Gross Estate

Question 1

Estate tax is a tax imposed on the privilege that a person is given in the disposition of his property, either by will or by operation of law, to take effect upon death. T or F?

Answer 1

TRUE

Question 2

Estate tax is an ad-valorem tax. T or F?

Answer 2

TRUE

Question 3

The accrual of the estate tax is distinct from the obligation to pay the same. T or F?

Answer 3

TRUE

Question 4

Delivery and acceptance are essential elements of estate taxation. T or F?

Answer 4

FALSE

Question 5

Under the “ability to pay theory,” the imposition of estate tax is justifiable because it reduces the property received by the successor, thus, helping to promote equitable distribution of wealth in society. T or F?

Answer 5

FALSE

Under the “Redistribution of Wealth Theory,” the imposition of estate tax is justifiable because it reduces the property received by the successor, thus, helping to promote equitable distribution of wealth in society.

Question 6

Regardless of situs, the tax code excludes intangible personal property of a non-resident alien decedent in determining his taxable estate. T or F?

Answer 6

FALSE

Intangible personal property with situs in the Philippines is included in the gross estate of a nonresident alien, unless excluded on the basis of reciprocity.

Question 7

Section 85 of the Tax Code provides that the value of the gross estate of a nonresident alien should be determined by including the value at the time of his death, of all property, real or personal, tangible or intangible, wherever situated. T or F?

Answer 7

FALSE

Included in the gross estate of a non-resident: (1) real property situated in the Philippines, (2) Tangible personal property situated in the Philippines, and (3) Intangible personal property with situs in the Philippines, unless excluded on the basis of reciprocity

Question 8

There is reciprocity if the decedent at the time of his death was a resident citizen of a foreign country, which at the time of his death did not impose an estate tax of any character in respect of tangible personal property of citizens of the Philippines not residing in that foreign country. T or F?

Answer 8

FALSE

There is reciprocity if the decedent at the time of his death was a resident citizen of a foreign country, which at the time of his death did not impose an estate tax of any character in respect of INTANGIBLE personal property of citizens of the Philippines not residing in that foreign country.

Question 9

For estate tax computation, real estate, in general, shall be valued at fair market value at the date of death of the decedent. T or F?

Answer 9

TRUE.

Question 10

If a zonal value of a real estate is available at the date of death, and this is higher than the fair market value per assessor’s listings of values, then the amount to be reported in the gross estate is the zonal value. T or F?

Answer 10

TRUE

Question 11

Donation mortis causa are transfers intended to take effect at the time of the decedent’s death. Hence, the property should be valued at the FMV of the property at the date of the actual transfer. T or F?

Answer 11

FALSE.

Since succession and the accrual of the corresponding estate tax takes effect upon death, it shall only be fair to appraise the estate at its fair market value at the time of the decedent’s death.

Question 12

Donation to the national government is an exempt transaction, but should still require inclusion of the property in the gross estate. T or F?

Answer 12

TRUE.

Question 13

Juan devised in his will a piece of land; naked title to Pedro and usufruct to Ana for as long as Ana lives, thereafter to Pedro. The transmission from Juan to Pedro and Ana is subject to estate tax, but the merger of the usufruct and the naked title to Pedro upon the death of Ana is exempt. T or F?

Answer 13

TRUE

Question 14

Ron devised in his will real property to his brother Bert who is entrusted with the obligation to preserve and transmit the property to Jay, son of Bert, when Jay becomes of age. The transmission from Bert to his son Jay is subject to estate tax. T or F?

Answer 14

FALSE.

Special Power of Appointment (SPA) exists when the donee can appoint only from a restricted or designated class of persons other than himself. Property transferred under a special power of appointment should be EXCLUDED from the gross estate of the donee of the power because the donee-decedent only holds the power in TRUST.

Question 15

When an estate, under administration, has income-producing property, the annual income of the estate becomes part of the taxable gross estate. T or F?

Answer 15

FALSE

When an estate, under administration, has income-producing property 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.

