Professional Documents
Culture Documents
Estate Tax
MACMOD
MAY 2014
TAX TABLE
The estate tax shall be computed on the basis of the value of the net estate in accordance with following graduated rates
(effective Jan. 1, 1998)
If the net estate is:
Over
But not over
The tax shall be
200,000
0
P
200,000
500,000
5% of the excess over P 200,000
500,000
2,000,000
P
15,000 + 8% of the excess over
500,000
2,000,000
5,000,000
135,000 + 11% of the excess over 2,000,000
5,000,000
10,000,000
465,000 + 15% of the excess over 5,000,000
11,000,000
1,215,000 + 20% of the excess over 10,000,000
1. Basic Concepts:
1. _______________ a mode of transferring and
acquiring ownership, rights, interest and obligations
from a dead individual.
2. _______________ refers to all property rights and
obligations of a person which are not extinguished by
his death and also those which accrued thereto since
the opening of succession; subject matter of
succession.
3. _______________ a person whose property is
transmitted thru the succession whether or not he left
a will.
4. _______________ a person whose property is
transmitted thru succession with a will.
5. _______________ a person called to the succession
either by a will or by provision of law.
6. ______________ a person who inherits personal or
movable property by a will.
7. _______________ a document wherein in his
handwriting an individual makes known his wishes
concerning the disposition of his estate after his death.
8. _______________ the person to whom the property
or property rights is transferred.
9. _______________ a person appointed by a testator to
carry out the provisions of the will.
10. _______________ a person appointed by the court in
the absence of an executor.
11. _______________ one carried out according to the
wishes of the testator to express in a will executed in a
form prescribed by the law (voluntary).
12. _______________ one that takes place by operation
of law (involuntary).
13. _______________ succession affected party by will
and partly by operation of law.
14. _______________ tax imposed upon gratuitous
transfer of properties.
15. _______________ portion of the estate reserved to
the compulsory heirs.
2.
3. Formula for computation of TNE:
1.
4.
Decedent single
5.
6.
Gross estate
7. P xx
8.
Less:
Allowable
9.
xx
deductions
10.
Taxable net estate
11.
Pxx
12.
Estate tax due (0%13.
P
20%)
14.
xx
2.
15.
18.
Decedent married
Gross estate
16.
19.
17.
20.
21.
22.
P xx
25.
xx
28.
31.
xx
34.
xx
37.
23.
24.
Common property of the
couple
27.
Allowable deductions
30.
From exclusive property
33.
36.
Net estate before share of
surviving spouse
39.
Less: Share of surviving
spouse
42.
Net estate before special
deductions
45.
Less: Deduction for family
home/medical exp./s.deductions
40.
43.
46.
26.
P xx
29.
32.
35.
xx
38.
xx
41.
xx
44.
xx
47.
x
x
48.
49.
51.
52.
50.
P xx
53.
P xx
54.
61.
Net
62.
64.
Divided by
65.
67.
Share
spouse
70.
of
the
surviving
68.
x
x
63.
xx
66.
2
69.
P xx
71.
72.
Your mind is a magnet. Continue to dwell on what you want with a strong belief and you will achieve it.
73.
- A. Matthews
74.
3.
75.
76.
P xx
77.
*Deduct estate tax credit for the tax paid 78.
abroad
xx
79.
Estate tax still due
80.
P xx
81.
*Formula for estate tax credit:
82.
83.
Under Limitation (used it only 1 foreign country is
involved: By country limitation.)
84.
85.
86.
Actual E.T. paid to FC
87.
P xx
88.
Or TNE,FC/TNE, W x E.T. due in the Phil.
89.
xx
90.
Allowable tax credit (whichever is lower)
91.
92.
For the foreign country
93.
P xx
94.
Limitation B: (by total, used if 2 or more 95.
foreign countries
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96.
98.
100.
102.
Or TNE, all FCs/TNE, W x E.T. due in
Phil.
104.
Allowable tax credit (whichever is lower)
97.
99.
101.
P xx
103.
xx
105.
P xx
106.
107.
Note: If there are 2 or more FCs both limitations
(A &B) should be used, then get whichever is lower
between the two as the final allowable tax credit.
108.
EXEMPTIONS AND EXCLUSIONS FROM THE
GROSS ESTATE
A.
P1.502A
2.
