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TAXATION

DEDUCTIONS

MULTIPLE CHOICE. Select the best answer for each of the following questions.
Encircle the corresponding letter of your choice.

1. If the decedent is married under the conjugal partnership of gains, vanishing deduction
shall be deductible against?
a. Exclusive Properties
b. Conjugal Properties
c. Either exclusive properties or conjugal properties
d. Neither Exclusive nor conjugal Properties

2. Judicial expenses may be deducted from the gross estate of the decedent who died
before 2018. which of the statements provided below is correct?
a. Judicial expenses are costs and expenses incurred during the settlement of the
estate and beyond.
b. Any unpaid amount of judicial expenses need not be supported by a sworn
statement of account issued and signed by the creditor
c. Attorney’s fees incident to litigation incurred by the heirs in asserting their
respective rights cannot be claimed as deduction from gross estate
d. Expenses incurred in the administration and settlement of an estate in extrajudicial
proceedings is not allowed as deduction.

3. Which of the following incurred expenses shall not be deducted under the category
of judicial expenses for a decedent who died before 2018?
a. Expenses for the inventory-taking of the assets comprising the gross estate.
b. Expenses for the administration and payment of debts of the estate.
c. Expenses for the distribution of the estate among the heirs.
d. Expenses as of the last illness of the decedent.

4. Deductible medical expense must be


a. Paid
b. Unpaid
c. Incurred within 6 months before death
d. Incurred within one year before death
5. Which is not claimable as medical expense?
a. Services of a mortician
b. Services of a physician
c. Cost of regular check-ups
d. None of these

6. Which obligation is deductible against gross estate?


a. Bank loans acquired for the medication of the decedent
b. Income tax of the decedent before death
c. Sole obligation of the surviving spouse
d. Real property tax of separate property of the surviving spouse

7. Which statement is incorrect?


a. Claims against insolvent persons are both included in gross estate and as
deduction against gross estate.
b. Claims against insolvent persons are separately presented from losses.
c. Only estates undergoing judicial settlement are allowed to claim judicial
expense.
d. Non-resident alien decedents can claim deduction for funeral expense, judicial
expense, losses, indebtedness and taxes.

8. Non-resident alien decedent can claim pro-rated amount for the following
deductions, except
a. Taxes
b. Losses
c. Indebtedness
d. Vanishing deductions

9. Which is not a requisite of vanishing deduction?


a. If the property is acquired by inheritance, he prior estate must have paid the
estate tax.
b. If the property is acquired by inheritance, the prior estate must have not claimed
vanishing deduction.
c. The decedent must have acquired he property by way of inheritance or donation.
d. The decedent must have acquired the property by purchase.

10. The amount of funeral expense that may be deducted from the gross estate is
a. 5% of the gross estate or P200,000 whichever is lower
b. Actual funeral expense or P200,000 whichever is lower
c. 5% of the gross estate or the actual funeral expense whichever is lower
d. 5% of the gross estate or the actual funeral expenses or P200,000 whichever
is the lowest

11. Which of the following losses is claimable as deduction against gross estate?
a. Losses claimed in the income tax return of the estate
b. Losses occurring before the death of the decedent
c. Losses occurring after the sixth month of death
d. Losses of separate properties of the decedent.

12. Vanishing deductions is allowed if the property subject to vanishing deduction is


acquired
a. One year before death
b. More than one year before death
c. Within five year before death
d. More than five year before death

13. Which of these taxes is deductible against gross estate?


a. Income tax paid before death
b. Income tax of the estate
c. Real property tax accruing after death
d. Real property tax accruing before death

14. A decedent died on Nov. 1, 2017 leaving a family home composed of the following:
conjugal house worth P800,000, and the land which he exclusively owned valued at
P400,000. he also owns a vacation house at Baguio worth P700,000.

The deductible amount of family home is :


a. P800,000
b. P1,200,000
c. P1,900,000
d. P1,000,000
15. Based on the preceding number, if the house is also an exclusive property, how much
is the deductible family home allowance?
a. P800,000
b. P1,200,000
c. P1,900,000
d. P1,000,000

16. The heirs of the decedent compiled the following accrued taxes:

Before death After death


Real property tax P 40,000 P -
Income tax 80,000 110,000
Estimated estate tax - 400,000

Compute the deductible taxes.


a. P120,000
b. P230,000
c. P510,000
d. P630,000

17. Mr. Bueno, a married Filipino citizen, died in a car accident. He left his wife with
their residential house with a fair value of 1,000,000. The lot on which it stands,
having a fair value of 400,000, is Mr. Bueno’s exclusive property. How much is the
allowable deduction for family home?
a. P1,400,000
b. 1,000,000
c. 900,000
d. 700,000

18. A decedent died leaving a P2,500,000 gross estate after deducting his funeral
expenses totaling P180,000. Compute the deductible funeral expense.
a. P125,000
b. P134,000
c. P180,000
d. P200,000
19. The following losses of properties occurred during the settlement of estate of Mrs.
Undoy:

Losses of separate properties of Mr. Undoy P 60,000


Losses of common properties 40,000
Losses of separate properties of Mrs. Undoy 80,000

Compute the deductible losses from gross estate.


a. P60,000
b. P80,000
c. P100,000
d. P120,000

20. The total expenses of the wake of Mr. Uliran totaled P195,000 including P10,000
payment for his unpaid medical expense. Mr. Uliran had P3,000,000 exclusive
properties. Mr. And Mrs. Uliran had P600,000 common properties, Mrs. Uliran also
had P2,000,000 exclusive properties. Compute the deductible funeral expense.
a. P150,000
b. P180,000
c. P185,000
d. P200,000