Succession and Transfer Taxes

Question 1

Estate tax is a tax on the right to transfer property at death and on certain transfers which are made by law the equivalent of testamentary disposition and is measured by the value of the property. T or F?

Answer 1

TRUE

Question 2

Estate tax is an excise tax. T or F?

Answer 2

TRUE

Question 3

The taxpayer in estate taxation is the estate of the decedent as a juridical person. T or F?

Answer 3

TRUE

Question 4

Estate tax accrues as of the date of the actual possession or enjoyment of the estate by the beneficiary. T or F?

Answer 4

FALSE.

The estate tax accrues as of the date of death of the decedent.

Question 5

Executor is the person appointed by a court to carry out the directions and request of a decedent in his will and to dispose of his property according to the testamentary provisions after his death. T or F?

Answer 5

FALSE.

Executor is a person designated in the last will and testament to carry out the provisions of the decedent’s will.

Administrator is a person appointed by the court and performs the same duty as the executor.

Question 6

Intestate succession arises when there is transmission of properties in the absence of a will, or if there is a will, the same is void or lost its validity, or nobody succeeds in the will. T or F?

Answer 6

TRUE.

Question 7

Every will may be in writing and executed in a language not necessarily known to the testator. T or F?

Answer 7

FALSE.

The requisites for a valid notarial will are as follows:
1. It must be in writing and executed in a language or dialect known to the testator.
2. It must be subscribed at the end thereof by the testator himself or by the testator’s name written by some other person in his presence and by his express direction.
3. It must be attested and subscribed by three or more credible witnesses in the presence of the testator and of one another.

Question 8

A holographic will is a will entirely written by a testator with his own hand and may be witnessed or attested. T or F?

Answer 8

FALSE.

A holographic will is a written 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.

Question 9

The will of an alien residing abroad produces effect in the Philippines if made in conformity with the formalities prescribed by law of the place in which he resides. T or F?

Answer 9

TRUE.

Question 10

A person has unlimited right to make donations in his last will and testament. T or F?

Answer 10

FALSE.

Voluntary heirs are only able to receive what the testator can freely dispose. The free portion refers to the portion or value left in the estate after deducting the legitime of the compulsory heirs.

Question 11

The rights to the succession are transmitted from the moment the heirs receive their share in inheritance. T or F?

Answer 11

FALSE.

Upon the death of the decedent, succession takes place and the right of the State to the tax the privilege to transmit the estate vests instantly upon death.

Question 12

The law presumes that every person is of sound mind in the absence of proof to the contrary. T or F?

Answer 12

TRUE.

Question 13

Brothers and sisters (whether half or full blood) of the decedent are not compulsory heirs. T or F?

Answer 13

TRUE.

Question 14

Brothers and sisters (whether half or full blood) of the decedent can be an intestate heir. T or F?

Answer 14

TRUE

Question 15

There cannot be a disinheritance for compulsory heirs. T or F?

Answer 15

FALSE.

Disinheritance is a testamentary disposition by which a compulsory heir is deprived of, or excluded from, the inheritance to which he has a right.

Disinheritance is not applicable to voluntary heirs.

Question 16

Relatives by affinity are strangers for estate tax purposes. T or F?

Answer 16

TRUE.

Question 17

An heir who inherits a specific personal property by will is known as devisee. T or F?

Answer 17

FALSE.

A devisee is an heir who inherits real estate which is NOT a specific personal property (movable).

Question 18

A codicil is a supplement or addition to a will, made after the execution of a will and annexed to be taken as a part thereof, by which any disposition made in the original will is explained, added to or altered. T or F?

Answer 18

TRUE.

Question 19

Under the law on legitime, if the only survivor is a widow or widower, she or he shall be entitled to one half of the hereditary estate of the deceased spouse, and the testator may freely dispose of the other half. T or F?

Answer 19

TRUE.

Question 20

Representation is a right created by the fiction of law, by virtue of which the representative is raised to the place and degree of the person represented and acquires the rights which the latter would have if he were living or if he could have inherited. T or F?

Answer 20

TRUE.

