Estate Tax

Question 1

Estate Tax

Answer 1

Right to transfer Property

Question 2

Estate (inhertitance)

Answer 2

• Property, rights and obligations (need to pay liab up to the value of the estate only)
• inherited by heirs or successor
• it can be managed by : executor or admin

Question 3

executor

Answer 3

Appointed by decendent

Question 4

administrator

Answer 4

Appointed by court

Question 5

Decedent

Answer 5

person whose property is transmitted through succession, whether or not he left a will

Question 6

Heirs/Successor

Answer 6

1. Compulsory Heirs

2. Voluntary

Question 7

Legatee

Answer 7

heir to a particular personal property

Question 8

devisee

Answer 8

heir to a particular real property

Question 9

Compulsory Heir

Answer 9

1. Primary
   - legitimate child
   - illegitimate child
   - surviving spouse
2. secondary
   - Parents and ascending (up to 5th degree)

Question 10

Succession

Answer 10

1. Testamentory
2. Intestate/Legal
3. Mixed

Question 11

Testamentory

Answer 11

Last will and testament

Question 12

Intestate

Answer 12

Operation of law

- intestate hierarchy (notebook)

Question 13

Mixed

Answer 13

1. Free use - use of law will and testament
2. Legitime - for compulsory heirs
   legitimate = 1
   illegitimate = .5 or half of legitimate
   surviving spouse = 1

Question 14

Formula estate tax

Answer 14

Gross Estate (inclusions and Exclusions)
- Deductions
\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Net Taxable estate
x                    6%
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Estate Tax

Question 15

Inclusions

Answer 15

a Real property
b Tangible and intangible personal property
Intangible
i Franchise which must be exercised in the
Philippines
ii Shares, obligations or bonds issued by a
domestic corporation
iii Shares, obligations or bonds issued by a
foreign corporation 85% of the business of
which is located in the Philippines
iv Shares, obligations or bonds issued by a
foreign corporation, if such have acquired
a business situs in the Philippines
v Shares or rights in any partnership,
business or industry in the Philippines
c Transfer in contemplation of death
d Revocable transfer
e Transfer under general power of appointment
f Transfer for insufficient consideration
g Proceeds of life insurance
Except:
i Proceeds of life insurance and benefits
received by members of the GSIS (RA 728)
ii Benefits received by members from SSS
by reason of death (RA 1792)
iii Retirement benefits of officials or
employees of a private firm (RA 4917),
provided they are included in the gross
estate.
iv Payments from the Philippines and US
governments to the legal heirs of
deceased of World War II Veterans and
deceased civilian for supplies or services
furnished to the US and Philippine Army
(RA 136)
v Amounts received from Philippine and
United States governments for war
damages
vi Amounts received from United States
Veterans Administration
h Claim against insolvent person

Question 16

Exclusions/Exemption

Answer 16

a Merger of usufruct in the owner of the naked title
b Transmission or delivery of the inheritance or
legacy by the fiduciary heir or legatee to the
fideicomissary
c Transmission from the first heir, legatee or donee in
favor of another beneficiary, in accordance with the
will of the predecessor
d All bequests, devises, legacies or transfers to social
welfare, cultural and charitable institutions no part
of the net income of which inures to the benefit of
any individual: Provided, that no more than thirty
percent (30%) of which will be used by such
institutions for administrative purposes

Question 17

Deduction

Answer 17

1. special deductions

2. ordinary deductions

Question 18

Ordinary Deduction

Answer 18

a	Claims against the estate		
b	Claims against insolvent person		
c	Unpaid mortgage or indebtedness		
d	Taxes		
e	Losses		
f	Transfer for public use		
g	Vanishing deduction

Question 19

a Claims against the estate

Answer 19

1. Notarized debt Instrument
2. Statement showing disposition of the proceeds of loan (contracted 3yrs prior to death)
3. Before at the time of death