Part 3

ESTATE TAXATION

(Multiple Choice Question)

A. COMPUTATION OF GROSS ESTATE

1. Which of the following is not an element of succession?

a. Decedent
b. Estate
c. Heir
d. Administrator

Answer: D

2. Inheritance does not include –

a. Property
b. Public office
c. Rights not extinguished by death
d. Obligations not extinguished by death

Answer: B

3. Estate tax is
a. A property tax is because it is imposed on the property transmitted
by the decedent to his heirs
b. An indirect tax because the burden of paying the tax is shifted on
the executor or any of the heirs of the decedent
c. An excise tax because it is also imposed on the privilege exercise by
the decedent to transfer ownership over the estate
d. A poll tax because it is also imposed on residents of the
Philippines whether Filipino citizens or not.

Answer: C

4. Which of the following is not a distinction between estate tax and

donor’s tax?
a. The tax imposed is an excise tax?
b. Extension for payment
c. Effectively of the transfer of property
d. The exemption granted in the tax table.

Answer: A
5. Statement 1: The estate tax accrues at the moment of death of the
decedent

Statement 2: In estate taxation, the taxpayer is the decedent.

Which of the above statements is correct?

a. Statement 1 only h.
b. Statement 2 only
c. Both statements i.
d. Neither statements
e. j.
f. Answer: A
g. k.

6. Which of the following statements is wrong?

l. a. An essentially mortis causa transfer which has been titled as

inter vivos shall be subject to donor’s tax.

m. b. Estate tax is more of a revenue tax rather than that of a

special tax.

n. c. If the decedent died September 5, 2006 but the actual transfer

of possession of the property to the heirs took place on June 5, 2010
the estate tax will be computed based on the prevailing law on September
5, 2006.

o. d. Under the Benefit-Received Theory in estate taxation, the

estate of a partner of the decedent in the distribution of the latter’s
estate.

p.

q. Answer: A

7. In 2005. J Cruz gave a loan of 150,000 to Sexy, his secretary. In 2008,

as an act of generosity J. Cruz condoned the debt of Sexy in his last
will and testament. J. Cruz died in 2011. The condonation of the debt of
Sexy is(RPCPA)
a. A donation inter vivos is subject to donor’s tax
b. A payment or compensation for the services rendered
c. A deduction from the gross estate of J. Cruz
d. A donation mortis causa subject to estate tax
r.
s.
t. Answer: D

u.

v.
8. The following are the motives of a tax payer that preclude the transfer
in contemplation of death, except one (RPCPA)
 a. To relieve the taxpayer of the burden of management
b. To save income and property taxes
c. To avoid payment of estate tax
d. To make dependent financially dependent
w.
x.
y. Answer: C
z.
9. In default of testamentary heirs, the law determines who are to succeed
to the inheritance of the deceased. Which of the following ranks first
in the order of succession? (RPCPA)
a. Legitimate children
b. Surviving spouse
c. Legitimate parents
d. Illegitimate Children
aa.
ab.
ac. Answer: A
ad.
10. H and W are married. They have legitimate children A and B. H
died, survived by W, A and B. His estate of P12,000,000 should be
divided as follows:
ae. W A B Free Portion
a. P 3M P 4.5M P 4.5M None
b. 3M 3M 3M P 3M
c. None 6M 6M None
d. 2.25M 4.5 M 4.5M 2.25M
af.
ag.
ah. Answer: B
ai.
11. Based on the following data, how much is the value of the
decedent’s interest if he died March 31, 2010?
aj. Cash in bank joint account of the decedent and his wife
254,000
ak. Interest on the bank deposit (Jan 1- June 30, 2010)
9,000
al. Dividends from a domestic corporation
am. Date of Declaration – Feb 5, 2010
an. Date of record - Apr 15, 2010
ao. Date of payment - May 15, 2010
ap. Share in 2009 net profit of partnership distributed to
aq. partners on April 15
9,000

ar. Winnings in lotto (Bet, March 30; April 1, 2008 draw)

500,000

a. 383,750
b. 138,000
c. 145,000
d. 388, 250
as.
at. Answer: A
au.
12. For estate tax purposes, the estate tax purposes, the estate of
the decedent shall be valued at the time
a. Of the preparation of the estate tax return
b. The estate tax is paid
c. Of death of the decedent
d. The estate is distributed to heirs

av.