Question 21

Which of the following statements is false? Transfer tax is

a. Imposed upon gratuitous transfer of property
b. Of two kinds: estate tax and donors’ tax
c. Classified as national tax
d. None of the above

Answer 21

None of the above

Question 22

The object of estate tax is the:

a. Right to transmit
b. Decedent
c. Properties of the decedent
d. Beneficiaries

Answer 22

Right to transmit

Question 23

Justification for the imposition of transfer tax.

a. Redistribution of wealth theory
b. Benefit received theory
c. State partnership theory
d. All of the above

Answer 23

All of the above:

a. Redistribution of wealth theory
b. Benefit received theory
c. State partnership theory

Question 24

Mortis causa transfer of property is effected:

a. When the property is received by the heir
b. When the court awarded the opportunity of property to a particular heir
c. Upon the death of the decedent
d. Upon payment of estate tax

Answer 24

Upon the death of the decedent

Question 25

The tax imposed on the transfer of property without consideration between two or more persons who are living at the time the transfer is made. a. Estate tax b. Business tax c. Donor's tax d. Personal tax

Answer 25

Donor's tax

Question 26

Statement 1: Cancellation of existing debt as payment for services rendered by the debtor to the creditor is a gratuitous transfer. Statement 2: A sale is a form of transfer transaction that requires payment of transfer tax. Which of the following is true?

Answer 26

Statements 1 and 2 are false. Both of the transactions mentioned are onerous transfers.

Question 27

Statement 1: A sale on installment basis is considered as an onerous transfer. Statement 2: A gift out of love to a former girlfriend is an onerous transfer. Which of the following is true?

Answer 27

Statement 1 is true. Statement 2 is false. A gift out of love to a former girlfriend is a gratuitous transfer.

Question 28

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. Purchase c. Barter d. Donation

Answer 28

Succession

Question 29

The elements of succession are: I. Decedent II. Estate III. Heirs IV. Administrators or Executors a. I and II only b. I, II, and III only c. All of the above d. None of the above

Answer 29

I, II, and III only. I. Decedent II. Estate III. Heirs

Question 30

Estate a. Is the sum of all the property of a deceased individual which are available for disposition to his heirs, successors, or beneficiaries, represented by an executor or administrator as the case may be b. Is a person designated in the last will and testament to carry out the provisions of the decedent's will c. Is a person who performs a fiduciary duty, such as taking care of the decedent's estate prior to final disposition to the heirs d. Is a person appointed by the court and performs the same duty, in lieu of an executor, if the latter refused to accept the appointment, failed to qualify under the law, or the last will and testament did not appoint one.

Answer 30

ESTATE is the sum of all the property of a deceased individual which are available for disposition to his heirs, successors, or beneficiaries, represented by an executor or administrator as the case may be

Question 31

Statement 1: Inheritance refers to all the property, rights, and obligations of a person which are not extinguished by death and all which have accrued thereto since the opening of succession. Statement 2: Rights which are purely personal are not transmissible, for they are extinguished by death. Which of the following is true?

Answer 31

Statement 1 and 2 are true.

Question 32

Which is not true about inheritance? a. Inheritance includes property, rights, and obligations of a person that have accrued since the opening of the succession. b. Inheritance includes devise and legacy c. Inheritance includes property, rights, and obligations extinguished by a person's death d. Inheritance includes property, rights, and obligations existing at the time of death

Answer 32

Inheritance includes property, rights, and obligations extinguished by a person's death

Question 33

Heirs, for real estate tax purposes, are classified as: I. Voluntary heirs II. Compulsory heirs III. Legal or intestate heirs a. I only b. I and II only c. All of the above d. None of the above

Answer 33

All of the above: I. Voluntary heirs II. Compulsory heirs III. Legal or intestate heirs

Question 34

Heirs who inherits personal property by will is known as: a. Devisee b. Legatee c. Compulsory heir d. Donee

Answer 34

Legatee

Question 35

Which of the following is not a compulsory heir? a. Legitimate children and descendants, with respect to their legitimate parents or ascendants b. In default of letter a, legitimate parents or ascendants c. Widow or widower d. Relative by affinity

Answer 35

Relative by affinity

Question 36

The "compulsory heirs" are classified as: I. Primary-legitimate children and/or descendants II. Secondary-legitimate parents and/or ascendants; illegitimate parents III. Concurring-surviving spouse; illegitimate children and/or descendants a. I only b. I and II only c. All of the above d. None of the above

Answer 36

All of the above: I. Primary-legitimate children and/or descendants II. Secondary-legitimate parents and/or ascendants; illegitimate parents III. Concurring-surviving spouse; illegitimate children and/or descendants