3.
4.
5.
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6.
7.
8.
9.
P1.502A
129.
EXERCISES/PROBLEMS
3.
4.
5.
6.
7.
8.
9.
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Expenses of internment
136.
Cost of the burial lot (paid
paid by friends & relatives
139.
Fees for performance of rites
incident to internment
142.
Mourning clothing of widow &
unmarried minor children
145.
Expenses during the wake before
burial (paid by uncle, 25%)
148.
Obituary notice
150.
Card of thanks
135.
P
40,0
00
137.
138.
2
0,00
0
140.
141.
1
0,00
0
143.
144.
5
,000
146.
147.
2
0,00
0
149.
3
,000
151.
2
,000
152.
153.
The allowable funeral expenses assuming the
decedents gross estate is:
154.
a.
P2,000,000
155.
b.
P1,500,000
156.
B. Determine whether the following properties are
conjugal/community or exclusive:
157.
158.
ACP
159.
CPG
1. Property acquired before
160.
162.
marriage
161.
163.
2. Property acquired during
164.
166.
marriage
165.
167.
a. By onerous Title
168.
169.
b. By gratuitous Title
170.
171.
3. Income from 2-a earned
172.
174.
during marriage
173.
175.
4. Income from 2-b earned
176.
178.
during marriage
177.
179.
5. Other income of the
180.
183.
couple earned during
181.
184.
marriage
182.
185.
P1.502A
6.
186.
187.
190.
192.
188.
189.
191.
193.
194.
195.
198.
200.
202.
203.
204.
196.
197.
199.
201.
205.
206.
207.
C. Multiple Choice
1. It refers to a mode of transferring & acquiring
properties left by the decedent.
209.
a.
Estate transfer
c.
Donation
210.
b.
Succession
d.
Execution of a will
211.
2. The property, rights & obligations of a person which
are not extinguished by his death & those which have
accrued thereto since the opening of succession.
212.
a.
Inheritance
c. Estate
213.
b.
Capital
d. Devisee
214.
3. The estate tax accrues from the moment of:
215.
a.
The fixing of notice of death
216.
b.
Expiration of a months after death
217.
c.
The death of the decedent
218.
d.
The filing of estate tax return
219.
220.
221.
222.
223.
4. The gift tax paid on a donation mortis causa, if any:
a. Exempts the property from estate tax.
b. Has no effect since the gift will be subject to
another gift tax.
c. Shall form as a tax credit to be deducted from the
estate tax due.
d. Is invalid & the tax will not be credited at all.
224.
5. Which shall not form part of the gross estate of a
decedent:
a. Intangible personal property of non-resident alien
decedent without reciprocity law
b. Revocable transfer
c. Transfer passing special power of appointment
d. Life insurance where the executor is the
beneficiary & it is irrevocable
225.
6.
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d.
e.
7.
P1.502A
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267.
270.
P2,00
0,000
269.
500,0
P1.502A
271.
Franchise in USA
272.
273.
274.
275.
276.
277.
278.
279.
280.
281.
282.
283.
Shares of stock of ABC, foreign
corporation
285.
75% of the business in the Phil.
287.
Other personal properties
284.
00
100,0
00
50,00
0
100,0
00
20,00
0
80,00
0
75,00
0
125,0
00
286.
288.
300,0
00
289.
28. If the decedent is a non-resident citizen his gross
estate is:
290.
a.
P3,650,00
c.
P2,500,000
291.
b.
P3,600,000
d.
P2,650,000
292.
29. If the decedent is non-resident alien his gross estate
is:
293.
a.
P1,195,000
c.
P1,250,000
294.
b.
P945,000
d.
P1,070,000
295.
30. If in the preceding number, reciprocity law can be
applied the gross estate is:
296.
a.
P1,050,000
c.
P1,250,000
297.
b.
P945,000
d.
P1,070,000
298.
31. Based on the original problem but assuming the PLDT
shares of stocks (PLDT) are not listed in the Local
Stock Exchange,& there are 1,000 shares at the time
of death, the companys outstanding shares were
10,000 shares. Its retained earnings was P2,000,000,
par value per share was P50/share. The gross estate
should show the said shares at:
299.
a.
Still at P75,000
c.
P200,000
300.
b.
P250,000
d. P0
301.
302.
