GROSS ESTATE OF MARRIED DECEDENT

MARRIAGE SETTLEMENT
The determination of the gross estate of the decedent who is married will depend
upon the property relations between the spouses.
The spouse may, in the marriage settlements, agree upon the regime of absolute
community, conjugal partnership of gains, complete separation of property, or any othe
regime. In thwe absence of a marriage settlement, or when the regime agreed upon is void,
the property relations of the spouses shall be governed by the following regime or system:
1. Conjugal Partnership of Gains, if married before August 3,1988.
2. Absolute Community of Property, if married on or after August 3,1988 ( Art. 75,
Family Code)
Note: the Family Code took effect on August 4, 1988.
Conjugal Partnership of Gains
The regime of Conjugal Partnership of Gains is also called Relative Community of
Property.
A. CONJUGAL PROPERTIES
1. Those acquired by onerous title during the marriage at the expense of the
common fund, whether the acquisition be for the partnership, or for only one of
the spouses;
2. Those obtained from labor, industry, work, or profession of either both the
spouses;
3. The fruits, natural, industrial, or civil, due or received during the marriage from
the common property,as well as the net fruits from the exclusive property of
each spouse;
4. The share of either spouse in the hidden treasure which the law awards to the
finder or owner of the property where the treasure is found;
5. Thise acquired through occupation such as fishing and hunting;
6. Livestock existing upon the dissolution of the partnership in the excess of the
number of each kind brought to the marriage by either spouse and;
7. Those which are acquired by chance, such as winnings from gambling or betting.
However, losses therefrom shall be borne exclusively by the loser-spouse.
B. EXCLUSIVE PROPERTIES
1. That which is brought to the marriage as his/her own;
2. That which each acquires during the marriage by gratuitous title;
3. That which is acquired by right or redemption, by barter or by exchange with
property belonging to only one of the spouses; and
4. That which is purchased with the exclusive money of the wife or of the husband.
Absolute Community of Property
The Absolute Community of Property between the spouses shall commence at the
precise moment that the marriage is celebrated.

A. COMMUNITY PROPERTIES
1. ALL properties owned by the spouses at the time of the marriage, and
2. ALL properties acquired thereafter.
B. EXCLUSIVE PROPERTIES
1. Property acquired during the marriage by gratuitous title by either spouse, and
the fruits as well as income thereof, if any, unless it is expressly provided by the
donor, testator or grantor that they shalol form part of the community property;
2. Property for personal and exclusive use of either spouse. However jewelry shall
form part of the community property; and
3. Property acquired before the marriage by either spouse who has legitimate
descendants by a former marriage, and the fruits as well as the income, if any, of
such property.
Similarities Between the Regimes of the Conjugal Partnership and Absolute
Community

Property

Conjugal
Partnership

Absolute
Community

The property acquired during the marriage (other

than inheritance or donation)

Conjugal
Property

Community
Property

Property acquired from labor, industry, work or

profession of the spouses

Conjugal
Property

Community
Property

Fruits or income received during the marriage

comming from the common property

Conjugal
Property

Community
Property

Property inherited or donated during the marriage

Exclusive
Property

Exclusive
Property

Differences Between the System of Conjugal Partnership and Absolute Community

of Property
Property
Property acquired before marriage, or brought to the
marriage
Fruits or income due or received during the marriage
from exclusive property

1.

2.

Conjugal
Partnership
Exclusive
Property
Conjugal
Property

Formula for Gross Estate of Married Decedent

If the couple was under the conjugal partnership of gains
Conjugal Properties
xxx
Add: Exclusive Properties of Decedent
GROSS ESTATE
If the couple was under the absolute community of properties
Community properties
Add: Exclusive properties of decedent
GROSS ESTATE

ILLUSTRATIVE PROBLEMS
IP 1. Mr. And Mrs. J. Reyes have the following assets:
1. Properties inherited by Mr. Reyes before the marriage
100,000
2. Properties brought to the marriage by Mrs. Reyes
400,000
3. Properties inherited during the marriage by Mr. Reyes
200,000
4. Income of the properties in No. 3
20,000
5. Properties inherited during the marriage by Mrs. Reyes
500,000
6. Income from properties in No. 5
50,000
7. Property acquired during the marriage
300,000
8. Income of the property in No. 7
100,000
Required:
A. Classify ther properties under Conjugal Partnership of Gains.
B. Classify the properties under Absolute Community of Property.
SOLUTIONS:
A. UNDER CONJUGAL PARTNERSHIP
1. Conjugal Properties

Absolute
community
Community
Property
Exclusive
Property

xxx
xxx
xxx
xxx
xxx

Property acquired during the marriage

300,000
Income of properties inherited during the marriage by Mr. Reyes
Income of properties inherited during marriage by Mrs. Reyes
50,000
Income of properties acquired during marriage
100,000
TOTAL CONJUGAL PROPERTIES
470,000
2.