Question 16

When an estate, under administration, has income-producing property 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. T or F?

Answer 16

TRUE

Question 17

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. T or F?

Answer 17

TRUE

Question 18

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. T or F?

Answer 18

FALSE.

Special Power of Appointment (SPA) exists when the donee can appoint only from a restricted or designated class of persons other than himself. Property transferred under a special power of appointment should be EXCLUDED from the gross estate of the donee of the power because the donee-decedent only holds the power in TRUST.

Question 19

The Tax Code is amended under RA 10963 (TRAIN Law) provides that the filing of the estate tax return should be done within one (1) year from the decedent’s death. T or F?

Answer 19

TRUE

Question 20

The payment of estate tax could only be extended up to the maximum of thirty (30) days from the date of filing. T or F?

Answer 20

When the Commissioner finds that the payment of the estate tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five years in case the estate is settled through the courts or two years in case the estate is settled extrajudicially.

Question 21

An estate tax on transfers inter-vivos

a. Donor’s tax
b. Estate tax
c. Income tax
d. VAT

Answer 21

Donor’s tax

Question 22

An excise on transfers mortis cause

a. VAT
b. Estate tax
c. Income tax
d. Donor’s tax

Answer 22

Estate tax

Question 23

Which among the following statements is not correct?

I. Estate taxation is governed by the statute in force at the time of the death of the decedent.
II. Estate tax accrues as of the death of the decedent
III. Succession takes place and the right of the State to tax the privilege to transmit the estate vests instantly upon death

a. I only
b. II only
c. III only
d. None of the above

Answer 23

All of the following are correct:

I. Estate taxation is governed by the statute in force at the time of the death of the decedent.
II. Estate tax accrues as of the death of the decedent
III. Succession takes place and the right of the State to tax the privilege to transmit the estate vests instantly upon death

Question 24

Estate tax is a tax on the right of the deceased person to transmit his estate to his lawful heirs and beneficiaries. Hence, it is

I. A tax on property
II. An excise tax

a. I only
b. II only
c. Both I and II
d. Neither I nor II

Answer 24

Estate tax is a tax on the right of the deceased person to transmit his estate to his lawful heirs and beneficiaries. Hence, it is an ESTATE TAX, not a tax on property.

Question 25

Estate tax is imposed upon the:

a. Decedent
b. Property or rights transferred
c. Right to transfer property upon death
d. Privilege to receive inheritance

Answer 25

Right to transfer property upon death

Question 26

When will the transfer through succession be effective?

a. Upon the signing of a written will
b. Upon payment of estate tax
c. Upon death of the testator
d. Upon registration in the register of deeds

Answer 26

Upon death of the testator

Question 27

Which of the following is not a characteristic of donation mortis causa?

a. The transfer to the donee is irrevocable while donor is alive
b. There is no conveyance of title or ownership to the donee before the death of the donor
c. The transferor retains the full or naked ownership and control of the property while alive
d. The transfer should be void if the donor should survive the donee

Answer 27

The transfer to the donee is irrevocable while donor is alive

Question 28

Mr. Wais thought that due to old age, death may be imminent. Knowing that the value of estate tax is high, he disposed his properties to his rightful heirs prior to his death (transfer in contemplation of death). To prevent undue avoidance of tax, inter-vivos disposition in contemplation of death is subject to:

a. Donor’s tax
b. Estate tax
c. Income tax
d. Excise tax

Answer 28

Estate tax

Question 29

The gross estate of a decedent shall be comprised of the following properties and interest therein at the time of his death, including revocable transfers and transfers for insufficient consideration, etc.:

I. Residents and citizens: All properties, real or personal or intangible, wherever situated
II. Nonresident aliens: Only properties situated in the Philippines that, with respect to intangible personal property, its inclusion in the gross estate is not subject to the rule of reciprocity.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

Answer 29

I only

Question 30

The personal property of a non-resident, not citizen of the Philippines, would not be included in the gross estate if:

a. The intangible personal property is in the Philippines
b. The intangible property is in the Philippines and the reciprocity clause of the estate tax law applies
c. The tangible property is in the Philippines
d. The personal property is shares of stocks of a domestic corporation 90% of whose business is in the Philippines

