Chapter 4

Question 1

It is an obligation contracted by the decedent when he was alive which he should have settled or paid during his lifetime.

Answer 1

Claim against the estate

Question 2

It is generally construed to mean debts or demands of a pecuniary nature which could have been enforced against the deceased in his lifetime and could have been reduced to simple money judgements

Answer 2

Claims

Question 3

Where does Claims against the estate or indebtedness in respect of property may arise?

Answer 3

Contract
Tort
Operation of Law

Question 4

It exists when the decedent leaves property encumbered by mortgage

Answer 4

Unpaid mortgage

Question 5

These are taxed which have accrued as of the death of the decedent but which were unpaid as of the time of death

Answer 5

Unpaid Taxes

Question 6

It is also referred to as vanishing deduction

Answer 6

Property Previously Taxed

Question 7

This deduction is being allowed to lessen the impact of successive taxation of the same property within a very short period due to the death of the decedent-transferee

Answer 7

Property Previously Taxed

Question 8

It is the dwelling house, including the land on which it is situated , where the husband and wife, or a head of the family, and members of their family reside, as certified to by the Barangay Captain of the locality.

Answer 8

Family Home

Question 9

It is deem constituted on the house and lot from the time it is actually occupied as a family residence and is considered as such for as long as any of its beneficiaries actually resides therein

Answer 9

Family Home

Question 10

It is generally characterized by permanency, that is, the place to which, whenever absent for business or pleasure, one still intends to return

Answer 10

Family Home

Question 11

True or False:

If the decedent’s loan was contracted within 3 years before his death, a statement o disposition of proceeds must be submitted by the executor or administrator

Answer 11

True

Question 12

True or False:

In a claim against insolvent person, the insolvency of the debtor must be proven and not merely alleged

Answer 12

True

Question 13

True or False:

It could be that the amount to be included as part of the gross estate in a claim against insolvent person is less than the full amount owed

Answer 13

False

Question 14

True or False:

So that unpaid mortgage may be deducted from gross estate, the fair market value of the mortgaged property must form part of the gross estate in full

Answer 14

True

Question 15

True or False:

For unpaid taxes to be deductible from gross estate, such must have accrued at the time or before the decedent’s death

Answer 15

True

Question 16

True or False:

Vanishing deduction is being allowed to lessen the impact of successive taxation of the same property within a very short period due to the death of decedent-transferor

Answer 16

True

Question 17

True or False:

The benefit of vanishing deduction may only be applied once

Answer 17

True

Question 18

True or False:

A transfer for public use or purpose is one made in favor of the Philippine government or any political subdivision for the public’s exclusive use

Answer 18

True

Question 19

True or False:

For estate tax purposes, a non-resident alien estate is entitled to the same deductions as a resident alien estate

Answer 19

False

Question 20

True or False:

Even property previously taxed situated outside the Philippines of a non-resident alien estate, for estate tax purposes, can be allowed vanishing deduction

Answer 20

False

Question 21

True or False:

The standard deduction allowed a resident alien estate is 500,000

Answer 21

False

Question 22

True or False:

The standard deduction is in addition to all other deductions to which Filipino citizens and resident aliens are entitled

Answer 22

True

Question 23

True or False:

Any amount received by the heirs from the decedent’s employer as a consequence of the death of the decedent-employee in accordance with RA 4917 shall be included in the gross estate of the decedent

Answer 23

True

Question 24

True or False:

Only husband and wife may constitute a family home

Answer 24

False

Question 25

True or False: The amount for inclusion in the gross estate for family home may be less than its fair market value

Answer 25

False

Question 26

True or False: The amount for inclusion in the deduction from gross estate for family home may be less than its fair market value

Answer 26

True

Question 27

True or False: The amount for inclusion in the deduction from gross estate for family home may be less than 10,000,000, the difference between the two amounts is subject to estate tax

Answer 27

False

Question 28

True or False: Any amount received by the heirs from the decedent's employer as a consequence of the death of the decedent-employee in accordance with RA 4917 shall be deductible from gross estate of the decedent

Answer 28

True

Question 29

True or False: Only property within the Philippines shall be considered when determining the gross estate and deductions of a non-resident alien estate

Answer 29

True

Question 30

Which is NOT TRUE about standard deduction for a citizen estate? a. It is equivalent to 5,000,000 b. It need not be reflected in the estate tax return c. It applies to non-resident alien estate d. It need not be substantiated

Answer 30

c. It applies to non-resident alien estate

Question 31

The following are requisites for vanishing deduction to be allowed except one. Which one? a. The estate tax of the prior succession must have been finally determined b. The present decedent within 5 years from date of death of the prior decedent c. The property with respect to which deduction is sought can be identified d. The property must have formed part of the gross estate situated in the Philippines of the prior decedent

Answer 31

a. The estate tax of the prior succession must have been finally determined

Question 32

Vanishing deduction may not be allowed when: a. The estate tax or donor's tax tax on the property previously taxed has not been paid b. The property previously taxed is situated in the Philippines c. The present decedent received the property previously taxed by inheritance or by gift d. The property previously taxed can be identified as the one received or acquired in exchange

