Tandem Activity GE Allowable Deductions

BAS, Rome Matthew B.
BSA
2 -C
PAPILOSA, Janie F.
ACCOUNTING ED. 10- BUSINESS TAX
ACTIVITIES FOR GROSS ESTATE, ALLOWABLE DEDUCTION AND ESTATE TAX DUE
( SINGLE DECEDENT)
1. The following are the properties of a resident decedent: ( 15 points)
Family home in the Philippines P 40,000,000

Cash on hand in a Philippine bank 6,000,000
Receivable under RA 4915` 500,000
Other properties outside of the Philippines 5,000,000
Among are the expenses as at the time of death and still unpaid
Funeral expenses 800,000
Judicial expenses 1,000,000
Claims against the estate 3,480,000
Unpaid mortgage on the family home 2,000,000
Other unpaid obligations of the decedent 800,000
Medical expenses 2,000,000
Legacy to a local government unit 700,000
Property stolen during the wake (death vigil) 100,000
Deficiency income tax of a previous year 150,000
There was a legacy of P2,000,000 to the government of the
Philippines for
Public use, and of P3,000,000 to the society for the Blind, a
charitable
Institution.
Compute for the net taxable estate:
Computation of Net Estate

Family home in the Philippines P 40,000,000
Cash on hand in a Philippine bank 6,000,000
Other properties outside of the Philippines 5,000,000
Less: Ordinary Deductions
Funeral expenses (Limit) 200,000
Judicial expenses 1,000,000
Claims against the estate 3,480,000
Other unpaid obligations of the decedent 800,000
Legacy to a local government unit 700,000
Property stolen during the wake (death vigil) 100,000
Transfer for public use 2,000,000
Transfer for charitable institution 3,000,000
Total Ordinary Deductions 11,280,000
This study source was downloaded by 100000842086529 from CourseHero.com on 03-18-2022 06:37:37 GMT -05:00
https://www.coursehero.com/file/94258087/Tandem-Activity-GE-Allowable-Deductionsdocx/
Less: Special Deductions
Receivable under RA 4915` 500,000
Medical expenses (Limit) 500,000
Unpaid mortgage on the family home 2,000,000
Total Special Deductions 4,000,000
Net Taxable Estate P 35,420,000
2. Compute the amount of deduction for family home: ( 8 points)

a. Mr. San Juan died leaving a family home valued at P 18,000,000 which he inherited
during the marriage when it was worth P8,000,000.
Family home P 18,000,000

Owned: 100% of the decedent 100%
Total: 18,000,000
Limit: 10,000,000
Deduction for Family Home P 10,000,000
b. The
spouses Mr. and Mrs. San Diego own a residential lot at their only real property.
The lot had an assessed value of P15,000,000, zonal value of P18,000,000 and
an independent appraised value of 25,000,000.
Family home P 18,000,000

