Land in Dagupan 450,000

Building, Sta Mesa, Manila 1,320,000

Accounts receivable 50,000
Coconut land 150,000 _______
Gross estate 5,920,000 4,870,000 P10,790,000
Less: Deductions
Ordinary –
Claims against the estate 40,000
Unpaid mortgage on lot 125,000
 Vanishing deduction (Sche. 1) 72,671 _______
Total 191,671 40,000
( 237,671)
Special -
Family home:
House - conjugal (4,500,000 x 1/2) 2,250,000
Lot - exclusive 4,000,000
(6,250,000)
Standard deduction
(5,000,000)
Net estate
-
Less: Share of surviving spouse
Gross conjugal 4,870,000
Less: Conjugal deductions 40,000
Net conjugal 4,830,000
Share (4,830,000 x 1/2)
2,415,000
Net taxable estate
.

1. Death benefits from GSIS are not taxable.

2. The proceeds of life insurance are not taxable because the beneficiary is Sarah who is
neither the executor nor the administrator. Moreover, her designation is irrevocable.

3. The donation of the land in Dagupan City is subject to estate tax because it is in the
nature of a transfer in contemplation of death.

4. The building in Sta. Mesa, Manila is not subject to vanishing deduction because the
holding period of the property in the hands of Jose was more than five (5) years already
at the time of his death.

5. The receivable on the debtor who went abroad is not deductible because there is no
proof that the debtor is insolvent.

6. To be deductible, the loss incurred must be a casualty loss. Hence, the loss on gambling
is not an allowed deduction. Moreover, such loss was incurred prior to the death of the
decedent.

7. The unpaid mortgage on the citrus plantation is not deductible because the cost of the
plantation is not included in the gross estate.

Schedule 1: Vanishing Deduction on Coconut Land