TAXATION 002

CHAPTER 1: Introduction to Internal Revenue

Taxes

1. What is an Internal Revenue Tax?

2. What is a withholding tax?

3. What are the kinds of income taxes?

4. What are the kinds of business taxes?

5. What are the classifications of transfer

taxes?

6. What is the situs of the classes of NIRT?

7. When will you file/pay the NIRT?

8. Who are the large taxpayers?

Terms:

 Income tax

 Internal revenue tax

 Regular income taxes

 Final income taxes

 Capital gains tax

 Passive income tax

 Business taxes

 VAT

 OPT

 Excise taxes

 Transfer taxes

 Donor’s tax

 Estate tax

 Documentary stamp tax

 Situs of taxation

 Large taxpayers
TAXATION 002

CHAPTER 2: Transfer Taxes and Basic Succession

1. What is the nature of transfer taxes?

2. How do you transfer property?

3. When is a transfer of property effective?

4. What is the difference between donor’s tax

and estate tax?

5. How does the government justify the

imposition of transfer taxes?

6. What is succession?

7. Who are the successors?

8. What are the types of succession?

9. How is one become disqualified from

inheritance (disinheritance)?

10. Who are the people that are incapable of

succeeding?

Terms:
 Testamentary distribution legitime rules  Intestate succession

 Intestate succession order rules  Mixed succession

 Intestate distribution legitime rules  Inheritance

 Onerous transfer

 Casual sale

 Gratuitous transfer

 Donation

 Succession

 Partially gratuitous transfer

 Redistribution of wealth theory

 Benefit received theory

 Privilege/State partnership theory

 Ability-to-pay theory

 Escheat

 Testamentary succession

 Disinheritance

 Collateral lines

 Voluntary heirs

 Equitable recoupment theory

 Succession

 Decedent

 Estate

 Successor  Intestate estate

 Will  Probate

 Holographic will  Reprobate

 Notarial will  Legatee

 Codicil  Devisee

 Testate estate  Executor

 Primary compulsory heir  Executrix

 Legitime  Administrator
 Administratrix 3. How is usufruct valued?

 Special proceedings 4. How is real property valued?

 Secondary compulsory heirs 5. How is personal property valued?

 Free portion 6. How are stocks, bonds, and other securities

valued?
 Direct lines
7. How do you use the adjusted net asset
 Compulsory heirs
method?

8. What are the rules in determining the

exclusive property?

9. What is the property relationship that is

applicable to married persons?

10. What is the decedent’s interest?

11. What is the treatment on claims against

insolvent persons?

12. What is the amount received by heirs under

R.A. # 4917

Terms:

 Properties owned

 Properties already transferred but still

owned

 Decedent’s accrued interests

 Real properties

 Tangible personal properties

 Intangible personal properties

 Gross estate

 Exclusive properties

 Conjugal properties
TAXATION 002
 Situs of gross estate
CHAPTER 3: Gross Estate
 General valuation rule

 Usufruct
1. How do you determine the Gross Estate?
 BSMT
2. How do you value the Gross Estate?
 Bare dominium
 Assessed value

 Zonal value

 Current market price

 Second-hand market price

 Grossed up loan value

 Fair value + accrued interest

 Discounted value  Exclusive property under Conjugal

partnership of gains
 Face value
 Regime of Complete separation of property
 Converted Philippine peso value
 Property regime
 Closing price
 Marriage settlement
 Trading price
 Regime of absolute community property
 Adjusted net asset method
 Regime of conjugal partnership of gains
 Exclusive property under Absolute
community property  Outside marriage property relationship

 Revocable transfer

 Transfers in contemplation of death

 Property passing under general power of

appointment

 Transfers for insufficient consideration

 Proceeds of life insurance with revocable

beneficiary

 R.A. 4917