Conjugal property ½ each of the 50%
spouse: 50%
Total 9,000,000
Limit: 10,000,000
Deduction for Family Home c. During
P 9,000,000
their marriage, Mr.
and Mrs. Sto. Cristo constructed a house using their salaries totaling P 12,000,000. The lot
was inherited by Mrs. Sto. Cristo when it was P8,000,000. Mr. Sto. Cristo died when the
house and the lot had fair values of P15,000,000 and P 12,000,000 respectively.
Gross estate: d.
Constructed house using their salaries P 15,000,000 Mr.
Exclusive lot of Mr. Sto Cristo 12,000,000
Total Gross estate to be reported 27,000,000
Computation of Family Home:
Constructed house using their salaries P 7,500,000
x percentage owned(15,000,000 x
50%)
Exclusive lot of Mr. Sto Cristo 12,000,00.
Mr. Sto Cristo’s interest 19,500,000
Limit: 10,000,000
Deductible to family home P 10,000,000
San Pedro died leaving a family home to his children as follows:
Lot- separate property of the decedent P 3,000,000
House-common property 12,000,000
Gross estate :
3. Lot - separate property of the P 3,000,000
decedent
House - common property 12,000,000
Total gross estate to be reported 15,000,000
Computation of Family Home :
Lot - separate property of the P 3,000,000
decedent
House - common property x 6,000,000
percentage owned(12,000,000 x 50%)
Mr. San Pedro’s interest 9,000,000
Limit: 10,000,000
Deductible to family home P 9,000,000
Compute for the allowable deduction from gross estate: ( 12 points)
a. Mr. Blue is a non-resident alien decedent had the following possible deductions from
his gross estate: ( 5 points)
Funeral and judicial expenses P 400,000
Obligations, 40% are payables in the Philippines 500,000
Losses of properties (60% occurred in the Philippines) 1,000,000
Transfer of property for public use 400,000
Ancestral house in the Philippines 4,000,000
Foreign properties 6,000,000
b. Mr. Jayuki, a Japanese citizen residing in Japan had the following properties and
deductions: ( 5 points)
Properties in the Philippines P 3,000,000
Properties in Japan 6,000,000
Properties in Hongkong 1,000,000
Losses and indebtedness P 3,000,000

Medical expenses 450,000
Transfer for public use of properties located
In Japan 500,000
c. Mr. She-shen, a Chinese citizen residing in Manila, Philippines, died leaving several
properties in the Philippines. How much is the allowable standard deduction.
( 2 points)
The allowable standard deduction for a resident alien amounts to Php
5,000,000.
4. Compute for the vanishing deduction: ( 15 points)

a. On November 1, 2018, Star died leaving the following properties:
Agricultural land inherited February2, 2016 P 1,200,000
House and lot 2,000,000
Cash 2,800,000
Car 500,000
Other personal properties 1,000,000
Total Properties P 7,500,000
Mortgage on the agricultural land 500,000
Other indebtedness 1,200,000
Deductible losses 400,000
Total ordinary deductions P 2,100,000
Star paid P 300,000 in mortgage before her death. The prior estate paid the
estate tax on the agricultural land which was then valued at P1,000,000.
Initial value P 1,000,000
Less: Mortgage paid 300,000
Initial basis 700,000
Less: Prorated deduction(700,000/7,500,000) x 196,000

2,100,000
b. Miss Final basis P 504,000
Multiply: Vanishing percent 60%
Vanishing deduction P 302,400

Sunshine , a citizen of the Philippine, died leaving property that she received as
gift three and one-half years ago, with the following data:
Fair value when received as gift P 5,500,000
Fair market value at the time of death 6,500,000
Mortgage on the property when received 500,000
Miss sunshine paid the mortgage in full.
Other properties in the gross estate 2,000,000
Selected ordinary deductions from the gross estate, not
Including the vanishing deduction. 800,000
Less: Mortgage paid 500,000
Initial basis 5,000,000
Less:prorated 470,588
deduction(5,000,000/8,500,000) x
800,000
Final basis P 4,529,412
c. Mr. San Lazaro,
a citizen of Multiply: Vanishing percent 40% the
Philippines, died
leaving Vanishing deduction P 1,811,765
property that he
inherited
one and one-half years ago as follows:
Property in the Philippines P 4,100,000
Property in Indonesia 1,000,000
Property he acquired thru his owned efforts 4,900,000
The properties inherited had fair values, at the time received as
Follows:
Property in the Philippines P 3,000,000
Properties in Indonesia 1,200,000
Selected ordinary deductions from the gross estate,
Not including the vanishing deduction 2,000,000
Less: Mortgage paid 0
Initial basis 4,200,000
Less:Prorated 840,000
deduction(4,200,000/10,000,000)
x 2,000,000
Final basis P 3,360,000
5.
Multiply: Vanishing percent 80%
Vanishing deduction P 2,688,000

