Chapter 15-Estate Tax Payable

CHAPTER 15: SELF-TEST EXERCISES

Discussion Questions
1. Illustrate the computational format of the net tax estate.
2. Discuss the computational procedures of the limits for
foreign taxes
paid.
3. Discuss the computational procedure of the net taxable estate used in the
computation of the foreign tax credit.
4. Discuss the estate tax requirements, their deadlines and conditions for
compliance.

Multiple-Choice Theory
)1. The taxable estate of the following includes all properties wherever
situated, except a
a. Resident citizen
b. Non-resident alien
C. Resident alien
d. Non-resident alien

2. Which ofthe following is normally deductible against common properties?

a. Medical expenses
b. Standard deductions
C Funeral expenses
d. Vanishing deductions

C3 Which is not considered in the computation of the share of the surviving

spouse?
a. Medical expenses
b. Family home
C. Obligations
d. Standard deductions

A4. Which is included in the net taxable estate?

a. Family home in excess of P1,000,000
b. Separate property of the surviving spouse
C. Medical expenses
d. Share of the surviving spouse

5. Which is excluded in the computation of the net taxable estate and in the
computation of the net distributable estate?
a. Share of the surviving spouse
b. Vanishing deductions
C. Estate tax
d. Family home

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6. Which is included in net taxable estate?
a. Excess funeral expense above deducible amounts
b. Losses of properties occurring within 6 months after death
C.
C. Losses of properties occurring before death
d. Claims against the estate

7 . Statement 1:No estate tax is due on an estate with only P1,000,000 worth of
properties.
Statement 2: An estate with a net estate of P200,000 will not pay estate tax.

Which is correct?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement

C8. Statement 1: An estate with a net taxable estate of P200,000 is not required
to file an estate tax return.
Statement 2: The BIR shall be notified of the death of the decedent if he has
a net estate of P20,000.

Which is incorrect?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement

9. Which of these is required to file an estate tax return?

a.An estate of P100,000 shares of stocks.

consisting solely
b.
b. An estate which includes a motor vehicle worth P200,000.
C. An estate with a real property worth P1,000,000.
d. All of these

credit?
10. Which decedent cannot claim deduction for tax
a.
a. Resident citizen
b. Non-resident alien
C. Resident alien
d. Non-resident alien

11. Which is correct regarding the share of the surviving spouse?

a. One-half of the gross estate after ordinary deductions
the separate properties of the
b. One half of the common properties plus
surviving spouse
c.
C.
One-half of the net common properties
d. The whole of the separate property of the surviving spouse

estate tax?
12. Who is directly liable to pay the
c. The estate administrator or executor
a. The decedent
b. The heirs d. The surviving spouse

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13. ACPA Certification is required if the gross estate

a. exceeds P20,000.
b. exceeds P200,000.
C. exceeds P2,000,000.
d. contains registrable properties without regard to the value of the
estate.

14. A decedent died with a gross estate of P4,000,000. Which of the following is
required?
a. Notice of death
b. Estate tax return
C. CPA Ccertification
d. All of these

15. The notice of death shall be filed within

a. 2 months before the date ofdeath.
b. 2 months from the date of death.
C. 30 days from the date of death.
d. 6 months from the date of death.

16. The estate tax return shall be filed within

a. 30 days from the date of death.
b. 2 months from the date of death.
C. 6 months from the date of death.
d. 2 years from the date of death

b 17. What is the maximum extension allowable in

a. 5 years
b. 2 years
C. 2 months
d. 30 days
filing of the estate tax return?

