43-8 Estate Tax: Gross Estate of Married Decedents all real i estar 'S after his tte. fter the 104, 00,000. in ns | and the B, 2, on P5,000,009, ters of ro be assessed, nt should have jeath which is ; based on the ate tax is not | paotll R13-B Sixt TAX: Gross Estate of Married Decedents per overview and Objectives chapter readers are expected to: wie e presentation of gross estate of a married decedent jerstand the Prese ‘rehend the various property regimes applicable to spouses ‘ L i ee the nature of each property regime 3. Mable to compute the separate and exclusive properties of the spouses 4 jute community of property and conjugal partnership of be ander abso ET gp0ss ESTATE OF MARRIED DECEDENTS estate of a married decedent is composed of: fecedent’s exclusive properties vmmon properties of the spouses ted as follows in the estate tax return: | The d 1. The co ‘he gross estate ofa decedent is repo! ‘ i | gross ESTATE | Less: Deductions | pemeeneee A Note: For single individuals, the “co njugal/communat” column is left blank. PROPERTY RELATIONS BETWEEN SPOUSES for married decedents, the boundary between separate properties and common properties of the spouses is important in the determination of the gross estate of the decedent spouse. What isa separate property or acommon property? perty or a common property is a question What constitutes a separate pro, f the spouses. which will be delineated by the property regime of ee the Family Code, the property relation between the spouses must be reed upon by the spouses before their marriage and is set in their luptial Agreement.” 501stat of Maed Decent se ae By soft rapt tes a te to Beer | egies | commen rer (A ‘Technical. al prope, rama aan pers eNO PTS may angie one ans (CP6) ~ AIL prOpEHCS Wat sey, fgets or as pee a pers te spouse indefault of an agreement me agree by the spony | Amacai een whe he Beare e 3, 1988 shall be gover seca atte comunity of property. Absolute community of propery ong pene f os _4 a August 3 198 ‘asc lesin the Determination of Property Interest 1. Common property presumption rule | Inthe ventory taking a the properties of the estat, the proper the spouses ae prsunis common properties unless proven tt exh properties of ether othe spouses | This presumption does no apply under absolute separation of proves Under ASP, properties ae presumed separate of ether spouse ES | rove tobe jit properties of the spouses soz Estate Tax: Gross Estate of Married Decedents ponte senate lesson ree + ye sale oF exchinge of properties do not ater their classification ‘is setesacquied sng separate properties are separate properties. ropes, properties acquired using common properties are commen jis, There is only one exception o this ruleunder ACP. propert sin value or gains on sale of properties: creases In value or gains on the sale of properties are fruits a ‘toners he propery regime gre upon by he spouses. conjGAl PARTNERSHIP OF GAINS (CPC) jon views marriage asa partnership of gains. sis property relat ‘Exclusive ‘Common Exclusive ie we pick hal Ruatig at he a oe re te fruits, income and gains derived by either or both of the spouses from their Industry or property during the marriage are common properties. Properties that are not fruits, Income or gains such as. gratuitous acquisitions like donations or inheritance received by either spouses during the marriage are exclusive properties. Exceptionally, when the property donated or inherited is designated by the donor or predecessor to both of thespouses, the same shall bea common property. Since common properties begin to accrue only from the date of marriage, this property regime Is best described as prospective. (Before marriage) 2 (During marriage) Exception: ‘Gratuitous acquisitions either spouse by 503,foe ‘ sarmmerd§ DOOUHOTA NOTOOOTE DOUTET— 00's 