ESTATE AND TRUST

Question 1

The property, rights and obligations of a person which are not extinguished by his death and those which accrued thereto since the opening of succession
a. Assets c. Estate
b. Capital d. Income

Question 2

A person whose property is transmitted through succession, whether or not he left a will
a. Decedent c. Transferee
b. Transferor d. Testator

Question 3

A decedent who has a will upon death
a. Transferor c. Donor
b. Grantor d. Testator

Question 4

The person called to the succession either by the provision of the will or by operation of law
a. Heir c. Legatee
b. Devisee d. Trustor

Question 5

An heir who inherits personal property by will is called
a. Legatee c. Trustor
b. Devisee d. Beneficiary

Question 6

An heir who inherits real property by will is called
a. Legatee c. Trustor
b. Devisee d. Beneficiary

Question 7

Statement 1: Where the estate is under judicial administration, the income of the estate shall be taxable to the fiduciary of trustee.
Statement 2: Where the estate is not under judicial administration, the income of the estate shall be taxable to the heirs and beneficiaries.
a. Statements 1 and 2 are false c. Statement 1 is false but statement 2 is true
b. Statement 1 is true but statement 2 is false d. Statement 1 is false but statement 2 is true

Question 8

Income received by the estate during the period of administration or settlement of the estate, for tax purposes is known as
a. Income of the estate c. Income of the trustee
b. Income of the heirs d. Income of the testator

Question 9

Statement 1: The amount of income of the estate for the taxable year, which is properly paid or credited during such year to any legatee, heir or beneficiary, is a special item of deduction from the gross income of the estate.
Statement 2: An allowance paid to a widow or heir out of the corpus of the estate is not deductions from the gross income of the estate.
a. Statements 1 and 2 are false c. Statement 1 is false but statement 2 is true
b. Statement 1 is true but statement 2 is false d. Statements 1 and 2 are true

Question 10

Statement 1: When an estate, under administration, has income-producing properties, the annual income of the estate becomes part of the taxable gross estate.
Statement 2: When an estate, under administration, has income-producing properties and its income during the year is distributed to the heirs, the income so distributed is taxable to the heirs as part of their gross income for the year.
a. Statements 1 and 2 are false c. Statement 1 is false but statement 2 is true
b. Statement 1 is true but statement 2 is false d. Statements 1 and 2 are true

Question 11

The following statements refer to the rules in determining the taxable income and the applicable income tax liability of an estate. Which of the statements is/are correct?
I. The items of gross income of the estate are the same items as the items of gross income of individual taxpayers.
II. In addition to the allowable deductions under the Tax Code, the estate is allowed to deduct the amount of income of the estate during the taxable year that is paid or credited to the legatee, heir or beneficiary
III. The amount of income of the estate during the year that is paid or credited to the legatee, heir or beneficiary is subject to final withholding tax of 15%
a. I and II only c. II and III only
b. I and III only d. None of the above

Question 12

An arrangement under which title to property is passed to another for investment with the income and ultimately the principal to be distributed in accordance with the direction of the creator is
a. A will c. An inheritance
b. A trust d. Pacto de retro

Question 13

The person who establishes a trust
a. Heir c. Legatee
b. Devisee d. Trustor

Question 14

The person in whom the confidence is reposed as regards property for the benefit of another person
a. Devisee c. Legatee
b. Trustee d. Trustor

Question 15

The person for whose benefit the trust has been created
a. Legatee c. Beneficiary
b. Heir d. Trustee

Question 16

For income tax purposes, any person or corporation that holds in trust an estate of another person or persons
a. Beneficiary c. Legatee
b. Fiduciary d. Devisee

Question 17

Which of the following is not subject to tax?
a. Estates under judicial settlement. c. Unregistered partnerships
b. Irrevocable trust d. Revocable trust

Question 18

Which of the following statements is correct?
a. Estates and trusts are allowed a personal exemption of P50,000 if the executor or trustee is married
b. The income tax rates for corporate taxpayers apply to taxable estates and trusts
c. The taxable year of estates and trusts maybe calendar or fiscal year.
d. For a trust to be taxable it must be irrevocable, both as to corpus (principal) and income

Question 19

19. Statement I: Estates and trusts can deduct from their gross income the same items of deductions authorized under the Tax Code as those allowed to individual taxpayers.
    Statement II: The schedular tax rates under Section 24 (A), which are prescribed for individuals, will be used in computing the income tax of estates and trusts.
    Statement III: The amount of income of the estate for the taxable year, which is properly paid or credited during such year to any legatee, heir or beneficiary, is a special item of deduction from the gross income of the estate.
    Statement IV: An allowance paid to a widow or heir out of the corpus or principal of the estate is deductible from the gross income of the estate.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. All of the above statements are true