Questions 32 & 33 are based in the following
information:
303.
Building, USA
304.
P5,00
0,000
305.
House & lot in Bulacan (500 sq.
306.
meters) zonal value is P10,000 per
307.
square meter
308.
4,500,
000
309.
Life
insurance
proceeds,
310.
beneficiary
is
the
wife,
the
311.
500,0
administratix, irrevocable
00
312.
Life insurance proceeds with
313.
another company beneficiary, his son,
314.
200,0
irrevocable
00
315.
Claims against a debtor who died
316.
a year ago (50% collectible)
317.
50,00
0
318.
Death benefits from US Veteran
319.
Administration
320.
100,0
00
321.
Death benefits from SSS
322.
40,00
0
323.
Paraphernal
property
of
his 324.
2,000,
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surviving wife
000
325.
326.
He also transferred mortis causa the following:
327.
328.
330.
FMW
331.
FMV
329.
S
- Death
Price
Transfer
332.
Car,
333.
P
334.
P1,0
335.
P
Mla.
500,000
00,000
800,000
336.
Land
337.
1,50
338.
2,00
339.
1,00
, Mla.
0,000
0,000
0.000
340.
Land
341.
2,00
342.
1,80
343.
3,00
, USA
0,000
0,000
0,000
344.
32. If the decedent is a Filipino citizen, his gross estate is:
a. P10,850,000
c. P10,950,000
b. P12,900,000
d. P11,050,000
345.
33. 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:
a. P5,350,000
c. P6,500,000
b. P5,300,000
d. P6,000,000
346.
34. The gross estate of a non-resident alien is P2,000,000,
75% of which is from abroad. The actual funeral
expenses totaled to P80,000, of which was paid by
his employer. The deductible funeral expense is:
a. P25,000 c.
P6,250
b. P20,000 d.
P80,000
347.
35. Based on the preceding number (the same world G.E.)
but the decedent is a non-resident citizen, the
deductible funeral expense is:
a. P25,000 c.
P5,000
b. P60,000 d.
P80,000
348.
36. 1st statement: A note payable contracted 11 yrs. ago
is a deduction from the gross estate if notarized.
349.
2nd Statement: To be deductible, medical
expenses must be paid within one year period before
death.
a. True, True
c. True, False
b. False, False
d. False, True
37. 1st Statement: Unpaid mortgage indebtedness is
deductible from the gross estate provided the said
property subject to the indebtedness is included in the
gross estate net of the mortgage indebtedness.
350.
2nd Statement: A donation inter vivos by
the decedent to the Phil. government few months
before his death is a deduction from the gross estate.
351.
a.
True, True
c.
True,
False
352.
b.
False, False
d.
False,
True
353.
354.
38. Purobuto, non-resident Japanese, died
leaving the following:
355.
357.
359.
361.
363.
Deductions claimed:
Funeral expenses
365.
Judicial expenses
356.
P
560,00
0
358.
42
0,000
360.
1,8
20,000
362.
364.
10
0,000
366.
10
P1.502A
367.
Unpaid expenses
0,500
368.
15
0,500
370.
371.
12
0,000
373.
374.
18
0,000
376.
377.
1,0
00,000
379.
1,0
00,000
P600,000)
430.
1,50
0,000
431.
Transfer to the Govt, included 432.
30
above
0,000
372.
Donation mortis causa to Makati
433.
Death Benefits from Employer 434.
20
City Hall
0,000
435.
Family home (included above) 436.
2,00
375.
Family Home (inc. above),
0,000
located abroad
437.
The allowable varnishing deduction is:
438.
a.
P213,000 c.
378.
Standard deduction
P426,000
439.
b.
P626,000 d.
380.
P440,625
381.
The taxable net estate is:
440.
382.
a.
P210,000
c.
42. The taxable net estate based on the preceding number
P1,900,000
is:
383.
b.
P516,500
d.
441.
a.
P4,056,250
P2,100,000
c.
P3,974,000
384.
442.
b.
P5,555,300
385.
38-a. If decedent is a Filipino citizen, TNE is
d.
P4,175,000
__________
443.
386.
43. Mr. Dinakahinga, head of family died on January 15,
39. JR, administrator claims the following funeral expenses
2010, leaving the following properties and obligations:
for a decedent:
444.
