ESTATE TAX

Question 1

1. It is a mode of acquisition by virtue of which, the property, rights and obligations, to the extent of
   the value of the inheritance, of a person are transmitted through his death to another either by
   his will or by operation of law
   a. Succession
   b. Donation
   c. Prescription
   d. Exchanges

Question 2

2. Succession which results from the designation of an heir, made in a will executed in the form
   prescribe by law
   a. Testamentary
   b. Mixed succession
   c. Intestate succession
   d. Legal succession

Question 3

3. An act whereby a person is permitted with the formalities prescribed by law, to control to a certain
   degree the disposition of his estate, to take effect after his death
   a. Contract
   b. Trust
   c. Will
   d. Legacy

Question 4

4. It is a will which must be entirely written, dated and signed by the hand of the testator himself. It
   is subject to no other form and it may be made in or out of the Philippines and need not be
   witnessed
   a. Ordinary will
   b. Notarial will
   c. Holographic will
   d. Codicil

Question 5

5. The person whose property is transmitted through succession, whether or not he left a will
   a. Successor
   b. Heir
   c. Legatee
   d. Decedent

Question 6

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

Question 7

7. An heir to a particular personal property given by virtue of will
   a. Legacy
   b. Devisee
   c. Successor
   d. Legatee

Question 8

8. An heir to particular real property given by virtue of will
   a. Devise
   b. Successor
   c. Devisee
   d. Legatee

Question 9

9. Part of the testator’s property which he cannot dispose of because the law has reserved it for
   certain heirs who are called compulsory heirs
   a. Legitimate
   b. Free portion
   c. Legitime
   d. Estate

Question 10

10. Which statement is false about succession
    a. In succession, fruits and credits maturing after the death of the decedent pass to the heirs even if they were not subjected to estate tax
    b. The successor can be made liable for the obligations of the decedent beyond the value of the asset he received
    c. In succession, the successor can refuse the inheritance
    d. The successor inherits all the transmissible property of a decedent including his liabilities

Question 11

11. The estate should be valued at the time
    a. The heirs are ascertained c. The estate is ready for distribution to the heirs
    b. The estate tax is paid
    c. The estate is ready for distribution to the heirs
    d. Of death of the decedent

Question 12

12. Statement I: The estate tax accrues upon the death of the decedent-owner of the properties
    transmitted by succession.
    Statement II: The estate tax should be paid by the executor or administrator, or the heir, before
    title to any registerable property may be registered in the name of the heir to whom it is given by
    succession.
    Statement III: The heirs or successors have the personal liability to pay the estate tax.
    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. None of the above is true

Question 13

13. The personal properties of a non-resident, not citizen of the Philippines, would not be included in the gross estate if
    a. The intangible personal property in the Philippines
    b. The personal property is shares of stock of a domestic corporation 90% of whose business
    is in the Philippines
    c. The intangible personal property in the Philippines and the reciprocity clause of the estate
    tax law applies
    d. The tangible personal property is in the Philippines

Question 14

14. One of the following is not an exemption or inclusion from gross estate
    a. Properties outside the Philippines of a non-resident Japanese decedent
    b. Shares of stock of Ayala Land Inc. of a non- resident Australian
    c. Capital or exclusive property of the surviving spouse
    d. The owner of usufruct in the owner of a naked title

Question 15

15. Which of the following is correct?
    a. The personal property of a non-resident alien without reciprocity is not included in the gross estate in the Philippines if they are intangible
    b. The gross estate of an American decedent who was a resident of the Philippines includes all properties in the Philippines only
    c. The gross estate of a Filipino decedent who was residing in Australia would include all
    properties regardless of location
    d. The gross estate of a resident citizen decedent would not include all properties, whether real or personal and whether within or without

Question 16

16. In computing the gross estate of a decedent
    a. If he was a non-resident, but citizen of the Philippines, tangible and intangible properties,
    regardless of location, shall be included
    b. If he was a resident who was not a citizen of the Philippines, tangible and intangible properties, regardless of location, shall be included
    c. If he was a non-resident who was not a citizen of the Philippines, tangible and intangible
    personal properties, located in the Philippines, shall be included
    d. All above statements are correct

Question 17

17. Which of the following statements is incorrect?
    a. In a revocable transfer, the decedent during his lifetime, may revoke, alter, amend or terminate the terms of enjoyment or ownership of the property
    b. A revocable transfer is always includible in the gross estate of the decedent-transferor
    c. A revocable transfer shall be included in the gross estate of the decedent-transferor even though the power to revoke was not exercised
    d. The power of the decedent-transferor to revoke terms may be exercised just once

Question 18

18. Statement I: A special power of appointment authorizes the donee of the power to appoint only
    from among a designated class or group of persons other than himself.
    Statement II: The donee-decedent of a special power of appointment only holds the property in
    trust, hence, the property shall form part of the donee-decedent’s gross estate.
    Statement III: The appointed property passing under a general power of appointment is not
    includible in the gross estate of the donee-decedent.
    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. None of the above is true

Question 19

19. Statement I: The power of appointment is “general” when the power of appointment authorizes
    the donee of the power to appoint only from a restricted or designated class of persons other than
    himself.
    Statement II: Special power of appointment exists when the power of appointment authorizes the donee of the power to appoint any person he pleases.
    a. Only statement 1 is correct
    b. Only statement 2 is correct
    c. Both statements are correct
    d. Both statements are incorrect