13. Mamo died leaving the following properties:

aw. Stocks of Cruz Corporation (2,000 shares) – listed in the Phisex
(highest-P40; lowest-P39)
ax. Common stocks of Hemo Corporation (1,500 shares)- not listed in
the stock exchange. Cost- P50 per share; book value –P45 per share.
ay. Car (cost- P600,000; book value-P350,000; market value- P400,000)
az. Real Properties (zonal value-P120,000; assessed value-P72,000)
a. 618,000
b. 867,000
c. 624,000
d. 666,500
ba.
bb.
bc. Answer: D
bd.
14. One of the following is subject to estate tax on properties
situated within the Philippines only
a. Resident Citizen
b. Resident Alien
c. Nonresident Citizen
d. Nonresident Alien
be.
bf.
bg. Answer: D

bh. Items 15-17 are based on the following information:

bi. Dina Mathay, Filipina died in the United States with the
following properties:

bj. Condominium unit in New York City P

2,000,000

bk. Shares of stock in a foreign corporation

600,000

bl. Interest in a partnership, domestic

475,000

bm. Bank deposit in a New York City bank

150,000

bn. Car in Cebu, donated inter vivos 5 yrs ago to her son
500,000

bo.
15. Which property should be included in the gross estate?
a. All the above properties
b. Only the properties located in the Philippines
c. All the above properties except the car
d. The properties in the Philippines except intangibles
bp.
bq.
br. Answer: C

bs.

16. If the decedent was a nonresident alien (with reciprocity), how

much is the gross estate?
a. 3,725,000
b. 975,000
c. 500,000
d. None
bt.
bu.
bv. Answer: D

bw.

17. If the decedent was a nonresident alien (no reoiprocity), how much
is the gross estate?
a. 3,725,000
b. 975,000
c. 500,000
d. 475,000
bx.
by. Answer: D

bz.

18. Which of the following is an intangible personal property within?

A. Franchise exercised in United States
B. Shares or rights in a domestic business partnership
C. Bonds issued by an American corporation
D. Stocks issued by foreign corporation with business situs in the
Philippines
ca.
a. B only
b. B and D
c. All of the above properties
d. None of the above properties
cb.
cc. Answer: B
cd.
ce.

cf.

19. An example of intangible personal property without is

a. Domestic shares of stock
b. Foreign shares, 85% of the business of the corporation is in the
Philippines
 c. Foreign shares with business situs in the Philippines
d. Foreign shares, certificate of stock are kept in Makati
cg.
ch. Answer: D
ci.
20. Which of the following statements is wrong?
a. An essentially mortis causa transfer which has been titled as inter
vivos shall be subject to donor’s tax
b. Estate tax is more of a revenue tax rather than that of a special tax
c. If the decedent died September 5, 2006 but the actual transfer of
possession of the property to the heirs took place on June 5, 2010
the estate tax will be computed based on the prevailing law on
September 5, 2006.
d. Under the Benefit-Received Theory in estate taxation, the estate of a
partner of the decedent in the distribution of the latter’s estate.
cj.
ck. Answer: A

cl.