Cash in bank, 50%, donated
445.
387.
Expenses of interment (paid by 388.
P
mortis causa to Natl Govt;50-% to Q.C.
446.
P
friend)
60,000
govt
300,000
389.
Cost of burial & tombstone 390.
447.
House and lot in Makati, F.
448.
1,50
(1/2 paid by relatives)
42,000
Home
0,000
391.
Other funeral parlor expenses
392.
449.
Personal properties
450.
1,5
36,000
00,000
393.
Expenses during the wake
394.
451.
Farm lot
452.
8
395.
Before burial
396.
25,000
13,000
453.
Claim against an insolvent debtor
454.
2
397.
Obituary notice
398.
25,000
7,500
455.
Transfer in contemplation of
456.
399.
Card of thanks
400.
death (gratuitous)
457.
1,50
3,500
0,000
401.
Mourning clothing of friends
402.
458.
Transfer passing special power of
459.
15,000
appointment
460.
75,0
403.
Mourning
clothing
of 404.
00
immediate family members
5,000
461.
Deduction claimed:
462.
405.
463.
Funeral expenses
464.
5
406.
If the gross estate is P1,000,000 the
75,000
allowable funeral expense is:
465.
Judicial expenses
466.
407.
a. P75,000
c. P174,500
67,500
408.
b. P82,500
d. P 50,000
467.
Donation mortis causa to Quezon
468.
409.
City government
469.
150,
40. Based on Number 39 but the gross estate is
000
P2,500,000 the allowable funeral expenses is:
470.
Unpaid mortgage on the farm lot
471.
410.
a. P75,000
c. P125,000
75,000
411.
b. P82,500
d. P93.500
472.
Medical expenses (included in the
473.
412.
funeral expense incurred within the 1
474.
41. Mr. Nabigla died on March 20, 2011 leaving a gross
year period with receipts)
475.
225,
estate of P7,800,000 including a land inherited from
000
his uncle on October 15, 2007 and a car donated to
476.
477.
him on April 20, 2005. The following data pertain to
478.
The farm lot was inherited 5 years by
the two properties:
the decedent before his death with a value then of
413.
414.
Unp 415.
FMV 416.
FMV
P575,000 and a mortgage indebtedness of P150,000.
aid
upon
upon
479.
The total deduction from the gross estate
Mortga
receipt
death
is:
ge
480.
a.
P1,867,500
417.
La
418.
P10 419.
P1,8 420.
P1,2
c. P2,092,500
nd
0,000
00,000
50,000
481.
b.
P867,500
421.
Ca
422.
50, 423.
300, 424.
400,
d.
P3,092,500
r
000
000
000
482.
425.
483.
44.
Based on the preceding number, the
426.
The decedent was able to pay of the
taxable net estate assuming the farm was inherited 5
unpaid mortgage on the land before his death. The
yrs ago:
deductions are:
484.
a. P3,982,500
c. P2,757,500
427.
Expenses,
losses, 428.
P1,200
485.
b. P4,982,500
d. P2,672,329
indebtedness, taxes (excluding the
,000
486.
unpaid
mortgages
above
but
45. Mr. Jose, Filipino, married died leaving the following
including actual funeral expenses of
estate:
P300,000 and medical expenses of
369.
Losses: occurring 3 mos. After
death due to fire
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429.
Standard Deductions
P1.502A
487.
Car acquired before marriage by
Mr. Jose
488.
489.
P
300,0
00
490.
Car acquired before marriage by
491.
Mrs. Jose
492.
45
0,000
493.
House and lot acquired during
494.
1,
marriage
500,0
00
495.
Jewelries of Mrs. Jose
496.
100,0
00
497.
Personal properties inherited by:
498.
499.
Mr. Jose during marriage
500.
250,0
00
501.
Benefits from SSS
502.
50,00
0
503.
Retirement benefits from a 504.
15
private firm
0,000
505.
Proceeds of group insurance
506.
taken by his employer
507.
7
5,000
508.
Land inherited by the wife during
509.
marriage
510.
1,
000,0
00
511.
Income earned from the land
512.
inherited by wife(25% of which was
513.
earned after death)
514.
20
0,000
515.
The gross estate under conjugal partnership of
gain is:
516.
a. P2,600,000
c. P1,950,000
517.
b. P3,600,000
d. P2,200,000
518.