00008 00002 000'0E ©0000" ooo’ —«000'sz_—O00'ST err voyoon's 4 000'000° 4 000004 4 —000'00Ed —000'00¥E spies SOUDSNSTA einaoy SOT rer (ed wOVOTS A TOV TEI oov'oz 00007 ooo‘ost 4 000°00T Pe a coo mai ooo'os = 00°08 ove 000°" o00'sz «00'S ooo'o0s 00°08 ooo'one 000008 ooo 00001 19 poviostd —000;00Fd a wy pey suse J° dgyssounsed renin Synmon 4 940 2 PH s san puses a nee OEP icon om auape20a pase so a3 55019 2 ayers 8"of Married Decedents os 8 oF oon cotta, eat e ae woo Mn Moe ia 200,00 P 100,09 p eee fy Sere 250000 150000 en SS SS se Properties! owe Reenter Sareea eae renariase — 33000 SoD in repre ibert Se miaoe 70000 $0000 ag frepen o n iq nb eos TORI rg, ‘etnies ‘xcs martin, ‘Broce Me ee nena IE a0 » 100000 reece ut no propetes accruing during sacra: wimgeurage #250000 150000 rere atte t ed Proper arfufomnon labor 0 Femi ‘som Properties ner ring mariage a rps aurea omovies on Rad Eas Bsn Caio ‘The ss esate rc shal be: Exclusiv propery af Me Cac 50000 ‘Common propery fr nd Mrs. Cros 210000 Grostestate Eizo 506 75 COMMUNITY OF Prone ABsOUACh ae ered sr lon Se pope Drier of marine nda et a ae mate ‘ aie jal features of ACP ayer speteerospectve feature Hi 1 iproperts which the spouses own het manga ~ ception: ee PO properties ofa spouse with desoendaint/s tm a es {Prete fr te pra eee ae jewel ee: prospective feature aicaea 3 “ll properties which the spouses may acquire du Seeger cre Exception: Se" Gratutous acquston recived by ether spouses. Eats ofexcluve propery Properties acquired for excise personal use of ether 3 exceptiewelry . (Beforemarriage) 2 (During marriage) 3 < ties hereare ons Froperies of spouse with descendants in prior mariage a — =r rape ol pers crea os Spouses with descendants ina prior mariage Te asolte community of property doesnot retract i descendants rom a por mariage, Properties mariage bya spouse with descendant from a peor 8) the was separate proprtien This is apparent interest of descendant which ould be peeled so7p-tsateTan ret ot Mal Mon sr 70 oe sinssan Taown ra ng. Ba ey OOH eine prormarige, MTS nr nse a a rig Te HTD, vay es to rds ang 7EONO ag a 0 fe rere age sD ape sobe sal dopenden fence tt PLN ante marty one tte propertesof eter pou ‘pefooving ssn ne "et meres Cong Teast Meee Pn zig y.99 PP 4M, a *y ane i ihe Som ogee ad Hong Frusolpmesorsewwty = > 5 adam Total ‘po1.000.000 P____- P_350.90) en tetany a ee Peele sumtin ps wth dcendantin prior mariage E spo ments Properties acquired aoe eas aaa poe aie eee Ee eee com tal aie —| | Sere im _| oom] far en afar ae ae om] eas ae Property for exclusive personal use, except jewelry ate Under ACP, properties for the exclusive personal use of elt spouses, except jewelry, are always exclusive property whether thy a acguired before or during the marriage. Jewelry acquired before mace ‘will become common propery. Note tha this rule does not exist with CPS 508 esate of Marre Decedents sf ee 13-8 Estate Tae cnet Groene, ‘St Mared Decedens = Fe man ence or ba tt ‘Gown of Mrs. Quezon ze ee nner, te a eee eto “Baap er es eet a J Gotkes shoes, and underwear of ns ner ‘6,000 gs 2 So oe rn " eer Sea sen zo ha cree 4 Sa actus ee id ee ee a ete ‘the pie oft property has ating dwt propery asian 1 ewan capone mnt ads popes ar ee rena ‘tbe spose 3. Propet fo ech pesoal eof eter pe, ther hn Jey re porary eve Fihy ar sequen tot aber ord oter see tet 1 Theyaesequred reordering mariage SEPARATE PROPERTIES ACOUIRED DURING MARRIAGE Properties received by way of gratuitous title : SSmilar to conjugal partnership of gains, propre reeved by way of ‘gratuitous tide such as donation or inheritance during marrige 2 ‘Separate property unless designated by the dona or decrdeattobeforboh spouses. 