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Taxation

Handout No. 004 Gross Estate (Theoretical Quizzer)

R. C. GLORIA
May 2006 Batch

Multiple Choice Questions


Choose the best possible answer.
1

. The gross estate of decedents is composed of properties:


Resident or Citizen Decedent
Non-resident alien decedent
a. Within and without the Philippines
Within and without the Philippines
b. Within the Philippines only
Within the Philippines only
c. Within and without the Philippines
Within the Philippines only
d. Within the Philippines only
Within and without the Philippines

. The rule of reciprocity applies to:

a.
b.
c.
d.

Non-resident
Alien decedent
Yes
No
Yes
No

Intangible personal
properties in the Philippines
Yes
No
No
Yes

. One of the following is not an intangible personal property situated in the Philippines
a. Shares, obligations or bonds issued by any corporation or sociedad anonima
organized and constituted in the Philippines in accordance with its laws;
b. Shares, obligations or bonds issued by any foreign corporation where 85% of its
business is located in the Philippines;
c. Shares, obligations or bonds issued by a foreign corporation if such shares,
obligations or bonds have acquired business situs in the Philippines;
d. Shares or rights in any partnership, business or industry established outside the
Philippines.

. Which of the following is subject to the rule of reciprocity?


a. Car in the Philippines owned by a non-resident alien decedent;
b. Investment in stock in a US Corporation owned by a non-resident alien decedent;
c. Investment in bonds in a US Corporation that has acquired business situs in the
Philippines, and is owned by a resident alien;
d. Share owned by a non-resident alien in a partnership established in the Philippines.

. A non-resident alien left the following properties at the time of his death:
A. Bank deposit, Chase Manhattan Bank, New York, USA;
B. Bank deposit, Philippines National Bank, Manila, Philippines;
C. Car, Manila, Philippines;
D. Investment in bonds, Meralco, Philippines;
E. Investment in stock, Microhard, USA;
F. House and lot, New York, USA.
The country of the non-resident alien decedent does not impose a transfer or death tax of
any character in respect of intangible personal property of citizens of the Philippines not
residing in that foreign country.
What properties will be included in the Philippines gross estate of the non-resident alien
decedent?
a. All the properties above
b. Properties B, C, and D
c. Property C only
d. Properties A and C

TAX-1103A
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. Using the same data in no.5, assuming the decedent is a resident alien, and his country
does not impose transfer taxes to Filipinos not residing therein, the Philippine gross estate
includes:
a. All properties above
b. Properties B, C, and D
c. Property C only
d. Properties A and C

. The gross estate of a non-resident citizen decedent will include:


a. All of the properties wherever situated;
b. Properties situated in the Philippines only;
c. Properties situated in the Philippines only subject to the rule of reciprocity;
d. Properties situated outside the Philippines only.

. Which of the following is not included in the gross estate?


a. Revocable transfer where the consideration is not sufficient
b. Revocable transfer where the power of revocation was not exercised
c. Transfer passing under general power of appointment;
d. Transfer for sufficient consideration.

. Proceeds of life insurance includible in the taxable gross estate.


a. Insurance proceeds from SSS and GSIS;
b. Amount receivable by any beneficiary, irrevocable, designated in the policy;
c. Amount receivable by any beneficiary designated in the insurance policy;
d. Proceeds of group insurance taken out by a company for employees.

10

. Which of the following proceeds of life insurance are included in the gross estate
regardless of whether the designation of the beneficiary is revocable or irrevocable?
a. Benefits received from SSS;
b. Benefits received from GSIS;
c. Benefits received from group insurance;
d. Benefits from an insurance company where the beneficiary is the estate of the
decedent, or its executor or administrator.

11

. Two of the following are included in the gross estate and at the same time deducted from
the gross estate:
A. Claims against insolvent persons;
B. Amount received by heirs under R.A. No. 4917;
C. Proceeds of life insurance;
D. Revocable transfers.
a. A and B;
b. B and C;
c. C and D;
d. A and D

12

. One of the items in the gross estate of a decedent is a claim against an insolvent person
amounting to P500,000. The insolvent debtor can still pay P100,000 out of the P500,000.
How much will be included in and deducted from the gross estate?
Gross Estate
Deduction
a.
P100,000
P100,000
b.
P500,000
P100,000
c.
P500,000
P400,000
d.
None
None

TAX-1103A
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13

. The following are transmissions and acquisitions exempt from transfer tax except:
a. The merger of the usufruct in the owner of the naked title;
b. The transmission or delivery of the inheritance or legacy by the fiduciary heir or
legatee to the fideicommisary;
c. The transmission from the first heir, legatee or donee in favor of another beneficiary
in accordance with the desire of the predecessor;
d. All bequests, devises, legacies and transfers to social welfare, cultural and charitable
institutions.

