CPAR_TAX7411_Estate Tax with Answer (1).pdf

ESTATE rAxArlON cPA Revieur ttffilij.tfte PhtirFprnes xlera Crwz r rle vera tr,opez1. This is not part of the coryugal properly

a. Those acquired by onerous title during the maniage at the expense of the ccrnmon frrndb. Those acquired by industry or work of either ofthemc. The fruits, rents or interests received or due during the marriage coming from the oonjugal property or

from the exclusive properties of the spouses.d. Those acquired during the marriage by gratuitous title

2. This is not part ofthe gross estate of the decedenla. Conjugal property c. Share of the surviving spouseb. Community property d, Exclusive property of the surviving spouse

3. Under the absolute comrnunity of property, jewelry f,or personal & ex.clusive use of the wife shall belong tothea. wife b. husband c. husband and wife d. children

4. The estate should be valued at the tirnea. The heirs are ascertainedb. The esta{e tax is paid

5. The estate may slaim a standard deduction of

c. The estate is ready for dislribution to the heirsd. Cf dr:ath,sf tire dscedent

d. P500i000I

a. PI,000,000 b. P2,000,000 c, F200,0006. A made the foilowing transfers inter-vivos:

Ts B. rqe lbD TP ECost Pi00,000 P100,0S0 P100,CI00 P100,000FMV, time of transfer 140,000 L00,000 100,000 I 80.000Consideration received 100,000 i40,000 8C,00dJ i 10,000FMV time of death of A 120,000 200,(t00 70,0(}0 90,000

The amount to be included in the gross estate of A isa. P 160,00t1 b. P100,000 c.Iji30,000

7. Medical experlses, to be deductible, must be incurred by the decedent witldna. One year prior to his deathb. One year after his death

8. The medical expense shall in no case exceeda. P200,000 b. P400,000 o. P500,000 d. Pi,000,00

9. The amount of funetai expense that nray be,leducted- korn ti,e;t,:s.: estale i:;a. 5o/o of the gross estate or P200,000 whichever is lovrerb. Actual funeral expense or P200,000 whichever is lowerc. 5Ya of tho gross estate or the acfual funerai expenses whichercr is lr.rwerd. 5% of the gloss estatc or the actual funeral expenses or P200,r100 wluE;krever is the lowest

10. One ofthe following is not an exemption or exclusion trom ihe gross estatea. Capitai or exclusive profrerly of the surviving spolrse rrb. Properties outside the Philippines of a non-resident Chinese Cecedentc. Shares of stock of San Miguel Corporation cf a rron-resident Msxicand. The merger of usulruct irr the owner of the naked title

11. A died ieaving a fann land. In his wili, he transfbned ti:e orvnership tirerer:f trr il but subject to the conditionthat C will have the right to use the lancl for a period of ten years iusuiruct). ln the seventh year, however, Cdied and in C's will he surrendered his right over the land to B.

a. The lransfer is subject to donor's tax e. The fransf'eris botir an inclusion from the gross estateb. The transfer is subject to estate tax d. The abovr: is a tax'.exennpf tran:;fer

12. Gross estate includes all his property, real or personal, tangible or in'.angible rvherel'er situated, excepa. Resident citizen b, No*-resident citizen c.. Resident alicrn tl. Nau-resident alien

d. P110,000

r.. Twc ycars pri.or to his rleethd. Three years prior tr: his death

MilletTypewritten TextD


MilletTypewritten TextC


MilletTypewritten TextA

MilletTypewritten TextB







MilletTypewritten Textyung personal stuff ni wife, exclusive yun except jewelries..