21. One of the following donations is not included in as part of gross

estate
a. Revocable transfers
b. Transfers with reservation of certain rights
c. Transfers under special power of appointment
d. Transfers in contemplation of death
cm.
cn. Answer: C
co.
22. Which of the following transfers is included in the gross estate?
a. Transfer inter vivos
b. Transfer under general power of appointment
c. Transfer under special power of appointment
d. Transfer for an adequate and full consideration
cp.
cq. Answer: B
cr.
23. Decedent Kulot A has the following data:
cs. Value of the property at the time of sale
1,200,000
ct. Value of consideration when said
1,000,000
cu. Value of property at the time of death
1,500,000
cv.
cw.
cx.
cy.
cz. The amount include in the gross estate is-
a. 300,000
b. 500,000
c. 200,000
d. 1,500,000
da.
db. Answer: B
 dc.
24. When Albino was informed by his physician that he was about die of
cancer, he sold his properties;
dd. Market Value Market Value
de. Date of Sale Selling Price Date of death
df.
dg. Land 2,500,000 1,500,000 2,700,000
dh. Jewelries 500,000 330,000 300,000
di. Transfer under
dj. Limited power
dk. Of appointment 1,000,000 600,000 800,000
dl.
dm. From among the data given, how much should be included in
the gross estate of Abino upon his death?
dn.
a. 1.200,000
b. 1,230,000
c. 1,430,000
d. 1,400,000
do.
dp. Answer: A
dq.
25. On the belief that he was about to die of a liver cancer. Bongbong
sold to Bengbeng a property valued at P1,100,000 for the same amount.
Six months later, Bongbong died of a car accident. At that time, the
property had already a value of P1,300,000. For Philippine estate tax
purposes, the amount includible in the gross estate of Bongbong is-
a. 1,000,000
b. 1,300,000
c. 200,000
d. None
dr.
ds. Answer: D
dt.
26. On February 1, 1970, Angel prepared a will on her property in
favor of her children. Angel died September 5, 1970 survived by his
children Bersabe and Contado who immediately took over the possession
and made an extrajudicial partition on September 20,1970 but without
registering the same in the Register of Deeds. Bersabe sold the property
to Contado on May 7, 2011 in order to finance his expenses for
hospitalization. Which date should be used as the basis in valuing the
property for purposes of computing the estate tax?
a. February 1, 1970
b. September 5,1970
c. September 20,1970
d. May 7, 2011
du.
dv. Answer: B
dw.
27. Amounts received by the estate of the deceased, his executor or
administrator as an insurance under policy taken by the decedent upon
his own life is (RPCPA) –
a. Excluded from the gross estate
 b. Part of the gross estate whether the beneficiary is revocable or
irrevocable
c. Part of the gross estate if the beneficiary is revocable
d. Part of the gross estate if the beneficiary is irrevocable
dx.
dy. Answer: B
dz.
28. Case 1- Designation of the beneficiary is revocable
ea. Case 2- Designation of the beneficiary is irrevocable
eb. Case 3- Policy is silent as to whether the designation is
revocable or irrevocable
ec.
ed. In which of the above cases will the proceeds be exempt from
estate tax, assuming that the beneficiary of the life insurance
proceeds is neither the estate, the executor nor the administrator
of the estate?
a. Case 1 only
b. Case 1 and 3
c. Case 2 only
d. All of the above cases
ee.
ef. Answer: C
eg.
29. Proceeds of life insurance not payable to estate, executor or
administrator shall be excluded in the gross estate if the beneficiary
appointed in the policy is
a. Revocable
b. Revocable or irrevocable
c. Irrevocable
d. The executor
eh.
ei. Answer: C
ej.
30. Proceeds of life insurance includible in the taxable gross estate
(RPCPA)
a. Insurance proceeds from SSS or GSIS
b. Amount received by any beneficiary irrevocably designated in the
policy by the insured
c. Amount receivable by any beneficiary revocably designated in the
insurance policy
d. Proceeds of group insurance taken out by company for its employees
ek.
el. Answer: C
em.
31. Which of the following proceeds of life insurance policies is
exempt from estate tax?
en.
I. Life insurance policy on the life of Kristine, appointing her
sister as the irrevocable beneficiary
II. Life insurance policy on the life of Kristine, appointing her
brother as the revocable beneficiary
III. Life insurance policy on the life of Kristine, appointing her
executor as the irrevocable beneficiary
 IV. Life insurance policy on the life of Kristine, appointing her
children as the beneficiary. The policy is silent as to whether
the appointment is revocable or irrevocable
eo.
a. I only
b. I and IV
c. II and III
d. All of them
ep.
eq. Answer: A
er.
32. Badol-badol insured his life for P500,000 with Philcharter
Insurance Company designating his estate as the revocable beneficiary.
Are the proceeds subject to estate tax? -
es.
I. In the event of death of Badol-badol?
II. How about if he designates his estate as irrevocable beneficiary?
III. How about if he designates his brother as the irrevocable
beneficiary?
IV. How about if the policy was taken by his employer in his favor as
the irrevocable beneficiary?
et.
a. Yes, Yes, No, No
b. Yes, No, No, Yes
c. Yes, No, Yes, No
d. No, No, Yes, Yes
eu.
ev. Answer: A
ew.
33. The following are transactions and acquisitions exempt from
transfer tax, except (RPCPA)
ex.
a. Transmission from the first heir or done in favor of another
beneficiary in accordance with the desire of the predecessor.
b. Transmission or delivery of the inheritance or legacy by the
fiduciary heir or legatee to the fideicommissary.
c. The merger of usufruct in the owner of the naked title.
d. All bequests, devisees, legacies or transfer to social welfare,
cultural and charitable institutions.
ey.
ez. Answer: D
fa.
34. A devised in his will a piece of land; naked title to B and
usufruct to C for as long as C lives, thereafter to B. The transmission
from A to B and C is subject to estate tax but the merger of the
usufruct and the naked title to B upon the death of C is exempt.
fb.

fc. X devised in his will real property to his brother Y who is

entrusted with the obligation to preserve and transmit the property to
Z, a son of Y, when Z becomes of age. The transmission from Y to his son
Z is subject to tax. (RPCPA)

a. First statement is correct, second statement is wrong.

