SUGGESTED ANSWER:

GROSS ESTATE
①REAL PROPERTY
②PERSONAL PROPERTY
③SHARES OF STOCK
④UNITS OF PARTICIPATION IN ANY ASSOCIATION,
RECREATION OR AMUSEMENT CLUB
⑤RIGHT TO USUFRUCT, USE OR HABITATION AND
ANNUITY
 VALUATION OF GROSS ESTATE
• RA 10963; RR 12-2018
• RULES:
1. IN GENERAL – FMV at the time of death

1. REAL PROPERTY –
oFMV determined by the Commissioner
oFMV as shown in the schedule of values fixed by the
provincial and city assessors.
3. PERSONAL PROPERTY – FMV at the time of death

4. SHARES OF STOCK
a) UNLISTED COMMON SHARES - BV per share of the issuing
corporation.
b) UNLISTED PREFERENCE SHARE - Par value per share
c) LISTED SHARES – FMV shall be the arithmetic mean
between the highest and lowest quotation at the date
nearest the date of death.
5. UNITS OF PARTICIPATION IN ANY ASSOCIATION,
RECREATION OR AMUSEMENT CLUB – Bid Price nearest the
date of death

6. RIGHT TO USUFRUCT, USE, OR HABITATION AND ANNUITY –

taking into account of probable life of the beneficiary.
A. Property owned by the decedent ACTUALLY
AND PHYSICALLY PRESENT IN HIS ESTATE, at the
time of his death such as land, buildings, shares of
stock, vehicles, bank deposit and the like.
C. Property NOT PHYSICALLY IN
THE ESTATE.
Transfer of property in favor of another person,
but the transfer was intended to take effect only
upon the transferor’s death.
There is no transfer in
Transfer by gift, intended to take effect at
contemplation of death
death, or after death, or under which the donor
reservedwhen the transfer
the income of to designate
or the right
property
the persons is a bona
who should fideincome.
enjoy the
sale for an adequate
and full consideration in
money or money’s
worth.
 INCLUSIONS

The decedent have transferred his property during his lifetime, but retained for
himself beneficial enjoyment of the thing or the right to receive income from the
same.
 INCLUSIONS

It is a transfer where the terms of enjoyment of the property may be altered,

amended, revoked, terminated by the decedent. It is sufficient that the
decedent had the power to revoke though he did not exercise the power.
 Atong donated real property worth P500,000 to Bardagol
during his lifetime. An item in the deed, however, grants the
donor the right to revoke the donation at will.

Is the P500,000 subject to donor’s tax or to estate tax?

The revocability of the donation at will of the

donor made the donation ambulatory.
Furthermore, no right was vested in the donee
while the donor is alive. Therefore, the
donation is subject to estate tax.
ILLUSTRATION 5:

CASE ESTATE TAX DONOR’S REASON

TAX
A high ranking official transferred Transfer
Transfer were
were
A most of her properties to her intended
intended toto take
take
children while still alive since her effect
effect upon
upon her
her
death might not be that far death
death
Transfer were
B Renato transferred his P50,000,000 intended to take
property to CJ during his lifetime effect during his
lifetime
Transfer at the
time of death must
Actual transfer – P200,000,000 be considered,
C FMV at the time of death – hence,
P250,000,000 P250,000,000 is
included in
computation of his
gross estate
 INCLUSIONS

A power of appointment is a right to designate by will or deed the person or

persons who are to receive certain property from the estate or a prior
decedent.
(a) By will
(b) By deed to take effect in
possession or enjoyment at or
after his death
(c) By deed under which he has
retained for his life or any period
not ascertainable without
reference to his death or for any
period which does not in fact end
before his death
(d) The possession or enjoyment of,
or the right to the income from the
property
(e) The right, either alone, or in
conjunction with any person to
designate the persons who shall
possess or enjoy the property or
the income therefrom
The donee can appoint any
beneficiary including: Authorizes the donee or holder
of the power to appoint only
a) Himself among a restricted class or
b) His estate designated class persons other
c) His creditor than himself
d) The creditors of his estate
The decedent is practically the The decedent is only a trustee
owner of the property, and so to the property, and so it should
the property is deemed part of not be included in his estate.
his gross estate.
 Alaskador died living a will whereby it was stipulated that his lot situated
in Cagayan de Oro City shall go to Buskador, and that should the latter
decide to transfer the property, he is free to give it to anybody.

Is the power of appointment general or special?

Since the power of appointment granted by

Alaskador to Buskador is not limited by any
restriction, the power of appointment is
general.
How about if the will expressly provides that Buskador
can appoint only either of his parents?
The power of appointment is special because the
right of Buskador to appoint transferees to the
property is restricted to certain person/s.