Ma. Faith R.

Tan April 4, 2021

BSA-2A | AEC10
Activity no.2
1. Whether the following properties are includable in the estate of decedent or not:
a) Includable d) Includable g) Includable
b) Includable e) Includable h) Includable
c) Includable f) Includable i) Includable

2. Cathay’s employer owed Cathay ₱ 5 000 on salary that had not been paid at the time of death.
a) Yes, Cathy’s right to that ₱ 5 000 salary is includable to her gross estate.
b) Yes, in such situation the amount ₱ 5 000 as a benefit to Cathay’s employment until retirement or
death, such that her death had come first, said amount is includable in the gross estate, classified as an
intangible personal property.
3. Sue Tek insured his life for ₱ 450 000. In policy, he designated his wife as the revocable beneficiary.
a) Yes, in such case that death has be fallen upon Sue Tek, the proceeds of his life insurance shall become
a part of his estate under the decedent’s interest, which includes the “proceeds of life insurance policy
payable to a revocable beneficiary.”
b) No, the proceeds of life insurance covering the life of the insured are includable in the estate except
when the beneficiary appointed in the policy is not the estate of the deceased, his executor or
administrator and the person designated as beneficiary is irrevocable. In which case, Sue Teks’s wife is
a revocable beneficiary.
4. Sigurista sold to Tagapagmana a real property valued at ₱ 650 000 for ₱ 300 000 only. The sale contains a
reserved power to revoke the same while Sigurista is alive, which she failed to exercise until his death.
When Sigurista died, the property had a value of ₱ 750 000.
a) ₱ 300 000 should be included in the gross estate of Sigurista, the difference between ₱ 650 000, the
real property value, and the price sold with, which amounts to ₱ 350 000 is subject to gift tax.
b) ₱ 750 000, If the transfer of the decedent is proven fictitious, the total value of the property at the time
of death shall be included in the gross estate.
5. Yolly took a life insurance policy upon her own life. The face value is ₱ 400 000. When she died the
insurance company paid her only daughter, Marietta, the proceeds of the insurance. Marietta did not
include the ₱ 400 000 in the computation of the gross estate. Upon assessment, the BIR official contends
that there is deficiency tax having failed to the insurance proceeds in the gross estate. Is the tax official
correct?
Answer: Yes, life proceeds are to be included in the gross estate. The entire value of the proceeds must
be included in the insured's gross estate even if the insured possessed no incident of ownership in the
policy, and paid none of the premiums. Proceeds are includable in an insured's gross estate if they are
receivable by or for the benefit of the insured's estate.
6. Ara Nina, 85 years old and aware of her serious illness, sold a property with a value of ₱ 800 000 for a
consideration of ₱ 300 000 to Dina Ngona. After a month, she died leaving a net estate after the deducting
of estate tax of ₱ 3 000 0000. How much is the net distributable estate of Ara Nina if the property sold to
Dina Ngona had a value of ₱ 840 000 at the time of death?
Answer:
Gross Estate ₱ 3 840 000
Less: (exception) ( 250 000)
Net Distributable Estate at time of Death ₱ 3 590 000

7. Bonador donated to Atacador a parcel of land in 2010. Bonador made the deed of donation entitled
“Donation Inter Vivos” in a public instrument and Atacador accepted the donation in the same document. I
was provided in the deed that the land donated shall be immediately delivered to Atacador and Atacador
shall have right to enjoy the fruits fully. The deed also provided that Bonador was reserving the right to
dispose of said land during his lifetime, and that Atacador shall not register the deed of donation until
Bonador’s death. Upon Bonador’s death, Curiadora, Bonador’s widow and sole heir, filed an action for the
recover of the donated land, contending that the donation made by Bonador is a donation mortis causa ad
not donation inter vivos. Will said action prosper?
Answer: Yes, Donation Inter Vivos is a contract which takes place by mutual consent, whilst Donation
Mortis Causa is a gift anticipation of death. In which the case provided has explicitly been told that upon
the death of Bonador that Atacador shall only and only register the deed of donation upon the death of
Bonador, as the deceased has conditioned.