Chapter 13 - The concept of taxation and estate tax

Multiple choice – theory 1

1. IT is a mode of gratuitous acquisition of property out of the generosity of a person – donation

2. it is a mode of gratuitous acquisition of property by the death of a decedent – succession

3. the donor in a donation mortis causa is – dead

4. which is not a form of succession – compulsory

5. it is succession in the absence of a will – intestate

6. it is succession by will and operation of law – mixed

7. it is written document which sets forth how the decedent’s property will be distributed after death –
will

8. which is not an element of succession – estate tax

9. it is the property, rights and obligations of the decedent not extinguished by his death – estate

10. they are the successors in interest of the decedent – heirs

11. it is a donee of a real property in a last will and testament – devisee

12. IT is a donee of personal property in a last will and testament – legatee

13. who is not a compulsory heir – a brother

14. who will inherent among the following – a legitimate child

15. which of the following heirs will not inherent – nephew

Multiple choice – theory 2

1. which will not inherent from the following group – grandson from a living daughter of the decedent

2. who may not inherent under an intestate succession – best friends

3. who will be disinherited from the following – parents

4. who shall inherent from the following group – legitimate child

5. who shall inherent from the following potential heirs – brothers and sisters

6. this is a person appointed by the court to manage the distribution of the estate – administrator

7. this is a person handpicked by the decedent to implement his will – executor

8. there are several estate tax laws in the history of estate taxation in the Philippines. Which applies to a
particular decedent – the estate tax law in effect at the date of the decedent’s death

9. which is correct regarding estate tax – a national tax

10. statement 1: succession will not effect until and unless the estate tax is paid.

Statement 2: estate tax is payable even in the absence of relatives who may inherit the estate.

Which is correct - estate tax is payable even in the absence of relatives who may inherit the estate.

11. statement 1: no estate tax is due if the net taxable estate is negative.

Statement 2: once there is a death, the estate tax is always payable.

Which is incorrect – once there is a death, the estate tax is always payable.

12. statement 1: A resident citizen is taxable on his estate wherever situated.

Statement 2: a non-resident citizen only on his estate situated in the Philippines.

Which is correct - A resident citizen is taxable on his estate wherever situated.

13. statement 1: a resident alien is taxable only on his estate situated in the Philippines.

Statement 2: a non-resident alien is taxable only on his estate situated in the Philippines.

Which is correct - a non-resident alien is taxable only on his estate situated in the Philippines.

14. the reciprocity exemption on intangible personal properties situated in the Philippines is applicable
only to a – non-resident alien

15. which is correct – estate tax is an excise tax

16. a decedent died intestate with 1,000,000 net estate. If he has four legitimate children and two
illegitimate children, how much shall each legitimate and each illegitimate child respectively receive –
P2,000,000; P100,000

17. a married decedent died intestate leaving behind 1,500,000 of his separate property and 6,000,000
common properties with his surviving spouse. If he has three children and one illegitimate child. How
much shall each legitimate child receive – P1,000,000

18. in the immediately preceding problem, compute the total properties of the surviving spouse after
partition of the properties. -P4,000,000

Chapter 13A – estate tax: gross estate

Multiple choice – theory 1

1. the gross estate of resident or citizen decedent does not include – properties not owned
2. gross estate means – properties owned by the decedent at the point of death

3. as a rule, all decedents are taxable on world estate, except – non-resident alien

4. as a rule, the gross estate of non-resident alien decedents includes – intangible personal properties
located in the Philippines

5. which has reciprocity exemption – non-resident alien

6. which property is covered by the reciprocity exemption – intangible personal property in the
Philippines

7. which of these properties may be excluded from gross estate by reason of reciprocity – cash

8. which is not deducted from the inventory list of properties in arriving at the gross estate – properties
held under a general power of appointment

9. if inventory-taking of properties id conducted after the death of decedent, which is deducted from the
inventory list – income accruing after death

10. which is not added to the inventory list of properties in computing gross estate – merger of the
usufruct in the owner of the naked title

11. which is correct statement – the proceeds of life insurance taken by the decedent for himself/herself
is always included in gross estate if the beneficiary is the estate, executor or administrator.

