Illustration 8-8

Turo Rista, filipino married residing in Manila, died leaving properties located in the
Philippines and in the United States. The following data relates to his estate:

Net estate, Philippines P 2,000,000

Net estate, United States 3,000,000
Share of surviving spouse in the conjugal estate 1,000,000
Tax paid in United States 100,000

REQUIRED: Compute the estate tax due after tax credit.

Net estate, Philippines P 2,000,000

Net estate, U.S. 3,000,000
Total net estate 5,000,000
Less: Share of surviving spouse 1,000,000
Net taxable estate 4,000,000
Rate of tax ______6%
Estate tax 240,000
Less: Foreign estate tax paid
US tax paid 100,000
Limit (3,000,000/5,000,000X240 000) 144,000
Credit allowed (lower) 100,000
Estate tax payable 140,000

If the decedent left properties in the Philippines and in one foreign country, Only
Formula 1 shall be applied. However, if the decedent left properties in two or more foreign
countries, both formulas above shall be applied.