Answer 30

The intangible property is in the Philippines and the reciprocity clause of the estate tax law applies

Question 31

Which of the following is subject to the rule of reciprocity?

a. Car in the Philippines owned by a non-resident alien decedent
b. Investment in stock in a US Corporation owned by a non-resident alien decedent
c. Investment in bonds in a US Corporation that has acquired business situs in the Philippines, and is owned by a resident alien
d. Shares owned by a non-resident alien in a partnership established in the Philippines

Answer 31

Shares owned by a non-resident alien in a partnership established in the Philippines

Question 32

The rule of reciprocity applies to _____________________________. However, it does not apply to _________________________.

a. Intangible personal property in the Philippines
b. Non-resident alien decedent

Answer 32

The rule of reciprocity applies to Intangible personal property in the Philippines. However, it does not apply to Non-resident alien decedent.

Question 33

Intangible Personal Property of Non-Resident Alien Decedent with Situs in the Philippines shall be Exempt from Taxation if:
I. The decedent, at the time of his death, was a resident citizen of a foreign country which at the time of his death did not impose an estate tax of any character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country
II. The laws of the foreign country of which the decedent was a resident citizen at the time of his death allow a similar exemption from estate taxes of every character, in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country.

a. I only
b. II only
c. Either I or II
d. Neither I nor II

Answer 33

I only

Question 34

One of the following is not an intangible personal property situated in the Philippines:
I. Shares, obligations or bonds issued by any corporation or sociedad anonima organized and constituted in the Philippines in accordance with its laws.
II. Shares, obligations, or bonds issued by any foreign corporation where 85% of its business is located in the Philippines
III. Shares, obligations or bonds issued by a foreign corporation if such shares, obligations, or bonds have acquired business in the Philippines
IV. Shares or rights in any partnership, business, or industry established outside the Philippines.

a. I only
b. II only
c. III only
d. IV only

Answer 34

III only

Question 35

Which of the following rules on “situs” of property of a decedent is correct?
I. As a general rule, the situs of real property is the place or country where it is situated
II. As a general rule, the situs of tangible personal property is the place or country where such is actually located at the time of the decedent’s death
III. The rule that situs of intangible personal property is the domicile or residence of the owner does not apply when the property has a situs elsewhere
IV. The test of situs of property of a non-resident alien decedent is not important at all because only the transmissions of property located in the Philippines are subject to estate tax

a. I only
b. I and II only
c. I, II and III only
d. I, II, III, and IV

Answer 35

I. As a general rule, the situs of real property is the place or country where it is situated
II. As a general rule, the situs of tangible personal property is the place or country where such is actually located at the time of the decedent’s death
III. The rule that situs of intangible personal property is the domicile or residence of the owner does not apply when the property has a situs elsewhere
IV. The test of situs of property of a non-resident alien decedent is not important at all because only the transmissions of property located in the Philippines are subject to estate tax

Question 36

Which is not a test of situs?

a. Residence of the debtor in case of accounts receivables
b. Place of storage in case of certificates of stocks
c. Location of depository bank in case of bank deposit
d. Place of exercise in case of copyright

Answer 36

Place of storage in case of certificates of stocks

Question 37

One of the following is not an intangible personal property situated in the Philippines

a. Shares, obligations, or bonds issued by any corporation or sociedad anonima organized or constituted in the Philippines in accordance with its law
b. Shares, obligations, or bonds issued by any foreign corporation 85% of the business of which is located in the Philippines
c. Shares, obligations, or bonds issued by any foreign corporation if such shares, obligations, or bonds have acquired business situs in the Philippines
d. Shares, obligations, or bonds issued by a non-resident foreign corporation

Answer 37

Shares, obligations, or bonds issued by a non-resident foreign corporation

Question 38

Which of the following statements is correct?

