ESTATE TAXATION

1. A decedent left the following properties:

Land in Italy (with P1M unpaid mortgage) P2,000,000
Land in Laguna, Philippines 300,000
Franchise in USA 100,000
Receivable from debtor in Philippines 70,000
Receivable from debtor in USA 100,000
Bank deposits in USA 80,000
Shares of stocks of PLDT, Philippines 75,000
Shares of stock of ABC, foreign corporation, 75% of the business in the Philippines 125,000
Other personal properties 300,000
Zonal value of the land in Laguna 750,000

If the decedent is a non-resident citizen, his gross estate is

A. P3,650,000 B. P3,600,000 C. P2,500,000 D. P2,650,00

2. Using the above data, if the decedent is a non-resident alien, his gross estate is
A. P1,195,000 B. P945,000 C. P1,320,000 D. P1,070,00

3. If in the preceding number there is reciprocity, the gross estate is

A. P1,050,000 B. P1,195,000 C. P1,250,000 D. P1,070,000

4. Based on the above problem but assuming that the PLDT shares of stocks are not listed in the local stock
exchange, and there are 1,000 shares at the time of death, the company’s outstanding shares were 10,000
shares. Its retained earnings was P2,000,000, par value per share was P50. The gross estate should show the
said shares at
A. P75,000 B. P250,000 C. P200,000 d. P0

5. J. Reyes died on April 15, 2018, leaving the following properties:

Real properties P1,500,000
1,000 shares in Good Corporation 1,000,000
Investment in TY Partnership 400,000
Other personal properties 300,000
Cash 600,000

Cash of P600,000 does not include the following amounts which were received after death.

(a) P100,000 representing cash dividend declared by Good Corporation on January 1, 2018, and received by J.
Reyes’s estate on April 30, 2018;
(b) Share of partnership profits for calendar year 2017 in the amount of P50,000 received by the estate on May
5, 2018; and
(c) Rental income of apartment of P40,000 due from January to April 2018 at P10,000 a month received by the
estate on May 2, 2018.

Determine the gross estate of J. Reyes.

A. P3,985,000 B. P5,344,000 C. P2,340,000 D. P3,234,000
6. A, Filipino, widower, died leaving the following:
Real properties P4,000,000
Family home 1,200,000
Personal properties 2,000,000
Paid Medical expense 600,000
Allowable deductions 800,000

Determine the net estate subject to tax and the net distributable estate

P200,000; P6,388,000

7. Mr. Y, an American, single and residing in USA, died in June 2018 leaving the following:
Land in Makati P2,000,000
Land in Manila 3,000,000
Gross estate, USA 5,000,000
Deductions claimed by the estate: 200,000
Actual funeral expense
Judicial expenses 100,000
Claims against the estate 120,000
Transfer of the land in Makati to the Philippine Government (in decedent’s will) 2,000,000
  The land in Manila when inherited 3½ years ago had a value of P2,400,000 with a mortgage thereon of
P400,000 which, was paid prior to Mr. Y’s death.
 The land in Makati, when inherited 4½ years ago, had a value of P1,500,000.

Determine the net estate subject to estate tax

A. P2,176,200 B. P1,793,200 C. P2,536,400 D. P2,234,400

8. Z, a resident citizen, died leaving in 2018 the following:

Net estate ( before standard deduction):
Philippines P5,000,000
USA 3,000,000
Australia 2,000,000
Estate tax paid:
USA 30,000
Australia 220,000

Determine the estate tax due after tax credit.

P210,000

9. A, Filipino, married, died in 2018 leaving the following:

Real property – conjugal P4,000,000
Real property – exclusive (A) 2,500,000
Family home – Exclusive (A) 1,200,000
Unpaid medical expenses 600,000
Allowable ordinary deductions - conjugal 1,400,000

Determine the net estate subject to tax, and the net distributable estate
A. P2,500,000; P4,210,000
B. (P1,200,000); P4,400,000
C. P3,400,000; P4,000,000
D. P2,300,000; P4,500,000