12. which of these transfers is subject to estate tax – transfer mortis causa for less than full and adequate
consideration

13. which of these properties is subject to estate tax – all of these

14. the proceeds of life insurance designated by the decedent to his/her child is included in gross estate
– if the designation is revocable

15. the proceeds of life insurance designated by the decedent to his/her estate is included in gross estate
– without regard to the designation as revocable or irrevocable

16. the proceeds of life insurance designated by the decedent to his wife is excluded in gross estate – if
the designation is irrevocable

17. the proceeds of life insurance designated by the decedent to his/her executor is excluded in gross
estate – under no circumstances

18. which is an inclusion in gross estate – common properties of the spouses

19. which is not included in gross estate – all of these

20. Which is not included in the gross estate of the husband – paraphernal properties

21. which is not included in the gross estate of the wife – capital properties

22. which of the following donations in the last will testament is excluded in gross estate of the decedent
– donation to a charitable institution
23. which proceeds of insurance is included in gross estate of the decedent – proceeds of property
insurance

24. if the decedent failed to specify the designation of the beneficiary of his life insurance policy – the
proceeds is exempt if he did not change the beneficiary during his lifetime

25. which is not an exclusion in gross estate – private retirement benefits

26. which of the following bequests to a social welfare or charitable institution is subject to estate tax –
bequests to be used for administrative purposes

27. statement 1: for taxable transfers, the value to include in gross estate shall be the fair value of the
property at the point of death.

Statement 2: for taxable transfers made for an insufficient consideration, the total fair value of the
property at the point of death shall be included in gross estate.

Which is correct - for taxable transfers, the value to include in gross estate shall be the fair value of the
property at the point of death.

Multiple choice – theory 2

1. mr. a devised in his will a pice of land to mrs. b. mrs. b shall enjoy usufructuary right over the property
and shall pass the same to mr. c upon her death.

Who shall include the property in his or her gross estate upon death – mr. a and mr. c

2. mrs. a appointed ms. B as fiduciary heir over an agricultural land which ms. B shall turn over to mr. c
upon ms. B’s death.

Which is incorrect – the land must be excluded in mr. c’s gross estate upon his death

3. mr. a designated his wife as the revocable beneficiary of the proceeds of his life insurance. Which is
correct – the proceeds must be included in the gross estate of mr. a

4. mr. a designated mr. k, the executor of his estate, as his irrevocable beneficiary to the proceeds of his
life insurance. Which is correct – the proceeds of life insurance policy shall be included in the gross
estate of mr. a

5. which of the following is excluded in the gross estate of mr. x – separate property of mrs. x

6. mr. a made an irrevocable donation in trust in favor of mr. c. mr. c died two years after receiving the
donation. Which is correct – the property shall be included in the gross estate of mr. c

7. what is best way to minimize estate tax exposure – invest property in life insurance and make the
designation of the beneficiary as irrevocable

8. which of these transfer mortis causa will more likely to be included in gross estate of the decedent –
300,000;200,000;280,000

9. which is excluded in gross estate – GSIS benefits

10. which of the following properties is excluded from gross estate even if present at the point of death –
proceeds of group insurance

11. which may be exempt from estate tax – proceeds of life insurance

12. which is not included in gross estate – income of properties of the decedent after death

13. the decedent owns an agricultural land with the following values:

Zonal value P2,000,000

Assessed value P1,500,000

Independent appraised value P3,200,000

Offer price of a willing buyer P4,000,000

The agricultural land shall be included in gross estate at – 2,000,000

14. the decedent owns 200,000 shares of saint peter corporation, a listed company.