a. The estate tax accrues as of the death of the decedent and the accrual of the tax is distinct from the obligation to pay the same
b. Estate taxation is governed by the statute in force at the time the return is filed
c. Both “a” and “b”
d. Neither “a” nor “b”

Answer 38

The estate tax accrues as of the death of the decedent and the accrual of the tax is distinct from the obligation to pay the same

Question 39

Which of the following item is considered situated outside the Philippines?

a. Franchise in the name of the decedent, which is exercised in the Philippines
b. Share of stock holdings of decedent in a foreign corporation whose business is 90% done in the Philippines
c. Bond certificate is issued by a domestic corporation owned by a non-resident decedent
d. Foreign currency deposited in bank outside the Philippines

Answer 39

Foreign currency deposited in bank outside the Philippines

Question 40

When the property is donated in contemplation of death, the basis of the tax shall be

a. Fair market value at the time of donation
b. Fair market value in the hands of the donor before the time of the donation
c. Fair market value at the time of death of the donor
d. Cost when the property was acquired

Answer 40

Fair market value at the time of death of the donor

Question 41

As a rule, the basis of valuation of property in the gross estate in the fair market value prevailing at the time of decedent’s death. In the case of domestic shares of stock not traded through the stock exchange, the fair market value is

a. The value appearing in the schedule of fixed values from the assessor’s office
b. Net realizable value
c. Acquisition cost
d. Issuer’s book value

Answer 41

Issuer’s book value

Question 42

Which of the following value is not used when valuing gross estate?

a. Fair market value at the time of death
b. Fair market value at the time the estate return is filed
c. Zonal value, when higher than the assessed value in case of real property
d. Book value in case of shares not traded in the stock exchange

Answer 42

Fair market value at the time the estate return is filed

Question 43

The following statements pertain to rules on valuing the estate left by a decedent. Select the incorrect statement.
I. Values in the gross estate are based on values at the time of the decedent’s death because it is at this time that the heir legally succeeds to the inheritance
II. Receivable are appraised on the basis of the amount of the principal and interests due and unpaid at the time of death

a. I only
b. II only
c. Both I and II
d. Neither I nor II

Answer 43

Neither I nor II are incorrect:

I. Values in the gross estate are based on values at the time of the decedent’s death because it is at this time that the heir legally succeeds to the inheritance
II. Receivable are appraised on the basis of the amount of the principal and interests due and unpaid at the time of death

Question 44

Decedent’s interest
I. Refers to the extent of equity or ownership participation of the decedent on any property physically existing and present in the gross estate, whether in his possession, control or dominion
II. Refers to the value of any interest, having value or capable of being valued or transferred, in property owned or possessed by the decedent at the time of his death

a. I only
b. II only
c. Both I and II
d. Neither I nor II

Answer 44

Both I and II

Decedent’s interest
I. Refers to the extent of equity or ownership participation of the decedent on any property physically existing and present in the gross estate, whether in his possession, control or dominion
II. Refers to the value of any interest, having value or capable of being valued or transferred, in property owned or possessed by the decedent at the time of his death

Question 45

Which of the following is not to be included in the gross estate of the citizen decedent?

a. Dividend income declared, but not yet actually received at the date of death
b. Share in partnership’s profit earned immediately after date of death
c. Rent income accrued before death but collected after death
d. None of the above

Answer 45

Share in partnership’s profit earned immediately after date of death

Question 46

Transfer in contemplation of death
I. Contemplates a situation where the transferor, during his lifetime, transfers property in contemplation of or intended to take effect in possession or enjoyment at or after his death
II. Includes situations where the transferor retains for life the possession or enjoyment, or the right to the income from the property, or the right to designate the person who shall possess or enjoy the property or income therefrom.
III. At the time of the decedent’s death, the decedent no longer owned the property, but such property forms part of his gross estate for estate tax purposes

a. I only
b. I and II only
c. All of the above
d. None of the above

Answer 46

All of the above

Transfer in contemplation of death
I. Contemplates a situation where the transferor, during his lifetime, transfers property in contemplation of or intended to take effect in possession or enjoyment at or after his death
II. Includes situations where the transferor retains for life the possession or enjoyment, or the right to the income from the property, or the right to designate the person who shall possess or enjoy the property or income therefrom.
III. At the time of the decedent’s death, the decedent no longer owned the property, but such property forms part of his gross estate for estate tax purposes