46. Under the same problem, the gross estate under
absolute community of property is:
519.
a. P2,600,000
c. P1,950,000
520.
b. P3,600,000
d. P2,500,000
47. Mr. Malungkot died intestate on September 30, 2011.
He is survived by his wife. An inventory of the estate
showed the following:
521.
522.
FMV
523.
tax
524.
Zonal
declarati
Value
on
525.
Exclusive estate of Mr. Bayot
526.
Commercial land 700
527.
P
528.
P
sq. m.
850,000
900/sq.
m.
529.
Residential land 900
530.
580,
531.
1,000
sq. m.
000
/sq. m.
532.
Conjugal estate:
533.
534.
535.
Farm land, 800, sq.
536.
1,30
537.
700/s
m.
0,000
q. m.
538.
Residential house
539.
750,
540.
000
541.
Car, Toyota
542.
200,
543.
000
544.
Other property
545.
280,
546.
000
547.
Death benefits (RA
548.
200
550.
4917)
,000
549.
551.
On January 1, 2011, the commercial land was
mortgaged at the Phil. National Bank for P200,000 at 24%
per annum. The residential house (certified family home is
mortgaged with unpaid balance of P180,000 as of the date
of death). The 900 sq. m. residential land is the family
homes lot. Actual funeral expenses amounted to P250,000
but of which is non-deductible. Medical expenses
reached P600,000 but only was incurred with in 1 yr
before death. Judicial expenses reached P150,000.
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552.
The gross estate is:
553.
a.
P4,280,000
c.
P2,730,000
554.
b.
P4,480,000
d.
P4,160,000
555.
556.
48. The total deductions excluding share of
surviving spouse and special deduction is:
557.
a.
P655,000
c.
P855,000
558.
b.
P891,000
d.
P1,016,000
559.
560.
49. The deduction for family home is:
561.
a.
P1,000,000
c.
P900,000
562.
b.
950,000
d.
P750,000
563.
564.
50. The taxable net estate is:
565.
a.
P401,500
c.
P201,500
566.
b.
P326,500
d.
P101,500
567.
568.
51.
Assuming the commercial land was
received as donation by the decedent from his uncle 3
years ago, the TNE is __________
569.
52. Mr. Bombo, Filipino died on April 10, 2010 with
the following data:
575.
Es
570.
571.
573.
572.
576.
Philippines
580.
Foreign
country A
Gros
s Estate
577.
P
1,375,0
00
581.
300,
000
584.
Foreign
country B
585.
450,
000
588.
Foreign
country C
589.
600,
000
574.
D
educti
on
578.
P
75,00
0
582.
1
50,00
0
586.
5
25,00
0
590.
2
25,00
0
tate
tax
paid
579.
P
-
583.
3,750
587.
591.
18,00
0
592.
593.
The estate tax due still due is:
594.
a.
P13,500
c. P14,000
595.
b.
P9,000
d. P13,250
596.
597.
Mr. Tantor married under the regime of absolute
community of property. Survived by his wife, left
behind the following properties and charges upon his
estate:
598.
599.
Real property acquired during the marriage P
3,000,000
600.
Family Home, built using community fund
1,000,000
601.
Real property received as a gift during the
602.
Marriage
2,000,000
603.
Lot where family home was built, inherited
604.
During the marriage
400,000
605.
Funeral expenses
300,000
606.
Taxes and Losses
1,300,000
607.
Medical Expenses, with receipt, incurred
608.
within 1 year period
1,000,000
609.
53. The allowed family home deduction is:
610.
a. P1,000,000
c.
P900,000
611.
b. P1,400,000
d.
P700,000
P1.502A
612.
54. The deduction for share of the surviving spouse is:
a. P 2,500,000
c. P 4,000,000
b.
P 1,250,000
d.
P 1,500,000
613.
P 1,250,000
P 2,500,000
c.
d.
P 1,500,000
P 4,000,000
619.
620.
621.
622.
623.
Einstein told us that time is just an illusion. When you understand and
accept that there is no time, you can see that whatever you want in the future already
exists. That is why when you write, imagine, or speak of your desire, you should use
the present tense. Radiate your desire in your mind, heart, and body, and see it as here
now.
624.
The Secrets by Rhonda Byrne
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P1.502A