1.

) Pedro transferred all his real properties worth P10,000,000 to Juan, in trust for Boy, Juan’s
legitimate minor son. Pedro reserved his right to terminate the transfer anytime.

Question 1: What amount should be included in Pedro’s gross estate upon his death?

Answer: P10,000,000

Question 2: Assume Juan subsequently died a year after Pedro’s death, what amount should
be included in Juan’s gross estate?

Answer: P0

2.) On January 2021, Juan sold for P5,000,000 an apartment with carrying value of P3,500,000
to Pedro. At the time of sale, the property has prevailing market price of P7,000,000. Juan
died on June 2021. At the time of death, the prevailing fair market value of the property
was P8,000,000.

Question 1: What should be included in the gross estate of the decedent?

Answer: P3,000,000

Question 2: What amount should be included in the gross estate of the decedent assuming
the fair market value of the property at the time of death was P4,000,000?

Answer: P0

Question 3: Assume that the property sold is classified as an ordinary asset and the sale or
transfer was made in the ordinary course of trade or business. What amount should be
included as part of the gross estate of the decedent?

Answer: P0

3.) On January 2021, Juan sold for P5,000,000 an apartment with carrying value of P3,500,000
to Pedro. At the time of sale, the property has a prevailing market price of P5,000,000.
Juan died on June 2021. At the time of death, the prevailing fair market value of the
property was P8,000,000.

Question 1: What amount should be included in the gross estate of the decedent?

Answer: P0

Question 2: Assume Juan transferred the property without consideration, what amount
should be included in his gross estate at the time of his death?

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 Answer: P8,000,000

Question 3: Assume Juan transferred the property during his lifetime and the corresponding
donor’s tax was paid, what amount should be included in his gross estate at the time of his
death?

Answer: P0

4.) Juan died with an existing collectible of P5,000,000 against Pedro. Since Pedro is financially
stable, Juan exerted all possible efforts to collect the amount during his lifetime, however,
Pedro failed to settle the same before Juan’s death.

Question 1: How much should be included in the gross estate of Juan?

Answer: P5,000,000

Question 2: How much is the deduction from gross estate ofJuan?

Answer: P0

Question 3: Assume that after Juan failed to collect the amount due from Pedro, he decided
to just condone the claim. The condonation was gladly welcomed by Pedro. A year after, Juan
died. How much should be included in the gross estate of Juan?

Answer: P0

5.) Juan died with an existing collectible of P5,000,000 against Pedro whose properties are not
sufficient to satisfy his debts. Pedro’s properties are valued at P6,000,000 while his
liabilities amounted to P10,000,000.

Question 1: How much should be included in the gross estate of Juan?

Answer: P5,000,000

Question 2: How much is the deduction from the gross estate of Juan?

Answer:

Collectible = (5,000,000 / 8,000,000) x 600,000

Collectible = 3,000,000

Uncollectible = 5,000,000 – 3,000,000

Total Deduction = P2,000,000

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 Question 3: Assume that P2M of Pedro’s liabilities are unpaid taxes from the government,
how much should be included as a deduction from the gross estate of Juan?

Answer:

Collectible = (5,000,000 / 8,000,000) x 400,000

Collectible = 2,500,000

Uncollectible = 5,000,000 – 2,500,000

Total Deduction = P2,500,000

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