Question 20

20. Statement 1: Mr. X devised in his will real property to his brother A who is entrusted with the
    obligation to preserve and transmit the property to B, a son of A, when B becomes of age. The
    transmission from A to his son B is subject to tax.
    Statement II: Mr. X died leaving a farmland. In his will, he transferred the ownership thereof to A
    but subject to the condition that B will have the right to use the land for a period of ten years
    (usufruct). In the seventh year however, B died and in B’s will he surrendered his right over the
    land to A. The transaction is a tax exempt transfer.
    Statement III: Mr. X devised in his will a piece of land, naked title to A and usufruct to B for as long
    as B lives, thereafter to A. The transmission from Mr. X to A and B is subject to estate tax but the
    merger of the usufruct and the naked title is A upon the death of B is exempt.
    Statement IV: Mr. D, with stage three cancer, made a last will and testament disposing of
    properties mentioned in the last will and testament. On the same day, he made gifts inter vivos to
    his children. A few days later he died. The donated properties are to be excluded in the gross
    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. None of the above is true

Question 21

21. Statement I: A died giving B power to appoint a person who will inherit A’s house and lot. B,
    however can only choose among C, D, E and F. B decided to transfer the property to C, in B’s will
    when he was old already. The transfer from B to C is subject to estate tax.
    Statement II: During A’s lifetime, he decided to give B as gift his car subject to the condition that if
    B does not become a CPA within three years, A shall revoke the transfer. In the second year,
    however, A died. The car can no longer from part of A’s gross estate.
    a. True, true
    b. True, false
    c. False, true
    d. False, false

Question 22

22. Which of the following is not included in the gross estate?
    a. Transfer in contemplation of death where the consideration is not sufficient
    b. Revocable transfer where the power of revocation was not exercised
    c. Proceeds of life insurance where the beneficiary designated is the executor and the designation is irrevocable
    d. Proceeds of life insurance where the irrevocably designated beneficiary is the father

Question 23

23. Proceeds of life insurance where the beneficiary of the decedent is not his estate, executor or administrator is
    a. Part of gross income if the beneficiary is revocable
    b. Part of gross income regardless whether the beneficiary is revocable or irrevocable
    c. Not part of gross estate if the beneficiary is irrevocable
    d. Part of gross estate regardless whether the beneficiary is revocable or irrevocable

Question 24

24. Statement I: Unpaid mortgage indebtedness is deductible from the gross estate provided the said
    property subject to the indebtedness in included in the gross estate, net of mortgage
    indebtedness.
    Statement II: A donation inter-vivos by the decedent to the Philippine government few months
    before the death is a deduction from the gross estate.
    a. True, true
    b. True, false
    c. False, true
    d. False, false

Question 25

25. The following statements are correct regarding standard deduction under the CREATE law, except
    a. A deduction in the amount of P5,000,000 shall be allowed as an additional deduction
    without need of substantiation
    b. The full amount of P5,000,000 shall be allowed as deduction for the benefit of the decedent
    c. Standard deduction is not allowed to decedents who are non-resident aliens
    d. None of the above

Question 26

26. Which of the following is deductible from the gross estate?
    a. Income tax paid on income received after death
    b. Unpaid property taxes accrued in the year of death
    c. Donor’s tax accrued after to death
    d. Estate tax paid to a foreign country

Question 27

27. Statement I: The underlying reason for vanishing deduction is to offer a relief from heavy burden
    of taxation if the same property is subjected to two estate taxes within a short period of time
    because of proximate dates.
    Statement II: In order that there can be vanishing deduction, the estate tax on a prior succession
    must have been previously finally determined and paid.
    a. True, true
    b. False; false
    c. True, false
    d. False; true

Question 28

28. A resident and citizen of the Philippines died on May 10, 2021. Among his gross estate are
    properties inherited from his deceased father who died on April 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

Question 29

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

Question 30

30. Statement I: If the property is inherited before marriage, it will belong to both spouses; while if it
    is inherited during marriage, it is exclusive.
    Statement II: Unless stipulated, the property relations shall be governed by conjugal partnership
    of gains for marriages celebrated on or before August 3, 1988.
    a. True, true c. False, true
    b. True, false
    c. False, true
    d. False, false

Question 31

31. Statement I: Unless stipulated, the property relations shall be governed by absolute community of property for marriages celebrated on or before August 3, 1988.
    Statement II: Under the regime of absolute community of property, property for personal and
    exclusive use of either spouse except jewelry shall belong to both spouses.
    a. True, true
    b. True, false
    c. False, true
    d. False, false

Question 32

32. One of the following is a conjugal property of the spouses
    a. That which is brought to the marriage as his or her own
    b. That which each acquires during the marriage by inheritance
    c. The fruits of an exclusive property
    d. That which is purchased with the exclusive property of the wife

Question 33

33. One of the following is not a community property of the spouses
    a. Properly inherited by the husband before marriage
    b. Winnings in gambling
    c. Fruits of property inherited during the marriage
    d. Fruits of property inherited before the marriage

Question 34

34. Personal property for personal and exclusive use shall be classified as
    Absolute Community Property Conjugal Partnership of Gain
    a. Community Conjugal
    b. Exclusive Exclusive
    c. Community Exclusive
    d. Exclusive Conjugal

Question 35

35. Under the absolute community of property, jewelry for personal and exclusive use shall belong to
    the
    a. Wife
    b. Husband
    c. Husband and wife
    d. Children

Question 36

36. This is not part of the conjugal property
    a. Those acquired by onerous title during the marriage at the expense of the common fund
    b. Those acquired by industry or work of either of them
    c. The fruits, rents or interests received or due during the marriage coming from the conjugal
    property or from the exclusive properties of the spouses
    d. Those acquired during the marriage by gratuitous title