 b. Both statements are not correct.
c. Both statements are correct.
d. First statement is wrong, second statement is correct.
fd.
fe. Answer: A
ff.
35. One of the following is included in the gross estate
fg.
a. Benefits received from GSIS
b. Benefits received from U.S Veterans Administration.
c. Benefits received from damages during World War 2.
d. Benefits received from a tax exempt employer as a consequence of
death of the employee.
fh.
fi. Answer: D
fj.
36. Which of the following distinguishes conjugal property from
community property?
fk.
a. Properties inherited during marriage.
b. Those acquired through occupation during marriage.
c. Fruits of exclusive property.
d. Income earned by each spouse during marriage.
fl.
fm. Answer: C
37. One of the following is a conjugal property of the spouses
fn.
a. That which is brought to the marriage as his or her own.
b. That which each acquires during the marriage by inheritance.
c. The fruits of an exclusive property.
d. That which is purchased with the exclusive property of the wife.
fo.
fp. Answer: C
fq.
38. One of the following is not a community property of the spouses
fr.
a. Property inherited by the husband before marriage.
b. Winnings in gambling.
c. Fruits of property inherited during the marriage.
d. Fruits of property inherited before the marriage.
fs.
ft. Answer: C
fu.
39. Which of the following is not a part of the gross estate?
fv.
a. Conjugal property
b. Community property
c. Exclusive property of the decedent
d. Exclusive property of the surviving spouse
fw.
fx. Answer: D
fy.
40. When a person dies and during the marriage the property
relationship between the husband and the wife was that of conjugal
partnership of gains, the gross estate of the decedent would include
(RPCPA)
 fz.
a. His exclusive properties only.
b. His exclusive properties and one-half of the conjugal properties
c. All the properties of husband and wife
d. His exclusive properties and all conjugal properties
ga.
gb. Answer: D
gc.
41.

gd. A. Share of the decedent in the community property.

B. Share of the surviving spouse in the community property.

C. Exclusive property of the decedent.
D. Exclusive property of the surviving spouse.
ge.
gf. Which of the above properties are included in the gross estate of
the decedent?
a. A and B
b. A, B, and C
c. And C
d. All of the above properties
gg.
gh. Answer: B
gi.
42. Properties acquired by gratuitous title before the marriage are
generally classified as:
gj.
a. Community properties under absolute community of property regime.
b. Conjugal properties under conjugal partnership of gains.
gk.
gl. Which of the following statements is correct?
gm.
a. A only
b. A and B
c. B only
d. Neither A or B
gn.
go. Answer: A
gp.
gq. Numbers 43 through 46 are based on the following information
gr.
gs. Aldo died leaving the following properties:
a. Real property in Baguio City, brought into marriage P300,000
b. Income of real property in Baguio 60,000
c. Real property in Cebu City, brought into marriage by wife 240,000
d. Income of real property in Cebu City 25,000
e. House in Pili, Camarines Sur, acquired by Aldo during
gt. Marriage
375,000
f. Income of House in Pili 50,000
g. Real property in Iloilo City, earned by wife during
gu. Marriage
225,000
h. Income of real property in Iloilo City 80,000
i. Tangible personal properties in Manila, inherited by Aldo
 gv. During marriage
500,000
j. Income of properties in Manila 175,000
k. Intangible personal properties in Singapore, inherited
gw. By wife during marriage
430,000
l. Income of properties in Singapore 85,000
m. Tangible personal property in Dagupan City, inherited
gx. By Aldo before marriage
