CHAPTER 2 GROSS ESTATE

2 KINDS OF DECEDENT

A) CITIZEN OR RESIDENT DECEDENT

1. Resident citizen
2. Non-resident citizen
3. Resident alien
B) NOT A CITIZEN, AND NOT A RESIDENT DECEDENT
a. Non-resident alien-engaged
b. Non-resident alien-not engaged in business

COMPOSITION OF THE GROSS ESTATE

A. PROPERTY LOCATED IN THE PHIL.

1. REAL PROPERTY
2. TANGIBLE PROPERTY
3. INTANGIBLE PROPERTY
B. PROPERTY LOCATED OUTSIDE THE PHIL.
1. REAL PROPERTY
2. TANGIBLE PROPERTY
3. INTANGIBLE PROPERTY

THE COMPOSITION OF PROPERTIES UPON DEATH OF RESIDENT OR CITIZEN DECEDENT IS ALL

PROPERTIES REGARDELESS OF LOCATION.

THE COMPOSITION OF PROPERTIES UPON DEATH OF NOT A CITIZEN AND NOT A RESIDENT DECEDENT
IS ONLY PROPERTIES LOCATED IN THE PHILIPPINES, WITH MODIFICATION CALLED RECEIPROCITY
CLAUSE AGREEMENT OF COUNTRIES IN INTANGIBLE PROPERTIES:

A. IF THE DECEDENT IS CONSIDERED NON RESIDENT ALIEN (DAYUHAN) AND HE IS A CITIZEN AND
RESIDENT OF HIS OWN COUNTRY, THE INTANGIBLE PROPERTIES HE OWN LOCATED IN THE
PHIL. ARE NOT INCLUDED IN HIS GROSS ESTATE IN THE PHILIPPINES. EXEMPTED
EXAMPLE: AMERICAN CITIZEN AND RESIDENT OF AMERICA
JAPANESE CITIZEN AND RESIDENT OF JAPAN

B. IF THE DECEDENT IS CONSIDERED NON RESIDENT ALIEN AND HE IS A CITIZEN BUT NOT A
RESIDENT OF HIS OWN COUNTRY, HIS INTANGIBLE PROPERTIES LOCATED IN THE PHILIPPINES
ARE PART OF HIS ESTATE. (NOT EXEMPTED) AMERICAN CITIZEN BUT A RESIDENT OF
ANYWHERE EXCEPT AMERICA.

EXAMPLE: AMERICAN CITIZEN AND A RESIDENT OF JAPAN

CANADIAN CITIZENT BUT A RESIDENT OF AMERICA

HABANG DUMARAMIN ANG GROSS ESTATE TUMATAAS ANG ESTATE TAX

STATORY DEFINITION INTANGIBLE PROPERTIES

1. FRANCHISE, WHICH MUST BE EXERCISED IN THE PHILIPPINES

2. SHARES, OBLIGATION OR BONDS ISSUED BY ANY CORPORATION OR SOCIADAD ANONIMA
ORGANIZED OR CONSTITUTED IN THE PHILIPPINES IN ACCORDANCE WITH LAWS (DOMESTIC
CORP) SHARES OF STOCK OF JOLIBEE, SM, SAN MIGUEL, PLDT, BONDS HOLDER (CREDITOR)
3. SHARES, OBLIGATION OR BONDS ISSUED BY ANY FOREIGN CORPORATION EIGTHY FIVE
PERCENT (85%) OF THE BUSINESS OF WHICH ARE LOCATED IN THE PHILIPPINES.
4. SHARES, OBLIGATION OR BONDS ISSUED BY ANY FOREIGN CORPORATION, IF SUCH SHARES,
OBLIGATION OFR BONDS HAVE ACQUIRED BUSINESS SITUS (PLACE) IN THE PHILIPPINES.
CITIBANK
5. SHARES OR RIGHTS IN ANY PARTNERSHIP, BUSINESS OR INDUSTRY IN THE PHILIPPINES.

CASH (BILL AND COINS) TANGIBLE KASI NAHIHIPO YUNG PERA

BANK DEPOSIT (DOCUMENTS) INTANGIBLE

PROPERTIES NOT IN THE POSSESSION OF THE DECEDENT AT THE TIME OF HIS

DEATH
A. PROPERTY TRANSFER IN COMPTEMPLATION OF DEATH
1. SALE OF PROPERTY WITH LESS THAN CONSIDERATION (BINENTA NG MURA)
2. SALE OR TRANSFER OF PROPERTY WITHOUT CONSIDERATION (MOCK TRANSFER)
PROPERTIES FMV AT THE FMV AT THE VALUE TO
TIME OF CONSIDERATIO TIME OF INCLUDE IN
SALE N RECEIVED DEATH THE GROSS
ESTATE
LAND P5,000,000 P 500,000 P10,000,000 P9,500,000 HE HAS TO PAY
ESTATE TAX.
BECAUSE THE
CONSDERATION
IS BELOW FMV
LAND P5,000,000 0 P10,000,000 P10,000,000 MOCK
TRANSFER OF
PROP.
LAND P5,000,000 5,000,000 P10,000,000 NONE SALE IN GOOD
FAITH -
WALANG
DAYANG
BILIHAN

B. REVOCABLE TRANSFER OF PROPERTY IS A TRANSFER OF PROPERTY WHERE THE

TRANSFEROR’S RIGHT IS RESTORED OVER HER PROPERTY TRANSFERRED UNDER THE
TERMS AND AGREEMENTS. THE RIGHT OF THE OWNER WAS SPECIFICALLY STATED
 WHICH INCLUDES THE RIGHT TO REVOKE, OR THE CHANGE THE BENEFICIARIES AND
THE RIGHT TO TERMINATE THE AGREEMENT. WHEN THE OWNER DIES THE PROPERTY
UNDER REVOCABLE TRANSFER IS PART OF HIS GROSS ESTATE.
C. TRANSFER OF PROPERTY UNDER THE GENERAL POWER OF APPOINTMENT.
MR. ABONO MADE A WILL TRANSFER HIS PROPERTY TO MR. BAYONA STATING IN THE
WILL ALSO THAT IN CASE MR BAYONA DIES HE WOULD TRANSFER THE PROPERTY TO
ANYBODY. THE PROPERTY INVOLVED IS PART OF THE GROSS ESTATE OF BAYONA.
MR. ABONO - PRIOR DECEDENT
MR. BAYONA- CURRENT DECEDENT

D. TRANSFER OF PROPERTY UNDER THE LIMITED POWER OF APPOINTMENT

MR. ABONO DIED LEAVING A LAST WILL AND TESTAMENT TRANSFERING HIS
PROPERTIES TO MR. BAYONA. HE ALSO SAID IN THE WILL THE PROPERTY IN CASE MR.
BAYONA DIED WILL BE GIVEN TO MR. LOY. THE PROPERTY IS NOT PART OF THE GROSS
ESTATE OF MR. BAYONA.
MR. LOY BEING AN HEIR WAS MENTIONED IN THE LAST WILL OF MR. ABONO.
E. PROCEEDS OF LIFE INSURANCE
F. RECEIVABLE FROM INSOLVENT PERSON

TO BE CONTINUED NEST MEETING