Question 47

The following are deemed transfers in contemplation of death, except

a. While still alive, the decedent donated property where the donation will take effect at the time of his death
b. The decedent transferred a property in the regular course of the business operation
c. The decedent donated a property with the condition that he or she will enjoy the fruits of such while still alive
d. The decedent transferred the property to take effect after his or her death

Answer 47

The decedent transferred a property in the regular course of the business operation

Question 48

An agreement created by will or an agreement under which title to the property is passed to another for conservation or investment with the income therefrom and ultimately the corpus to be distributed in accordance with the directives of the creator as expressed in the governing instrument

a. Estate
b. Trust
c. Fiduciary
d. Beneficiary

Answer 48

Trust

Question 49

All of the following are true, except

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. The power of the decedent-transferor to revoke terms may be exercised just once
d. A revocable transfer shall be included in the gross estate of the decedent-transferor even though the power to revoke was not exercised

Answer 49

The power of the decedent-transferor to revoke terms may be exercised just once

Question 50

Which of the following statements regarding transfer under general power of appointment and transfer under special power of appointment is correct?

I. There are three persons involved under this rule; the transferor, the first transferee, and the second transferee. The first transferee is the decedent
II. If authority is granted by the transferor to the first transferee to determine the person, who, upon the latter’s death, would next possess or enjoy the property transferred, his authority emanates from a general power of appointment
III. If the transferor himself had determined beforehand who, upon the death of the first transferee, would next possess or enjoy the property, then the authority of the first transferee emanated from a special power of appointment

a. I and II only
b. II and III only
c. All of the above
d. None of the above

Answer 50

All of the above are correct:

I. There are three persons involved under this rule; the transferor, the first transferee, and the second transferee. The first transferee is the decedent
II. If authority is granted by the transferor to the first transferee to determine the person, who, upon the latter’s death, would next possess or enjoy the property transferred, his authority emanates from a general power of appointment
III. If the transferor himself had determined beforehand who, upon the death of the first transferee, would next possess or enjoy the property, then the authority of the first transferee emanated from a special power of appointment

Question 51

Which is wrong?

a. A power of appointment is the right to designate the person or persons who shall succeed to the property of a prior decedent
b. A special power of appointment authorized the donor of the power to appoint only from among a designated class or group of persons, including himself
c. The donee-decedent of a special power of appointment only holds the property in trust, hence, the property shall not form part of the donee-decedent’s gross estate
d. None of the above

Answer 51

A special power of appointment authorized the donor of the power to appoint only from among a designated class or group of persons, including himself

Question 52

Which of the following statements is not true?

a. A general power of appointment authorizes the donee of the power to appoint any person to possess or enjoy the property
b. A general power of appointment makes the donee of the power the owner of the property
c. A power of appointment is not always general
d. The appointed property passing under a general power of appointment is not includible in the gross estate of the donee-decedent

Answer 52

The appointed property passing under a general power of appointment is not includible in the gross estate of the donee-decedent

Question 53

The power of appointment may be exercised by the donor-decedent through the following modes:
I. By will
II. By deed to take effect in possession or enjoyment at or after his death
III. By deed under which he has retained for his life or any period not ascertainable without reference to his death or for any period which does not in fact end before his death

a. I only
b. II only
c. I and II only
d. I, II, and III

Answer 53

The power of appointment may be exercised by the donor-decedent through the following modes:
I. By will
II. By deed to take effect in possession or enjoyment at or after his death
III. By deed under which he has retained for his life or any period not ascertainable without reference to his death or for any period which does not in fact end before his death