509ry of ether both Petey sai sono . ppt gaya eT ODE alo, ed Te rey sn PoP ey nity of Property _ ‘Before * marriage | ai comets ca = ae ea tein he pt ae oem feta, vets cap alanine acne Poca teeestommt 4, aap)“ Income from own labor - Ms. tO “The following shows a summary ofthe properties ofthe spouses Twn labor (Mrs) ge tcp Se nant oro ting te a ween oes Diario ‘otc on eer itt a is ee pe EE. np mete ve rd oy 7 MG diene 3 2 i ey 000.000 car and P2,000,000 residential on. nS MATT#BEFespectvey a og thie, maage Mand Ws. Negot acre popes wang ie a ai Mt Me Se ee ee i pe aa sock Invested the etre proceeds in Shown below are the separate and common properties ofthe spouse Separate oper a om hm ‘rome é ae Stocks (gain and principal) ¥ ipo Fruits of labor (P500K+P800K) 900.000 Total z ———_ 120000 ote: ot exo espouses re nde te ACP by tt echt maid afer apt 3.1 Inddinot greta a propery ein. Serena se 2 Under AP, the oe of separate ropes rig be maria ra wh {sows ep seston. Sc he prac omen per 2M ‘in P2M} so commen propery. Theruleonewelry Jewelry for the excusve use of either spouse is generally 2 common property. However, jewelry i an exsve property it quis as sich nde other rules of ACPcanes a ari provision hy at stato hy ai aga, DONS SA Bea, = seo a in acs i ape tpeoto income of 4 Py. Aga £990 for bis acon Meech F250 200000 eae ee ama ned Essa rit, 7 yay aang mai mties, Hence, the inherited peg Note: Proper et mae sil separate PrOPET Seen Satie cen acannon ae wh ante eae sunt of property Mr Xhadasaiy| nt on @ sopping spree Jen 22900 Cipne ee. Fasiontng 1e00 Conn gar dress _taaoon ‘Tora for Mrs X 262,000 paar he ioe alas pet emaning sh caucus sa Fo es Re p00 lowing properties: Sree follows Do y 33-8 Ete TO tos Esato Married Decedents ecedents ot er ies shall be dassified a follows: ae s gs j on ae van, on Fgnature dresses ea SSeS oe | P3000 ing cash = Sl tuona ustrations: Absolute Community of Property .gihustration 1 he and Bebe who were under the absolute community of property ne Rent Bebe Total donee or inheritance reeved P100000 P150000, 7 250,000 4 Perec reper frome...” 10an0 20800 20000 or na ees acqlted rom separate rear 400.000 300,000 700,000 ig, Mperty resived by donation or fneritance 1800000 500.000. 1300.00 «gnome of properties from No.1 and? 15000 25000 40,00 fe momeof propery fomNo.3 40000 3000070000, & Rome of property rom No.4 60.000 50.000 130,000 separate properties ofthe spouses: Sevamte popes a {Donations or Inheritance ecelved pis ee ee 2. Income of property from No.1 4° Property received by donation or heritance ‘800000 $00,000 2, Income of propery rom Not —a0.g00 __s0.000 oa separate properties Eamonn “ESsn000\ i wnat Seen - ‘Bent ‘Bebe Toy pee aa” he tame ty : eipahee ee stam es Pei ae! mt ck separate nee es rom 182 15,000 000, 40m « emerwcens ks he Ear ; jotta z museration 2» apsolute community of property op soot sa wan Ane wag onan 2 Laat De a essary read ¢ Siparimetaorg [En PTT SO mT 2 epee amon evel Be spone 1 Weokrzo00 fe mont buyer orth we “The following depicts the analysis ofthe foregoing transactions ws Communal Husbands) pwapheral — Properties ‘anita eres 1.000000 Dress +P 100000 + 00003 pani 00K + BOOK Cash salary P 400,000 ash rentals 12000 Jewelry 20000 20000 Gown __spa00 « 3000 Total ino Bazoo00 zoom Integrated tlustration 3 ‘Mr. Crocs died. An inventory ofthe properties of Mr. and Mrs. Cros who wet ‘under the absolute community of property were a follows: ‘MeSiies Meecrss 1 pees aero ‘ es fo exusive personaly P 200000 rope brought ita the ‘oy ” 20000 Pree provers emer asry {280 aa, 750000 saber di rome etratofowmitsor = 250800 an rroperjerecalredferextasvewe $0800 tenga {8000 opr a freer 30000 “ana00 yong rats es inherited bef ot pert re mariage 10g Propeter inherited during 1000 soa00 150900 Fefeccanitisetet mh a as properties earned from common labor 900 60000 50,000 pe following shows the cassicaion of he 1 Properties ofthe spouses under Picutesasertes_ Common opeciesacsmngbeloremaniage, “MAG Ma.Gnst Popes ropertes inherited before marriage Fropertie fo exclusive personaluse esata Other properesbrovghtintothemarage” “OOO F ORD rapestes actulne during mariage: Properties inherited during 750900 Properties as fui of own labor ee Properties acquired for exclusive use 3000 4ggo9” °00°O™ Proper as tof common bor 250,900 Properties inherited before mariage Properties inherited during marrage. 