MilletTypewritten Text6,21,28,29,31,32*,33,34,36,37,42,43,48,49,50

13. Written notice shall be given to the CIR if the gross estate excecdsa. P 20,000 b. P50,000 c. F100.000 d. P150,000

Items 14 through t7 pertain to the following infonnation:Proceeds of life insurance shall be included in the gross estate if the beneficiary designated is:

14. The estate and the designation isa. Revocablec. WheJher revoeable or irrevocable

15. The executor and the designation isa. Revocablec. Whether revocable or irrevocable

16. The adminisffator and the designation isa. Revocablec. Whether revocable or irrevocable

17. A person other than the estate, executor or adrdnistrator and the designation is

b Irrevocablecl. Partly revocable, partly in'evocable

b, Irrel'ocabled Partly rovooable, paftly irrevooable

h. lrrevocabled. Partiy revocable, partiy irrevocable

b. Irrevocabled. Partly revocable, partly irrevocable

l

I

Items 18 and i9 pertain to the following information: I

If it rvill causs undue bardship on the part of the estate, the estate tax may be paid *ithl,I

a. Revocablec. Whether revocable or irrevocable

18. In case the estate is settled through the courtsa.2 years b. 3 years

a. One month b. 2 months

19. In case the estate is settied rvithout court's interventiona. 2 years b. 3 years

i. ,+ ]rear';

c. 4 years

c. 3 months

i

c. ) yearsI

d. 5 yeaisi

,

d. 6 nnohths

d. Pi0,000,000

ql. 18 months

20. From the time of death, notice of death should lre given within

21. As a rule, estate tax return shouid be filed under oath. if the gross estatr exceedsa. P 100,000 b. P200,000 c. P500.000 d. P1,000,000

22.If t&re estate oonsists cf, registrable property, such as real propers, rnctor velucle, shares of stook or othersimilar properly frcrn

'uhieh a ctrearance frcm the BiR" i.s required as a cc,nditicin for the transfer ofo*n"rrhip, an estrrte tax retum should be filed under oath Ia. If tbe gross estate exceeds P200,000b. If the gross estate exceeds P500,000

i

23. The estate tax retr-rrn shall be supported with a statenterrt duly o*rii{iert by a CPA if thelgross estate exceedsa. P1,000,000 b. P2,000,000

c. If the gross estate *xceed*q Pl,000,000d. R.egarcllesr of the value of the $oss estate

c. P5,000.000

24. From the decesjents' deatir" the estate tax retrrrn shall bs fi"lsd w.thilr.a. 2 montls c. 6 rnonths

estate tax.a. True, true

b.3 months

25. The CIR, in meritrrrious ca$es may g-rent a reasonal:le extension to frl* xh"e retum, not exceedinga. 30 days b. 60 days c. 3 months d. 6 months

26. -

Fruits and incomr: of,exclusive propery*, shall belong to ttre sp$r.rses-

Donations made by the deeedent during triferime but to take effect upon iris death shall be exempt from

F"alse, falseb. T'rue, false c. Falsc, true d.27.

- Property brought to the urarriage by either spouse shall belcng to both spouses.

-- The share of r"lre surviving spouse in the conjugel properSr is pari.'cf th* gross estate of the decedenta. True, true b. True, false c. Iialse, true d. False, false










MilletTypewritten TextKapag 200K-filed under oath.. 2M-duly certified by a CPA..





MilletTypewritten TextFF

MilletTypewritten Textonly if Conj.Partn.of Gains

MilletTypewritten Textonly if Abs.Community

MilletTypewritten TextFT

28. Which of the following statements is not correot in succession?t. Legitimate children share equally in their legitime of % of the net distributable estateb. When the spouse survives with one legitimat child, the legitime of the spouse is % of the net

distributable estatec. Wtien the spouse sunives rvitir wo iegitirua-te children, the legitime of the spouse is % of the net

distributable estated. The legitimes of the legitimate and illegitimate ohildven take precedence over the legitime of the

surviving spouse

29 . - Taxation of the estate shall b,e governed by the statute or law in force at the time of distribution of theestate to the heirs

- Succession takes place upon the determination of the respective share of the heirs in the estate of thedecedent

a. True, true b. True, false c. False, ffue d. False, false

30. -

The family home includes the holrse and the lot where the house stands-- The value of the house and the lot where it stands, if a Family Home is deductible ftom the estate of thedEoedenta. True, true b. True, false c. False, true d" False, false

