1.

INTRODUCTION
2. GROSS ESTATE
3. DEDUCTION FROM GROSS ESTATE
4. ILLUSTRATION OF COMPUTATION OF ESTATE TAX

MR. A

COMPUTATION OF ESTATE TAX

NOV. 11, 2021

GROSS ESTATE

1. HOUSE AND LOT-FAMILY HOME………………………………………………..P15,000,000

2. AGRCULTURAL LAND……………………………………………………………………. 5,000,000
3. SHARES OF STOCK………………………………………………………………………….1,000,000
4. OTHERS PROPERTY –JEWELRIES, CAR……………………………………………..3,000,000
DEDUCTION/CHARGES FROM GROSS ESTATE:
CLAIMS AGAINST THE ESTATE…………………………………….700,000
TRANSFER FOR PUBLIC PURPOSE……………………………….600,000
CASUALTY LOSSES DUE TO THEFT………….…………………..300,000
UNPAID MEDICAL EXPENSE………………………………………,,500,000
FUNERAL EXPENSE……………………………………………………..100,000

THE AGRCULTURAL LAND WAS SUBJECT TO MORTGAGE OF P600,000, INHERITED 2 1/2 YEARS AGO
BEFORE THE DECEDENT DEATH. THE FAIR VALUE OF THE SAID LAND WAS P 4,000,000 WHEN INHERITED.
RECEIVABLE FROM INSOLVENT IS 4,000,000, 40% OF IT IS EXPECTED TO BE COLLECTED.

COMPUTE ESTATE TAX.

 MR. A (SINGLE DECEDENT)

COMPUTATION OF ESTATE TAX

NOV. 11, 2020

GROSS ESTATE

5. HOUSE AND LOT-FAMILY HOME………………………………………………..P15,000,000

6. AGRCULTURAL LAND……………………………………………………………………. 5,000,000
7. SHARES OF STOCK………………………………………………………………………….1,000,000
8. RECEIVABLE FROM INSOLVENT PERSON…………………………………………….500,000
9. OTHERS PROPERTY –JEWELRIES, CAR……………………………………………..3,000,000

GROSS ESTATE…………………………………………………………………………………………P 24,500,000

LESS: DEDUCTIONS:

DEDUCTION/CHARGES FROM GROSS ESTATE:

CLAIMS AGAINST THE ESTATE…………………………………. 1,200,000
UNPAID MORTGAGE ON AGRICULTURAL LAND…………. 200,000
TRANSFER FOR PUBLIC PURPOSE………………………………. 600,000
CASUALTY LOSSES DUE TO THEFT………….………………….. 300,000
RECEIVABLE OF INSOLVENT PERSON……………………………500,000
VANISHING DEDUCTION………………………………………… 1,346,285.71
STANDARD DEDUCTION…………………………………………. 5,000,000
FAMILY HOME………………………………………………………. 10,000,000 P19,226,285.71

NET TAXABLE ESTATE…………………………………………………………………………….. P 5,353,714.21

ESTATE TAX RATE ……………………………………………………………………………………………………. 6%

ESTATE TAX………………………………………………………………………………………………P 321,222.85

COMPUTATION OF VANISHING DEDUCTION:

INITIAL VALUE TO TAKE…………………………………………………………….4,000,000 ( MABABA SA P5,000,000)

LESS; PAYMENT MADE ON MORTGAGE………………………………………200,000

BALANCE……………………………………………………………………………………3,800,000

LESS: 3,800,000/24 ,500,000 X 2,800,000……………………………. 434,285.79

BASIS OF VANISHING DEDCUTION…………………………………………….3,365,714.21

X RATE 40% -3.5 YEARS………………………………………………………………………..40%

VANISHING DEDUCTION…………………………………………………………P 1,346,285.71

GROSS ESTATE

10. HOUSE AND LOT-FAMILY HOME………………………………………………..P15,000,000

11. AGRCULTURAL LAND……………………………………………………………………. 5,000,000
12. SHARES OF STOCK………………………………………………………………………….1,000,000
13. RECEIVABLE FROM INSOLVENT PERSON…………………………………………….500,000
14. OTHERS PROPERTY –JEWELRIES, CAR……………………………………………..3,000,000

GROSS ESTATE…………………………………………………………………………………………P 24,500,000

LESS: DEDUCTIONS:

DEDUCTION/CHARGES FROM GROSS ESTATE:

CLAIMS AGAINST THE ESTATE…………………………………. 1,200,000
UNPAID MORTGAGE ON AGRICULTURAL LAND…………. 200,000
TRANSFER FOR PUBLIC PURPOSE………………………………. 600,000
CASUALTY LOSSES DUE TO THEFT………….………………….. 300,000
RECEIVABLE OF INSOLVENT PERSON……………………………500,000
VANISHING DEDUCTION………………………………………… 1,346,285.71
STANDARD DEDUCTION…………………………………………. 5,000,000
FAMILY HOME………………………………………………………. 10,000,000 P19,226,285.71

