Accomodation Loan

Agreement signed by 2 parties where one co-

signerfor
Transfer guarantees
Public Use credit liability for the
other (personal
co-signer (ex. guarantor)
Property
All bequest Previously
property), Taxed
legacies (Vanishing Deduction)
(money), devises transfer for
Presented
public
Its purpose is
as
purpose to the
to
receivable
government
minimize the
in Gross
burden of
Estate
double
and
transfer tax
Mustabe Claimsinagainst
deduction
indicated insolvent
last will and testament person
A property claimed deduction to other categories will no longer
GOCC are commercial and not for public purposes hence not
claim vanishing deduction
Ordinary Deduction
deductible
Requisites of Vanishing Deduction
- The deductible amount is the unrecoverable amount.
1. Decedent must have died within 5 years after donation on
- Items - which
Basedofon
inheritance diminish
"Property the
property amountRule"
Classification of the which
inheritance.
is loss to
- The separate
2. only
Property property
exeption
subject mustis
tohere bethe
deduction deduct to seperate
deduction
is situated property
in the for "Propery
Philippines
3. Itwhile
is the same property received from prior decedent or donor
previously taxed/ Vanishing Deduction" which is a tax
DEBT/TOTAL
4. Prior LIABILITY
estate or donor X TOTAL
tax is fully paid. ASSET= RECOVERABLE
inceptives.
Others (Unpaid
5. IfAMOUNT
prior Taxes)
estate claim vanishing deduction, second estate cannot
- Income
Claimed
claim by any tax
DEBT-RECOVERABLE=
tax, business decedent DEDUCTION
and property not yet paid as of the time of
death
Substantiation requirements on claims against the estate
Those settled
Simple before death or accrue after death is not deductible
Loan Advances
a. Debt instrument must be noterized
b. Duly notarized certificate from creditor as to unpaid balance including interest @ time of
death
c. Proof of financial capacity of creditor to lend and latest audited Balance Sheet which
shows unpaid balance of decedent
d. Statement under oath executed by admin
Procedural
Puchase of Goods orComputation
services for Vanishing Deduction
Unpaid mortgages
- Evidence of purchase signed by decedent and creditor.
-Initial
Sale of Value= Lower
Goods- Sales between FV@ First Transfer and FV @Death
Invoice
Others
-Initial (Losses)
Sale oFBasis=
Service-Initial
Contract
- Deductible if the property with
from
Basis=
Notarized Initial
certification
Value-Debt assumed before death (paid)
- Statement of Account given by creditor, received by decedent
May-Final
arise casualty (fire,the
Basis-(Initial
from creditor storms,
Basis/Gross shipwreck,
Estate)(LITT)
unpaid balance robbery,
with interest theft,
at time of death
embezzlementmortgage is included in Gross
-Vanishing (theft
Certified trueDeduction
Requisites:
Claims against
copy
the
of audited
of latest funds)Balance
which are
Sheet not unpaid
showing compensated by insurance
balance of decedent.
-Note-:
If decedent diedisestate
If settlement (Indebtedness)
made through
within: court the court approved the said claims
1. Must ofEstate.
1. 1yr
Requisites be a casualty
from loss
receipt= 100%
Deductibility:
1. 2. Loss
Personal must 80%occur
Obligation afterexisting
of deceased deathatupthe to 1year
time of death except medical expenses.

money's -lossOnly
2. 2yrs=
3.woth.
3yrs= 60%must be mortgages
not claimed in Income incurredTax Return during
2. The liability was contracted in good faith and for adequate and full consideration in money or
3. This
3. The debt
lifetime
must40%
4. 4yrs=
4. The indetbtedness
5. 5yrs=
must not and
have beenremain
be valid and enforceable by court.
20%
unpaid
condoned by the creditor on
or must not have the
been prescribed

1. Family time
Classification Rules
6. Benifit
More of death
than 5yrs=
Rule 0%
- Incurred for the benefit of family
is deductible.
- Original Amount-Paid Before
- deduction to to common property otherwise stated
Example:
- Education, medication or other suooort to family member