Chapter 11 Flashcards by DAZ, KRISTEL ANN, P.

What is a donation?
a. A sale of property
b. A gratuitous transfer of property
c. A loan of property
d. A lease of property

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What is the main reason for making a donation inter vivos?
a. To ensure the donee receives the gift during the donor’s lifetime
b. To avoid paying taxes
c. To prevent creditors from claiming the property
d. To create a will

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What is required for a donation of immovable property to be valid?

a. Oral agreement
b. Private contract
c. Public document
d. Court approval

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A donation mortis causa is subject to what kind of tax?

a. Donor’s tax
b. Estate tax
c. Income tax
d. Value-added tax

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What is a donation?
a) A sale of property
b) A gratuitous transfer of property
c) A loan of property
d) A lease of property

b) A gratuitous transfer of property

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What is the main reason for making a donation inter vivos?
a) To ensure the donee receives the gift during the donor’s lifetime
b) To avoid paying taxes
c) To prevent creditors from claiming the property
d) To create a will

a) To ensure the donee receives the gift during the donor’s lifetime

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A donation mortis causa takes effect when?
a) During the donor’s lifetime
b) Upon the donor’s death
c) Upon acceptance by the donee
d) When notarized

b) Upon the donor’s death

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Which of the following is NOT a requirement for a valid donation of an immovable property?
a) Must be made in a public document
b) Must be accepted by the donee
c) Must be registered with the BIR
d) Must specify the property donated and its value

c) Must be registered with the BIR

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Which type of property cannot be donated?
a) Present property
b) Future property
c) Usufructuary property
d) Community property

b) Future property

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What is required for a donation to be perfected?
a) Delivery of the donated property
b) Acceptance by the donee
c) Registration with the government
d) Payment of taxes

b) Acceptance by the donee

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A donation inter vivos is subject to what tax?
a) Estate tax
b) Donor’s tax
c) Inheritance tax
d) Capital gains tax

b) Donor’s tax

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If a donor imposes a burden on the donee that is less than the value of the gift, the donation is considered:
a) Onerous
b) Gratuitous
c) Voidable
d) Revocable

b) Gratuitous

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Who may give or receive a donation?
a) Only persons over 18 years old
b) All persons who may contract and dispose of property
c) Only legal heirs
d) Only government-recognized institutions

b) All persons who may contract and dispose of property

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A donation that includes an agreement that the donor may revoke the donation at any time is:
a) Valid
b) Voidable
c) Conditional
d) Illegal

c) Conditional

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Which of the following is a donation mortis causa?
a) A donation that takes effect immediately
b) A donation conditioned upon the donor’s death
c) A donation that is revocable at any time
d) A donation given to a minor

b) A donation conditioned upon the donor’s death

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What is the term for a donation made out of pure generosity, without any condition?
a) Onerous donation
b) Conditional donation
c) Pure donation
d) Simulated donation

c) Pure donation

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Which of the following institutions is exempt from donor’s tax?
a) Private corporations
b) Philippine-American Cultural Foundation
c) Business organizations
d) Individual heirs

b) Philippine-American Cultural Foundation

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A donation made by a husband or wife involving conjugal property requires what?
a) Notarization
b) Approval from the court
c) Consent of the other spouse
d) Signature of both spouses in a contract

c) Consent of the other spouse

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Which of the following statements is TRUE regarding donations?
a) Donations can be made orally in all cases
b) A minor can donate property freely
c) Donations must be accepted to be valid
d) Donations do not require legal documentation

c) Donations must be accepted to be valid

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Which document is needed to make a donation of an immovable property valid?
a) Private agreement
b) Public document
c) Handwritten will
d) Verbal contract

b) Public document

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What is the tax implication of a donation mortis causa?
a) It is subject to donor’s tax
b) It is subject to estate tax
c) It is tax-exempt
d) It is taxed as income

b) It is subject to estate tax

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In what case is a donation NOT considered valid?
a) When the donor is of legal age
b) When the donee is aware of and accepts the donation
c) When the donation is made to avoid creditors
d) When the donation is recorded in a public document

c) When the donation is made to avoid creditors

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Which of the following is an example of a donation inter vivos?
a) A person giving a necklace to a friend out of love
b) A person writing a will to donate property
c) A parent leaving property to a child after death
d) A conditional donation based on future events

a) A person giving a necklace to a friend out of love

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What happens if the donee does not accept the donation?
a) The donation is still valid
b) The donation is void
c) The donation is taxable
d) The donation is converted into a loan

b) The donation is void

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Enumerate the two types of donations.

Inter vivos Mortis causa

Give three reasons why people donate during their lifetime.

To avoid estate taxes To ensure the donee receives the gift To have full control over the donation

List three elements of a valid donation.

Consent Object Cause

Name four institutions exempt from donor’s tax.

International Rice Research Institute Philippine-American Cultural Foundation Ramon Aboitiz Award Foundation Integrated Bar of the Philippines

Give three examples of donations that require written documentation.

Donations of immovable property Donations exceeding ₱5,000 Donations with legal conditions

The person who gives the donation.

Donor

The person who receives the donation.

Donee

A donation that takes effect after the donor’s death.

Mortis causa

A donation that takes effect during the donor’s lifetime.

Inter vivos

A tax imposed on donations given during the donor’s lifetime.

Donor's tax

A tax imposed on donations given after the donor’s death.

Estate tax

A donation made with the intention to deceive or avoid legal obligations.

Simulated donation

A donation of property that must be in a public document. Immovable property donation

Immovable property donation

A donation where the donor reserves the right to revoke it anytime.

Conditional donation

A type of property that cannot be donated.

