Professional Documents
Culture Documents
and
DEDUCTIONS FROM
GROSS ESTATE
1
7/25/2020
1. Standard deductions
2. Family home Not allowed
3. Medical expenses
4. R.A. 4917
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7/25/2020
• Medical
expenses • NA
A. Funeral expenses
Paid or unpaid up to the time of interment, the
amount deductible shall be whichever is the lowest
among the following:
a). The actual funeral expenses
b). The amount equal to 5% of the gross estate
c). Amount not to exceed P200,000.
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C
A
S
E How much is the deductible amount of funeral
expenses under each of the following
A independent cases ?
N Actual Gross estate
A Case 1 P180,000 P4,000,000
L Case 2 140,000 2,900,000
Y Case 3 207,000 4,250,000
S
I
S
C
A
S
FRANKENSTEIN died. The amount of his funeral
E
expenses is covered by a memorial plan up to
P120,000. Other actual funeral expenses
A
amounted to P75,000. The amount of his
N
tangible properties upon death was P3,700,000.
A
L
Y
S 1. How much is the gross estate ?
I 2. What is the amount of the funeral expenses ?
S
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ORDINARY DEDUCTIONS
FROM GROSS ESTATE
ORDINARY DEDUCTIONS
FROM GROSS ESTATE
Requisites for deductibility
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ORDINARY DEDUCTIONS
FROM GROSS ESTATE
ORDINARY DEDUCTIONS
FROM GROSS ESTATE
C
A
S
E Amount of claim against the debtor P 50,000
Total assets of the debtor 500,000
A Total liabilities of the debtor 800,000
N
A
L 1. How much should be included in the gross
Y estate of the decedent ?
S
I 2. What is the amount of deductible claim against
S the insolvent person ?
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ORDINARY DEDUCTIONS
FROM GROSS ESTATE
ORDINARY DEDUCTIONS
FROM GROSS ESTATE
G. Losses
The amount deductible is the value of the property
lost. Its requisites for deductibility are:
• The loss must arise during the settlement of the
estate but not beyond the deadline for the
payment of the estate tax
• It must arise from fires, storms, shipwreck, or
other casualties, or from robbery, theft or
embezzlement
• Such losses have not been claimed as deduction
for income tax purposes
• Not compensated by insurance or otherwise.
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ORDINARY DEDUCTIONS
FROM GROSS ESTATE
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7/25/2020
ORDINARY DEDUCTIONS
FROM GROSS ESTATE
ORDINARY DEDUCTIONS
FROM GROSS ESTATE
Vanishing deductions
Is an amount allowed to reduce the taxable
estate of a decedent where the property received
by him from a prior decedent by GIFT or by
BEQUEST, DEVICE or INHERITANCE.
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7/25/2020
REQUISITES FOR
DEDUCTIBILITY
DEATH
IDENTITY of
PROPERTY
REQUISITES FOR
DEDUCTIBILITY
LOCATION
• The property on which vanishing deduction is
being claimed must be located in the
Philippines
INCLUSION OF THE
PROPERTY
REQUISITES FOR
DEDUCTIBILITY
PREVIOUS TAXATION
of the PROPERTY
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7/25/2020
REQUISITES FOR
DEDUCTIBILITY
NO PREVIOUS VANISHING
DEDUCTION on the PROPERTY
VANISHING
DEDUCTION RATES
8
What is the amount of the vanishing deduction ?
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7/25/2020
SPECIAL
DEDUCTIONS
A. Standard Deductions
The law allows a standard deduction of
a) P5,000,000 for citizens & resident (P1
million prior to TRAIN Law
b) P500,000 for NRA
SPECIAL
DEDUCTIONS
B. Family Home
the dwelling house including the land on
which it is situated, where the husband and
wife, or a head of the family, and members of
their family reside, duly certified to by the
Barangay Captain of the locality.
the amount of family home allowable as a
deduction would be whichever is lower of P 10
million or the fair market value at the time of
the decedent’s death (P1 million prior to
effectivity of TRAIN Law.
REQUISITES FOR
DEDUCTIBILITY – FAMILY HOME
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REQUISITES FOR
DEDUCTIBILITY – FAMILY HOME
SPECIAL
DEDUCTIONS
C. Medical expenses
all medical expenses ( cost of medicine,
hospital bills, doctor’s fees, etc), paid or
unpaid, within one year before the death of the
decedent shall be allowed as a deduction
provided duly supported by receipts and does
not exceed P500,000.
Requisites for Deductibility
incurred by the decedent within one (1)
year prior to his death
substantiated by receipts
Note: Not included under TRAIN Law 2 starting 2019
SPECIAL
DEDUCTIONS
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15
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