Sample Computations and Illustrations – Estate Tax

SEC. 8. PROPER PRESENTATION OF FAMILY HOME AND STANDARD DEDUCTION AS DEDUCTIONS FROM THE GROSS ESTATE. – Illustrative examples to properly present the manner of
deducting family home, standard deduction, and other allowable deduction from the gross estate in accordance with the provisions of the NIRC.

Illustrations:
(1) Decedent is unmarried, family home more than P10,000,000:
Real and personal properties P 14,000,000

Family Home 30,000,000

Gross Estate P44,000,000

Less: Deductions

Ordinary Deductions

Unpaid real estate tax (2,000,000)

Special Deductions

Family Home (10,000,000)

Standard Deduction (5,000,000)

Total Deductions (17,000,000)

NET TAXABLE ESTATE P27,000,000

Although the family home is valued at P30 million, the maximum allowable deduction for the family home is P10 million only.

(2) Decedent is married, the family home is conjugal property, more than P10,000,000:
 Exclusive Conjugal Total

Conjugal Properties:

Family Home P30,000,000 P30,000,000

Real and personal properties 14,000,000 14,000,000

Exclusive Properties: 5,000,000 5,000,000

Gross Estate 5,000,000 44,000,000 P49,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 42,000,000

Special Deductions

Family Home (10,000,000)

Standard Deduction (5,000,000)

Total Deductions (17,000,000)

Net Estate 32,000,000

Less: 1/2 Share of Surviving Spouse (21,000,000)

Spouse

Conjugal Property P44,000,000

 Conjugal Deductions (2,000000)

Net Conjugal Estate P42,000,000

(P42M/2)

NET TAXABLE ESTATE P11,000,000

(3) Decedent is married, the family home exclusive property, more than P10,000,000:
Exclusive Conjugal Total

Conjugal Properties:

Real and personal properties 14,000,000 14,000,000

Exclusive Properties:

Family Home P30,000,000 P30,000,000

Gross Estate 30,000,000 14,000,000 P44,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 12,000,000

Special Deductions

Family Home (10,000,000)

Standard Deduction (5,000,000)

Total Deductions (17,000,000)

 Net Estate 27,000,000

Less: 1/2 Share of Surviving Spouse (6,000,000)

Spouse

Conjugal Property P14,000,000

Conjugal Deductions (2,000000)

Net Conjugal Estate P12,000,000

(P12M/2)

NET TAXABLE ESTATE P21,000,000

(4) Decedent is an unmarried, the family home is below P10,000,000:
Real and personal properties P 14,000,000

Family Home 9,000,000

Gross Estate P23,000,000

Less: Deductions

Ordinary Deductions 2,000,000

Special Deductions 14,000,000

Family Home 9,000,000

Standard Deduction 5,000,000

Total Deductions (16,000,000)

NET TAXABLE ESTATE P7,000,000

(5) Decedent is married, the family home is conjugal property and is below P10,000,000:
Exclusive Conjugal Total

Conjugal Properties:

Family Home P9,000,000 P9,000,000

Real and personal properties 14,000,000 14,000,000

Exclusive Properties: 5,000,000 5,000,000

Gross Estate 5,000,000 23,000,000 P28,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 21,000,000

Special Deductions

Family Home (4,500,000)

Standard Deduction (5,000,000)

Total Deductions (11,500,000)

Net Estate 16,500,000

Less: 1/2 Share of Surviving Spouse (10,500,000)

Spouse
 Conjugal Property P23,000,000

Conjugal Deductions (2,000000)

Net Conjugal Estate P21,000,000

(P21M/2)

NET TAXABLE ESTATE P6,000,000

(6) Decedent is married, the family home exclusive property and below P10,000,000:
Exclusive Conjugal Total

Conjugal Properties:

Real and personal properties 14,000,000 14,000,000

Exclusive Properties:

Family Home P9,000,000 P9,000,000

Gross Estate 9,000,000 14,000,000 P23,000,000

Less:

Ordinary Deductions

Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Net Conjugal Estate 12,000,000

Special Deductions

Family Home (9,000,000)

Standard Deduction (5,000,000)

Total Deductions (16,000,000)

 Net Estate 7,000,000

Less: 1/2 Share of Surviving Spouse (6,000,000)

Spouse

Conjugal Property P14,000,000

Conjugal Deductions (2,000000)

Net Conjugal Estate P12,000,000

(P12M/2)

NET TAXABLE ESTATE P1,000,000

Donations were made on January 30, 2018 at P2,000,000; on March 30, 2018 at P1,000,000; and August 15, 2018 at P500,000.

How much is the donor’s tax due on these donations?

Date of donation Amount Donor's Tax

1. January 30, 2018 P2,000,000

January 30, 2018 donation 2,000,000

Less: Exempt Gift (250,000)

Tax Due / Payable on the January Donation = 1,750,000 P105,000

2. March 30, 2018 1,000,000

March 30, 2018 donation 1,000,000

Add: January 30, 2018 donation 2,000,000

Less: Exempt Gift (250,000)

Total = 2,750,000

Tax Due Thereon 165,000

Less: Tax due/paid on January donation 105,000

Tax Due / Payable on the March Donation 60,000

3. August 15, 2018 500,000

August 15, 2018 500,000

Add: January 2018 donation 2,000,000

Add: March 2018 donation 1,000,000

Less: Exempt Gift (250,000)

Total =3,250,000

Tax Due Thereon 195,000

Less: Tax due/paid on Jan/March donation (165,000)

Tax Due / Payable on the August Donation 30,000