Activity #2 Estate Tax Return Preparation

Problem
Mr. Pim Musay. Filipino and married, died in 2019, leaving his estate in favor of his
surviving spouse. The following information were made available:

Real property in Quezon City, acquired during marriage. Said property is supported by a
barangay certification that the spouses resided in this property at the time of Mr. Musay's death.
The market value of this property as per latest tax declaration is P15,000,000 while the zonal
value at the time of death is P 20,000,000. Said real property was held as a mortgage in a loan
applied by the spouses. As of the time of death, the outstanding balance of the mortgage
payable amounted to P5,000,000.

Real property in Batangas, inherited by Mr. Musay during marriage, two and half years
ago, from his late father. The fair market value per tax declaration as of his death is P8,000,000
while the zonal valuation is P12,000,000. Said property was previously taxed at a value of
P10,000,000 when Mr. Musay inherited the property from his father.

Real property in Cavite, donated to Mrs. Musay, 10 years ago (before marriage) by his
parents-in-law The fair market value as per latest tax declaration as of the time of Mr. Musay's
death is P3,000,000 while the zonal valuation is P4,000,000.

Other exclusive properties of Mr. Musay P1,000.000, Other properties of Mr. and Mrs.
Musay P3,000,000. Funeral expenses incurred by the estate during the wake and burial of Mr.
Musay amounted to P1,900,000.

Personal details of Mr. Musay

TIN: 423-942-365
Address: 80 MAHUSAY ST. SAMPAGUITA SUB, INOCENCIO, TRECE MARTIRES CITY
CAVITE
Email: PIMUSAY@ gmail.com

Questions
1. How much is the total common property?
2. Compute for the vanishing deduction.
3. Compute for the share of the surviving spouse.

Requirements.
A. Answer the above questions.
B. Prepare the income tax return of Mr Musay, with you as the executor