31. -

When exclusive property is sold during the mamage, the proceeds become property of th9 spouses.. The tegal heirs df td. decedent must bi detenrdned first before the correct estate tax can be

ascertaineda. True, true b. True, false c. False, true d. False, false

32. -

Under the absolute ccrnnnnurrity' of property, prorterfy acquired before marriage by either spouse includingfruits and income, if any shall belong to botlt spouses

-- The cost of burial ploi, tombstone, monument or mausoleum, mourning apparel, exFenses of the wake,and notices are deeluctible'{iom gross estate as funeral expenses

d- False, falsea. True, true b.'irue, false c. False, true

33. -

Expenses incurred for the performance of the rites and ceremonies incident to interment and thoseincurred after interment, such as prayers, masses and entertainment are part of funeral expense'

-- The administator or eNecutor shall submit a statement showing the disposition of the proceeds of the loanif the claims against the estate rvas contracted withjn five years before the death of the decedent'

a. True, true b. True, false c. False, true d. False, false34.

- If the property is inherited before marriage it vrill belong to both spouses while if it is inherited during

marriage it is exclusive.-- Unless stipulated, the properiy relations shall be govemed by conjugal parhrership of gains for marriages

celebrated on or before Aug. 3, 1988.d- False, falsea. True, true b. True, false c. False, true

35. -

Unless stipulated, the propertv reiotions shatl be go'verned by absolute community of property formarriages celebrated on or after August 3, 1988

-- Under tl* ,"gr*" of absolute .o**lnrity of property, property for personal and exclusive use of eitherspouses except jewelry shall belong to both spouses'

a. True, true b. '['rue, false e. False, true d. False, false36. Statement 1

- The court may authorize the distribution of estate, to an heir if irl its sound discretion it

believes that the heir badly rreeds his share.Statement 2

- The adnninistrator or any of his heirs, may however upon authorization of BIR withdraw

from tfle decedent's bank deposits P20g00 without the riquired certification that the estate tax has beenpaid.

a. True, tnre b. True, false c. False, true d" False, false

37. Statement I -

Unpaid mortgage indebtedness is deductible from the gross estate provided the said propertyr"bJ".t t" th. inde|tedness ii included in the gross estote, net of the mortgage indebtedness'

-

Statement 2- A donation inter-vivos by the dicedentto the Fhilippine government few months before hisdeath is a deduction from the gross estate

a. True, true b. True, false c. False, true d. False, false



MilletTypewritten TextTF

MilletTypewritten Textdeductible only upto 1M

MilletTypewritten TextF F

MilletTypewritten TextXXXXXXX

MilletTypewritten TextXXXX

MilletTypewritten Textat the time of DEATH of the DECEDENT..

MilletTypewritten TextXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXupon death..


MilletTypewritten TextAbs.Comnty


MilletTypewritten Textonly if no former marriage..

MilletTypewritten Textonly upto 200K


MilletTypewritten TextXXX

MilletTypewritten Textbefore


MilletTypewritten Textwithin 2 years..

MilletTypewritten TextKapag >2 yrs na, dapat may substantiation..


MilletTypewritten Text___________

MilletTypewritten Textboth spouse if Abs.Community

MilletTypewritten Text_________

MilletTypewritten Texton Aug. 3, 1988 = ABCbefore Aug 2, 1988 = CPG

MilletTypewritten TextT F

MilletTypewritten Text____

MilletTypewritten TextFT


MilletTypewritten TextXXXXXXXXXXXXXXXXXXXXXXX

MilletTypewritten Text________


MilletTypewritten Textdonation mortis causa is included in GE.

