Transfer Taxes

Question 1

Estate tax

Answer 1

Tax levied on the transmission of properties from a decedent to his heirs.

Question 2

Donors tax

Answer 2

Tax levied on the transmission of properties from a living person (donor) to another living person (donee)

Question 3

Estate Tax Inclusions

Answer 3

1. Decedents Interest
2. Transfer in contemplation of death
3. Revocable transfer
4. Property passing under general power of appointment
5. Proceeds of life insurance
6. Prior interest
7. Transfers for insufficient consideration

Question 4

Deductions in ET

Answer 4

1. Expenses, losses, indebtedness and taxes (ELIT)
2. Property previously taxed
3. Transfers for public use
4. Family home
5. Standard deduction (1m)
6. Medical expenses
7. Amount received under RA 4917

Question 7

Exemption on certain acquisitions and transmissions

Answer 7

1. Merger of the usufruct in the owner of the naked title
2. Transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to fideicommissary
3. Transmission from the 1st heir, legatee or donee in favor of another beneficiary, in accordance with the desire of the predecessor
4. All bequest, devices, legacies or transfers to social welfare, cultural and charitable institutions, no part of the net income inures to the benefit of any individual

Question 8

Political Contributions

Answer 8

REQUISITES FOR VALID NOTARIAL WILL:

1. In writing
2. In a language or dialect known to the testator
3. Subscribed at the end by the testator himself or by the testator�s name written by some other person in his presence, and by his express direction
4. Attested & subscribed by three or more credible witnesses in the presence of the testator and of one another
5. Each and every page, except the last, must be signed by the testator or by the person requested by him to write his name, and by the instrumental witnesses of the will, on the left margin
6. Each and every page of the will must be numbered correlatively in letters placed on the upper part of each page
7. It must contain an attestation clause, stating the following:
   a. The number of pages used upon which the will is written
   b. The fact that the testator signed the will and every page, or caused some other person to write his name, under his express direction, in the presence of the instrumental witnesses
   c. All the instrumental witnesses witnessed and signed the will and all its pages in the presence of the testator and of one another
8. It must be acknowledged before a notary public by the testator and the witnesses

Question 9

Claims Against the Estate

Answer 9

1. They were contracted in good faith and for an adequate and full consideration in money or moneys worth.
2. They must be existing against the estate.
3. They must be enforced against the claimants.
4. They must ne reasonably certain in amount.
5. The debt instrument was duly notarized and if loan was contracted within 3 years before the death of the decedent, the admin or exec shall submit statement showing the disposition of the proceeds of the loan.

Question 10

Vanishing deduction

Answer 10

a) Present decedent must have died within five (5) years from the date of death of prior decedent or date of gift.
b) The property with respect to which deduction is claimed must have formed part of the gross estate situated in the Philippines of the prior decedent or taxable gift of the donor.
c) The property must be identified as the same property received from the prior decedent or donor or the one received in exchange therefore.
d) The estate taxes on the gift must have been finally determined and paid.
e) No vanishing deduction on the property was allowed to the prior
estate.