EXERCISES ON ESTATE TAXATION I
A. Multiple Choices
Questions 1-4 are based on the following information. A decedent left the following properties:
Land in Italy (with 1M unpaid mortgage) 2,000,000
Land in Davao City, Phil. (zonal value 750,000) 500,000
Franchise in USA 100,000
Receivable from debtor in Phil. 50,000
Receivable from debtor in USA 100,000
Bank deposit in Phils. 20,000
Bank deposit in USA 80,000
Shares of stock of PLDT, Phils. 75,000
Shares of stocks of ABC, Foreign Corp. 125,000
75% of the business in the Philippines
Other personal properties 300,000
1. If the decedent is a non-resident citizen, his gross estate is: 3,600,000
2. If the decedent is a non-resident alien his, gross estate is: 1,288,750
3. If in the preceding number, reciprocity can be applied, the gross estate is: 750,000
4. Based on the original problem but assuming the PLDT shares of stock 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. Its retained earnings was 2,000,000, book value per share
was 50. The gross estate should show the said shares at: 50,000
Questions 5 & 6 are based on the following information:
Building, USA 5,000,000
House & Lot in Bulacan (500 sq.m.) zonal value is 10,000 per sq.m.
(conjugal family home) 4,500,000
Life insurance proceeds, beneficiary is the wife, the administrator, irrevocable 500,000
Life insurance proceeds with another company; beneficiary, his son, irrevocable 200,000
Claims against a debtor who died a year ago (50% collectible) 50,000
Death benefits from 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 cause the following:
SP FMV-Transfer FMV-Death
Car, Manila 500,000 1,000,000 800,000
Land, Manila 1,500,000 2,000,000 1,000,000
Land, USA 2,000,000 1,800,000 3,000,000
5. If the decedent is a Filipino citizen, his gross estate is: 11,050,300
6. Based on the preceding number, the deductible family home is: 5,000,000
7. 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: 6,050,300
8. If gross estate of a non-resident alien is 2,000,000, the standard deduction would be: 500,000
B. Classification.
9. The decedent was married at the time of death. He was survived by his wife and children. The
following were presented to you and you are asked to compute the exclusive and conjugal
properties under Conjugal Partnership of Gains (CPG) and exclusive and community
properties under Absolute Community of Properties (ACP).
Description Amount CPG ACP
EXCL CONJ EXCL COMM
Cash owned by the decedent before the 5,000,000 5,000,0 5,000,00
marriage 00 0
Real property inherited by the decedent 6,000,000 6,000,00 6,000,000
during the marriage 0
Personal property received by the wife 400,000 400,00 400,000
as gift before the marriage 0
Property acquired by the decedent with 600,000 600,00 600,000
cash owned before the marriage 0
Clothes of the decedent purchased with 500,000 500,00 500,000
the exclusive money of the wife 0
Jewelry purchased with the exclusive 1,000,000 1,000,0 1,000,00
cash of the decedent 00 0
Property unidentified when and by 1,200,000 1,200,00 1,200,000
whom acquired 0
Cash representing income during the 2,000,000 2,000,00 2,000,000
marriage 0
TOTAL 7,500,0 9,200.00 7,500,00 9,200.000
00 0 0
C. Mr. Mo Filipino citizen, married died on February 2018 leaving the following properties;
a. Family Home (conjugal property with unpaid mortgage 1M) 30,000,000
b. Other real and personal properties 14,000,000
c. Exclusive properties 5,000,000
Expenses:
Funeral Expenses 500,000
Other Conjugal Ordinary deductions 1,000,000
Medical Expenses 600,000
I. How much is the total gross estate of Mr. Mo? 49,000,000
II. Allowable ordinary deductions is? 2,100,000
III. The net taxable estate? 31,900,000
IV. Estate tax due and payable? 1,914,000