38' Statement I * A died grving B power to appoint & persotr who will inherit A's house and lot. B howevercan only choose among C, D, E and F. B decided to transfer the property to C, in B's will when he was oldalready. The hansfer from B to C is subject to estate tax$tatemenl 2 * During A's lifetime, he decided to give B as gift his car subject to the condition tl,t if Bdoes not bscome a CPA within three years, A shall ievoke t&e-transfer. In the second year however, A died.The car can no longer fomr part of A,s gross estate.

a. True, true b. True, false c. False, true d. False, false39. A decedent left the following properties:

Land in Italy (with PIM unpaid mortgage)Land in Laguna, philippinesFranchise in USAReceivable from debtor in philippinesReceivable from debtor in USABank deposits in USAShares of stocks of PLDT, philippinesShares of stocks ofABC, foreign corporation 7-co af tnebusiness in the philippinesOther personal propertiesZonal value of the land in Laguna

If the decedent is a non-resident c*izeqhis gross estate isa. P3,650,000 b. P3,600,000 c. F2,500,000

43. A, Filipino, widower, died leaving the following:a. Real propertiesb. Familyhomec. Personal propertiesd. Paid medical pxpensee. Allowable deductions

a) Determine the net estate subject to tax.

P 2,000,000500,000100,00070,000

100,00090,00075,000

125,000300,000750,000

d. P2,650,000

40. Using the above data, if the decedent is a non-resident alien, his gross estate isa. P1,195,000 b. p94S,000 c. p1,320,000 d. p1,070,000

4i. If in the preceding number reciprocity law can be applied the gross estate isa. P1,050,000 b. p1,195,000 c. p1,250,000 d. p1,070,000

42' Based on the above problem but assuming that the PLDT shares of stocks are not listed in the local stockexchange, and there are 1,000 shares at the time of death, the company's outstanding shares were 10,000shares. Its retained eamings was P2,000,000, par value per share ** pSb. The gross

"itute should show the

said shares ata. Still at P75,000 b. P250,000 c. P200,000 d. P0

P 4,000,0001,200,0002,000,000

600,000900,000

b) Net distributable estate44" A, Filipino, married, died leaving the following:

a. Real property- cor{ugal p 4,000,000b. Real property

- exolusive (A) 2,500,000

c. Family home -

exclusive (A) I,200,000d. Unpaid medical expenses 600,000e. Allowable dedugtions

- cor{ugat 1,400,000

a) Determine the net ta:rable estate b) Net distributable estate45. C, Filipino, married to D, died leaving the following:

a. Real properties -

coqiugalb. Real property

- exclusive (C)

c. Family home -

exclusive (D)d, Allowable deduction- cor$ugal

Deterrnine the net taxable estate

P 4,000,0001,800,0001,400,0001"200,000

MilletTypewritten Text___

MilletTypewritten Textlimited 'to





MilletTypewritten Textassume w/in the Philippines

MilletTypewritten Text______________all properties worldwide tapos tax credit na lang yung iba..

MilletTypewritten TextNRC NRA NRAw/o+**++++++++++++++36001195 1050

MilletTypewritten TextLOWER AMT.

MilletTypewritten TextHIGHER AMT.


MilletTypewritten Text2000(RE) x 10% + 1K shares x 50 PV = 250K

MilletTypewritten TextIf FV is missing, use BV..

MilletTypewritten TextGEELITSplDeductn40001200-10002000-500-800StdDeduc-1000=7200-800-2500 = 3900 Net Estate 344 Estate Tax

MilletTypewritten Text3900K

MilletTypewritten TextGE7200Unpaid exp-800Estate tax-344Distributable = 6056

MilletTypewritten Text_____


MilletTypewritten TextCESplDeduc400025001200-1000-500-1400-1000Standard=2600/2=1300 +3700-2500 = 2500 Net estate 190 Tax Due


MilletTypewritten Text4000+2500+1200-600-1300*-190=4210


MilletTypewritten Text

MilletTypewritten TextCESpl Deduction40001800XX-1200=2800/2=1400 +1800-1000STD = 2200 Net Estate

46.8, Filipino, married ro Ii, dred leaving the following:a. Real properties

- corgugal P 5,000,000

b. Real property -

exclusive @) 1,200,000c. Real property

- exn:lusive @) (Lot where the fannily home stands) 400,000

d. Family home- c*iljrlgal 1,000,000e. Allowable deductions

- conjugal 1,600,000

Determine the net taxahle estate.

