FS2223-ESTATETAX-14

BSA 2105 Atty. F. R. Soriano

ESTATE TAX
MARRIED – CONJUGAL PARTNERSHIP OF GAINS
EXERCISE

Mr. Bello Nario, Filipino, married, died on October 1, 2020. His executor gave you the following
information on his estate:
1. Lot located in Manila, inherited by Mr. Nario from his father during the marriage, FMV of
P250,000.00
2. Residential house, constructed on the above-mentioned lot during the marriage through the salary
of Mrs. Nario, FMV of P1,300,000.00, certified as family home together with the lot on which it
stands, by the chairman of the barangay
3. Apartment units located in Quezon City, inherited by Mr. Nario from his father during the
marriage, FMV of P2,600,000.00.
4. Rental on the apartment units received during the marriage, P240,000.00.
5. Mercedes Benz car acquired by Mr. Nario during the marriage with cash he inherited from his
father during the marriage, FMV P1,000,000.00.
6. Agricultural lot, located in Tarlac, inherited by Mr. Nario from his mother before the marriage,
FMV of P300,000.00.
7. Crops harvested from the agricultural lot during the marriage, FMV of P60,000.00.
8. Fishpond, located in Pampanga, acquired by Mrs. Nario before the marriage, FMV of
P270,000.00.
9. Fish harvested from the fishpond during the marriage, FMV of P30,000.00.
10. Fleet of taxis donated to Mr. Nario by his uncle during the marriage, on March 31, 2016, FMV of
P2,700,000.00.
11. Fare revenues from the operations of the taxis, received during the marriage, P120,000.00.
12. Jewelry acquired during the marriage for the exclusive use of Mrs. Nario, FMV of P80,000.00.
13. Lancer car acquired by the spouses during the marriage, FMV of P600,000.00.
14. Promissory note from Ms. Magna Nacao who is insolvent and could only pay 40% of her
liabilities, P200,000.00.
15. Cash of P1,000,000.00 inherited by Mrs. Nario during the marriage. Interest of P50,000.00 was
earned during the marriage when the said amount was deposited in the bank in the name of Mrs.
Nario.

Your review of other data revealed the following information:

1. Funeral expenses amounted to P310,000.00.
2. Judicial expenses amounted to P90,000.00.
3. Total medical expenses incurred for the last illness of Mr. Nario amounted to P520,000.00. Of this
amount, 10% was incurred more than one year before his death.
4. The Lancer car was destroyed in a fire one month after Mr. Nario’s death. The insurance company
paid 70% of the amount of the insurance policy of P500,000.00.
5. The fleet of taxis was reported in the donor’s tax return of Mr. Nario’s uncle at a fair market value
of P3,200,000.00. A chattel mortgage of P1,200,000.00 was assumed by Mr. Nario on the fleet of
taxis at the time of the donation. Only P310,700.00 on such mortgage remained unpaid as of the
time of Mr. Nario’s death.
6. Mr. Nario’s last will and testament provided for a cash transfer of P300,000.00 in favor of
Barangay Sto. Nino for the construction of a barangay hall.
7. Claims of creditors from Mr. Nario for funds he borrowed for his personal use amounted to
P750,000.00. The debt instruments were duly notarized.
8. Unpaid real property taxes on the apartment units amounted to P9,000.00 as of the time of Mr.
Nario’s death.

REQUIRED: Compute the taxable estate of Mr. Bello Nario under the conjugal partnership of gains.
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