20000 a Properties acquired from own abor 0900 Properties earned from commonlabor saan ae ‘Stoo Poo eXgone00 ‘The gross estate of Mr Crocs shall be: ; Exclusive property of Mr. Crocs F Sapes. ‘Common property of Mr, and Mrs. Crocs en Gross estate R220.eof Married Decedents I chapter 13-8- TIES sup PROPERT be included a AcqustION OF AT popes he excluded nthe const ‘The scrui of ere spouses but Sta Computay* common pro] ng " ofthe grass estates ment employees Mr. Ravena deg g, ation are both 6over eT ecelved a lump sum Csis mt tend Mrs Ravena ae btn Bre I iage Bete DE Ete go ofthis was expended Bele br gas as invested In 2 rope wi oe ar ron “ et ‘pave P0004 mon propery Arn er are Es DEEN of Poy 72200,000. tconmon properties ofthe spouses = computed as: P 800,000 et > a00000 otal investment a Other common properties ion. on properties s 900) Seer chars) "a ‘exable common properties 24.00.00 ‘Te gross estate of Mrs. Ravera shall be: Exclusive property of Mrs. Ravena P 2,200,000 Taxable common properties — 4.100.000 Gross estate 26,300,000 EXEMPT PROPERTIES OF NON-RESIDENT ALIEN DECEDENTS ‘The exempt foreign properties of a married non-resident alien decedent must be excluded in gross estate. Ilustration Mr. Speedy Gonzales, a non-resident Mexican, died in Korea, Mr. and Mrs Gonzales had the following properties: 516 |3-B ~ Estate Tax: Gy coaster 1035 Estate Mane Decadent ral properties P roca, Zions 1000 Korea jnernal properties 25000 ° 200.000 far proertes tangible ssn, 300,000 F ~ 600.000 wn properties ~ intangi Common PI Nhe _ 200,000 foal Repo 5S90tm0 —isoama __ fe poss estate OFM. Gonzales shal cat para! he ands apt properties tes properties ~ tangible P 200000 Gomer properties Intangible 200,000 — 500.009 Gross Estate pssuming thatthe reciproky ruleapptes he - r0S8 estate of Mt Gonzales shall sband’s capital properties jon properties ~ tangible P 200000 200,000 Rsoo009 si7“ne pormeoss wt « spouse Discussion Questions, TN) Treusive properties PP" 1» descendant fom 4 2 Whats etna brie dlcuss the tes Of Property roping, ‘ eae Propertesare exces Prior marriage are z ampare the abc communlty POPE" The conga ie i of done y : ‘ner abshute community of ans nichis : renership of gaing, PETS a exci 4 Enumerate and discuss the lst of excusve properties yag, by ie fas flor of eter gon Dropetes under eoauga community f property va Community of property, SE a exchsie se, g, The Bros estate Of a decedent includes hig ‘under the absolute ‘True or False 1 common properties with his. - ‘Separate. Lhe spouses can stipulate the conjugal Partmership of gay, 9, Marriages celebrated ater augue RSREUEE.eTUeS an thee 2 OPeTY Tatmes tee of the spouses MAY BE agreed ypon , Yo, etal ofan ageereepe nessa ome nde 2 On dy 7 August 3, 1° fen the ‘spous ariise: ng before AUEUS 3, 1986 are promt ME SPOWREL, mariage celebrated 3. Indefsut of agreement a5 0 the property relation betwen ey, 8 oe “ke ‘under the conjugal parieratip af absolut fon of property Is presumed. ieues of Property regime ae re re etge me ctndushey ores ® {Emin wrens pennies ee its accruing before the marriage are conclusivaye ~~ = proven ase sree ose " common unless . Droperty sold during the community of property applies on Fults prospecting By (aan ing the marrage can become a iarriage. 