20,000
n. Income of property in Dagupan City 10,000
o. Intangible personal property in Canada, inherited by wife
gy. Before marriage
350,000
p. Income of personal property in Canada 85,000
gz.
43. Under the conjugal partnership of gains, the total conjugal
properties of the spouses is:
a. P1,170,000
b. 1,820,000
c. 1,990,000
d. 2,495,000
ha.
hb. Answer: A
hc.
44. Under the conjugal partnership of gains, the gross estate of Aldo
is –
hd.
a. P1,170,000
b. 2,495,000
c. 1,990,000
d. 1,820,000
he.
hf. Answer: C
hg.
45. Under absolute community of property of regime, the total
community property of the spouses is –
hh.
a. 1,820,000
b. 1,990,000
c. 2,495,000
d. 1,170,000
hi.
hj. Answer: A
hk.
46. Under absolute community of property regime, the gross estate of
Aldo is:
hl.
a. 1,170,000
b. 2,495,000
c. 1,990,000
d. 1,820,000
hm.
hn. Answer: B
ho.
 hp.
hq. Pepe married Pilar on January 20, 1995 without any prior
agreement in writing as to the system of property relationship that
will govern their properties when they are already married. Pepe
brought into the marriage an old Spanish house in Vigan, Ilocos Sur
worth P2,000,000 while Pilar brought with her a 200 hectare pineapple
plantation in Bukidnon which she acquired while she was still single.
hr.
hs. As a consequence of her marriage, she received as gift from
her parents another 200 hectare banana plantation in Cagayan de Oro
City on January 31, 1995.
ht.
hu. Twelve (12) years thereafter, she died of a car accident.
The joint account deposit of the spouses with Metrobank was
P5,000,000.
hv.
hw. She was insured with an insurance company for P2,500,000
with Pepe as the appointed irrevocable beneficiary.
hx.
hy. For numbers 47 to 51, classify the properties identified
above by choosing your answer from the options below:
hz.
ia. Options:
ib.
a. Exclusive property of Pepe
b. Exclusive property of Pilar
c. Conjugal Partnership of Pepe and Pilar
d. Community property of Pepe and Pilar
ic.
47. The Old Spanish house in Ilocos Sur
id.
ie.
if. Answer: D
ig.
48. The Banana Plantation in Cagayan de Oro City
ih.
ii. Answer: B
ij.
49. The income of the banana plantation
ik.
il. Answer: B
im.
50. The deposit with Metrobank
in.
io. Answer: D
ip.
51. The proceeds of the insurance policy is –
iq.
a. Excluded from gross estate
b. Included in the gross estate
c. Deductible from gross estate
d. None of the above
ir.
is. Answer: A
it.
iu. Items 52 through 55 are based on the following data:
iv.
iw. Angelo married to Angel 3 years ago, died leaving the
following properties:
ix.
iy. Condo Unit at West Tower Condominium, Makati City
iz. Acquired by him and his wife
2,500,000
ja. Apartment unit in Vancouver, Canada inherited from
jb. His parents who died 2 ½ years ago
3,500,000
jc. Valvo car registered in Canada, donated to him by his
jd. Mother four (4) years ago
2,000,000
je. Toyota Fortuner in the Philippines, purchased by Angelo
jf. Out of his exclusive property
1,200,000
jg. Jewelry in the Philippines, inherited last year by his
jh. Wife, Angel, from her mother
550,000
ji. Cash in Bank- Banco de Oro; 50% was earned by Angelo
jj. Before marriage; 50% was earned by the spouses
840,000
jk. Interest on bank deposit (net of withholding tax)
8,000
jl. Interest in a domestic partnership, acquired by Angel
jm. Before marriage
300,000
jn. Investment with Acer Corp., foreign corporation,
jo. 85.5% of business in the Philippines
1,000,000
jp. Dividends with Acer Corporation, date of record was
jq. Made after death of Angelo
45,000
jr. Investment with Filipinas Company, domestic, 25,000
js. Shares, traded in the stock exchange (highest P23.00;
jt. Lowest P22.83)

