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TAX > Succession and Transfer Taxes > Flashcards

Succession and Transfer Taxes Flashcards

1
Q

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?

A

TRUE

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2
Q

Estate tax is an excise tax. T or F?

A

TRUE

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3
Q

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

A

TRUE

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4
Q

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

A

FALSE.

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

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5
Q

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?

A

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.

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6
Q

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?

A

TRUE.

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7
Q

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

A

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.

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8
Q

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

A

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.

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9
Q

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?

A

TRUE.

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10
Q

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

A

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.

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11
Q

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

A

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.

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12
Q

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

A

TRUE.

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13
Q

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

A

TRUE.

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14
Q

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

A

TRUE

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15
Q

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

A

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.

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16
Q

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

A

TRUE.

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17
Q

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

A

FALSE.

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

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18
Q

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?

A

TRUE.

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19
Q

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?

A

TRUE.

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20
Q

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?

A

TRUE.

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21
Q

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

A

None of the above

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22
Q

The object of estate tax is the:

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

A

Right to transmit

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23
Q

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

A

All of the above:

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

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24
Q

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

A

Upon the death of the decedent

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25
Q

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

A

Donor’s tax

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26
Q

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?

A

Statements 1 and 2 are false.

Both of the transactions mentioned are onerous transfers.

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27
Q

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?

A

Statement 1 is true.
Statement 2 is false.

A gift out of love to a former girlfriend is a gratuitous transfer.

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28
Q

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

A

Succession

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29
Q

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

A

I, II, and III only.

I. Decedent
II. Estate
III. Heirs

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30
Q

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.

A

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

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31
Q

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?

A

Statement 1 and 2 are true.

32
Q

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

A

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

33
Q

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

A

All of the above:

I. Voluntary heirs
II. Compulsory heirs
III. Legal or intestate heirs

34
Q

Heirs who inherits personal property by will is known as:

a. Devisee
b. Legatee
c. Compulsory heir
d. Donee

A

Legatee

35
Q

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

A

Relative by affinity

36
Q

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

A

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

37
Q

A person appointed by the testator to carry out the provisions of the will is called:

a. Administrator
b. Executor
c. Enforcer
d. Beneficiary

A

Executor

38
Q

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”

A

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

39
Q

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

A

All of the above:

I. Testamentary or testate succession
II. Legal or intestate succession
III. Mixed succession

40
Q

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

A

Testamentary succession

41
Q

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

A

When the heir instituted is capable of succeeding

42
Q

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

A

The will was subsequently rendered void by circumstances

43
Q

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

A

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

44
Q

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

A

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

45
Q

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”

A

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

46
Q

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

A

Even half blood brothers and sisters may inherit

47
Q

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

A

Collateral relatives within the 6th degree

48
Q

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

A

Legitimate children

49
Q

How many degrees (of generation) apart are third cousins?

a. Two
b. Four
c. Six
d. Eight

A

Eight

50
Q

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

A

The State

51
Q

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?

A

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

52
Q

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

A

Legitime

53
Q

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?

A

Statements 1 and 2 are true

54
Q

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?

A

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

55
Q

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

A

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

56
Q

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?

A

Statements 1 and 2 are true.

57
Q

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?

A

Statements 1 and 2 are true.

58
Q

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?

A

Statement 1 is true.
Statement 2 is false.

59
Q

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?

A

Statements 1 and 2 are true

60
Q

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

A

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

61
Q

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

A

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

62
Q

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

A

Collecting the heir’s estate

63
Q

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.

A

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

64
Q

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

A

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

65
Q

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

A

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

66
Q

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?

A

Statement 1 is false.
Statement 2 is true.

67
Q

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

A

None of the above is false

68
Q

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

A

I, II, and III are incorrect

69
Q

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

A

Disinheritance

70
Q

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

A

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

71
Q

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

A

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

72
Q

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

A

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

73
Q

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?

A

Statements 1 and 2 are true.

74
Q

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?

A

Statements 1 and 2 are true.

75
Q

Which is not authorized to take charge of the estate during intestate period?

a. Executor
b. Court
c. Administrator
d. Heirs

A

Court

TAX (10 decks)

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