Exclusive Properties of Mr. Reyes

Properties inherited by Mr. Reyes
100,000
Properties inherited during the marriage by Mr. Reyes
200,000
TOTAL EXCLUSIVE PROPERTIES OF MR. REYES
300,000

3.

Exclusive Properties of Mrs. Reyes

Properties brought to the marriage by Mrs. Reyes
400,000
Properties inherited during the marriage by Mrs. Reyes
500,000
TOTAL EXCLUSIVE PROPERTIES OF MRS. REYES
900,000

B. UNDER ABSOLUTE COMMUNITY

4. Community Properties
Properties inherited by Mrs. Reyes before the marriage
100,000
Properties brought to the marriage by Mrs. Reyes
400,000
Property acquired duriong marriage
Income of property acquired during the marriage
100,000
TOTAL COMMUNITY PROPERTIES
900,000

20,000

300,000

5.

Exclusive Properties of Mr. Reyes

Properties inherited during marriage by Mr. Reyes
200,000
.Income of properties inherited during marriage
20,000
TOTAL EXCLUSIVE PROPERTIES OF MR. REYES
220,000

6.

Exclusive Properties of Mr. Reyes

Properties inherited during the marriage by Mrs. Reyes
500,000
Income of properties inherited during the marriage by Mrs. Reyes
50,000
TOTAL EXCLUSIVE PROPERTIES OF MRS. REYES
550,000

IP 2.
The following information are gathered regarding the inheritance due to death of a married
individual, Filipino and and a resident of Baguio City, Philippines:
*Residential house and lot in Baguio, acquired at P1,000,000 with zonal value of P3,000,000
at the date of death.
*Jewelry found on the body of the decedent at the date of death, with fair market value of
P500,000. This asset is determined as exclusive property of the decedent.
*Real property in Mindanao, Philippines, bought 10 years ago, assessed at that time for
P1,000,000. An interested buyer would like to buy this property a week before his death at
P5,000,000.
*Investment in Bonds, local and foreign, P600,000.

*Shares of stock of various domestic corporations, listed in the local stock exchange at date
of death at aggregate value of 400,000.
*Real property located in Pangasinan, inherited from his father 3 years ago. This was taxed
at 2,500,000 when transferred from his father to hi name. At that time, he assumed the
unpaid mortgage of 500,000. This has 20% assessment level at declared fair market value
of 2,600,000. The BIR zonal valuation stated a fair value of 2,800,000 at date of death.
*Income from farm earned before the date of death, 800,000 (net of related income tax).
*Commercial lot inherited by wife during marriage. This was valued at 6,000,000 when
inherited by wife and it has a fair market value of 10,000,000 at the date of death,
3,000,000, (net of related income tax).
*Property brought to marriage by his wife, 6,000,000.
Deductions claimed by the executor:
Actual funerla expenses
180,000
Judicial expenses
900,000
Medical expenses
1,000,000
Unpaid mortgage on property in Pangasinan
200,000
Various claims of creditors
8,000,000
Claims against insolvent person
800,000
Required:
A.

Under the regime of conjugal partnership of gains, compute the following:

1. The gross exclusive estate.
2. The gross conjugal estate.
3. The total gross estate.

B.

Under the regime of absolute community of property, compute the following:

1. The gross exclusive estate.
2. The gross conjugal estate.
3. The total gross estate.

SOLUTION to IP 2
Conjugal Partnership of Gains
Properties:
Residential house and lot in Baguio
City
Jewelry
Real property in Mindanao, Philippines
Investment in bonds
Shares of stock
Inheritance from the decedent father
Income from farm
Income from wifes exclusive property
Claims against insolvent person
TOTAL

Absolute Community of Property

Properties:
Residential house and lot in Baguio
City
Jewelry
Real property in Mindanao, Philippines
Investment in bonds
Shares of stock
Inheritance from the decedent father
Income from farm
Claims against insolvent person
Prperty brought to marriage by wife
TOTAL

IP 3.