ju. Dividends from Filipinas Company, date of record,

jv. One month before Angelo’s death (gross of divedends tax)
7,500
jw. Receivable insurance on a foreign insurance company for
jx. an accident insurance suffered six months before death
50,000
jy. Proceeds of a life insurance taken by the employer
jz. Corporation of Angelo on his life
200,000
ka. Receivable on life insurance taken by Angelo on his
kb. Own life appointing his estate as the irrevocable
kc. Beneficiary; common funds of the spouses were used in
kd. Paying the insurance premium
150,000
ke.
52. The gross estate if Angelo was a non-resident citizen aunder the
absolute community property regime –
kf.
a. P 12,127,625
b. 11,827,625
c. 6,577,625
d. 3,700,000
kg.
kh. Answer: A
ki.
53. The gross estate if Angelo was a resident alien under the conjugal
partnership of gains –
kj.
a. P 10,127,625
b. 11,827,625
c. 3,700,00
d. 6,577,625
kk.
kl. Answer: B
km.
54. The gross estate if Angelo was a non-resident alien without
reciprocity under the absolute community of property regime –
kn.
a. P 10,127,625
b. 11,827,625
c. 3,700,000
d. 6,577,625
ko.
kp. Answer: D
kq.
55. The gross estate if Angelo was a nonresident alien, with
reciprocity, under the conjugal partnership of gains-
kr.
a. P 10,127,625
b. 11,827,625
c. 6,577,625
d. 3,700,000
ks.
kt. Answer: D
ku.
56. Sol, Teritoy,a bachelor, bought a parcel of land on installment
basis measuring 200 square meters. In he deed of sale, the ownership
shall be vested in him even before full payment of the purchase price. A
year before he could fully pay the price, Sol got married to Roma Raga
and out of the conjugal funds, the balance was paid. Who owns the land?
kv.
a. Sol because he paid more than what was assumed by the conjugal fund.
b. Roma because she is the wife of Sol.
c. The conjugal partnership because the full payment was made during the
marriage.
d. Sol because the ownership was vested to him before the marriage.
kw.
kx. Answer: A
ky.
57. Rufino is engaged in the business of lending money at a usurious
rate of interest. On September 30, 2009, he lend P100,000 to Pepito
payable in one (1) year at 5% interest per month. On December 10, 2010
he got married to V. Gomez. How much is the exclusive property of
Rufino? How about the conjugal partnership?
kz. Exckusive Conjugal
la.
lb. a. 100,000 60,000
lc. b. 100,000 60,000
ld. c. 115,000 45,000
le. d. 160,000 None
lf.
lg. Answer: C
lh.
58. Ivan and Sarah are married. Ivan inherited a residential lot
valued at P1,000,000 from his parents. Out of the conjugal funds, the
spouses constructed a house on the land which cost them P2,000,000. Who
owns the land immediately upon the death of either the wife or the
husband? How about the residential house?
li.
lj. Residential lot Residential House
lk. a. Conjugal Conjugal
ll. b. Exclusive of Ivan Conjugal
lm. c. Exclusive of Ivan Exclusive of Ivan
ln. d. Conjugal Exclusive of Ivan
lo.
lp. Answer: B
lq.
lr. B. DEDUCTIONS FROM GROSS
ESTATE
ls.
59. An example of a funeral expense which is not deductible -
lt.
a. Cost of coffin assumed by a family friend.
b. Funeral services paid out of decedent’s estate.
c. Mourning clothing of deceased’s unmarried minor children and
surviving spouse
d. Cost of tombstone
lu.
lv. Answer: A
lw.
60. Statement 1: The amount of funeral expenses within the P200,000
threshold, which are still payable shall be allowed as a deduction from
the gross estate.

