CHAPTER 1- DISCUSSION QUESTIONS

1.

a. The transfer tax payable by the transferor is donors tax because it was made during
the lifetime of the donor who did not retain any right to control said property after
the donation.
b. Although the delivery is made during the lifetime of the donor, since there is a
reservation that the title shall pass only to the donee upon the death of the former,
it is understood that the transfer is in the nature of a donation mortis causa.
Therefore, it is subject to estate tax.
c. If the delivery and the transfer of title to the property shall be made only upon the
death of the donor, it is a transfer mortis causa which is subject to estate tax.

2.

The contention of the accountant is tenable. In cases of transfers inter vivos, the tax
due and payable by the donor is not a tax on the property, but one which is imposed on
the donor's privilege to transfer title over the property; hence, a donors tax which is an
excise tax.

3.

a. This donation is a conditional donation inter vivos. True, the donor designated the
donation as a donation mortis causa, but this is not controlling. It merely indicates
when the delivery to the donee shall be effected. The condition imposed by the
donor, on the other hand, indicates that the donation is immediately operative.
Hence, it is inter vivos in character. The same is also true with the specification that
the donation will be deemed revoked if the donee does not comply with the
condition. This indicates that the donation is inter vivos in character.
b. This donation is clearly a remuneratory donation inter vivos because it is given by a
person to another on account of the services rendered by the latter to the former,
provided they do not constitute a demandable debt. According to the Civil Code,
such a donation is a remuneratory donation inter vivos.
c. The donation is a conditional donation inter vivos. It is clear that the obligation
imposed upon the donee is merely a charge or burden whose value is less than the
value of the thing given.

4.

The donation was already consummated by the execution of the deed of donation and
with the signing by a notary public. Considering that no conditions were imposed, it is
clear that the donation was one of an inter vivos donation.
The instrument need not be executed in accordance with the formalities of a will
because it was not a donation mortis causa.

5.

The subject of succession includes not only tangible properties but also intangibles as
well. Furthermore, succession includes not only properties but rights and obligations.
Thus, I will advise Angelica and Angelina that they will entitled to all the properties of
their father which is net of the deceaseds obligation.

6.

a. No, estate taxes accrue immediately upon the death of the decedent. However, the
heir, executor or administrator is given six (6) months from death to file the tax
return and pay the tax. Since this was not complied by Lydondo, he is liable to pay
surcharges and interest. Wherefore, the argument of Lydondo that he just took
possession of the property and therefore, not liable for surcharges and interest is of
no moment.
b. Estate taxes accrue from the moment of death of the decedent. Therefore, it has
accrued in January of the year of his death.
1
c. The law prevailing at the time of death of the decedent. Hence, the date of the
preparation of tax return is to be ignored.

7.

The sale is valid. Buen had a perfect right to sell his right to the inheritance to Zulueta
after the death of the decedent. This is so because the rights to the succession were

transmitted immediately to him from the moment of death of Alfonso.

8.

The main distinction in the preparation of the tax return between a married and a single
decedent is that the estate of a married decedent may include conjugal or community
property.
Necessarily, conjugal or community property deductions shall also be
deducted from the gross estate, including the share of the surviving spouse in the
conjugal or community property. These are not to be considered in preparing the tax
return of an unmarried decedent.

9.

No. Only one tax return has to be prepared for the entire estate of the decedent. Thus,
the properties of Zuma in the cities of Naga, Iloilo and Davao shall be contained in one
estate tax return only.