18. What is the maximum period of extension in

paying the estate tax for estate
under extrajudicial settlement?
a. 5 years c. 6 months
b. 2 years d. 30 days

19. What is the maximum period of extension in

paying the estate tax for estate
under judicial settlement?
a. 5 years C. 6 months
b. 2 years d. 30 days

)20. The estate tax return ofa non-resident alien decedent is filed with
a. An accredited agent bank
b. Revenue district office
C. Collection agent
d. Office of the Commissioner

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Multiple-Choice Problems: Part 1

C1
1. A single decedent died with the following data regarding his estate:
Family home P 800,000
Agricultural land 2,500,000
Cash and other personal properties 1200,000
Total P 4,500,000
Itemsof deductions: P 400,000
Funeral expenses
Medical expenses - unpaid 200,000
300,000
Judicial expenses
Claim against the estate 500,000
Standard deduction 1.000.000
Total P 2400.000
Compute the net taxable estate
a. P 2,300,000 C. P 1,500,000
b. P 2,100,000 d. P 1,300,000

Assuming that the estate tax in the preceding problem is P95,000, compute
the net distributable estate.
a. P3,100,000 c.P 2,100,000
b. P3,005,000 d. P 2,005,000

resident decedent:
3. The following data were relates to the estate of a single

Gross estate, including P1.5M family home P 6,000,000

Ordinary deductions 1,800,000

What is the net taxable estate?

a. P4,200,000 c.P2,200,000
b. P 3,200,000 d. P 1,200,000

4. Romeo died leaving his wife, Juliet, the following net conjugal properties

Gross estate, including P1.5M family home P 8,000,000

Less: ordinary deductions 2.400.000
Net conjugal properties P 5,600,000
Compute the net taxable estate.
a. P5,600,000 c.P 1,050,000
b. P4,600,000 d. P 800,000

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5. Capt. Jeffrey Magiting, an unmarried Filipino, died in action

following net estate to his mother who is
leaving the
living with him:
Family home P 2,000,000
Other properties 8.000.000
Total properties P10,000,000
Less:
Funeral expenses P 300,000
Judicial expenses 200,000
Paid medical expenses 600,000
Claims against the estate 1.500.000 2.600.000
Net estate
P 7,400.000
Compute the net taxable estate.
a. P 6,600,000 c. P2,800,000
b. P5,600,000 d. P1,800,000

6. Assuming that the estate tax is P555,000, compute the net distributable
estate of Capt. Magiting
a. P8,000,000 c.P6,845,000
b. P 7,445,000 d. P 6,405,000

b 7. Mr. X, a non-resident citizen bachelor, had a net estate of P1,800,000 after

the following:

Funeral expenses P 250,000

Judicial expenses 150,000
Claims against the estate 600,000
Losses 200,000

Compute the net taxable estate.

a. P 1,850,000 c. P 850,000
b. P 900,000 d. P 750,000

A 8. Mr. Y died leaving the following properties and

estate deductions:

o00
P 1,000,000
Separate properties of Mr. Y
2,400,000
Separate properties of Mrs. Y
2,600,000
Communal properties

P 200,000
Funeral expenses
Other ordinary deductions of communal properties 800,000
exclusive of Mr. Y 400,000
Ordinary deductions -

exclusive of Mrs. 500,000

Ordinary deductions 900,000
Family home -

exclusive of Mrs. Y

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Compute the taxable net estate of Mr. Y.

a. P410,000 c. P600,000
b. P510,000 d. P 1,600,000

9. Assuming instead that Mrs. Y died, compute her net taxable estate.
a. P600,000 c.P 1,600,000
b. P800,000 d. P 1,800,000

10. A decedent had a net estate of P 3,750,000 after deducting all indebtedness,
taxes, losses, judicial expenses and P250,000 funeral expenses. Included in
the estate was his family home worth P1,200,000.

What is the net taxable estate?

a. P4,000,000 c. P 2,800,000
b. P3,000,000 d. P1,800,0o0

Multiple-Choice Problems: Part 2

1 . The following pertain to the estate of a citizen decedent:

Separate properties of the decedent P 2,400,000

Common properties of the spouses 5,600,000

Possible deductions:
Funeral expenses P 180,000
Judicial expenses 120,000
Obligations (1/4 is separate property) 800,000
Family home - common property 1,200,000

What is the taxable net estate?

a. P5,300,000 c. P 2,950,000
b. P3,550,000 d. P 2,550,000

2. Assuming a P100,000 estate tax, compute the net distributable estate.

a. P4,550,00o c. P3,950,000
b. P4,450,000 d. P3,850,000

) 3. A single non-resident alien decedent died with the following gross estates
and deductions:

Tangible properties in the Philippines P 4,500,000

Intangible properties in the Philippines 500,000
Tangible properties abroad 5.000.000
Total gross estate P10,000,000

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Possible deductions
Funeral expenses P 200,000
Judicial expenses 400,000
Medical expenses 300,000
Obligations (20% Philippines) 500,000
Losses
300,000
Transfer for public use (property in the Philippines) 500,000

Compute the net taxable estate.

a. P4,450,000 c.P4,300,000
b. P 4,950,000 d.P 3,800,000

C 4. Assuming that the reciprocity rule applies, compute the net taxable estate.
a. P3,090,000 c. P 3,370,000
b. P3,460,000 d. P 3,300,000

A 5. The following data pertains to the estate of a married non-resident alien

decedent:

Philippine properties:
Separate properties of the surviving spouse P 3,000,000
Separate properties of the decedent 1,800,000
Common properties of the spouses 3,200,000

Total foreign properties, excluding P5,000,000

separate properties of the surviving spouse P10,000,000

Possible deductions: P 180,000

Funeral expenses
Judicial expenses 120,000
Medical expense 500,000
Obligations - common fund 900,000
Family home - common property 1,200,000

What is the taxable net estate?

a. P3,200,000 c. P 2,000,000
b. P 2,800,000 d. P0

t6. The following pertains to the estate ofMr. Servano, a widower:

Cash P 500,000
Investment in stocks 1,500,000
Car 2,000,000
Agricultural land 5,000,000
Family home 3,000,000

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Items of deduction:
Funeral expenses P 350,000
Judicial expenses 200,000
Claim against the estate 2,000,000
Claim against insolvent person
(uncollectible receivables) 500,000
Theft of cash (already deductedfrom the cash balance) 700,000
Compute the net taxable estate.
a. P 7,600,000 c.P 5,600,000
b. P 7,100,000 c.P5,100,000
7. Mr. Mori, a resident Japanese citizen, had the following

Philippines Japan Total

Gross estate P 5,000,000 P 3,000,000 P 8,000,000
Ordinary deductions 1,600,000 1,200,000 2,800,000
Family home, Philippines 800,000 800,000
Standard deduction 1,000,000

Compute the net taxable estate in the Philippines.

a. P1,600,000 c.P 1,975,000
b. P 2,600,000 d. P 1,625,000

C8. Compute the nettaxable estate abroad.

a. P1,800,000 c.P 1,425,000
b. P 800,000 d.P 1,775,000

.9. Assuming a global estate tax of P289,000, compute the estate tax payable
A assuming the estate of Mr. Mori paid P150,000 estate tax
abroad.
a. P167,875 c. P 139,000
b. P163,625 d.P 53,625

10. A single resident citizen died leaving the following estate and deductions:

Philippines China Taiwan Total

- P 1,800,000
Family home P 1,800,000 P P
Other properties Z200,000 3,000,000 4.000000 14.200.000
Total estate P 9,000,000 P 3,000,000 P 4,000,000 P16,000,000
70,000 P - P 320,000
Funeral expenses P 250,000 P
300,000 150,000 100,000 550,000
Judicial expenses
2.250,0000 800,000 1200.000 4250.000
Obligations
Total P 2.800,000 P 1.020,000 P 1.300,000P 5,120.000
Estate before
Standard deduction P 6,200,000 P 1,980,000 P 2,700,000 P10.880,000

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Philippines China Taiwan Total

Estate tax paid P PP 220,000P 250,000 P 470,000

estate in the Philippines, China, and

Compute respectively the net taxable
Taiwan.
a.
P4,731,250; P 1,818,750; P 2,450,000
b. P 4,650,000; P 1,830,000; P 2,520,000
C. P 4,850,000; P 1,870,500; P 2,279,500
d. P4,750,250; P 1,825,750; P 2,424,000

Compute the estate tax due and payable in the Philippines.