Computation of Gross Estate ( 25 points)
a. A decedent left the following properties: ( 15 points)
Land in Australia (with 1 M unpaid mortgage) P 2,000,000
Land in Legazpi city, Philippines 600,000
Franchise in USA 100,000
Receivable from a debtor in the Philippines 70,000
Receivable from a debtor in USA 100,000
Bank deposit in USA 80,000
Shares of stocks of PLDT, Philippines 75,000
Shares of stocks of XYZ , a foreign corporation, 75% of the 125,000
business is in the Philippines
Other personal properties 300,000
Zonal value of the land in Legazpi city 750,000
Required: Compute for the gross estate if the decedent is:

a. a non-resident citizen
Land in Australia (with 1 M unpaid mortgage) P 2,000,000
Franchise in USA 100,000
Receivable from a debtor in USA 100,000
Bank deposit in USA 80,000
Shares of stocks of XYZ , a foreign corporation, 75% of the business is in the 125,000
Philippines
Zonal value of the land in Legazpi city 750,000
Gross estate P 3,600,000
b. a non-resident alien
Zonal value of the land in Legazpi city P 750,000
c. a non-resident alien with reciprocity
Zonal value of the land in Legazpi city P 750,000

b. Mr. B. Quiras died on April 15, 2018, leaving the following properties: ( 10 points)
Real properties P 1,500,000
1,000 shares in Sunshine Corporation 1,000,000
Investment in ABC corporation 400,000
Cash 600,000
The cash of P 600,000 does not include the following amounts
which were received after death:
a. P 100,000 representing cash dividend declared by
Sunshine Corporation on January 2018, and received by Mr.
Quiras’ estate on April 30, 2018;
b. Share of partnership profits for calendar year 2017, in the
amount of P 50,000 received by the estate on May 5, 2018;
and
c. Rental Income of apartment of P40,000 due from January
to April 30, 2018 at P 10,000 a month received by the estate
on May 2, 2018.
Compute for the gross estate of Mr. B. Quiras.

Real properties P 1,500,000
1,000 shares in Sunshine Corporation 1,000,000
Investment in ABC corporation 400,000
Cash 600,000
The cash of P 600,000 does not include the following amounts which were
received after death:
a. P 100,000 representing cash dividend declared by Sunshine Corporation
on January 2018, and received by Mr. Quiras’ estate on April 30, 2018;
b. Share of partnership profits for calendar year 2017, in the amount of P
50,000 received by the estate on May 5, 2018; and
c. Rental Income of apartment of P40,000 due from January to April 30, 2018
at P 10,000 a month received by the estate on May 2, 2018.
Powered by TCPDF (www.tcpdf.org)

Tandem Activity GE Allowable Deductions

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Tandem Activity GE Allowable Deductions

Uploaded by

Copyright:

Available Formats

BAS, Rome Matthew B.

1. The following are the properties of a resident decedent: ( 15 points)

Family home in the Philippines P 40,000,000

Compute for the net taxable estate:

Computation of Net Estate

Net Taxable Estate P 35,420,000

2. Compute the amount of deduction for family home: ( 8 points)

Family home P 18,000,000

Family home P 18,000,000

Losses and indebtedness P 3,000,000

4. Compute for the vanishing deduction: ( 15 points)

Initial value P 1,000,000

Less: Mortgage paid 300,000

Initial basis 700,000

Less: Prorated deduction(700,000/7,500,000) x 196,000

Multiply: Vanishing percent 60%

Vanishing deduction P 302,400

Initial value P 5,500,000

Less: Mortgage paid 500,000

Initial basis 5,000,000

Initial value P 4,200,000

Less: Mortgage paid 0

Initial basis 4,200,000

Vanishing deduction P 2,688,000

Required: Compute for the gross estate if the decedent is:

c. a non-resident alien with reciprocity

Zonal value of the land in Legazpi city P 750,000

Compute for the gross estate of Mr. B. Quiras.

You might also like