Question 37

A person appointed by the testator to carry out the provisions of the will is called: a. Administrator b. Executor c. Enforcer d. Beneficiary

Answer 37

Executor

Question 38

Which of the following could legally effect transfer of properties through succession? a. By virtue of a will b. By operations of law c. By onerous transfer d. By both "a" and "b"

Answer 38

a. By virtue of a will b. By operations of law

Question 39

Which among the following are the kinds of succession? I. Testamentary or testate succession II. Legal or intestate succession III. Mixed succession a. I only b. I and II only c. All of the above d. None of the above

Answer 39

All of the above: I. Testamentary or testate succession II. Legal or intestate succession III. Mixed succession

Question 40

Succession which results from the designation of an heir, made in a will executed in the form prescribed by law, is known as: a. Legal or intestate succession b. Testamentary succession c. Mixed succession d. Ordinary succession

Answer 40

Testamentary succession

Question 41

Which is true? Legal or intestate succession does not take place a. If a person dies without a will, or with a void will, or one which has subsequently lost its validity b. When the heir instituted is capable of succeeding c. When the will does not dispose of all the property belonging to the testator d. If the suspensive condition attached to the institution of heir does not happen or is not fulfilled

Answer 41

When the heir instituted is capable of succeeding

Question 42

Which of the following is regarded as an intestate succession? a. The will is designating the State as the beneficiary of the free portion b. The will was subsequently rendered void by circumstances c. The will designates a part of free portion to a stranger d. The will disposed the legitime to the rightful heir

Answer 42

The will was subsequently rendered void by circumstances

Question 43

The following statements pertain to relatives by consanguinity, except: I. Consanguinity is the relation subsisting among all the different persons descending from the same stock or common ancestor II. A portion of the blood of the common ancestor flows through the veins of all his descendants, and though mixed with the blood flowing from many other families, yet it constitutes the kindred or alliance by blood between any two of the individuals III. This relation is also known as relation by blood IV. Relation by consanguinity is of two kinds: lineal and collateral a. I and II only b. I, III, and IV only c. All of the above d. None of the above

Answer 43

All of these pertain to relatives by consanguinity: I. Consanguinity is the relation subsisting among all the different persons descending from the same stock or common ancestor II. A portion of the blood of the common ancestor flows through the veins of all his descendants, and though mixed with the blood flowing from many other families, yet it constitutes the kindred or alliance by blood between any two of the individuals III. This relation is also known as relation by blood IV. Relation by consanguinity is of two kinds: lineal and collateral

Question 44

Which is not true about relationships? a. The relation subsisting between son, father, and grandfather, in that order, is an example of an ascending lineal consanguinity b. Consanguinity is the relation of persons ascending from the same stock or common descendants c. Collateral consanguinity is that which subsists between persons who have the same ancestors, but who do not descend or ascend one from the other d. Affinity is the connection existing in consequence of a marriage between each of the married spouse and kindred of the other

Answer 44

Consanguinity is the relation of persons ascending from the same stock or common descendants

Question 45

Which of the following statements regarding degree of relationship is incorrect? a. In the direct line, ascent is made to the common ancestor. Thus, the child is one degree removed from the parent, two from the grandfather, and three from the great-grandparent b. In the collateral line, ascent is made to the common ancestor and then descent is made to the person with whom the computation is to be made. Thus, a person is two degrees removed from his brother, three from his uncle, who is the brother of his father, four from his first cousin and so forth c. Both "a" and "b" d. Neither "a" nor "b"

Answer 45

Neither "a" nor "b" is INCORRECT a. In the direct line, ascent is made to the common ancestor. Thus, the child is one degree removed from the parent, two from the grandfather, and three from the great-grandparent b. In the collateral line, ascent is made to the common ancestor and then descent is made to the person with whom the computation is to be made. Thus, a person is two degrees removed from his brother, three from his uncle, who is the brother of his father, four from his first cousin and so forth

Question 46

In a legal succession a. Only full blood brothers and sisters may inherit b. Even half blood brothers and sisters may inherit c. Half blood brothers and sisters are not considered collateral relatives d. Full blood brothers and sisters do not inherit

Answer 46

Even half blood brothers and sisters may inherit

Question 47

Who is not an intestate heir a. Legitimate children or descendants b. State c. Legitimate parents or ascendants d. Collateral relatives within the 6th degree

