DONATION IS TRANSFER OF PROPERTY GRATUIOUSLY OR (A WILLFUL ACT) TO DONEE FREE OR

WITHOUT ASKING FOR CONSIDERATION.

PARTIES IN THE DONATION

1. DONOR – ONE WHO GIVE

2. DONEE – ONE WHO RECEIVE THE DONATION

4 ELEMENTS OF A VALID DONATION

1. CAPACITY OF THE DONOR

2. DONATIVE INTENT OF THE DONOR
3. DELIVERY OF THE DONATED PROPERTY
4. ACCEPTANCE OF THE DONATION BY THE DONEE

DONOR TAX UNDER THE TRAIN LAW

TOTAL GIFT-250,000 EXEMPTION X 6%
IF THE TOTAL GIFT IS P1,000,000 MINUS P250,000 X 6%=P750,000 X 6% =P45,000
IT MEANS NO TAX TABLE, NO DONATION TO STRANGER, NO DONATION TO
RELATIVES, NO DOWRY
ACCEPTEANCE OF THE DONEE TO THE DONATION PERFERTED THE TRANSACTION OF DONATION

COMPARISON OF THE OLD LAW TO THE TRAIN LAW

OLD LAW UNDER RA 8424 TRAIN LAW UNDER RA 10963

COMPREHNSIVE INCOME TAX EFFECTIVE JANUARY 1, 2018
LAW OF 1997
EFFECTIVE JAN 1, 1998
DOWRY (DOTE) A DEDUCTION OF P10,000 DELETED
FROM GROSS GIFT
ENCUMBRANCES (SANLA OR DEDUCTION ON GROSS GIFT DEDUCTION ON GROSS GIVE
MORTGAGE)
DONATION TO NGO DEDUCTION ON GROSS GIFT EXEMPTED

DIMUNITION ON THE
DONATION (CHARGES PAID BY DEDUCTION DEDUCTION
THE DONOR
DONATION TO GOVERNMENT DEDUCTION EXEMPED
DONATION TO STRANGER TAXED BY A PLAT OF 30% UNDER THE TRAIN A 6% FLAT
RATE WAS CHARGED
 DONATION TO RELATIVES TAX TABLE (5% TO 20%) FLAT OF 6%

STRANGER (5TH DEGREE OF CANSANGUINITY) SECOND COUSIN)

EXAMPLE OF STRANGER

A. BROTHER IN LAW
B. MOTHER IN LAW
C. 2ND COUSIN
D. FRIENDS
E. GODSON

RELATIVES- FROM DEGREE BLOOD RELATIONSHIP TO FOURTH DEGREE BLOOD (UP TO FIRST COUSIN

1. LEGITIMATE CHILD OF THE DONOR

2. WIFE OF THE DONOR
3. AUNTIE OR UNCLE OF THE DONOR
4. FIRST COUSIN OF THE DONOR
5. MOTHER AND FATHER OF THE DONOR

IS THE DONATION A CONTRACT? ANSWER IS YES, BECAUSE THE DONOR CAN MANDATE THE DONEE TO
WHAT TO DO WITH THE DONATION.

EXAMPLE

1. THE DONOR MR. EWAN DONATED THE FOLLOWING PROPERTIES TO SEVERAL DONEES:
a. An ambulance to Barangay Tugatog worth, P 800,00
b. 10 unit of tricycles to TODA of Tugatog worth P 600,000
c. A land worth P4,000,000 to his first cousin,
d. A constructions material to the fire victims, P500,000

How much the donor’s tax on DEC 16, 2020 the date of donation?

Answer:

Javier, P114,000

Villan, P303,000

Ventura, P291,000

A. THE DONOR MR. EWAN DONATED THE FOLLOWING PROPERTIES TO SEVERAL DONEES:
1. An ambulance to Barangay Tugatog worth, P 800,00 exempted (gov’t)
2. 10 unit of tricycles to TODA of Tugatog worth P 600,000 taxable
3. A land worth P4,000,000 to his first cousin, taxable
4. A constructions material to the fire victims, P500,000 taxable
 a. An ambulance to Barangay Tugatog worth, P 800,00 exempted (gov’t)
b. 10 unit of tricycles to TODA of Tugatog worth ………………………………………P 600,000
c. A land worth P4,000,000 to his first cousin, taxable. 4,000,000
d. A constructions material to the fire victims, P500,000 taxable…………………..500,000
Total gift………………………………………………………………………………………………….5,100,000
Less: exemption under the law………………………………………………………………… .250,000
Net taxable gift…………………………………………………………………………………………4,850,000
X tax rate of 6%.........................................................................................................6%
Donor’s tax…………………………………………………………………………………………………291,000

Example of NGO
1. Bantay Bata
2. Red Cross
3. Study and Reception for Children
4. Home for the aged

Familiarize yourself with the legal requirement of the law of Donation.