Date of death date of interment

Book value per share P23.50 P23.55

Closing price P48.20 P49.50

Average trading price P48.00 P49.60

The 200,000 shares shall e included in gross estate at – (200,000 x P48.20) = P9,640,000

15. the decedent had S2,000 in his possession at his death on November 2, 1019. He was buried on
November 12, 2019. The following were the exchange rates:

November 2, 2019 P42.50: S1

November 2 to November 12, 2019 average rate P43.25: S1

November 12, 2019 P42.75: S1

At what amount shall the S2,000 be included in the gross estate of the decedent – (S2,000 x P42.50) =
85,000

Multiple choice – problems part 1

1. mrs. dely cado died on November 1, 2019. An inventory of her properties was conducted for estate tax
purposes on January 1, 2020. On that date, she had properties with an aggregate fair value of
P7,000,000. This amount includes 300,000 income received by the estate since her death and is net of
600,000 expenses used during her funeral.

What amount of gross estate – (7,000,000 – 300,000 + 600,000) = 7,300,000

2. mr. tio died leaving the following properties:

 Purchase cost Fair value

Car, registered in his name P800,000 P400,000

Family home 2,000,000 5,000,000

Other properties 400,000 350,000

Compute the gross estate – (400,000 + 5,000,000 + 350,000) = 5,750,000

3. mr. bacleito had the following properties with their respective fair values in his possession at the date
of his death:

Agricultural land, held in trust P200,000

Car, registered in the name of his brother 300,000

Motorcycle 80,000

Residential lot 900,000

Other personal properties 70,000

Compute the gross estate – (80,000 + 900,000 + 70,000) = 1,050,000

4. the heirs of mr. masigasig identified a total of 12,000,000 in properties existing at the date of his
death. A total of 500,000 was used during his wake up to his internment. His heirs also used 400,000 to
pay off obligations of mr. masipag.

An investment in the estate of mr. masipag also earned 50,000 in dividends which the heirs reserved for
payment of his estate tax.

What is the gross estate – 12,000,000

5. a decedent died in October 2018. His properties had an aggregate fair value of 12,000,000 at that
time. His heirs failed to pay his estate tax. In march 2020, his heirs prepared a list of the decedent’s
properties which now had a value of 13,500,000 and which excluded a car worth 1,500,000 stolen in
January 2020.

What is the gross estate – 12,000,000

6. a resident decedent died leaving the following properties:

An orchard, held as usufructuary 1,200,000

A motorcycle, borrowed from a friend 80,000

Cash, proceeds of his bank loan 500,000

A ranch, acquired for 1,000,000 in 1990 2,500,000

Cattles 600,000

House and lot 800,000

Compute the gross estate – ( 500,000 + 2,500,000 + 600,000 + 800,000) = 4,400,000

7. a citizen decedent died leaving the following:

Properties, inherited from his father P1,200,000

Properties, donated by brother 800,000

Cash, from his salary savings 400,000

Cash, income of properties before death 200,000

Receivables, income or properties after death 100,000

What is the gross estate – (1,200,000 + 800,000 + 400,000 + 200,000) = 2,600,000

8. a resident Japanese decedent died with the following properties:

A house and lot in Japan 2,000,000

Bank deposit, in the Philippines 800,000

A car in the Philippines 1,000,000

A residential lot in the USA 1,500,000

Compute the amount to be included in gross estate – (2,000,000 + 800,000 + 1,000,000 + 1,500,000) =
5,300,000

9. a non-resident alien decedent died leaving the following:

A building in korea 8,000,000

A car in hongkong 2,000,000

Shares of stocks in Malaysia 4,000,000

Cash in Philippines banks 800,000

Investment in bonds of domestic corporations 400,000

Compute the gross estate – (800,000 + 400,000) = 1,200,000

10. a Korean citizen residing in the Philippines died in the Philippines:

An agricultural land in korea 12,000,000

A house and lot in korea 4,000,000

A condominium unit in the Philippines 2,000,000

A business interest in the Philippines 3,000,000

Car in the Philippines 1,200,000

Cash in japanese banks 1,800,000

What is the amount include in gross estate – (12M + 4M + 2M + 3M + 1.2M + 1.8M) = 24,000,000