Future property

A donation that includes an obligation for the donee.

Onerous donation

The law governing donations in the Philippines.

Civil Code of the Philippines

A donation intended to take effect only after the donor's death and is subject to estate tax.

Mortis causa donation

A condition that makes a donation voidable.

Lack of acceptance by the donee

A document required for donations of real property.

Public document

A legal consequence if a donation is made with an intent to defraud creditors.

Null and void donation

A type of donation that cannot include personal services.

Property donation

A person who cannot donate property entrusted to them.

Guardian

A donation made between spouses involving conjugal property requires this.

Consent of the other spouse

A requirement for a donation to be valid.

Acceptance

Which of the following donations is considered void? a. Donations made to a spouse during marriage b. Donations made between persons guilty of adultery or concubinage c. Donations made to a charitable institution d. Donations made to public schools

b. Donations made between persons guilty of adultery or concubinage

What is the primary purpose of donor’s tax? a. To penalize excessive donations b. To generate additional revenue for the government c. To supplement estate tax and prevent tax avoidance d. To encourage more donations

c. To supplement estate tax and prevent tax avoidance

Donor’s tax is imposed on: a. Transactions involving real estate only b. Any gratuitous transfer of property between living persons c. The sale of goods and services d. The inheritance of property

b. Any gratuitous transfer of property between living persons

Which of the following statements is TRUE about donor’s tax? a. It applies only to tangible properties b. It is a property tax c. It is an excise (privilege) tax d. It applies only when the donor is deceased

c. It is an excise (privilege) tax

A donation is considered perfected when: a. The donor signs the document b. The donee knows and accepts the donation c. The donor declares the donation publicly d. The donation is registered with the Bureau of Internal Revenue

b. The donee knows and accepts the donation

Under what condition is a donation of an immovable property considered valid? a. It is given as a verbal agreement b. It is written in a public document and accepted separately in another document c. It is secretly handed over to the donee d. It is done through a handshake agreement

b. It is written in a public document and accepted separately in another document

Which of the following is NOT a reason for the imposition of donor’s tax? a. To prevent tax evasion through splitting income b. To encourage unlimited donations c. To supplement estate tax d. To ensure fair taxation on wealth transfers

b. To encourage unlimited donations

The law governing donor’s tax at the time of the completion of the donation is: a. The law at the time of the donor’s birth b. The law at the time the donor writes the donation c. The law in force when the donation is completed d. The law in effect when the donee dies

c. The law in force when the donation is completed

If a debt is condoned or remitted, it is considered: a. A taxable donation equivalent to the value of the debt b. A non-taxable transaction c. A sale agreement d. A rental agreement

a. A taxable donation equivalent to the value of the debt

Which of the following institutions is eligible to receive tax-exempt donations? a. A for-profit company b. A government-recognized charitable organization c. A political party d. A private individual

b. A government-recognized charitable organization

What kind of tax is donor’s tax? a. Income tax b. Property tax c. Excise tax d. Corporate tax

c. Excise tax

Donor’s tax applies to: a. Cash donations only b. Both real and personal property c. Only tangible property d. Only real estate

b. Both real and personal property

The tax imposed to prevent avoidance of estate tax is: a. Value-added tax b. Excise tax c. Donor’s tax d. Corporate tax

c. Donor’s tax

The moment a donation is considered complete for tax purposes is when: a. The donor writes a letter of intent b. The donee accepts the donation c. The donor informs the Bureau of Internal Revenue d. The property is transferred to a trust

b. The donee accepts the donation

If a public official receives a donation due to his position, the donation is: a. Valid but taxable b. Void c. Valid if given in cash d. Tax-free

b. Void

The document required for a valid donation of immovable property is: a. A notarized letter b. A verbal agreement c. A public Deed of Donation d. A simple contract

c. A public Deed of Donation

Which of the following is not an example of a void donation? a. A donation between persons found guilty of the same crime b. A donation between spouses during marriage c. A donation between parents and children d. A donation between cohabiting partners

c. A donation between parents and children

The transfer of property through donor’s tax is known as: a. Testate succession b. Inter vivos transfer c. Capital gains d. Mortgage agreement

b. Inter vivos transfer

What is the effect of a donor’s tax on progressive taxation? a. It allows tax evasion b. It prevents income splitting c. It eliminates estate tax d. It increases inflation

b. It prevents income splitting

Donor’s tax is assessed based on: a. The total income of the donor b. The fair market value of the donated property c. The number of donees d. The age of the donor

b. The fair market value of the donated property

Five institutions eligible for tax-exempt donations:

1. Philippine Red Cross 2. National Museum 3. National Library 4. Public Schools (Adopt-a-School Act) 5. National Historical Institute

Five cases of void donations:

1. Between persons guilty of adultery or concubinage 2. Between persons guilty of the same criminal offense 3. Between spouses during marriage (except moderate gifts) 4. Between persons living together as husband and wife without marriage 5. To a public officer due to his position

Five elements required for a valid donation:

1. Capacity of the donor 2. Acceptance by the donee 3. Intention to donate 4. Delivery of the donation 5. Legal documentation (Deed of Donation for immovables)

Five purposes of donor’s tax:

1. To supplement estate tax 2. To prevent tax avoidance through income splitting 3. To regulate gratuitous property transfers 4. To ensure fairness in wealth distribution 5. To provide government revenue

The tax imposed on gratuitous transfers of property.

Donor’s tax

A void donation involving a public official.

Donation made due to public office

A document required for valid donations of real estate.

Deed of Donation

The legal term for a donation given while the donor is still alive.

Inter vivos

The law governing donor’s tax at the time of donation.

Law in force during completion of donation