Answer 32

a. The estate tax or donor's tax tax on the property previously taxed has not been paid

Question 33

Dolfo, a citizen of the Philippines and resident of Bacolod City, died testate on ay 10, 2021. Among his gross estate are property inherited from his deceased father who died on Apr. 4, 2018. What percentage of deduction will be used in computing the amount of vanishing deduction? a. 80% of the value taken as basis for vanishing deduction b. 100% of the value taken as basis for vanishing deduction c. 60% of the value taken as basis for vanishing deduction d. 40% of the value taken as basis for vanishing deduction

Answer 33

d. 40% of the value taken as basis for vanishing deduction

Question 34

Who is not a beneficiary of the family home? a. head of a family b. parents c. nieces and nephews d. brothers and sisters

Answer 34

c. nieces and nephews

Question 35

For family home deduction to be allowed a. such must have been the decedent's family home as certified by the barangay captain of the locality b. the current fair market value of the family must be included both as part of gross estate and deduction from gross estate regardless of amount

Answer 35

a. such must have been the decedent's family home as certified by the barangay captain of the locality

Question 36

For a casualty loss to be deductible from gross estate, the loss must a. have occurred during the settlement if the estate even after 6 months from decedent's death b. be compensated for by insurance or otherwise c. have occurred after the settlement of the estate but before the deadline for payment of estate tax d. not have been claimed for income tax purposes

Answer 36

d. not have been claimed for income tax purposes

Question 37

For Claims Against Insolvent Person to be allowed as deduction from gross estate a. the debtor must be insolvent as defined under RA 10142 or the Financial Rehabilitation and Insolvency Act (FRIA) of 2010 b. the value of the decedent's interest must be included in the gross estate c. both a and b d. neither a nor b

Answer 37

c. both a and b

Question 38

For family home deduction purposes a. a qualified person may constitute only one family home a. legally separated woman may qualify as head of a family c. the man and woman consulting the family home must be legally married d. all of the above

Answer 38

a. a qualified person may constitute only one family home

Question 39

The proportionate deduction for losses and indebtedness allowed a non-resident alien estate include a. claims against the estate b. property previously taxed c. transfers for public use d. all of the above

Answer 39

d. all of the above

Question 40

A deduction the maximum of which is 10 million but the amount claimed may be less than maximum a. vanishing deduction b. standard deduction c. medical expenses d. family home

Answer 40

d. family home

Question 41

Which of the following may a non-resident alien estate deduct? a. vanishing deduction b. amounts received by heirs under RA 4917 c. family home d. none of the above

Answer 41

d. none of the above

Question 42

The following deductions fall under "losses, indebtedness and taxes," Which does not? a. claims of the deceased against Insolvent person b. claims against the estate c. unpaid mortgage d. property previously taxed

Answer 42

d. property previously taxed

Question 43

The deduction allowed a non-resident alien estate for losses, indebtedness and taxes is a. world gross estate over Phil. gross estate multiplied by world losses, etc. b. Phil. losses over world losses, etc. multiplied by world gross estate c. world losses, etc. over Phil. losses, etc. multiplied by world gross estate d. Phil. gross estate over world gross estate multiplied by world losses, etc.

Answer 43

d. Phil. gross estate over world gross estate multiplied by world losses, etc.

Question 44

Y, a Filipino resident, died on Nov. 5, 2020 and his estate incurred losses due to: 1st loss: From fire on Feb. 5. 2020 of improvement on his property not compensated for by insurance 2nd loss: From flood on Feb. 25, 2021 of household furniture also not compensated for by insurance a. 1st loss is not deductible and 2nd loss is deductible b. Both losses are not deductible c. both losses are deductible from gross estate d. 1st loss is deductible and 2nd loss is not

Answer 44

a. 1st loss is not deductible and 2nd loss is deductible

Question 45

Unsettled obligation of the decedent a. claim against the estate b. claim against insolvent person c. unpaid mortgage d. casualty loss

Answer 45

a. claim against the estate

Question 46

Which is not a requisite in order that claim against the estate may be deducted from gross estate? a. certain in amount b. contracted in good faith c. for less than adequate or full consideration d. existing and legally enforceable against the estate

Answer 46

c. for less than adequate or full consideration

Question 47

When founded upon a promise or agreement, the deduction to be allowed for claims against the estate, unpaid mortgage or any indebtedness shall be a. limited to the extent that they were contracted bona fide b. for an adequate and full consideration in money or money's worth c. both a and b d. neither a nor b

Answer 47

c. both a and b

Question 48

The following deductions are allowed a non-resident estate except one. Which one? a. standard deduction b. family home c. property previously taxed d. net share of surviving spouse

Answer 48

b. family home

Question 49

Transfers for public use to qualify as deduction from gross estate must be for a. the use of the government of the Republic of the Philippines b. the use of any political subdivision of the government c. public purposes exclusively d. all of the above

Answer 49

d. all of the above