47. G,Filipino, married to H, died leaving the following:a. Real properties

- conjugal P7, 000,000

b. Real prope4y- exclusive (G) 1,400,000c. Real property* conjugai (lot where the farnily home stands) 800,000d. Family horne

- exclusive (G) 1,800,000

e. A-llowable deductions - conjugal 2,400,000

Determine the net tanable estate

48.IvIr. A, Filipino, married. died on January 1, 2011 survived by his wife and 2 legitimate children by aformer marriage and a legitirnate child with his present rruife, leaving the following:il. Property inherited from lds father who died January 2,2A07.

1) Agricultural land P ;!.,800,0002) Residential land 3,000,000

b. Property inherited from his mother who died on Nov. 1, 2000, one day after Mr. A's marriage to hispresent wifel) Fish pond P 1,200,0002) Jewelry 1,000,000

c. Properly acquired thru Mr. A's labor:1) Residential house andlot used as fhmily home F 1,900,CI002) Motor vehicles 800,0003) Commercial land 4,000,0004) Cash 2,000,000

The agricultural land and residential land were previously mortgaged for P800,000 when inherited whereP450,000 was paid by Mr. A during lifEtime. The ccrnmercial land has a mortgage of P1,000,000 of whichP600,000 was paid by Mr. A before his death. Mr. A by will bequeathed to the City of Manila forexclusiveiy public pu{pose t}re suin of P200,000.The estate claimed the following expenses:

a. Funeral expenses P 250,000 e. Claims against the estate 150,000b. Judicial ex.penses 100,000 d Medical expenses 400,000

Determine the net taxable estate

49. Z, a resident citizen. died leavingtho tbllowing:Net estate @etbre standard deduction):Philippinr:s P 5,C00,0CI0

usA 3,000,000Austalia 2,000,000

Estate ta"x paid:usA 290,000Austalia 220,000

Determine the estate tax due after tax credit.

50. Mr. Y, an A,rnerican, single and residing in USA, 6i"6laving the following:Land in Makati P 2,000,000Land in Manila 3,000,000Gross e$tate, USA 5,000,000

Deductions claime"d by the estate:Actual frureral expose 200,000Judicial expenses 100,000Claims against the estate 120,000Transfer of the land in Makaii to the Philippine government (in decedent's will) 2,000,000

o The land in Manila wken inherited 3 L/zyearc ago had a vaiue of P2.400,000 $rith a mortgage thereon of P400,000which was paid prior to lvIr. Y's death.

r The land in Maka4 when inherite d4'/zyea* ago has a value of P1,500,000.Determine the net eslate subjecl to estate tffi"

MilletTypewritten TextC E5000 1200 +400 FH1000FH-1600=4400/2= +2200 -500FH -400FH -1000STD= 1900



MilletTypewritten TextC E7000 1400800FH 1800-2400-5400/2= 2700 -1000FH - 1000STD = 3900

MilletTypewritten TextExclsveExclsve

MilletTypewritten TextExclsveExclsve

MilletTypewritten Text=> 4.5M=> - 2.7M1065____________=> - 2M x3/10 = 319.5 vs 280-28010M-1M=9M => 1065 x 2/10 = 213 vs 220-213.33=547.66

MilletTypewritten Text(200 + 100 + 120) = 420 x 5/10 = 210

MilletTypewritten Text1500 (lower) - 0= 1500 x (210+2000)/5000=6631500-663 = 837 x 20% 167.4 Vanishing deduction

MilletTypewritten Text2400(lower) -400 =2000 Initial basis x 2210/5000=8842000 - 884 = 1116 x 40% = 446.4 Vanishing deduction

