II. There is no transaction that is subject to transfer taxes.

There are two kinds of transfer tax: donor’s tax and estate tax.

Donor’s tax is levied on gifts or on sale for less than an adequate or full
consideration (Sections 98 and 100, NIRC). In the case at bar, Mark did not
subject the property to donation nor sell for an adequate consideration.

Estate tax is levied on the right to transmit property at the time of death. In
the case of Lorenzo vs Posadas, the court ruled that death is the source of
the taxing power and it is the power to transmit or the transmission from the
dead to the living on which the tax is based. From such definition and
ruling, it contemplates that there must be death. However, in the facts
provided, there was no death that would commence a transfer of property .