lx. Statement 2: The unpaid portion of the actual funeral

expenses incurred which is in excess of the P200,000 threshold shall be
allowed as deduction under “claims against the estate.”

a. Both statements are true.

b. Only the first statement is true.
c. Only the second statement is true.
 d. Neither statements are true.
ly.
lz. Answer: B
ma.
61. Which of the following is included in the term “funeral expenses?”
mb.
a. Mourning apparel of a 40-year old legitimate child of the deceased.
b. Hospital bills during the last illness of the deceased.
c. Burial expenses defrayed by the relatives of the deceased.
d. Obituary notices to relatives and friends.
mc.
md. Answer: D
me.
62. The amount of funeral expenses that may be deducted from gross
estate (RPCPA)
mf.
a. 5% of the gross estate or actual funeral expenses, whichever is lower
b. Always 5% of the gross estate
c. Actual funeral expenses incurred.
d. 5% of the gross estate or actual funeral expenses incurred whichever
is higher.
mg.
mh. Answer: A
mi.
63. The deductible amount of funeral expense is P200,000 if the actual
expenses and the gross estate amount to –
mj.
mk. Actual Gross estate
ml. a. 195,000 4,500,000
mm. b. 210,000 4,300,000
mn. c. Both A and B
mo. d. Neither A nor B
mp.
mq. Answer: B
mr.
64. How much is the deductible amount of funeral expenses under each
of the following independent cases?
ms.
mt. Actual Gross Estate
mu. Case 1 180,000 4,000,000
mv. Case 2 140,000 2,900,000
mw. Case 3 207,500 4,250,000
mx.
my. Case 1 Case 2 Case 3
a. 180,000 145,000 207,500
b. 180,000 140,000 200,00
c. 200,000 140,000 200,000
d. 200,000 145,000 212,500
mz.
na. Answer: B
nb.
65. R. Villamogez died. The amount of his funeral expenses is covered
by a memorial plan up to P120,000. Other actual funeral expenses
amounted to P75,000. The amount of his tangible properties upon death
was P3,700,000.
 nc. How much is the gross estate? How about the funeral
expenses?
nd.
ne. Gross Estate Funeral Expenses
a. 3,700,000 70,000
b. 3,700,000 195,000
c. 3,820,000 191,000
d. 3,820,000 195,000
nf.
ng. Answer: C
nh.
66. Which of the following statements about funeral expenses is wrong?
ni.
a. Non-resident citizen, there may be deductible funeral expenses even
if such expenses were incurred entirely outside the Philippines.
b. Non-resident alien, there may be deductible funeral expenses even if
such expenses were incurred within and outside the Philippines.
c. Non-resident alien, the entire funeral expenses cannot be claimed as
deduction from gross estate if such expenses were entirely incurred
outside the Philippines.
d. Non-resident alien, the entire funeral expenses cannot be claimed as
deduction from gross estate even if such expenses were incurred
entirely within the Philippines.
nj.
nk. Answer: C
nl.
67. Which of the following is not included in the value of the gross
estate?
nm.
a. Judicial expenses
b. Claims against insolvent persons
c. Benefits received under RA 4917
d. The undiminished value of the property mortgaged.
nn.
no. Answer: A
np.
68. Which of the following statements about judicial expenses is
false? The judicial expenses that may be claimed as deduction from the
gross estate –
nq.
a. Of a decedent are the expenses incurred for the settlement of the
estate, but within the period for filing the estate tax return
b. Of a decedent are the entire expenses incurred for the settlement of
the estate regardless of time it was incurred by the decedent.
c. Includes accountant’s fees and payment for the appraiser of the value
of the properties.
d. Shall be allowed even if the estate is settled extrajudicially.
nr.
ns. Answer: B
nt.
69. Which of the following statements is correct about “Claims against
the Estate?”
nu.
 a. A loan contracted by the decedent which is secured by a mortgage of
his lot can still be claimed as deduction from gross estate falling
under “claims against the estate.”
b. Unpaid income tax and real estate taxes that accrued before the
death, being payable during lifetime are deductible from the gross
estate of the decedent as “claims against the estate.”
c. Claims against the estate, as deduction from the gross estate
represents obligations enforceable during the lifetime of the
decedent,
d. Debt contracted during the lifetime of the decedent which is payable
in three (3) years but the decedent debtor died on the second year is
not deductible from the gross estate.
nv.
nw. Answer: C
nx.
70. The following are requisites in order that claims against the
decedent’s estate may be deductible except (RPCPA)
ny.
a. They must be existing against the estate.
b. They must be reasonably certain as to amounts.
c. They must have been prescribed.
d. They must be enforced by the claimants.
nz.
oa. Answer: C
ob.
71. One of the following is deductible as claim against the estate –
oc.
a. An obligation contracted by the decedent one (1) day before he died.
b. An obligation of the decedent which prescribed while the decedent was
still alive.
c. An obligation which was not reduced in writing under the Statutes of
fraud.
d. An obligation which shall be paid by the heirs.
od.
oe. Answer: A
of.
72. All of the following, except one are deductible from the gross
estate of a decedent who died September 30, 2011.
og.
a. Income tax on income earned from January to September 29, 2011.
b. Gift taxes on donations given June 12, 2011.
c. Real property taxes payable during the last quarter of 2011.
d. Income tax on income earned during the last quarter of 2011.
oh.
oi. Answer: D
oj.
73. Which of the following options is correct? In claims against
insolvent persons –
ok.
a. As deduction from gross estate, only the entire amount of
uncollectible claims shall be included in the gross estate of the
decedent.
b. As a deduction from gross estate, the full amount of receivable
including uncollectible, must be included in the gross estate.
 c. Such claim is not deductible from the gross estate if the decedent
was also insolvent at the time of his death.
d. If the entire debt is uncollectible, it may be omitted in the gross
estate and as a deduction therefrom.
ol.
om. Answer: B
on.
74. Statement 1: If the proceeds of a mortgage loan is merely an
accommodation loan, its value must be included in the gross estate, as a
receivable amount and as a deduction thereof.

oo. Statement 2: If there is a legal impediment to recognize the

accommodation loan as receivable of the estate, the unpaid mortgage
payable shall not be allowed as a deduction from the gross estate.

a. Only the first statement is correct.

b. Both statements are correct.
c. Only the second statement is correct.
d. Neither statement is correct.
op.
oq. Answer: B
or.
75. The following expenses and obligations were left by Boning upon
his death:
os.
ot. Notes payable, not notarized 30,000