(1)
Exclusive

(2)
Conjugal
3,000,000

500,000

2,800,000
_________
3,300,000

(4)
Exclusive

5,000,000
600,000
400,000
800,000
3,000,000
800,000
13,600,000

(5)
Community
3,000,000

500,000

2,800,000
_________
3,300,000

5,000,000
600,000
400,000
800,000
800,000
6,000,000
16,600,000

(3)
Total
3,000,000
500,000
5,000,000
600,000
400,000
2,800,000
800,000
3,000,000
800,000
16,900,000

(6)
Total
3,000,000
500,000
5,000,000
600,000
400,000
2,800,000
800,000
800,000
6,000,000
16,900,000

1999. Mr. H through his labor acquired personal properties valued at

4,000,000. Mrs. W acquired real properties, valued at 1,000,000 and
inherited commercial buildings worth 2,000,000 from her grandparents.
2000. Mr. H and Mrs. W got married.
2001 to 2004. Through their joint income, they were able to acquire their
residential house and lot at 3,000,000. Mr. H received house and lot in Tarlac
as inheritance from his father, valued at 1,000,000; H & W used this as their
family home. Mrs. W earned rent income of 200,000 from the commercial
building she had inherited from here grandparents. In November 2004, Mr. H
died of heart attack.
Mr. H?

Which of the above properties should be included in the gross estate of

Property ownership of H & W is governed by Absolute Commnity under the Family Code
because the couple was married after August 3, 1988, and as such, the properties to be
included in the gross estate of Mr. H are:
Community Property:
Hs personal properties acquired in 1997
Properties of W acquired before marriage (1M+2M)
3,000,000
Residential house and lot
Rent Income
Total Community Property

400,000
3,000,000
200,000
6,600,000

Add: Exclusive Property of H, inheritance from his father

TOTAL GROSS ESTATE OF MR. H
Note:

1,000,000
7,600,000

1. The properties acquired by the wife during marriage through gratuitous

transfer reamain exclusive property of the wife and should not be included in
the gross estate of the husband.
2. The gross esatate should be valued at their FMV, fair market value at the date
of death.
3. Exclusive property does not become a community property just beacause it is
used as family home.
4. Fruits or income due during the marriage coming from exclusive property is an
exclusive property under the absolute community property regime.
5. As a rule, the earnings of the exclusive or conjugal properties have been
subjected o income taxes which is different from estate tax. Hence, thse
earnings will still be subjected to transfer taxes.

IP 4. Concepcion, married to Domingo Jugalab on June 12, 1995 died in 1999 leaving the
following properties:
Car purchased in 1990

250,000

House and lot acquired during marriage from conjugal funds

800,000
Savings deposit with Banco Filipino, obtained through labor
and industry of Domingo
Fishpond in Pangasinan, acquired through the income from
Concepcios Goto House
Lotto winnings by Domingo
Yamaha wonderbike purchased by Concepcion out of
her exclusive property
Riceland brought into marriage by Domingo
200,000
Shares of stocks inherited by Concepcion from her
mother who died
two weeks ago

90,000
200,000
5,000,000
50,000

63,000
Required: Compute the gross estate.
Conjugal Property:
House and lot
Savings deposit
Fishpond in Pangasinan
Winnings in Lotto
Exclusive Poperty:
Car
Yamaha wonderbike
Shares of stocks
GROSS ESTATE

800,000
90,000
200,000
5,000,000

6,090,000

250,000
50,000
63,000

363,000
6,453,000

IP5. Dante Pugante, Filipino, married to Ada Maganda on February 10, 2000, died March 20,
2004 leaving the following properties:
Real properties:
Riceland bought by Dante in 2002 720,000
House and lot which he brought into the marriage 3,400,000
Subdivision lot inherited by Dante from his father in 2002 1,300,000
Coconut land inherited by Ada from her father who died in 1995 1,200,000
Personal Properties:
Computer set given as birthday gift to Ada by her mother in 2003 240,000
Rolex watch owned by Dante 200,000
Cash in bank earned by the spouses during the marriage 3,800,000
Required: Compute the gross estate of Dante if the marriage was under the absolute
community of property regime.
Community Property:

Riceland
House and Lot
Cash in Bank
Coconut land
9,120,000
Exclusive property:
Rolex watch
Subdivision lot
1,500,000
GROSS ESTATE
10,620,000

720,000
3,400,000
3,800,000
1,200,000
200,000
1,300,000

AKLAN STATE UNIVERSITY

School of Management Sciences
Second Midterm Quiz
VILLANUEVA
Business and Transfer Taxes

-O .

Name: ___________________________________ Course/Yr: __________ Score: _____

PROBLEM I
Direction. If the property is includible in the gross estate, write A on the blank, if community
property, and B on the blank, if exclusive property. If the property is not ncludible in the
gross estate, write X.
_______ a. Property inherited before the marriage.
________b. Property received as gift during the marriage.
________c. Income from property inherited in (a) above.
________d. Income from property received as gift during the marriage in (b) above.
________e. Property inherited by the spouse during the marriage.
________f. Property received as gift by the spouse during the marriage.
________g. Income received from the property in (e) above.
________h. Assets before marriage with decendants from previous marriage.
________i. Assets rceived as gift by spouse during marriage which was subsequently donated
to a charity inter-vivos.

