Fair market value at the time of transfer P 500,000

Consideration received by transferor-decedent

at the time of transfer 500,000

fair market value at the time of death of transferor 750,000

value to include in gross estate of transferor-decedent 0

Fair market value at the time of transfer P 500,000

Consideration received by transferor-decedent

at the time of transfer 300,000

fair market value at the time of death of transferor 750,000

value to include in gross estate of transferor-decedent 450,000

Fair market value at the time of transfer P 500,000

Consideration received by transferor-decedent

at the time of transfer 0

fair market value at the time of death of transferor 750,000

value to include in gross estate of transferor-decedent 750,000

1.

 Included in gross estate

2.

 Included in gross estate

-3. Mr. Felipe took an insurance on his life for P15 million and designated his mother as
beneficiary

 Included in gross estate (if the statement is silent, it is revocable)

4. Mr. Felipe took an insurance on his life for P20 million and designated his wife as
revocable beneficiary.

 Included in gross estate (if it is stated that it is a revocable transfer, then it is

revocable)

5. Mr. Felipe took an insurance on his life for P25 million and designated his son as
irrevocable beneficiary.

 Not included in gross estate (because of irrevocable beneficiary and irrevocable

transfer)

CLASSIFY EACH TRANSFER WHETHER

A. TRANSFER IN CONTEMPLATION OF DEATH

B. REVOCABLE TRANSFER
C. TRANSFER UNDER A GENERAL POWER OF APPOINTMENT
D. TRANSFER UNDER A SPECIAL POWER OF APPOINTMENT

1. Mr. Celerio has been fighting for his life since he was diagnosed to have cancer
of the colon two months ago. The cancer is already on its terminal stage.
Accepting his fate, he sought the assistance of his lawyer and made his will.
 A. TRANSFER IN CONTEMPLATION OF DEATH
2. Mr. Celerio designated his wife as beneficiary of an insurance which he took
upon his own life.
 B. REVOCABLE TRANSFER
3. Mr. Celerio transferred all his real property to Mr. Vicente in trust for Junior, Mr.
Celerio’s minor son but reserved his right to terminate the transfer anytime.
 B. REVOCABLE TRANSFER
4. Mr. Celerio transfers his property in trust for his son, Junior for life and then in
trust for the children of Junior as Junior may appoint by will.
 TRANSFER UNDER A SPECIAL POWER OF APPOINTMENT
5. Mr. Celerio, in his last will, devised his real property in favor of Mr. Vicente stating
that Mr. Vicente’s subsequent transfer may be made to any person. Mr. Vicente
transferred the property to Hospicio de San Jose.
 C. TRANSFER UNDER A GENERAL POWER OF APPOINTMENT
6. Mr. Celerio just celebrated his 100th birthday. Feeling that death is not far, he
transferred all his property to hi heirs.
 A. TRANSFER IN CONTEMPLATION OF DEATH
7. Mr. Celerio transfers his property in trust for his son, Junior for life and in trust for
whoever Junior shall designate by will to succeed to the property.
 C. TRANSFER UNDER A GENERAL POWER OF APPOINTMENT
8. Mr. Celerio transfers his property in trust for his son, Junior for life and in trust for
any of Junior’s siblings as Junior may appoint by will.
 TRANSFER UNDER A SPECIAL POWER OF APPOINTMENT
9. Mr. Celerio frequently travels abroad due to the nature of his business. He thinks
that he is not spared from meeting air accidents considering the rampant
occurrence of plane crash these days. He decided to execute his will and
testament.
 A. TRANSFER IN CONTEMPLATION OF DEATH
10. Mr. Celerio transfers his property in trust for his son, Junior for life and the in trust
for anybody whom Junior may, by will, appoint and designate.
 C. TRANSFER UNDER A GENERAL POWER OF APPOINTMENT

VALUATION OF PROPERTY

1. Mr. Cervantes devised to his son a 300 square meter lot in Quezon City, values
available are as follows

Approved zonal value for the locality P10,000 sq. m 3,000,000

Assessed value per assessment roll P2,500,000
Fair market value fixed by the assessor P2,700,00
2. Mr. Cervantes died holding 8,000 shares issued by Warranty, Inc. At the time of
his death, the highest quotation in the stock exchange for each share was P200
while the lowest is P150

200+150 = 350/ 2 = 175 x 8,000 shares = 1,400,000

3. Two years ago, Mr. Cervantes lent his friend-debtor P200,000 evidenced by a
note. They mutually agreed that 18% simple interest per annum shall be
charged. Exactly two years after, Mr. Cervantes died. How much accounts
receivable shall be included in the gross estate of Mr. Cervantes?

200,000 x .18 x 2 years = 72,000 + 200,000 = 272,000

4. Mr. Cervantes was about to present to his long-time girlfriend in a dinner sate a
24k gold engagement ring he bought that same day for P80,000. Had he opted to
buy it in one year installment scheme, it would have been more expensive by
P20,000. On his way to meet her, he met a car accident and died.

80,000

5. Warranty, Inc. is the issuer of 100,000 shares of stock of Mr. Cervantes. The
decedent has the following financial data at the time of his death. The shares are
not traded in the stock exchange.

Par value per share P4.00

Outstanding shares 800,000
Retained earnings P1,200,000
Retained earnings P1,200,000
Paid in Capital
(outstanding share x par value)
800,000 x 4 3,200,000
TOTAL P4,400,00
Divide by 800,000
Book value per share 5.50
Multiply by 100,000 shares
VALUE TO INCLUDE IN GROSS ESTATE 550,000