11. c.P599,781.25
a. P1,065,000
b. P955,000.00 d. P 595,000.00

Problems: Part 3
Multiple-Choice
net estate:
1. A single resident alien decedent died with the following

standard deduction P 2,500,000

Net estate in the Philippines, before
deduction 3.500.000
Net estate abroad, before standard
Net estate, world before standard
deduction P 6.000.000

Compute the estate tax.

a. P615,000 c.P 465,000
b. P 585,000 d. P190,000

the estate tax assuming the

2. In the immediately preceding problem, compute
decedent is a non-resident alien.
a. P615,000 c. P 465,000
b. P 585,000 d. P 190,000

home hada net estate of P1,200,000

3. A single resident alien without a family
items totaling P 800,000. 40% of the
after allowable deduction for ELIT
properties of the decedent were in the Philippines.

Compute the estate tax.

a. PO c. P 14,000
b. P10,000 d.P71,000

C 4. In the immediately preceding problem, compute

decedent is a non-resident alien.
the estate tax assuming the

a. PO c.P 14,000o
b. P10,000 d. P 71,000

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5. A married citizen died leaving the following net estate:

Exclusive properties of the decedent P 3,000,000

Common properties of the spouses* 12,000,000
Total allowable deduction for ELIT - common 1,800,000
Transfer for public use - exclusive 200,000
Vanishing deductions exclusive 500,000

Medical expenses 600,000

P1,500,000.
The common properties includes a family home worth

Compute the net taxable estate.

a. P6,900,000 c. P5,150,000
b. P5,900,000 d. P4,900,000

determine their net distributive

6. The heirs of a decedent bachelor want to
decedent were as follows:
share in the net estate. Details of the estate of the

Gross estate 7,000,000

Total allowable deduction for ELIT 1,800,000
Transfer for public use 200,000
Vanishing deductions 500,000
Medical expenses (20% unpaid) 250,000

The total actual ELIT was P2,100,000.

Compute the net distributable estate assuming that the estate tax was

P240,000.
a. P4,710,000 c. P 4,410,000
b. P4,510,000 d. P4,240,000

P7. A residentcitizen died with various properties abroad:

Taxable Estate
estate tax paid
Net estate in the Philippines P 2,000,000
Net estate in Taiwan 2,500,000 P 240,000
Net estate in Singapore 1,500,000 200,000
Net estate in Indonesia 3,000.000 300.000
Total net estate P 9,000,000 P 740,000
Compute the estate tax payable.
a. P1,065,000 c. P 325,000
b. P347,500 d. P 392,500

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8. A non-resident alien died
leaving a net taxable estate of P4,000,000 in the
Philippines and P6,000,000 abroad. He paid P300,000 estate tax abroad
including P70,000 attributable to properties situated in the
Philippines.
Compute estate tax payable.
the
a. P915,000
c.P 355,000
b. P615,000 d. P 285,000

9. Mr. Masiba died

leaving the following properties:
Bank deposit P 2,100,000
Business interest
3,000,000
Commercial building 4,000,000
Family home, inclusive of P2,000,000 lot 3,800,000
Additional information:
The commercial building was
purchased using donations received by
Mr. Masiba during the marriage. The same building sustained a
P400,000 fire loss shortly after Mr. Masiba died.
The lot where the family home stands was received by Mrs. Masiba as
inheritance during the
marriage
Funeral expenses and judicial expenses were respectively P400,000
and P200,000.
The commercial building was mortgaged to a bank for P1,500,000. Mr.
and Mrs. Masiba paid P500,000 prior to Mr. Masiba's death. There were
P100,000 accrued interest at the death of Mr. Masiba.

Compute the net taxable estate.

a. P 7,100,000 c.P3,850,000
b. P7,000,000 d.P 3,750,000

(10. The following relate to the estate of a single decedent:

Receivables representing proceeds of life insurance
irrevocably designated to a brother P 1,000,000
Motor vehicles 400,000
Investment in bonds 600,000
Stock investments 300,000
Land (inherited from mother) 4,000,000

Funeral expenses (1/2 paid by friends) P 300,000

Loss motor vehicle 400,000
Obligations (1/4 acruing after death) 800,000

Compute the net taxable estate.

a. P4,150,000 c.P3,150,000
b. P 3,950,000 d. P 3,550,000

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