11. a filipino citizen died while residing in the USA. He had the following properties at the date of his
death:

Shares of domestic corporations 2,000,000

Cash in US banks 5,000,000

Car in the US 3,000,000

House and lot in the Philippines 4,000,000

What is the amount to include in gross estate – (12M + 5M + 3M + 4M) = 14,000,000

12. a Mexican citizen died in Tokyo, Japan. He had the following properties:

House and lot in Mexico 12,000,000

House and lot in Japan 18,000,000

Car in Japan 2,000,000

Shares of stock in a domestic corporation 4,000,000

Interest in a Philippine-based business 2,000,000

What is the amount to include in gross estate – (4,000,000 + 2,000,000) = 6,000,000

13. in the immediately preceding problem, what is the amount to include in gross estate assuming that
the reciprocity condition applies – 0

14. a non-resident alien decedent had the following interests at the point of death:

Interest in business partnership organized abroad 300,000

Shares in a foreign corporation 75% of the business

Of which is situated in the philippines 400,000

Shares of foreign corporation traded in the

Philippines stock exchange 800,000

Claims for resident debtors 1,200,000

Compute the amount of properties considered situated in the Philippines – (800,000 + 1,200,000) =
2,000,000

15. Mr. Masipag died leaving a commercial land as part of his estate. The land was purchased in 2010
atan acquisition price of P 11,000,000. An interested buyer tendered a P 15,000,000 offer to buy
theproperty. The land had an independent appraisal of P 16,000,000, assessed value of P 12,000,000 and
a zonal value of P 14,000,000.

What is the amount to be included in gross estate – 14,000,000

16. the following relates to the withdrawals from the account of a decedent who died January 8, 2019:

January 7, 2019 400,000

January 9,2019 500,000

January 10,2019 500,000

Assuming that the bank was duly notified of his death, compute the required exclusion in gross estate –
500,000

17. Mr. Imbestor died with a significant stock holdings as follows:

- 1,000 Globe preferred stocks with P 1,000 par value per share

- 40,000 San Miguel common shares with par value of P 100 per share

- 80,000 stocks of Carmen Corporation with par value of P 50 per share

Book values PSE closing price at

date of death

Globe preferred P1,000 P1,000

San Miguel common shares 250 300

Carmen common shares 45 -

What is the total amount to include in gross estate – (1,000 x 1,000 + 40,000 x 300 + 80,000 x 45)
=16,600,000

18. A decedent died with the following properties:

Purchase cost

Newly purchased jeepney P 1,200,000

An old model Ford Expedition 1,500,000

Land, mortgaged to a bank for P 1,000,000 3,000,000

500 grams pure gold 850,000

The Ford Expedition was refurbished by the decedent making it readily saleable at P 1,800,000 in the
second market. The land had zonal of P 4,000,000 and assessed value of P 2,500,000. The Bangko Sentral
ng Pilipinas (BSP) is buying gold at P 1,800 per gram at the date of death of the decedent.

Compute the total amount to be included in gross estate – (1,200,000 + 1,800,000 + 4,000,000 + 500 x
1,800) = 7,900,000

19. mr. margarito died while serving as the managing partner in business partnership. He owned 40% of
the capital and profits of the partnership. The partnership had a total capitalization of 10,000,000,
exclusive of accrued profits of 1,000,000. Partnership income was subject to 30% corporate income tax.
What is the value of the business interest which must be included in the gross estate of mr. margarito –
(10M X 40% + (1M X 70%) X 40%) = 4,280,000

20. A decedent owns 25,000 stocks in a closely held corporation which had the following equity
structureat the date of death of the decedent:

Common stocks (1,000,000 outstanding shares) P 5,000,000

Additional paid in capital 2,000,000

Retained earnings 1,000,000

Total Shareholder’s equity P 8,000,000

What is the value of the stocks to be reported in gross estate – (25,000/1,000,000 x 8,000,000) = 200,000

21. Mr. Canuto was hospitalized on April 8, 2014 but died on Apirl 12, 2014. It’s was buried on April
21,2014. Mr. Canuto had $124,000 prior to hospitalization. $24,000 was spent for his hospitalization
while $10,000 was used for his funeral.