Question 54

Which of the following transfer is not included in the gross estate?
a. Transfer with reservation of certain rights
b. Transfer for insufficient consideration
c. Transfer for an adequate full consideration in money or money’s worth
d. Transfer in contemplation of death

Answer 54

Transfer for an adequate full consideration in money or money’s worth

Question 55

In determining whether the value of a property transferred onerously by a decedent during his lifetime should be included in his estate, ask yourself was the consideration insufficient?
I. If yes, then add the excess of the FMV at the time of death over the consideration received
II. If no, then it was a bona fide sale. Exclude the property in determining the decedent’s gross estate

a. I only
b. II only
c. Both I and II
d. Neither I nor II

Answer 55

In determining whether the value of a property transferred onerously by a decedent during his lifetime should be included in his estate, ask yourself was the consideration insufficient?
I. If yes, then add the excess of the FMV at the time of death over the consideration received
II. If no, then it was a bona fide sale. Exclude the property in determining the decedent’s gross estate

Question 56

Proceeds of life insurance includible in the taxable gross estate

a. Insurance proceeds from SSS or GSIS
b. Amount receivable by any beneficiary other than the estate, administrator or executor, irrevocably designated in the policy by the insured
c. Amount receivable by any beneficiary designated in the insurance policy
d. Proceeds of group insurance taken out by a company for its employees

Answer 56

Amount receivable by any beneficiary designated in the insurance policy

Question 57

Amounts receivable by the estate of the deceased, his executor, or administrator as an insurance under policy taken by the decedent upon his own life is:

a. Excluded from gross estate
b. Part of the gross estate whether the beneficiary is revocable or irrevocable
c. Part of the gross estate if the beneficiary is revocable
d. Part of the gross estate if the beneficiary is irrevocable

Answer 57

Part of the gross estate whether the beneficiary is revocable or irrevocable

Question 58

Which of the following is not included in the gross estate?

a. Revocable transfer 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 estate and the designation is irrevocable
d. Proceeds of life insurance where the beneficiary designated is the mother and the designation is irrevocable

Answer 58

Proceeds of life insurance where the beneficiary designated is the mother and the designation is irrevocable

Question 59

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 of whether the beneficiary is revocable or irrevocable
c. Not part of the gross estate if the beneficiary is irrevocable
d. Part of the gross estate regardless of whether the beneficiary is revocable or irrevocable

Answer 59

Not part of the gross estate if the beneficiary is irrevocable

Question 60

Which of the following is not true regarding a claim against insolvent persons?

a. The decedent’s claim is deductible in full because the debtor’s liabilities exceed his remaining assets
b. The decedent’s claim must be included in full in the gross estate
c. The decedent’s claim which cannot be collected is deductible according to the ratio of the debtor’s assets to his liabilities
d. Claim against insolvent person is a claim against a person whose assets are not sufficient to pay his liabilities

Answer 60

The decedent’s claim is deductible in full because the debtor’s liabilities exceed his remaining assets

Question 61

Which is correct?
I. In a claim against insolvent person, the insolvency of the debtor must be proven and not merely alleged
II. 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

a. I only
b. II only
c. Both I and II
d. Neither I nor II

Answer 61

I only is correct

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

Question 62

Which of the following is included in the income of the estate of a decedent?

a. Income received by the estate of a deceased person during the period of administration or settlement of the estate
b. Excess of selling price over the appraised value placed upon the property at the time of death, where the property was sold after the settlement of the estate
c. Appreciation in the value of property passed to the executor or administrator upon death of the decedent
d. Delivery of property in kind to legatee or devisee

Answer 62

Income received by the estate of a deceased person during the period of administration or settlement of the estate

Question 63

The following are transactions exempt from transfer tax, except:

a. Transmission from the first heir or donee in favor of another beneficiary in accordance with the desire of the predecessor
b. Transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
c. The merger of usufruct in the owner of the naked title
d. All bequests, devices, legacies, or transfers to social welfare, cultural and charitable institutions

Answer 63

All bequests, devices, legacies, or transfers to social welfare, cultural and charitable institutions

