal properties 2,000,000
Conjugal real properties:
Family home (house) 1,200,000
Others 3,800,000
Unpaid obligations 2,000,000

Required: Compute the:

a. Gross estate
b. Allowed deductions from gross estate
c. Estate tax due and payable

Problem 13
Mr. Rodney Basco, a citizen and resident of the Philippines, under the system of absolute
community of property during the marriage, died leaving the following properties and
obligations:

Real properties inherited from the father

ten years ago and before the marriage P 200,000
Real property received as gift from the
mother seven years ago, and during the
marriage 1,115,000
Cash-income from the property received
as gift 5,000
Real property owned by Mrs. Basco
before the marriage 300,000
Real property (family home) acquired
during the marriage 500,000
Funeral expenses 50,000
Judicial expenses for the settlement of
the estate 100,000
Unpaid medical expenses of the year 70,000
Obligations incurred during the marriage 150,000
Indebtedness incurred before the
marriage for a pleasure trip of Mr.
Basco 120,000

Required: Compute the following:

a. Gross Estate
b. Allowed deductions from gross estate
c. Estate tax due and payable

Problem 14
Mrs. Rosa Asuncion, a citizen and resident of the Phlippines, under the system of absolute
community of property when alive, died, leaving the following (condensed):

Land purchased during the marriage P6,000,000

Land inherited six years before and during
the marriage 1,000,000
Obligations of community property 3,000,000
Obligations of exclusive property 500,000

Required: Compute the following:

a. Gross Estate
b. Allowed deductions from gross estate
c. Estate tax due and payable