The following were the exchange rate between the Peso and the Dollar:

April 8,2014 April 12, 2014 April 21, 2014

Peso-Dollar exchange rate P 42.30 P 42.50 P 42.45

Compute the amount to be included in gross estate – ( S124,000 – S24,000) X P42.50) = 4, 250,000

Chapter 13-B gross estate of married decedents

Multiple choice theory 1

1. Statement 1: under absolute community property, properties are presumed community unless proven
otherwise.

Statement 2: under the conjugal partnership of gains, properties are presumed conjugal unless proven
otherwise.

Which is correct - Both statements

2. In determining the property regime of the spouses, which is given primacy - agreement

3. Which is not a property regime - pooling of interest

4. Which is a conjugal property - property received from exercise of profession during marriage

5. Which of these is an exclusive property - fruits of properties acquired before marriage

6. Which is a community property - properties representing fruits of community properties

7. Which is a common property under absolute separation of property - business interest jointly financed
by both spouses

8. Which of these donations or inheritance is a common property - a donation designated by the donor
for the husband and wife

9. Which is not a common property - revocable donation to both spouses

10. Which is not a separate property under conjugal partnership - all of these

11. Which is incorrect regarding fruits of separate properties during the marriage - exclusive under
conjugal partnership of gains

12. Fruits accruing before the marriage are - common under absolute community of properties

13. The income of donated properties before marriage are - exclusive properties under conjugal
partnership

14. Property inheritance during the marriage is - exclusive under conjugal partnership and exclusive
under absolute community of property. A and C

15. The property inheritance before the marriage is - separate property under conjugal partnership and
common property under absolute community of property. A and C

Multiple choice theory 2

1. Which is incorrect under the absolute community of property – jewelry received as an inheritance…,
jewelry received as a donation…, jewelry acquired from income…, NONE OF THESE.

2. the income of properties acquired from the personal hard work of either spouse is – exclusive under
absolute separation of properties and common properties under absolute community of property. A
AND B

3. the husband has numerous pricey personal apparels. These are – exclusive properties under
conjugal…, common properties under absolute…, common properties under absolute separation…,
NONE OF THESE.

4. the gain on sale of a separate property during the marriage is – common property under conjugal
partnership of gains

5. the gain on sale of common properties is – common under absolute community of property

6. which is not considered a separate property of the recipient spouse – acquisition of property as a
trustee, acquisition of property as a fiduciary heir, acquisition of property as usufructuary, ALL OF THESE.

7. which is a paraphernal property under the absolute community of property – property inherited by
the wife.

8. which is a paraphernal property under the conjugal partnership of gains – property brought into the
marriage by the wife
9. which of these is a capital property under conjugal partnership of gains – properties inherited by the
husband

10. which is a capital property under the absolute community of property – properties for exclusive
personal use of the husband

11. which is excluded in gross estate – separate property of the surviving spouse

12. which is excluded in gross estate of a deceased husband under the absolute community of property –
fruits of properties inherited by the wife during marriage

13. which is excluded in the gross estate of a deceased wife under the conjugal partnership of gains –
property bought into the marriage by the husband

14. which will not be included in gross estate regardless of the property regime of the spouses – accrual
from SSS

15. which is excluded in the gross estate of the husband under the conjugal partnership of gains –
properties inherited by the wife

Multiple choice problems part 1

Case 1

1. Mr. andrenico brought into the marriage an agricultural land worth P1,000,000. During the marriage,
the agricultural land was sold for P1,500,000 and was used to acquire a family home. The family home
was valued at P1,800,000 at the death of mr. andrenico.

Compute the amount to be included in the common properties of the spouses under the conjugal
partnership of gains – (P1,800,000 – P1,000,000) = 800,000

2. in the preceding problem, compute the amount to be included in the communal properties of the
spouses – 1,800,000

Case 2

The following problem applies for November 3 through 10.