10. C, Filipino, married to D, died in July 2018, leaving the following:

Real properties-conjugal P4,000,000
Real property – exclusive (C) 3,800,000
Family home – exclusive (D) 1,400,000
Allowable ordinary deduction - conjugal 1,200,000

Determine the net taxable estate

A. P4,200,000 B. P6,600,000 C. P200,000 D. P300,000

11. E, Filipino married to F, died in July 2018, leaving the following:

Real properties – conjugal P5,000,000
Real properties – exclusive (E) 4,000,000
Real properties – exclusive (E) – (Lot where the family home stands) 6,000,000
Family home – conjugal 6,000,000
Allowable ordinary deductions – conjugal 1,600,000

Determine the net taxable estate

A. P700,000????? B. P2,345,000 C. P1,300,000???? D. P1,300,200

12. G, non-resident alien, married to H, died in 2018 leaving the following:

Real properties in Manila – Conjugal P7,000,000
Real property abroad – exclusive (G) 1,400,000
Real property in Q.C – conjugal 800,000
Personal properties in Manila – Exclusive (G) 1,800,000
Allowable ordinary deductions - conjugal 2,400,000

Determine the net taxable estate

A. P4,500,000 B. P5,345,000 C. P4,000,000 D. P4,440,000

13. Chanella, a reviewee, married her reviewer in Auditing, Chris, who already had 2 legitimate children from a
former marriage. They got married on July 25, 2015. Prior to their marriage, Chris inherited a commercial
 building from his father who died on July 19, 2009. Chris also received a residential lot from his mother by way
of donation on September 23, 2011. On their first year wedding anniversary, Chanella’s mother donated to
Chanella a 50 hectare agricultural lot. Which of the 3 properties are considered conjugal properties?
A. The commercial building and the residential lot
B. The agricultural land
C. All 3 are conjugal properties
D. None. All are exclusive properties

14. Mr. A, Filipino, married to B with whom he has two children died on February 14, 2018. The inventory of the
properties of the spouses show the following:
House and lot in Manila owned by A before the marriage P3,000,000
Agricultural land owned by B before the marriage 1,200,000
Real property acquired during marriage 2,000,000
Family home acquired during marriage 2,200,000
Personal property acquired during marriage 1,400,000
Commercial properties in Makati inherited by A during marriage from 2,000,000
his father who died on February 14, 1987
Apartment house inherited by B during marriage from her mother who 4,000,000
died on February 14, 2003
Proceeds of life insurance where the estate A was designated as the 1,000,000
irrevocable beneficiary
Proceeds of life insurance where B was designated as the irrevocable 2,000,000
beneficiary

Deduction claimed by the estate:

Devisee given in favour of Philippine government in decedent’s will P300,000
Claims against the estate 100,000
Unpaid mortgage on agricultural land (letter b above) 400,000
Funeral expenses 180,000
Judicial expenses 600,000

Determine the estate tax due and payable.

P111,000

15. A, Filipino, married, died on January 2018, leaving the following:

Family Home P1,800,000
Cash and other properties 2,500,000
Benefits under RA 4917 1,000,000
Ordinary deductions for expenses, losses and taxes (ELIT) 700,000

Determine the net taxable estate of A

(P4,100,000)

16. Mr. O, Filipino, married, died on August 1, 2018, three years after his marriage to Mrs. O. He left the following:
a. Property inherited by Mr. O from his father who died February 14, 2013 P3,000,000
b. Property inherited by Mrs. O from her father who died February 14, 2014 1,200,000
c. Property inherited by Mr. O from his mother who died February 14, 2015 1,800,000
d. Property inherited by Mrs. O from her mother who died February 14, 2016 1,400,000
e. Property acquired thru the labor or:
Mr. O 2,000,000
Mrs. O 1,500,000
Mr. and Mrs. O (family home) 2,400,000
f. Other personal property 1,600,000
Deductions claimed by the estate:
 Funeral expense 220,000
Unpaid mortgages on property in letters
a. P500,000 b. P300,000 c. P180,000 d. P200,000
Claims against the estate 170,000
Accrued taxes (before the death of Mr. O) 80,000

Determine the net taxable estate assuming:

1. Conjugal partnership of gains
2. Absolute community of property