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Estate Tax > Introduction to Transfer Taxation > Flashcards

Introduction to Transfer Taxation Flashcards

1
Q

Types of Transfers

A

Bilateral transfers
Unilateral transfers
Complex transfers

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2
Q

Examples of Bilateral Transfers

A

Sale

Barter

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3
Q

Taxation Rules on Sale or Barter

A 
Business tax (for business sellers)
Income tax (for both business and non-business sellers)
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4
Q

Types of Unilateral Transfers

A

Donation

Succession

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5
Q

Donation inter vivos

A

Donation

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6
Q

Donation mortis causa

A

Succession

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7
Q

Complex transfers

A

Transfers for less than adequate consideration

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8
Q

Tax rules on complex transfers

A

Transfer element - subject to transfer tax

Exchange element - subject to business tax

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9
Q

Transfer element of complex transfers are generally considered

A

Donation inter vivos, unless

a. The sale was made in contemplation of the death of the seller
b. Titled to be transferred upon the death of the seller

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10
Q

Rationale of Transfer Taxation

A 
The Tax Evasion or Minimization Theory
Tax Recoupment Theory
The Benefit Received Theory
The State Partnership Theory
The Wealth Redistribution Theory
The Ability to Pay Theory
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11
Q

Nature of Transfer Taxation

A
  1. Privilege tax
  2. Ad valorem tax
  3. Proportional tax
  4. National tax
  5. Direct tax
  6. Fiscal tax
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12
Q

Extent of Taxation of Residents or Citizens

A

Global transfers of property

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13
Q

Extent of Taxation of Non-Resident Aliens

A

Philippine transfers of property

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14
Q

Incorporation Tests

A

Determination of citizenship of juridical persons

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15
Q

Situs of Transfer

A

Location of the property

  1. Date of donation (donation)
  2. Date of death (succession)
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16
Q

Exceptional Rules on Transfers

A

Transfer in contemplation of death
Transfer intended to take effect at death
Incomplete transfers

17
Q

Inter-vivos transfer with thought of death

A

Mortis causa

18
Q

Inter-vivos transfer with motive associated with life

A

Inter-vivos

19
Q

Motives associated with life

A

To reward services rendered
To relieve the donor of the burden of management of the property
To save on income tax
To see children financially independent
To see children enjoy the property while the decendent still lives
To settle family disputes

20
Q

“Last will and testament”

A

A document expressing the decendent’s desire on how his properties will be distributed after his death

21
Q

Types of incomplete transfers

A

Conditional transfers
Revocable transfers
Transfers with reservation of title to property until death

22
Q

How are conditional transfers completed?

A

Fulfillment of the condition by the transferee or

Waiver of the condition by the transferor

23
Q

How are revocable transfers completed?

A

Waiver by the transferor to exercise their right to revocation or
The lapse of the transferor’s right to revocation

24
Q

How are transfers with reservation of title to property until death completed?

A

The death of the decendent

25
Q

Are physical transfers = completed transfers?

A

No

26
Q

A transferor unilaterally transfers property to their son/daughter. If the transferor dies before a condition is fulfilled or before the right to revocation lapsed, and it (either condition or right to revocation) is not waived, which type of unilateral transfer is it?

A

Mortis causa

27
Q

Test of Taxability of Complex Incomplete Transfers

A

@ date of delivery of the property, consideration paid < full and adequate consideration
@ date of completion of the transfer, FV of property ≥ consideration paid

28
Q

Non-Taxable Transfers

A

Void transfers

Quasi-transfers

29
Q

Void transfers

A

Prohibited by law or

Do not conform to legal requirements for their validity

30
Q

Quasi-transfers

A

Transmissions of property which will never involve transfer of ownership

31
Q

Examples of void transfers

A

Donation of properties not owned by the donor
Donation between spouses
Donations which do not manifest all essential requisites to validity such as donations refused by the donee
Donations that do not conform to formal requirements such as oral donation of real properties

32
Q

Examples of quasi-transfers

A

Transmission of the property by the usufructuary to the owner of the naked title
Transmission of the property by a trustee to the real owner
Transmission of the property from the first heir to the second heir in accordance with the desire of a predecessor

33
Q

Examples of intangible properties

A

Financial assets

Accounting intangible assets

34
Q

Who does the reciprocity rule apply to?

A

Non-Resident Aliens

Estate Tax (3 decks)

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