1 fg aa ee pate Property oad ePerY Sold during the marriage is a 6 The conjugal parmership of gins operates retrospecing, ae is generally coneane ate Comm of property, or : tive ; dered community property prospectively. % 16. Jew’ inherited during the mariage is excuse ropery. 7. Properties for exclusive personal use of either spouses properties under absolute community of prope 8. All fruits, accruing before or after the marriage, are conjugal proper 9. Fruits accruing from common properties are common properties s conjugal partnership of gains. 2 nd 10. Fruits accruing from separate properties are common pro, conjugal partnership of gains. Properties une 11. All fruits before the marriage are conjugal properties. 12. All fruits during the marriage are communal properties. 13, Real properties are common properties under absolute communiy ¢ properties. 14, Personal or movable properties are separate properties under absiky community of properties, 15. Properties received by way of gifts are exclusive properties. FFE ext, True or False 2 1. Properties received by way of inheritance are exclusive properties. 2. All properties brought into the marriage are separate under the cone partnership of gains. 3. Generally, all properties brought into the marriage are commutiy properties. 518 17, The sale ofa separate pro conga propery. 418, The sale of a conjugal property may produce a zs conus propery Separate propery and a 19. The properties ofa spouse witha descendant fom apr marge are communal properties. eae 20, The properties of a spouse without any descendant from a pir mariage are communal properties. perty may produce a separate property and a Multiple Choice - Theory: Part 1 1, Statement 1: Under absolute community of property, properties are presumed community unless proven otherwise. Statement 2: Under conjugal partnership of gains, properties are presumed conjugal unless proven otherwise. Which is correct? a. Statement 1 b. Statement 2 2. Indetermining the property regime ofthe spouses, which is given primacy? a. Agreement : 'b. Conjugal partnership of gains 519 Both statements, Neither statementig uring marriage scenes «6. Which sa community ror 2" Properties receive by Propertes represen fe Properties represen & Propsof inheritance during mariage 18, Which ofthese donations or inheritan ‘a Donations designated by the dono wife b. Adevise to the husband _Adonation designated by the don 4. Aninheritance from the mother ofthe wife 18 revocable donation in trust fo in in rust fr both spouse Direc and irevoestle donation or bth spo 4 Allofthese ae 520 of Married Deceden estate Tax: Gross te ts a? Estate of Maried Decedents ar pota separate property under rope niet He ejonal income of heaead ee 19 ea ee ps & en none se correct regarding frlts of separate properties during the ander conjgaparneaip of ace bch Cnet of rope eu nde ale seerain ope aacfthese ayesacerung before the marriage ae ts anon under conjugal partership of ain under absolute community of properties commo Goptsive under absolute communty of properes, ‘and C eg eoeeg: 2 > e a of donated properties before marriage are ot roperties under conjugal partnership a Beisveunderabsltcommuny of Paty Bean properties unde cnjgl partnership of ais §, Aand C sa ory eran aig he marie romero under con partes a Paci under aol communi f pope Bac properties under onal partnership esas § wand B ss, Teineorme a 1s. The property inheritance before the mariage i The Bparate property under conjugal partnership a arate property under absolute community of ProPEY. 5 Seetmon property under absolute community of Property d. AandC Multiple Choice ~ Theory: Part2 ‘ect under the absolute community of property? iy recelved as an inhertance during mariage if exclusive perty. >. Jewelry received as a donation before marriage Is a common PrOPErY: b Fewelry acquired from income of separate POPS is an exclusive property. 4. None of these 521