Which of the statements are correct?

I. Transfer tax is imposed upon gratuitous transfer of property.

II. Estate tax accrues as of the date of the actual possession or enjoyment of the estate by the
beneficiary.
III. Cancellation of existing debt as payment for services rendered by the debtor to the
creditor is a gratuitous transfer.
IV. Donor’s tax is 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.
V. Legitimate children and descendants, with respect to their legitimate parents or
ascendants are compulsory heir.
I,II and III only
II,III and IV only
III,IV and V only
IV,V and I only

Which of the following statements are correct?

I. Administrator is the person appointed by the testator to carry out the provisions of the
will.
II. In the absence of compulsory heirs, relatives to the 3rd degree would inherit the estate.
III. In case there are no relatives to receive the inheritance, the state has claim on the estate.
IV. Estate taxation is governed by the statute in force at the time of death of the decedent.
V. “Donation mortis causa” is subject to estate tax, while “donation inter vivos” is subject to
donor’s tax.
I,II and III only
II,III and IV only
III,IV and V only
IV,V and I only

Which of the following statements are wrong?

I. Estate includes rights which are purely personal that they are not transmissible for they
are extinguished by death.
II. There is reciprocity if the decedent at the time of his death was a resident citizen of a
foreign country, which at the time of his death did not impose an estate tax of any
character in respect of tangible personal property of citizens of the Philippines not
residing in that foreign country.
III. If the decedent failed to prepare his “last will and testament”, his estate will be disposed
of by operation of law or intestate succession.
IV. The rule that situs of intangible personal property is the domicile or residence of the
owner does not apply when the property has a situs elsewhere.
V. Under the “ability to pay theory”, the imposition of estate tax is justifiable because it
reduces the property received by the successor, thus helping promote equitable
distribution of wealth in society.

I,II and III only

II,III and IV only
III,IV and V only
IV,V and I only

Which of the statements are correct?

I. The gross estate, for purposes of estate tax, may exceed the actual value of his assets at
the time of his death as it includes the value of transfers of property by him during his
lifetime that partake of the nature of testamentary dispositions.
II. The power of appointment is “general” when the power may be exercises in favor of
anybody including the done-decedent.
III. If the decedent stated in his will that the net income from his apartment will be given to
his wife, but the owner in the title of the land and the building is his son. Upon death of
his wife, the land and the building will be excluded from her gross estate computation.
IV. In the case of domestic shares of stock not traded thru stock exchange, the fair market
value that must be included in the computation of the gross estate is the value appearing
in the schedule of fixed values from the assessor’s office.
V. The mount of Receivables that must be included in the gross estate are the amount of the
principal and interests due and unpaid at the time of death.

I,II and III only

II,III and IV only
III,IV and V only
IV,V and I only

Which of the statement is false?

I. The power of appointment may be exercised by the donor-decedent by deed under which
he has retained for his life or any period not ascertainable without reference to his death
or for any period which does not in fact end before his death.
II. Proceeds of life insurance to the extent of the amount receivable by the estate of the
deceased, his executor or administrator under policies taken out by decedent upon his
own life shall be part of the gross estate if the designation of the beneficiary is revocable.
III. The decedent devised in his will real property to his sister, who is entrusted with the
obligation to preserve and transmit the property to her son when said son is 19 years old.
The transmission from sister to her son is subject to estate tax.
IV. The decedent’s claim against insolvent person is deductible in full because the debtor’s
liabilities exceeds his remaining assets.
V. A special power of appointment is where the decedent, who frequently travels and due to
the nature of his profession, decided to execute his last will and testament appointing his
properties to his children.

I,II and III only

II,III and IV only
III,IV and V only
IV,V and I only

Which of the following statements are false?

 I. Under TRAIN law, an estate tax return is not required to be filed when the estate consists
of registered or registrable properties for which a clearance from the BIR is required as a
condition precedent for the transfer of ownership.
II. A decedent’s will is enforceable even if it is written in a language that the decedent
cannot write nor read.
III. The gross estate of a nonresident alien decedent must include a partially collectible
claims against an insolvent person who resides in Manila, the country of the nonresident
alien decedent does not impose transfer taxes of any kind.
IV. The executor of administrator of an estate has the primary obligation to pay the estate tax
but the heir or beneficiary has subsidiary liability for paying that portion of the estate
corresponding to his distributive share in the value of the total net estate.
V. The fair market value at the time the estate return is filed is not used when valuing gross
estate.
I,II and III only
II,III and IV only
III,IV and V only
IV,V and I only

Which of the following statements are correct?

