Gross Estate Tax Determination

Tax 1 Final Activity

Problem:
Mr. Hipo Lito, a resident of the Philippines, died
on Jan. 2, 2016, leaving personal and real
properties. Properties of the decedent were
transferred to his wife after 3 years. The
following are his properties:
 Type of Property Value
Family Home 4,200,000
2 units of condominium with FMV of
5,000,000 each and assessed value of
2,300,500 each.
Funeral Expenses 500,000
Other Claims: Obligations/debts but no 500,000
proof
Medical Expenses 500,000
Standard deduction 500,000
Shares of stock with Gaisano but with no
proof of his membership except a
certification from the accountant of his 5,000,000
fixed deposits
Estate Tax
Estate Tax is a tax on the right of the deceased person to
transmit his/her estate to his/her lawful heirs and
beneficiaries at the time of death and on certain
transfers, which are made by law as equivalent to
testamentary disposition. It is not a tax on property. It is
a tax imposed on the privilege of transmitting property
upon the death of the owner. The Estate Tax is based on
the laws in force at the time of death notwithstanding
the postponement of the actual possession or
enjoyment of the estate by the beneficiary.
Computation