MilletTypewritten Text

MilletTypewritten Text2000+3000 -210-2000-167.4 -446.=2176.2

MilletTypewritten Text2176.2

5l' Mr. A, Filipino, married to B with u&om he has two chiidren died on February 14,2011. The inventory ofthe properties of the spouses show the following:a, House and lot in Manila owned by A before the marriageb. Agricultural land ovrmed by B before the marriagec. Real property acquired during marriaged. Family home acquired during marriagee. Personal property acquired during marriagef. Commercial building in Makati inheritedhy A during marriage

from his father who died on February 14,l9g7g. Apartnent house inherited by B during merriage from her mother who

diedonFebruary 14,2003h. Proceeds of life insurance where rhe estate of A was designated as the

irrevocable beneficiaryi' Proceeds of life insurance where B was designated as the irrevocable beneficiary

Deductions claimed by the estate:L Legacy Stven in favor of Philippines goveiltment in decedent's will P300,0002. Claims against the estate 100,0003. Unpaid mortgage on agricultural land (etter b above) 400,0004. Funeral expenses 1g0,0005. Judicial expenses 600,000

Determine the estate hx due and payable

52. Mr. O, Filipino, married, died on Dec. 31,following:

2012, tiuee years after his marriage to Mrs. O. He left the

Property inherited by Mr. O from his father who died February 14,ZO07Property inherited by Mrs. O from her father w'ho died February 14,200&Property inherikd by Mr. O from his motlr.er rlrrc died February 14,2009Property inherited by Mrs. O from her mother *iro died February t4,2Al0

e. Property acquired thru the labor ofMr. OMri. OMr. & Idrs. 0 (farnily home)f. Other personal property

Deductions claimed by the estate:a. Funeral expenseb. Unpaid mortgages on property in letters:

a. 500,000 b.300,000 c. 180,000 d.200,000c. Claims against tle estated. Acorued tores (before the death of Mr. O)

Determine the net tmoble estate, assuming1. conjugal partnership of gains 2. Absolute comrnunity of property

If the net estate isESTATE TAXThe tax shall he Plqs

P 3,000,0001,200,0002,000,0002,200,0001,400,000

2,000,000

4,000,000

1,000,0002,000,000

a.

b.c.

d.

P3,000,0001,200,0001,800,0001,400,000

2,000,0001,500$oo2,400,0001,600,000

220,044

170,00080,000

Ovel

P 200,000500,000

2,000,0005,000,000

10,000,000

But not overP 200,000500,000

2,000,0005,000,000

10,000,000

Exempt

P 15,000135,000465,000

1,215,000

Tke End

5%8%llo/o15%2A%

Ofexcess over

P 200,000500,000

2,000,0005,000,000

10,000,000

'Tqt 1d -

11 6

MilletTypewritten TextSS = 2860Net Estate = 5560

MilletTypewritten TextDec. 31, 2009 mrriage

MilletTypewritten Textb is not included in CPG

MilletTypewritten Text#52Father F-inlaw Mother MarriageM-inlaw Death'07 '08 '09 12.31.09'10 12.31.123M 1.2 1.814ACPC C CECPGE E EEVD*TB=1.8-18/123 x 1.130=1,634,634 x 40% = 653,854

MilletTypewritten TextCPGExclCommTotalGE32+1.51.82.4+1.6=4.8 + =7.512.3MOrd-ELIT-0.5-0.2-0.18-0.17Ord-VD -0.653804-0.8 =3,466,146 + =7050K 10,516,146Spl-FH-1MSpl-STD-1MSpl-MED-3.525 = 4,991,146

MilletTypewritten TextACPExclCommTotalGE3+1.2+1.82+1.5+2.4+1.6=0 + =13.513.5MOrd-ELIT-0.5-0.2-0.18-0.3-0.17-0.8Ord-VD -0.858312 =0 + =11,211,688 11,211,688Spl-FH-1MSpl-STD-1MSpl-MED-5.5605844 =3,605,844

Documents

CPAR_TAX7411_Estate Tax with Answer (1).pdf