MINDANAO STATE UNIVERSITY

DEPARTMENT OF ACCOUNTANCY

ACCTG 163: REVIEW IN TAXATION

ESTATE TAXATION

GENERAL PRINCIPLES

(DEFINITION OF TERMS)

1. Succession - is the mode of acquisition by virtue of which the property, rights and
obligations to the extent of the value of the inheritance of a person, are transmitted through his
death to another or others either by his will or by operation of law.

2. Decedent - the person whose property is transmitted through succession whether with or
with a will.

3. Heir - person called to the succession either by the provision of a will or by operation of law.

4. Devisee - person who receives real property by virtue of a will.

5. Legatee - person who receives personal property by virtue of a will.

6. Testamentary succession - transfer of properties through an executed will (testament).

7. Intestate succession - transfer of properties where there is no will or if there is a will, it is

void or nobody succeeds in the will.

8. Mixed succession - transfers made partly by a will and partly by operation of law.

9. Executor - person or trust company named in the will to carry out its provisions.

10. Administrator - person or trust company appointed by the court to administer and distribute
the estate where no executor was named in the will or if executor does not want to act.

11. Legitime - the portion of the decedent’s estate which the law reserves to his compulsory
heirs. The portion of the decedent’s estate in excess of the legitimes is called free portion.

12. Extrajudicial settlement of the estate - out of court settlement entered into by the heirs
transferring and distributing the property left by the decedent.

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 MINDANAO STATE UNIVERSITY

DEPARTMENT OF ACCOUNTANCY

ACCTG 163: REVIEW IN TAXATION

13. Transfer tax - a tax imposed upon the transfer of property ownership. It is a privilege tax
which is imposed on the act of passing the ownership of property and not a tax on the property
itself.

14. Estate tax - a tax levied upon the transfer of the net estate of a decedent to his heirs.

15. Inheritance tax - an imposition created by law on the privilege to receive property.

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