Question 64

Which of the following exempt transmissions will still require inclusion of the property in the gross estate?

a. Merger of the usufruct in the owner the naked title
b. All bequests, devices, legacies, or transfers to social welfare, cultural and charitable institutions
c. Transfer from a first heir to a second heir designated by the decedent
d. Death benefits under GSIS and SSS

Answer 64

All bequests, devices, legacies, or transfers to social welfare, cultural and charitable institutions

Question 65

One of the following is included in the gross estate of a nonresident alien decedent

a. Wholly uncollectible claims against a debtor who absconded, debtor resides outside the Philippines
b. Partially collectible claims against an insolvent person who resides in Manila, the country of the nonresident alien decedent does not impose transfer taxes of any kind
c. Proceeds of life insurance of the decedent where the decedent’s estate was designated as irrevocable beneficiary, the policy was procured in Manila
d. Personal property situated in the Philippines donated by the decedent before he died to a son on account of the son’s marriage

Answer 65

Wholly uncollectible claims against a debtor who absconded, debtor resides outside the Philippines

Question 66

Which of the following is a transfer in contemplation of death?

a. Mhalapit Nha has been fighting for his life since he was diagnosed to have a terminal illness. Accepting his fate, he sought the assistance of Atty. Lho Yer and made his will
b. Mr. Matibay celebrated his 101st birthday. Feeling that death is not far, he transferred all his properties to Pedro and Juan
c. Both “a” and “b”
d. Neither “a” nor “b”

Answer 66

Both “a” and “b”

a. Mhalapit Nha has been fighting for his life since he was diagnosed to have a terminal illness. Accepting his fate, he sought the assistance of Atty. Lho Yer and made his will
b. Mr. Matibay celebrated his 101st birthday. Feeling that death is not far, he transferred all his properties to Pedro and Juan

Question 67

Which of the following is a transfer under special power of appointment?
I. Earl transfers his property in trust for his son, Gabry and then in trust for anybody whom Gabry may, by will, appoint or designate
II. Mr. Biyahero frequently travels due to the nature of his profession. He thinks that he is not spared from meeting accidents considering the rampant occurrence of accidents these days. He decided to execute his last will and testament, appointing his properties to his children
III. Georgia designated his special friend, E. Garcia as beneficiary of an insurance which he took upon his own life

a. I only
b. II only
c. All of the above
d. None of the above

Answer 67

None of the above

Question 68

Under which of the following situations, an estate tax return is required to be filed under the TRAIN Law?

a. Transfers which are subject to estate tax
b. The estate consists of registered or registrable properties for which a clearance from the BIR is required as a condition precedent for the transfer of ownership
c. Both “a” and “b”
d. Neither “a” nor “b”

Answer 68

Both “a” and “b”

a. Transfers which are subject to estate tax
b. The estate consists of registered or registrable properties for which a clearance from the BIR is required as a condition precedent for the transfer of ownership

Question 69

Who shall file the estate tax return?

a. Executor, or administrator, or any of the legal heirs
b. Creditors of the decedent
c. Personal secretary of the decedent
d. Debtors of the decedent

Answer 69

Executor, or administrator, or any of the legal heirs

Question 70

Statement 1: The estate tax imposed under the Tax Code shall be paid by the executor or administrator before the delivery of the distributive share in the inheritance to any heir or beneficiary
Statement 2: The executor or administrator of an estate has the primary obligation to pay the estate tax, but the heir or beneficiary has subsidiary liability for paying that portion of the estate corresponding to his distributive share in the value of the total net estate.

Which of the following is correct?

Answer 70

Statement 1 and 2 are true

Question 71

Statement 1: The Commissioner or any of the Revenue Officer authorized by him pursuant to the tax code shall have the authority to grant, in meritorious cases, a reasonable extension not exceeding thirty days for filing the return
Statement 2: The application for the extension of time to file the estate tax return must be filed with the RDO where the estate is required to secure its TIN and file the tax return of the estate

Which of the following is correct?

Answer 71

Statements 1 and 2 are true