I. The estate as a juridical entity is the taxpayer in estate tax.
II. Shares, obligations or bonds by any foreign corporation, 75% of the business of which is
located in the Philippines are not considered as intangible property in the Philippines.
III. The amount of all bequests, legacies, devises or transfers to or for the use of the
Government of the Republic of the Philippines for exclusively public purpose shall be
allowed as deduction for nonresident alien from his gross estate.
IV. Prior to 2018 taxable year, funeral expenses derived from assistance by sympathizers are
deductible as funeral expense.
V. Obligations contracted by a person during his lifetime are terminated upon his death.

I,II and III only

II,III and IV only
III,IV and V only
IV,V and I only

Which of the following statements are correct?

I. Attorneys’ fees paid by the heirs in protecting their personal interest is deductible as
judicial expense.
II. The decedent would be allowed family home deduction because actual occupancy of the
family home was not interrupted or abandoned even if she worked abroad and was
temporarily absent from his family home when he died.
III. Unpaid funeral expenses (if decedent died prior to 2018) cannot be allowed as s
deduction under “claims against the estate” if the amount is already in excess of the
maximum allowable funeral expense.
IV. There shall be no allowed deduction under casualty losses if it occurred after 1 year from
date of death.
 V. Expenses related to the death which accrues after the internment are considered funeral
expenses if the death is prior to 2018.

I,II and III only

II,III and IV only
III,IV and V only
IV,V and I only

Which of the following statements are false?

I. One of the requisites for deductibility of claims against the estate is that the liability was
contracted in good faith and for adequate and full consideration in money or money’s
worth.
II. Any amount received by heirs from decedent’s employer as consequence of the death of
the decedent –employee is deductible under special deduction. Thus no need to add the
amount in the gross estate computation.
III. A person has unlimited right to make donations in his last will and testament.
IV. One of the characteristic of donation mortis cause is that the transfer to the done is
irrevocable while the donor is still alive.
V. One example of a personal property is an obligation and action which have for their
object movables or demanding sums.
I,II and III only
II,III and IV only
III,IV and V only
IV,V and I only

Which of the statements are false?

I. The test of situs of property of a non-resident alien decedent is not important because
only the transmissions of property located in the Philippines are subject to estate tax.
II. Transfers in contemplation of death are ostensible transfers, usually with the purpose to
evade the estate tax.
III. A revocable transfer shall be included in the gross estate of the decedent-transferor even
though the power to revoke was not exercised.
IV. Transfer for public use is a remedy against double taxation.
V. A special power of appointment authorized the donor of the power to appoint only from
among a designated class or group of persons including himself.

I,II and III only

II,III and IV only
III,IV and V only
IV,V and I only

Aphmau, a head of the family resident alien, died last January 30, 2019 leaving the following:
  50,000 shares of Nestle Philippines, Inc. ordinary shares, not traded (outstanding shares
575,000; P92 par; Retained earnings P5,750,000).
 House & lot, where his parents and minor siblings live, assessed value determined by the
City of Davao P12,000,000, zonal value determined by the CIR P15,000,000 and the
FMV as determined by independent assessors P20,000,000.
 A 2,000 square meter lot in Kidapawan City. Assessed value determined by the City of
Kidapawan P1,500/ sq. m and the FMV as determined by independent assessors
P5,000,000. According to Aphmau’s will, this property will be given to the City of
Kidapawan upon his death.
 Bank deposits: (1) foreign branch of a domestic bank, P500,000; (2) Davao City branch
of a foreign bank, P1,500,000. 6 months after Aphmau died, Davao City branch declared
bankruptcy. Deposits of P500,000 and below were insured and returned to the owner.
 A 5% 3-year note receivable from Beta ( a close friend of Aphmau) P750,000. The
principal and the interest will be paid on January 30, 2020.
Compute the total amount of the gross estate.
P25,712,500
P25,425,000
P24,425,000
P25,750,000

Compute the total of the allowable deduction of Aphmau’s estate:

P4,000,000
P16,000,000
P19,000,000
P14,000,000

A nonresident alien decedent died June 1, 2021, leaving the following:

Vacation house in Samal Island, Davao City. Assessed value by Samal Island P7,000,000,
assessment by CIR P5,000,000.
Family Home in Pasay, Philippines P6,000,000
Vehicles in Los Angeles, P2,000,000
Vehicles in the Pasay; P4,750,000
Receivables from debtors in Samal Island, P200,000
Shares of stock of foreign corporations with 90% of its operations is in the Philippines; P350,000
Lot in Catalunan Grande Davao City given by the decedent’s father in trust for the decedent’s
illegitimate son; P1,550,000.
Compute the amount to be excluded from the computation of the gross estate. At the time of
death, decedent was a resident citizen of a foreign country that did not impose an estate tax of
any character in respect of intangible personal property of citizens of the Philippines not residing
in that foreign country.
P17,750,000
P4,100,000
P19,300,000
P2,550,000