NET TAXABLE ESTATE…………………………………………………………………………….. P 5,353,714.21

ESTATE TAX RATE ……………………………………………………………………………………………………. 6%

ESTATE TAX………………………………………………………………………………………………P 321,222.85

COMPUTATION OF VANISHING DEDUCTION:

INITIAL VALUE TO TAKE…………………………………………………………….4,000,000 ( MABABA SA P5,000,000)

LESS; PAYMENT MADE ON MORTGAGE………………………………………200,000

BALANCE……………………………………………………………………………………3,800,000

LESS: 3,800,000/24 ,500,000 X 2,800,000……………………………. 434,285.79

BASIS OF VANISHING DEDCUTION…………………………………………….3,365,714.21

X RATE 40% -3.5 YEARS………………………………………………………………………..40%

VANISHING DEDUCTION…………………………………………………………P 1,346,285.71

ANSWER

ROL, 648,000; DEL ROSARIO, P201,600; DUNQUE, P329,600; EGALAM, P534,800;

VILLAN, P265,115.63; DELA CRUZ, 823,564.80;

VENTURA, P 439,337.14
 MR. A

COMPUTATION OF ESTATE TAX

NOV. 11, 2021

GROSS ESTATE

15. HOUSE AND LOT-FAMILY HOME………………………………………………..P15,000,000

16. AGRCULTURAL LAND……………………………………………………………………. 5,000,000
17. SHARES OF STOCK………………………………………………………………………….1,000,000
18. OTHERS PROPERTY –JEWELRIES, CAR……………………………………………..3,000,000
DEDUCTION/CHARGES FROM GROSS ESTATE:
CLAIMS AGAINST THE ESTATE…………………………………….700,000
TRANSFER FOR PUBLIC PURPOSE……………………………….600,000
CASUALTY LOSSES DUE TO THEFT………….…………………..300,000
UNPAID MEDICAL EXPENSE………………………………………,,500,000
FUNERAL EXPENSE……………………………………………………..100,000

THE AGRCULTURAL LAND WAS SUBJECT TO MORTGAGE OF P600,000, INHERITED 2 1/2 YEARS AGO
BEFORE THE DECEDENT DEATH. THE FAIR VALUE OF THE SAID LAND WAS P 4,000,000 WHEN INHERITED.
RECEIVABLE FROM INSOLVENT IS 4,000,000, 40% OF IT IS EXPECTED TO BE COLLECTED.

COMPUTE ESTATE TAX.

ANSWER

GROSS ESTATE

1. HOUSE AND LOT-FAMILY HOME………………………………………………..P15,000,000

2. AGRCULTURAL LAND……………………………………………………………………. 5,000,000
3. SHARES OF STOCK………………………………………………………………………….1,000,000
4. OTHERS PROPERTY –JEWELRIES, CAR……………………………………………..3,000,000
5. RECEIVABLE FROM INSOLVENT PERSON………………………………………..4,000,000

GROSS ESTATE…………………………………………………………………………………………..28,000,000

LESS: DEDUCTIONS:

CLAIMS AGAINST THE ESTATE………………………………… 1,200,000X

TRANSFER FOR PUBLIC PURPOSE……………………………….600,000X
CASUALTY LOSSES DUE TO THEFT………….…………………..300,000X
RECEIVABLE FROM INSOLVENT PERSON………………….1,600,000X
UNPAID MORTGAGE………………………………………………….600,000X
VANISHING DEDUCTION 2,031,428.60
STANDARD DEDUCTION …………………………………………..5,000,000
FAMILY HOME…………………………………………………………10,000,000 20, 731,428.60

NET TAXABLE ESTATE………………………………………………………………………………P 7,268,571.40

X 6% ESTATE TAX RATE…………………………………………………………………………………………… .6%

ESTATE TAX………………………………………………………………………………………………P 436,114.28

COMPUTATION OF VANISHING DEDUCTION:

INITIAL VALUE TO TAKE…………………………………………………………….4,000,000 ( MABABA SA P5,000,000)

LESS; PAYMENT MADE ON MORTGAGE………………………………………………….0

BALANCE……………………………………………………………………………………4,000,000

LESS: 4,000,000/28 000,000 X 4,300,000……………………………. 614,285.71

BASIS OF VANISHING DEDCUTION…………………………………………….3, 385,714.29

X RATE 60% -2.5 YEARS……………………………………………………………………….. 60%

VANISHING DEDUCTION…………………………………………………………P 2,031,428.60

FAMILIAR TO YOURSELF ABOUT THE EXCLUSIVE OF EITHER SPOUSE UNDER CONJUGAL PROPERTY OF
GAINS AND ABSOLUTE COMMUNITY OF PROPERTY.