14

. Which of the following exempt transmissions will still require inclusion of the property
in the gross estate
a. Merger of the usufruct in the owner of the naked title;
b. Legacy to a charitable institution the administrative expenses of which do not exceed
30% of the legacy;
c. Transfer from the first heir to the second heir designated by the decedent;
d. Amount received as war damages and from US Veterans Administration.

15

. Which of the following value is not used when valuing gross estate?
a. Fair market value at the time of death;
b. Fair market value at the time the estate tax return is filed;
c. Zonal value when higher than the assessed value in case of real property.
d. Book value in case of shares of stock not traded in the stock exchange.

16

. A decedent left 10,000 PLDT shares. The shares were traded in the local stock exchange.
At the time of death, the following were available:
Fair market value- P400 per share
Mean between the highest and lowest quotations-P500 per share
Book value- P350 per share
What was the value included in the decedents gross estate?
a. P5,000,000
b. P4,000,000
c. P3,500,000
d. Whichever was the highest among the fair market value, mean and book value.

17

. A decedent left 1,000 XYZ Corporation common shares. The shares were not traded in
the stock exchange. The following data were made available:
Capital stock, XYZ Corporation
P10,000,000
Retained Earnings
5,000,000
.
Outstanding shares
100,000
What was the value included the decedents gross estate?
a. P150,000
b. P100,000
c. P50,000
d. Cannot be established.
18

. A decedent left a piece of land. The following data were available in connection with the
property:
Assessed value, six (6) months before death- P2,500,000
Zonal value, time of death- P2,000,000
Fair market value, time of filing estate tax return- P3,000,000
What would be the value of the piece of land in the gross estate?
a. P3,000,000
b. P2,500,000
c. P2,000,000
d. Cannot be established because the data were from different dates

TAX-1103A
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19

. In the absence of a marriage settlement, or when the regime agreed upon was void, the
property relations of the spouses who were married on or after August 3, 1988 would be:
a. Absolute community of property;
b. Conjugal partnership of gains;
c. Absolute separation of property;
d. Either absolute community of property or conjugal partnership of gains.

20

. The gross estate of a decedent who was married at the time of death will be composed of:
a. His capital property, the wifes paraphernal property and the community property;
b. His capital property and the common property;
c. Common property
d. His capital property

21

. Properties owned by spouses before and brought into the marriage will be classified as:
Under absolute community of property
Under conjugal partnership of gains
a.
Community
Conjugal
b.
Exclusive
Exclusive
c.
Community
Exclusive
d.
Exclusive
Conjugal

22

. The fruits from exclusive property of each spouse due or received during the marriage are
classified as:
Under absolute community of property
Under conjugal partnership of gains
a.
Community
Conjugal
b.
Exclusive
Exclusive
c.
Community
Exclusive
d.
Exclusive
Conjugal

23

. One of the following is not an exclusive property under conjugal partnership of gains:
a. Property brought to the marriage as the spouses own;
b. Property acquired during the marriage by lucrative title;
c. Property acquired by right of redemption, by barter or by exchange with property
belonging to the spouses;
d. Property purchased with the exclusive money pf the wife or of the husband.

24

. Under absolute community of property, which of the following property will be classified
as exclusive?
a. Jewelry for the exclusive use of the husband or wife;
b. Jewelry acquired as inheritance before the marriage by the husband or wife;
c. Jewelry acquired as donation before the marriage, brought by one of the spouses into
the marriage;
d. Personal effects and belongings for the exclusive use of either spouse acquired during
the marriage.

25

. First statement: Under conjugal partnership of gains, properties owned by the spouses are
deemed conjugal unless proven exclusive.
Second statement: Under absolute community of properties, properties owned by the
spouses are deemed community unless proven exclusive.
a. True, True;
b. False, False
c. True, False
d. False, True
END

THOUGHTS TO PONDER:
It is better to understand little than to misunderstand a lot.
-Anatole France

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