PROBLEM 2
Dante Pugante, a Filipino, married to Ada Maganda on February 10, 2000, died March 20,
2004 leaving the following properties:
Real Properties:
1.
2.
3.
4.

Riceland bought by Dante in 2002 720,000

House and lot which he brought into the marriage 3,400,000
Subdivision lot inherited by Dante from his father in 2002 1,300,000
Coconut land inherited by Ada from her father who died in 1995
1,200,000
Personal Properties:
1. Computer set given as birthday gift to Ada by her mother in 2003 240,000
2. Rolex wathch owned by dante 200,000
3. Cash in bank earned by the spouses during the marriage 3,800,000.
Required: How much is the
1. Community Property under Absolute Community Property Regime for Dante:
____________
2. Exclusive Property under Absolute Community Property Regime for Dante:
____________
3. Gross Estate under Absolute Community Property Regime for Dante:
____________
4. Conjugal Property under Conjugal Partnership of Gains for Dante: ____________
5. Exclusive property under Conjugal Partnership of Gains for Dante: ____________
6. Gross Estate under under Conjugal Partnership of Gains for Dante:
____________
7. Exclusive property under Conjugal Partnership of Gains for Ada: ____________
PROBLEM 3.
. Concepcion, married to Domingo Jugalab on August 3, 1987 died leaving the following
properties:

63,000

Car purchased in 1980

House and lot acquired during marriage from conjugal funds
800,000
Savings deposit with Banco Filipino, obtained through labor
and industry of Domingo
Fishpond in Pangasinan, acquired through the income from
Concepcios Goto House
Lotto winnings by Domingo
Yamaha wonderbike purchased by Concepcion out of
her exclusive property
Riceland brought into marriage by Domingo
200,000
Shares of stocks inherited by Concepcion from her
mother who died
two weeks ago

Required:
1. Compute the exclusive property of Concepcion: ________________
2. Compute the gross estate of Concepcion: _______________
PROPBLEM 4.
Spouses Tyrone & Jane Reyes have the following assets:
a) Properties inherited by Mr. Reyes before the marriage
100,000
b) Properties brought to the marriage by Mrs. Reyes
400,000
c) Properties inherited during the marriage by Mr. Reyes
200,000
d) Income of the properties in (c)
20,000
e) Properties inherited during the marriage by Mrs. Reyes
500,000
f) Income from properties in (e)
50,000
g) Property acquired during the marriage
300,000

250,000

90,000
200,000
5,000,000
50,000

h) Income of the property in (h)

100,000
Required:
Compute the following:
1. Total Exclusive Properties under Absolute Community Regime: _________________
2. Total Exclusive Properties under Conjugal Partnership of Gains: _________________
3. Total Community Properties: _________________
4. Total Conjugal Properties: __________________
5. Total Exclusive Properties of Mr. Reyes under Absolute Community Regime:
_________________
6. Total Exclusive Properties of Mrs. Reyes under Absolute Community Regime:
_________________
7. Total Exclusive Properties of Mr. Reyes under Conjugal Partnership of Gains:
_________________
8. Total Exclusive Properties of Mrs. Reyes under Conjugal Partnership of Gains:
_________________
PROBLEM 5.
The following data pertain to the death of a resident alien:
Property acquired by decedent prior to marriage
600,000
Property acquired by surviving spouse prior to marriage
700,000
Property inherited by decedent during marriage
800,000
Property inherited by the surviving spouse during marriage
900,000
Property acquired through labor during marriage
1,000,000
Income derived from property inherited by the surviving spouse
During marriage inclusive of income tax of 50,000
450,000
Time deposit (excluding interest before death, 90,000 and interest
After death, 60,000)
850,000
Required:
Determine the gross estate under the following property relationships:
1. Conjugal partnership of gains regime: _______________
2. Absolute community of property regime: _________________
PROBLEM 6.
Concepcion, married to Domingo Jugalab on June 12, 1995 died in 1999 leaving the following
the properties:
Car purchased in 1990
House and lot acquired during marriage from conjugal funds
800,000
Savings deposit with Banco Filipino, obtained through labor
and industry of Domingo
Fishpond in Pangasinan, acquired through the income from
Concepcios Goto House
Lotto winnings by Domingo
Yamaha wonderbike purchased by Concepcion out of
her exclusive property
Riceland brought into marriage by Domingo
100,000
Shares of stocks inherited by Concepcion from her
mother who died
two weeks ago

250,000

90,000
200,000
5,000,000
50,000

63,000
Required:
1. Compute the exclusive property of Concepcion: ________________
2. Compute the gross estate of Concepcion: _______________
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frequently makes for success.
Dale Carnegie