PROBLEM 6-36

1) Inherited property of Mr. Dedo 6,000,000

Income from property inherited by Mr. Dedo 1,000,000
Death Benefits under RA 4917 3,000,000
Gross Estate 10,000,000

2) Claims against insolvent persons 300,000

Cash (1380000-180000) 1,200,000
Time Deposit 2,000,000
Interest on Time Deposit (2000000 x 18%) x 4/12 120,000
Dividend Income 250,000
Proceeds of life insurance 3,000,000
House and Lot- Family Home (10M-2M) 8,000,000
Car Trooper 2,000,000
Unpaid Mortgage Payable-under accommodation 500,000
Cost of Business Investment 6,250,000
Gross Estate 23,620,000

3) Coffin and Funeral Expenses 50,000

Obituary 8,000
Mourning apparel of surviving spouse 6,000
Cost of burial plot 50,000
Burial Ceremony 25,000
Total Deductible Funeral Expenses 139,000

4) Fees of administrator 30,000

Cost of preserving the distributing estate 80,000
Total Deductible Judicial Expenses 110,000

5) Notes Payable 400,000

Accrued Interest Payable 40,000
Total Deductible Claims against the Estate 440,000

6) Unpaid Mortgage Payable- under accommodation 500,000

Unpaid Mortgage Payable on property inherited 400,000
Total Deductible Unpaid Mortgage 900,000

7) Gross Estate 33,620,000

Deductions 3,889,000

Value Taken 5,000,000

 Less: Mortgage Paid -200,000
Initial Basis 4,800,000
Less: Proportionate Deduction -555,241
Final Basis 4,244,759
Multiply: Vanishing Deduction Rate 80%
Amount Deductible 3,395,807

8) Share of surviving spouse 11,065,500

(23440000 - 1889000) x 50%

9) Deductible Family Home 1,000,000

10) Medical Expenses Paid 500,000

Family Home 1,000,000
Death Benefits under RA 4917 3,000,000
Standard Deduction 1,000,000
Total Special Deductions 5,500,000

11) Communal Exclusive

Gross Estate 23,620,000 10,000,000
Less: Ordinary Deductions

Funeral Expenses -139,000

Judicial Expenses -110,000
Claims against the estate -440,000
Unpaid Mortagage Payable -500,000 -400,000
Claims against insolvent
person -300,000
Transfer for public use -2,000,000
Vanishing Deduction -3,395,807
Net estate bef. Special 22,131,000 4,204,193
Deductions
Less: Special Deductions
Net estate bef. Share of
Surviving Spouse
Share of spouse
(22131000 x 50%)
NTE

12) Estate Tax 465,000

Excess 715,454
(4769693 x 15%)
Total Tax Due 1,180,454
13) Share of Surviving Spouse 11,560,500

14) Communal Exclusive

Gross Estate recog. above 23,800,000 10,000,000
SSS Death Benefits 1,000,000
Total Gross Estate 24,800,000 10,000,000
Less: Ordinary Deductions

Funeral Expenses -89,000

Judicial Expenses -110,000
Claims against the estate -440,000
Unpaid Mortagage Payable -500,000 -400,000
Prayer expenses after burial -25,000
Autopsy -15,000
Claims against insolvent person -300,000
Unpaid Income tax after death -200,000
Donation to Church -1,000,000
Donation to Relatives -500,000
Donation to Intramuros -180,000
Transfer for public use -2,000,000
Total Deductions
Net estate bef. Share of 23,121,000 5,920,000
Surviving Spouse
Share of Surviving Spouse
Net estate bef. Tax
Estate Tax
NDE

15) Wife 5,433,349

Two Children 10,866,697
Total 16,300,046
6,000,000
1,000,000
3,000,000
10,000,000

300,000
1,200,000
2,000,000
120,000
250,000
3,000,000
8,000,000
2,000,000
500,000
6,250,000
23,620,000

50,000
8,000
6,000
50,000
25,000
139,000

30,000
80,000
110,000

400,000
40,000
440,000

500,000
400,000
900,000

33,620,000
3,889,000

5,000,000
 -200,000
4,800,000
-555,241
4,244,759
80%
3,395,807

11,065,500

1,000,000

500,000
1,000,000
3,000,000
1,000,000
5,500,000

Exclusive Total
10,000,000 33,620,000

-400,000

-2,000,000
-3,395,807 -7,284,807
4,204,193 26,335,193

-5,500,000

20,835,193
-11,065,500

9,769,693
 Exclusive Total
10,000,000 33,800,000

10,000,000 34,800,000

-400,000

-1,000,000
-500,000
-180,000
-2,000,000
-5,759,000
5,920,000 29,041,000

-11,560,500
17,480,500
-1,180,454
16,300,046
7) Deductions
Funeral Expenses 139,000
Judicial Expenses 110,000
Unpaid Mortgage 900,000
Claims against the estate 440,000
Claims against insolvent person 300,000
Transfer for public use 2,000,000
Total 3,889,000

Proportionate Deduction 4800000/33620000

x 3889000
Total 555,241

14) Gross Estate recog. Above 23,620,000

Donation to Intramuros 180,000
Total 23,800,000

Funeral Expenses
Coffin and Funeral Expenses 25,000 (50000 x 50%)
Obituary 8,000
Mourning apparel of surviving spouse 6,000
Cost of burial plot 10,000 (50000 x 10%)
Burial Ceremony 25,000
Mourning Apparel of relatives and married 15,000
Total 89,000
(50000 x 50%)

(50000 x 10%)