Before their marriage, mr. and mrs. boneti had salary savings respectively of 2,000,000 and P1,500,000.
Mr. and mrs. boneti earned respectively P200,000 and P180,000 income from these savings during the
marriage. Mr. and mrs. Bonetti also earned respectively P400,000 and P 500,000 from their separate
industries.

Under the absolute community of property, compute the following:

3. separate property of mr. Boneti – 0

4. separate property of Mrs. boneti – 0

5. common property of the spouses – add all. 4,780,000

6. the gross estate of mr. boneti – 4,780,000

Under the conjugal partnership of gains, compute the following:

7. separate property of mr. boneti – 2,000,000

8. separate property of mrs. boneti – 1,500,000

9. common property of the spouses – (200,000 + 180,000 + 400,000 + 500,000) = 1,280,000

10. the gross estate of mr. boneti – (2,000,000 + 1,280,000) = 3,280,000

Case 3

The following problem applies to numbers 11 through 18.

Lovely, married andy, a 60-year old lawyer, who had two children from a previous marriage.

The spouses had the following properties:

Lovely Andy

Before marriage:

Total properties P400,000 P4,000,000

During marriage:

Income from separate industry 200,000 2,000,000

Income of properties brought to the marriage 80,000 700,000

Inheritance and donations received 450,000 500,000

Assuming the conjugal partnership of gains, compute the following:

11. the separate property of lovely – (400,000 + 450,000) = 850,000

12. the separate property of andy – (4,000,000 + 500,000) = 4,500,000

13. the common property of the spouses – (2,000,000 + 200,000 + 700,000 + 80,000) = 2, 980,000

14. the gross estate of lovely - (2,000,000 + 200,000 + 700,000 + 80,000) = 2, 980,000 + 400,000 +
450,000 = 3,830,000

Assuming the absolute community of property, compute the following:

15. the separate property of lovely – 450,000

16. the separate property of andy – (4,000,000 + 700,000 + 500,000) = 5,200,000

17. the common property of the spouses – (2,000,000 + 400,000 + 200,000 + 80,000) = 2,680,000

18. the gross estate of lovely – (400,000 + 200,000 + 80,000 + 450,000 + 2,000,000) = 3,130,000
Case 4

The following problem applies to number 19 through 26:

Mr. Cornelius died. An inventory and analysis of the properties held by his family are presented below:

Mr. Cornelius Mrs. Cornelius total

Properties acquired before marriage:

Properties for exclusive personal use P20,000 P30,000 P50,000

Other properties acquired 280,000 470,000 750,000

Total P300,000 P500,000 P800,000

Properties acquired during marriage:

Properties for exclusive personal use P30,000 P40,000 P70,000

Properties from own industry 290,000 500,000 790,000

Donated properties received 300,000 300,000

Inherited properties 400,000 400,000

Fruit of donated/inherited property 80,000 60,000 140,000

Total P800,000 P900,000 P1,700,000

Assuming the conjugal partnership of gains, determine the following:

19. separate property of mr. Cornelius – (300,000 + 400,000) = 700,000

20. separate property of mrs. Cornelius – (500,000 + 300,000) = 800,000

21. the common properties of the spouses – ( 70,000 + 790,000 + 140,000) = 1,000,000

22. the gross estate of mr. Cornelius – 1,700,000

Assuming the absolute community of property, determine the following:

23. separate property of mr. Cornelius – (20,000 + 30,000 + 400,000 + 80,000) = 530,000

24. separate property of mrs. Cornelius – (30,000 + 40,000 + 300,000 + 60,000) = 430,000

25.the common property of the spouses – (750,000 + 790,000) = 1,540,000

26. the gross estate of mr. Cornelius – 2,070,000 ?