ou. Loans payable, PNB 300,000

ov. Accounts receivable, debtor not insolvent 40,000
ow. Accounts receivable, debtor is insolvent 60,000
ox. Death benefits from employer 200,000
oy. Mortgaged paid 50,000
oz. Income taxes on income of decedent’s estate 7,500
pa.
pb. The total amount deductible from gross estate is –
pc.
a. 600,000
b. 550,000
c. 1,560,000
d. 560,000
pd.
pe. Answer: C
pf.
76. Which of the following statement is incorrect regarding an unpaid
mortgage?
pg.
a. Unpaid mortgage, as deduction from the gross estate of a resident
citizen, must pertain to a property mortgaged which is situated
either within or without the Philippines.
b. Unpaid mortgage, as deduction from the gross estate of a non-resident
alien, must pertain to a mortgaged property which is situated within
the Philippines only.
c. If the unpaid mortgaged was contracted by a prior decedent on a
property inherited by the present decedent before marriage, it is
 chargeable against the community property if it benefited the
community property of the spouses.
d. If the unpaid mortgage was contracted by prior decedent on a property
inherited by the present decedent during marriage, it is chargeable
against the community property of the spouses if it benefited the
community property of the prior decedent.
ph.
pi. Answer: D
pj.
77. Casualty losses are deductible from gross estate if (RPCPA)
pk.
pl. 1st Statement: Such loss was incurred during the settlement of the
estate.
pm. 2nd statement: Such loss was incurred nit later than the last day
for the payment of the estate tax.
pn.
a. Both statements are false.
b. 1st statement is false, 2nd statement is true.
c. 1st statements is true, 2nd statement is false.
d. Both statements are true.
po.
pp. Answer: D
pq.
78. Y, a Filipino resident, died on November 5, 2011 and his estate
incurred losses due to: (RPCPA)
pr.
ps. 1st loss: From fire on February 2, 2011 of improvements on his
property; not compensated by insurance.
pt. 2nd loss: From flood on February 25, 2012 of household furniture;
also not compensated by insurance.
pu.
a. 1st loss not deductible ans 2nd loss is deductible.
b. Both losses are not deductible.
c. Both losses are deductible from gross estate.
d. 1st lossdeductible and 2nd loss is not.
pv.
pw. Answer: A
px.
79. Which statement is incorrect regarding losses?
py.
a. A building that has been razed by fire immediately after the
internment shall still be included in the gross estate even if does
not exist anymore at the time of filing the estate tax return.
b. In a casualty loss, the value of the property is included in the
gross estate but subsequently deducted therefrom.
c. In a casualty loss, since the value of the property is included in
the gross estate but subsequently deducted therefrom, it may be
omitted in both for after all there is no effect on the net taxable
estate.
d. In estate taxation, the amount loss deductible is based on the value
of the property lost minus indemnity from an insurance company.
pz.
qa. Answer: C
qb.
80. Which of the following losses is deductible?
qc.
a. Destruction of a house by an earthquake which killed the decedent.
b. Shipwreck which occurred before the death of the decedent but was
only discovered after his burial.
c. Total wreckage of a car in an accident but was fully compensated by a
comprehensive insurance.
d. Theft which occurred during burial of the decedent.
qd.
qe. Answer: D
qf.
81. Liza died on July 5, 2011 leaving the following data on
deductions:
qg.
qh. Unpaid 2010 real estate taxes 40,000
qi. Unpaid 2011 real property taxes 40,000
qj. Income tax on income from Jan. 1 to July 4, 2011 35,000
qk. Losses from fire that occurred on July 3 (60% was
ql. compensated by insurance)
800,000
qm. Casualty losses on September, 2011
450,000
qn. Building destroyed by earthquake on Feb., 2011
1,300,000
qo.
qp. Based on the above data, the deduction from gross estate is –
qq.
a. 1, 365,000
b. 565,000
c. 845,000
d. 525,000
qr.
qs. Answer: B
qt.
qu.
82. Amount of claims against the debtor 50,000
qv. Total assets of the debtor 500,000
qw. Total liabilities of the debtor 800,000
qx.
qy. How much should be included in the gross estate of the decedent as
claim against insolvent person?
qz.
a. 50,000
b. 800,000
c. 500,000
d. 300,000
ra.
rb. Answer: A
rc.
83. The deductible claim against insolvent person is –
rd.
a. 50,000
b. 31,250
c. 300,000
d. 18,750
re.
 rf. Answer: D
rg.
84. Che Cua, a nonresident alien, died leaving the following assets –
rh.
ri. Domestic shares 1,000,000
rj. Foreign shares 3,000,000
rk. Tangible personal property, Philippines 6,000,000
rl. Expenses (deductible) 1,200,000
rm.
rn. Note – the country where she is a citizen and resident does not
impose transfer tax on transmission of intangibles of Filipinos.
ro.
rp. The net estate subject to tax in the Philippines is –
rq.
a. 5,280,000
b. 3,800,000
c. 4,800,000
d. 4,280,000
rr.
rs. Answer: A
rt.
85. Ta Pue, a nonresident alien, single, died living the following
properties and deductions –
ru. Shares, domestic corporation 500,000
rv. Shares, foreign corporation 500,000
rw. Tangible personal property 1,500,000
rx. Deductible expenses 500,000
ry.
rz. Assuming there is no reciprocity, the estate tax payable is –
sa.
a. 1,600,000
b. 1,500,000
c. 103,000
d. 95,000
sb.
sc. Answer: C
sd.
se.
sf. Encoded by: Angelic R. Pedrosa
sg. III-AFIN
sh.
si.
sj.
sk.

sl.

sm.

sn.

so.

sp.
sq.
sr.
 ss.
st.
su.

sv.

sw.

sx.

e.
e.