Answer 47

Collateral relatives within the 6th degree

Question 48

In default of testamentary heirs, the law determines who is to succeed to the inheritance of the deceased. Which one of the following ranks first in order of succession? a. Legitimate children b. Surviving spouse c. Legitimate parents d. Illegitimate parents

Answer 48

Legitimate children

Question 49

How many degrees (of generation) apart are third cousins? a. Two b. Four c. Six d. Eight

Answer 49

Eight

Question 50

In case where there are no relatives to receive the inheritance, who of the following has the claim on the estate? a. The nearest relative beyond fifth degree b. The closest associate or friend c. Any charitable institution located in the place where the bulk of the estate is located d. The State

Answer 50

The State

Question 51

Statement 1: Compulsory heirs include illegitimate children Statement 2: In the absence of compulsory heirs, relatives to the 3rd degree would inherit the state. Which of the following is true?

Answer 51

Statement 1 is true Statement 2 is false. Other collateral relatives within the 5th degree will inherit

Question 52

Certain parts of the estate of a deceased Filipino citizen cannot be freely disposed of because Philippine law reserves them for the "compulsory heirs." This portion of the decedent's estate is known as a. Legitime b. Free portion c. Legacy d. Bequest

Answer 52

Legitime

Question 53

Statement 1: In testamentary and legal succession, the compulsory heirs are assured of their legitimes Statement 2: In every inheritance, the relative nearest in degree excludes the more distant ones, saving the right of representation when it properly takes place Which of the following is true?

Answer 53

Statements 1 and 2 are true

Question 54

If the surviving heirs in an intestate succession are the parents and a legitimate child of the decedent, what is the share of the parents in the legitimes?

Answer 54

None. Parents are secondary compulsory heirs who succeed only in the absence of the primary compulsory heirs.

Question 55

Which of the following statement is true? a. The sharing of heirs in intestate succession does not satisfy the rule on legitimes b. The sharing of heirs in testamentary succession must satisfy the rules on legitimes c. A compulsory heir cannot receive more than his legitimes d. There cannot be disinheritance for compulsory heir

Answer 55

The sharing of heirs in testamentary succession must satisfy the rules on legitimes

Question 56

Statement 1: Under the law on legitime, if the only survivor is the widow or widower, she or he shall be entitled to one half of the hereditary estate of the deceased spouse, and the testator may freely dispose of the other half Statement 2: Legitimate and illegitimate child has equal share under intestate distribution of estate Which of the following is true?

Answer 56

Statements 1 and 2 are true.

Question 57

Statement 1: A free portion of the estate could be transferred to compulsory heirs by virtue of a will Statement 2: The surviving spouse is always entitled to his or her legitime that varies according to the number and classes of other surviving compulsory heirs. Which of the following is true?

Answer 57

Statements 1 and 2 are true.

Question 58

Statement 1: The presence of children does not disqualify parents to inheritance. Statement 2: The rules on legitime are a substitute for testamentary dispositions. Which of the following is true?

Answer 58

Statement 1 is true. Statement 2 is false.

Question 59

Statement 1: A "will" is an act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate upon his death. Statement 2: A "codicil" is a supplement or an addition to a will, made after the execution of a will to be taken as a part thereof, by any disposition made in the original will is explained, added to, or altered. Which of the following is true?

Answer 59

Statements 1 and 2 are true

Question 60

No will shall be revoked, except a. By implication of law b. By some will, codicil, or other writing executed as provided in the case of wills c. By burning, tearing, canceling, or obliterating the will with the intention of revoking it, by the testator himself, or some other person in his presence, and by his express direction d. All of the above

Answer 60

All of the above are ways a will shall be revoked: a. By implication of law b. By some will, codicil, or other writing executed as provided in the case of wills c. By burning, tearing, canceling, or obliterating the will with the intention of revoking it, by the testator himself, or some other person in his presence, and by his express direction

Question 61

Which of the following is a valid will? a. That which reduces the legitime of compulsory heirs b. That which increase the share of one heir without impairing the legitimate of the other heirs c. That which transfer the legitime of one heir to the other heir d. That which impair the legitimate of compulsory heirs

Answer 61

That which increase the share of one heir without impairing the legitimate of the other heirs

Question 62

Probate of a will involves the following processes, which one is NOT? a. Collecting the decedent's estate b. Liquidating liabilities and paying necessary taxes c. Distributing property to the heirs d. Collecting the heir's estate

Answer 62

Collecting the heir's estate

Question 63

Mr. Mhalapit Nha executed a second will three months after he executed the first one. The second will is silent as to the first will. What effect does the second will produce? a. The second will is void because he waived his right to revoke the first will. b. The first will is automatically revoked because of the existence of a subsequent will c. The second will annul provisions of the first will that are inconsistent with the second will d. The first shall subsist over the second will because it is the original will.