Multiple choice problems part 2

1. mr. jose married Josephine on February 2, 1988. Jesephine died on February 14, 2019. On that date,
the spouses had the following properties:
Car, donated to mr. jose on June 14,2015 P1,200,000

Investments - inherited by Josephine on February 4, 1995

When its value was P2,000,000 2,800,000

House and lot – salaries of mr. jose and Josephine 4,000,000

Cash income of car 400,000

Compute the separate property of mr. jose – 1,200,000

2. compute the separate property of Josephine – 2,000,000

3. compute the gross estate – (2,800,000 + 4,000,000 + 400,000) = 7,200,000

4. mr. a died on June 3, 1987, but his estate had not paid tax since then. He had the following properties
at the time of his death:
proceeds of life insurance irrevocably designated to his son P2,000,000

Properties for exclusive use of mr. and mrs. a 300,000

Properties inherited by mrs. a on June 1, 1987 4,000,000

Properties from salaries of mr. a and mrs. a 1,400,000

Properties which accumulated since June 3, 1987 400,000

Common properties of the spouses used by the family since mr. a’s death 230,000

Compute the gross estate of mr. a – (300,000 + 1,400,000 + 230,000) = 1,930,000

5. mr. filan, a bachelor, died leaving the following properties:

Proceeds of group insurance P150,000

House and lot 1,000,000

Car, registered in his name 400,000

Original investment in a business partnership 200,000

Mr. filan owns 50% interest in the profit of the business partnership with his boyfriend. The partnership
had undistributed profits of P100,000 at the time of filan’s death.

Compute the gross estate – (1,000,000 + 400,000 + 200,000 + (100,000 x 50%)) = 1,650,000

6. mrs. Enriquez, a government employee, died in a car accident which resulted in the total destruction
of their family car.

She left the following properties:

Receivable from the car insurance company P800,000

Benefits (receivables) from GSIS 1,000,000

Family home, bought using mr. enriquez’s salaries 2,000,000

Jeepney, bought using mrs. enriquez’s salaries 700,000

Value of the car immediately before the accident 800,000

Clothing, shoes, and apparels of mr. Enriquez 40,000

Clothing, shoes, and apparels of mrs. Enriquez 60,000

Wedding gift, received by the spouses on April 1, 1990 120,000

Compute the gross estate of mrs. Enriquez – (2,000,000 + 700,000 +800,000 + 120,000) = 3,680,000

7. mr. x died on November 1, 2020. He left the following properties to his wife:

Land, as birthday gift to mrs. x 2,000,000

Car, bought from mr. x’s compensation income 1,000,000

Family home 4,000,000

Properties for exclusive use of either spouse 120,000

Assume mr. and mrs. x were under the conjugal partnership of gains.

Compute mr. x’s gross estate – (1,000,000 + 4,000,000 + 120,000) = 5,120,000

8.
Chapter 16 introduction to donor’s tax

Multiple choice theory part 1

1. which is an incorrect statement – donor’s tax is imposed on donation inter-vivos, estate tax is impose
on donation mortis causa, income tax is impose on onerous transactions, NONE OF THESE

2. donor’s tax is not intended to – provide a system of business regulation

3. who is the one directly liable to the payment of donor’s tax – the donor

4. which of these donations is subject to donor’s tax – irrevocable donation

5. which of the following donation is not subject to donor’s tax – donation intended to take effect upon
the death of the decedent

6. which is subject to donor’s tax – cancellation of indebtedness of a debtor out of gratuity

7. which is not required in a contract of donation – legal capacity of the donee

8. which is not required in taxation of transfers for less than adequate and full consideration – intention
of the donor and acceptance of the donee. A AND B

9. what is the required form in the donation of real property – public instrument

10. the donation of shares of stocks must be in – a public instrument

11. which is a correct statement – donation of tangible personal property not exceeding 5,000 can be
made orally

12. which donor is subject to tax on global donation – Japanese donor residing in the Philippines

13. which is taxable only on Philippine donations – an Italian citizen, residing in the united arab emirates

14. which of the following donated properties of a non-resident alien donor may be exempt from
donor’s tax – investment in domestic stocks