Scribd
Upload
89 views3 pages

Taxation

1. The document outlines special deductions that can be claimed for estate tax purposes, including a standard deduction, family home allowance, medical expenses (repealed under TRAIN Law), and benefits received under R.A. 4917. 2. The standard deduction is P1,000,000 for decedents who died before 2018 and P5,000,000 for those who died in 2018 or later, with nonresident decedents getting P500,000. 3. The family home allowance provides a deduction for the family home of up to P1,000,000 prior to TRAIN Law and P10,000,000 under TRAIN Law, based on the decedent's actual interest in the

Uploaded by

Megumi Hideyuki
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
89 views3 pages

Taxation

1. The document outlines special deductions that can be claimed for estate tax purposes, including a standard deduction, family home allowance, medical expenses (repealed under TRAIN Law), and benefits received under R.A. 4917. 2. The standard deduction is P1,000,000 for decedents who died before 2018 and P5,000,000 for those who died in 2018 or later, with nonresident decedents getting P500,000. 3. The family home allowance provides a deduction for the family home of up to P1,000,000 prior to TRAIN Law and P10,000,000 under TRAIN Law, based on the decedent's actual interest in the

Uploaded by

Megumi Hideyuki
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

SPECIAL DEDUCTIONS

1. Standard Deduction
The amount deductible without any required substantiation is P1,000,000 if the decedent died
before 2018 and P5,000,000 if the decedent died on or after January 1, 2018. A standard
deduction of P500,000 shall also be allowed to nonresident alien decedent beginning January
1,2018.

2. Family Home Allowance


 REQUISITES:
a) The decedent is married or head of a family;
b) The family home must be the actual residential home of the decedent and his family at
the time of his death, as certified by the Brgy. Captain of the locality the family home is
situated;
c) It is located in the Philippines;
d) The value of the family home is included in the gross estate

 AMOUNT DEDUCTIBLE – The LOWER between the Actual Interest and the Limit.

The LIMIT as provided by law are as follows:


 Prior to TRAIN Law = P1,000,000
 TRAIN Law = P10,000,000

 ACTUAL INTEREST
 Purely Exclusive = 100% FMV
 Purely Common Property = 100%FMV/2
 MIXED:
Exclusive Property (100%) Pxx
Add: Common Property (100%/2) xx
Total xx

3. Medical Expenses (Repealed under TRAIN Law)

 REQUISITES (Applicable only if the decedent died before 2018):


a) Incurred within 1 year prior to the death of the decedent;
b) Duly substantiated;
c) Not to exceed P500,000

4. Amount Received by heirs under R.A. 4917


 REQUISITES
a) Include such amount in the gross estate.
b) Amount Deductible – amount received by the heirs from the decedent’s employer as a
consequence of the death of the decedent-employee.

SHARE OF THE SURVIVING SPOUSE


 Applicable only to married decedents.
 Amount Deductible:
Common Properties
Common Deductions
Net Common Properties before special deductions
Multiply by:
Share of the Surviving Spouse

o The property on which vanishing deduction is being taken must be identified as the one
received from the prior decedent, or from the donor, or something acquired in
exchange therefore;
o No vanishing deduction on the property was allowable to the estate of the prior
decedent.

AMOUNT DEDUCTIBLE (PROFORMA COMPUTATION):

Value to take (lower between FMV at the time death vs. FMV at the PXX
time inheritance or donation)
Less: Mortgage paid by present decedent (on mortgaged assumed) (XX)
Initial Basis (IB) PXX
Less: Proportional Deduction
[(IB/GE) x (**ELITe + TFPU)] (XX)
Final Basis PXX
Rate X%
VANISHING DEDUCTION PXX

 **If the decedent died on or after January 1, 2018, exlude the following in the
computation of proportional deduction:
 Funeral expenses Repealed under
 Judicial expenses TRAIN Law

RATE OF VANISHIMG DEDUCTION:


INTERVAL OF AQUISTION AND DEATH OF
PRESENT DECEDENT RATE
Within 1 year 100%
More than 1 year but not more than 2 years 80%
More than 2 years but not more than 3 years 60%
More than 3 years but not more than 4 years 40%
More than 4 years but not more than 5 years 20%

SPECIAL DEDUCTIONS

SUMMARY:

Citizen/Resident decedent NRA decedent


Standard Deduction
Prior to TRAIN Law P1,000,000 -
TRAIN Law P5,000,000 P500,000

Family Home
Prior to TRAIN Law P1,000,000 (max) -
TRAIN Law P10,000,000 (max) -

Medical Expenses
Prior to TRAIN Law P500,000 (max) -
TRAIN Law repealed -

Benefits under R.A. 4917 As provided -

You might also like