The following data are available at the time of death (February 14, 2020) of the decedent
(single):
  Sold for P500,000, a set of jewelry with a prevailing market price at the time of sale
P675,000. At the time of death, the prevailing FMV of the jewelry was P800,000.
 Land, valued at P300,000 by CIR was sold at P100,000. At the time of death, FMV of the
land was already P550,000.
 House & Lot, FMV at P3,000,000, with unpaid mortgage of P1,750,000 at the time of
death.
 Condone the liability of her brother, 10%, 5-year note of P100,000. Decedent died when
the note was 4 years old.
 Decedent has an existing collectible, P415,000. The debtor, whose properties were not
sufficient to satisfy his debts, has properties valued at 1,500,000 and liabilities of
P2,000,000.
 Decedent took a life insurance with his mother as the beneficiary, P1,000,000.
 Another life insurance of P1,250,000 was taken out by the decedent with his mother as
the irrevocable beneficiary.
 The estate will also receive the proceeds of life insurance under a group insurance taken
by the employer, P300,000.
 Unpaid Medical Expenses; P500,000

Compute the gross estate:

P5,305,000
P4,555,000
P5,315,000
P6,555,000

Total allowable deductions:

P1,853,750
P2,353,750
P5,353,750
P5,665,000
A Filipino residing in Canada died on April 1, 2021, leaving a gross estate of 5,500,000.
Included in the gross estate is a jewelry set (stored in Canada) inherited by the decedent from his
mother who died December 1, 2019. At the time of death of the decedent, FMV of the jewelry
was P250,000 and paid a total of P25,000 (unpaid mortgage). The jewelry set was previously
taxed with a fair market value of P200,000 for estate tax purposes. Also included in the gross
estate is a vehicle from his father who died last February 14, 2016. The vehicle was previously
taxed with a fair value of P2,500,000 for estate tax purposes. Decedent paid the installment of
the vehicle amounting to P900,000. FMV of the vehicle at the time of decedent’s death was
P1,000,000. Decedent devises that a parcel of land (included in the gross estate, FMV of
P50,000) be given to the government of the Philippines. Total deductions claimed for losses,
indebtedness and taxes, including the unpaid mortgages was P 1,375,000. Compute the total
vanishing deductions.

P65,000
P5,000
P70,000
P95,000
A resident decedent, head of the family, died December 28, 2017 leaving the following
properties and obligations:
House & Lot in Davao City (Family Home); P12,000,000
100,000 shares of stocks traded in the local stock exchange. At the time of death, highest
quotation P300/ share; lowest quotation P60/share and the book value is P100/share
Residential Lot in Mati; P1,250,000
Condominium unit in Davao City; P11,000,000. A day before decedent’s death, the building was
razed by fire, however it was insured by the decedent for P5,000,000.
Cash in bank, 60% donated mortis causa to National Government; P575,000
Agricultural lot in Digos, P2,000,000. Decedent devises that his parents hold it in trust until his
sibling turns 19 years old.
Vintage car (P2,250,000), which the decedent inherited from his uncle who died last September
2, 2015. It was previously taxed with a fair value of P1,050,000 for gross estate purposes.
Deductions claimed:
Medical expenses, P603,750 (30% remained unpaid at the time of decedent’s death)
Funeral expenses P431,250
Judicial expenses P125,000
Claims against insolvent person P375,000
Donation mortis causa to the National government P345,000
Compute the gross estate:

P41,450,000
P53,075,000
P41,075,000
P52,075,000
Compute the total allowable deductions to the gross estate.

P3,957,360.68
P3,959,531.45
P3,959,691.00
P3,957,263.54
A nonresident alien decedent (Head of the family) left the following assets:
Shares of stock domestic corporation, P11,000,000
Shares of stock, foreign corporation, P22,000,000
Bank deposit in the foreign branch of a domestic bank, P600,000
Bank deposit in the domestic branch of a foreign bank, P400,000
Real properties in the Philippines, P9,000,000 (including the family home, P4,000,000)
Real properties abroad, P15,000,000
Losses, unpaid indebtedness and taxes, P15,600,000
The country where the decedent is a citizen and resident does not impose transfer tax on
transmission of intangibles of Filipinos not residing therein. Compute the taxable net estate in the
Philippines

P6,079,310.34
P17,044,827.59
P2,079,310.34
P13,044,827.59
Assuming that there is no reciprocity, net taxable estate is:
P14,559,310.34
P10,559,310.34
P10,120,689.66
P14,120,689.66