PRELIM TASK
Problem 1
The administrator of a decedent’s estate (head of the family) provided the following data:
Property
Domestic shares of 2,000 shares inherited 6 years ago 8,000,000
House and lot, family home, located in Davao, inherited 2 years ago
at a value of 1,500,000 2,000,000
Jewelry items in the Philippines at the time of death 400,000
Jewelry items kept in a vault abroad 200,000
Bank deposit in a Philippine branch of a US bank 5,000,000
Interest from bank deposits after decedent’s death 25,000
Expenses and other charges
Funeral expenses abroad 80,000
Funeral expenses Philippines 200,000
Judicial expenses abroad 100,000
Judicial expenses, Philippines 50,000
Claims against the estate with the notarized debt
instrument issued in the Philippines 120,000
Donation to the Philippine government as provided in his will
250,000
Required
A. Determine the following if the decedent was a Filipino citizen but a resident of Australia
1. Taxable Net Estate
Domestic shares 8,000,000
House and Lot 2,000,000
Jewellery Items in the Philippines 400,000
Jewellery kept in a vault 200,000
Bank Deposit in a Ph Bank 5,000,000
Donation to the government 250,000
Gross Estate 15,580,000
DEDUCTIONS
Claims against the estate (120,000)
Transfer of Public Use (250,000)
Vanishing Deductions (1,171,987)
SPECIAL DEDUCTIONS
Standard Deduction (accrd TRAIN LAW) (5,000,000)
Family Home (2,000,000)
TAXABLE NET ESTATE P7,308,013
Vanishing deduction
Value 1,500,000
Proportionate Deductions
(1500/15850)* 370,000 (35,016)
1,464,984
Vanishing rate (2 years ago) 80%
Vanishing Deduction 1,171,987
2. Estate Tax Due
7,308,013 * 6% = P 438,480.78
B. Determine the following if the decedent was not a Filipino citizen but a resident of Davao
City
1. Taxable Net Estate
Domestic shares 8,000,000
Donation to the government 250,000
Gross Estate 8,250,000
DEDUCTIONS
Claims against the estate (120,000)
Transfer of Public Use (250,000)
SPECIAL DEDUCTIONS
Standard Deduction (accrd TRAIN LAW) (5,000,000)
Family Home (2,000,000)
TAXABLE NET ESTATE P880,000
2. Estate Tax Due
880,000 * 6% = P 52,800
Problem 2
A non-resident alien, married, died on September 2018. He left the following:
Conjugal properties, Philippines, 5,000,000
Exclusive properties, Philippines, 2,000,000
Conjugal properties, USA, 10,000,000
Exclusive properties, USA, 5,000,000
The following deductions were claimed:
Actual funeral expenses, 1,250,000
Judicial expenses, 800,000
Claims against the estate, 1,725,000
Transfer for Public Use, 200,000
Medical expense, 875,000
Total 4,850,000
Included in the Philippines gross estate (conjugal) were the following:
Domestic shares, 500,000
Share in a partnership, 1,000,000
Other tangible personal properties, 3,500,000
The Philippine exclusive properties were all tangible personal properties. These included a car,
which was inherited 3 1⁄2 years before the present decedent’s death, and had a fair market value
of 500,000.
Required
Determine the following:
1. Exclusive Property of the Decedent
Exclusive properties, Philippines 2,000,000
Less: Transfer for Public Use (200,000)
Vanishing Deductions (184,318)
TOTAL P1,615,683
2. Community Property
Conjugal properties, Ph 5,000,000
Less: LITe (548,864)
TOTAL P4,451,136
3. Taxable Net Estate
Exclusive properties 2,000,000
Conjugal properties 5,000,000
TOTAL: 7,000,000
Deductions:
LITe* 548,864
Transfer for public use 200,000
Vanishing Deduction 184,318
Standard Deduction 500,000
NET ESTATE 5,566,818
Surviving spouse net share ** (2,225,568)
TAXABLE NET ESTATE P3,341,250
*LITe
= (1,725,000) (7,000,000 / 22,000,000)
= 548,864
**Surviving spouse
Net share =( Conjugal property – LITe )/2
= 5,000,000 – 548,864
= 4,451,136 /2
4. Estate Tax Due
Taxable net estate * 6% = Estate Tax Due
3,341,250 * 6% = P200,475
Problem 3 (30 points)
A donor made the following donations during 2018:
To Abel, a car worth 800,000
To Jen, a condominium worth 3,000,000 in Macau
To Gore, GJ Company shares (domestic corporation) amounting to 250,000
To Alexa, 100,000 worth of shares of stock of a resident foreign corporation where 90% of its
operation is in the Philippines
To Earl, a building in Singapore valued at 5,000,000 mortgaged for 2,000,000 assumed by the
donee
To Hannah, parcel of land in Isabela, 1,500,000
To Chen, 100,000 bank deposit in BPI
To Kristine, 100,000 bank deposit in Metrobank, US Branch
To Gavrie, 500,000 cash
The donor also made the following transfer of properties within the year:
Fair Market Value at the time
Consideration Received
of transfer
Land 1 - QC 2,000,000 3,000,000
Land 2 – Taguig 3,000,000 2,000,000
Land 3 – USA 5,000,000 10,000,000
Car – Manila 800,000 1,000,000
Required
Determine the amount of Gross Gifts subject to donor’s tax assuming the donor is
1. Resident Citizen
Car 800,000
Condominium (Macau) 3,000,000
Domestic shares 250,000
Share of stock ( foreign corp) 100,000
Building (Singapore) 5,000,000
Parcel of Land 1,500,000
Bank deposit ( BPI) 100,000
Bank Deposit (US Branch) 100,000
Cash 500,000
Land 3 – USA * 5,000,000
Car – Manila** 200,000
TOTAL 16,550,000
*Land 3 – 10,000,000 – 5,000,000 = 5,000,000
** Car – Manila – 1,000,000 – 800,000 = 200,000
2. Non-resident Citizen
3. Resident Alien
4. Nonresident Alien with Reciprocity
5. Nonresident Alien without Reciprocity