Answer 63

The first will is automatically revoked because of the existence of a subsequent will

Question 64

In which of the following cases is a will invalid? a. When no heir has been instituted b. When the will was executed in a language not known to the testator c. When the institution does not cover the entire estate d. When the instituted heir is incapacitated to succeed

Answer 64

When the will was executed in a language not known to the testator

Question 65

Which of the following is not a valid will? a. That which increases the legitime of a compulsory heir b. That which transfers the portion of the legitime to other successors other than compulsory heirs c. That which reduces the free portion of the estate tax d. That which transfers a part of the free portion to a compulsory heir

Answer 65

That which transfers the portion of the legitime to other successors other than compulsory heirs

Question 66

Statement 1: The making of a person's will may be left in part to the discretion of a third person. Statement 2: Persons of either sex under eighteen years of age cannot make a will Which of the following is true?

Answer 66

Statement 1 is false. Statement 2 is true.

Question 67

A testator may execute a holographic will instead of an ordinary will. Which of the following statements pertaining to holographic will is false? I. A person may execute a holographic will which must be entirely written, dated, and signed by the hand of the testator himself. II. A holographic will is subject to no other form, and may be made within or outside of the Philippines, and need not be witnessed III. In case of any insertion, cancellation, erasure, or alteration in a holographic will, the testator must authenticate the same by his full signature a. II only b. III only c. All of the above d. None of the above

Answer 67

None of the above is false

Question 68

Choose the incorrect statement from the following: I. If a compulsory heir is given by will, less than his legitime, the provisions of the last will and testament should not be modified in such a way that he will receive his legitime II. Compulsory heirs have rights to insist that the legitime be given in the form of a property III. The property left by the decedent without a will shall be transferred in favor of the government a. I only b. II only c. I and II only d. I, II, and III

Answer 68

I, II, and III are incorrect

Question 69

It deprives an heir to inherit properties by the decedent through the issuance of a will. a. Disinheritance b. Distributable share c. Legitimate d. Disqualification

Answer 69

Disinheritance

Question 70

The following are causes of disinheriting a child. Which one is NOT? a. When a child has been found guilty of an attempt against the life of the testator b. When a child has been convicted of adultery or concubinage with the spouse of the testator c. When a child marries a person other than the testator's choice d. When a child leads a dishonorable or disgraceful life

Answer 70

When a child has been convicted of adultery or concubinage with the spouse of the testator

Question 71

The following are causes for disinheriting a spouse, which one is not? a. When the spouse justifiably refuses to support the children or the other spouse b. When the spouse has accused the testator of a crime for which the law prescribes imprisonment for six years or more, and the accusation has been found to be false c. When the spouse by fraud, violence, intimidation, or undue influence causes the testator to make a will or change one already made d. When the spouse has given cause for legal separation

Answer 71

When the spouse justifiably refuses to support the children or the other spouse

Question 72

Which is not true about an inheritance? a. The acceptance of an inheritance may be express or tacit. b. The express acceptance of an inheritance may be made in a public or private document c. An heir may accept or repudiate an inheritance d. The inheritance or repudiation of an inheritance takes effect upon inheritance or repudiation

Answer 72

The inheritance or repudiation of an inheritance takes effect upon inheritance or repudiation

Question 73

Statement 1: Representation is a right created by fiction of law by virtue of which the representative is raised to the place and degree of the person represented and acquires the rights which the latter would have if he were living or if he could have inherited. Statement 2: If a compulsory heir dies ahead of the testator, his legitime goes to the child by representation Which of the following is true?

Answer 73

Statements 1 and 2 are true.

Question 74

Statement 1: The right of representation takes place in the direct descending line, but never in the ascending line Statement 2: The child of a voluntary heir who predeceases the testator gets nothing because there is no representation among voluntary heirs nor in the free portion Which of the following is true?

Answer 74

Statements 1 and 2 are true.

Question 75

Which is not authorized to take charge of the estate during intestate period? a. Executor b. Court c. Administrator d. Heirs

Answer 75

Court