Estates and trusts

1. Ms. Hair Noh died during the year on July 1, 2009, leaving 2 heirs, Gay and Bald. The
estates of Ms. Noh undergo judicial settlement. The following relates to the gross income
of Ms. Noh, Gay and Bald in 2009.

Bald and Gay received P80,000 distribution each from the executor of Ms. Noh's estate
during the year. 1⁄2 of the respective distributions to Bald and Gay came from the corpus
of the estate.
Compute the 2009 taxable income of Gay.

P515,000
2. The term applied to the person whose property is transmitted through succession,
whether or not he left a will
Decedent
3. Angel created two irrevocable trusts, Trust 1 and Trust 2 with different trustee but with
common beneficiary, the following data pertain to the trust and the beneficiary's own
account:

Compute the taxable income of the Grantor if Trust 2 is designated as revocable

P357,000
4. Which of the following items is a non-deductible item from the gross income of an estate
or trust?
Exemption of P 50,000
5. What is the treatment of cash advances by the surviving spouse and the heirs from the
corpus of the estate?
Diminution of the assets of the estate
6. The term applied to the person whose property is transmitted through succession,
whether or not he left a will
 Decedent
7. Ms. Hair Noh died during the year on July 1, 2009, leaving 2 heirs, Gay and Bald. The
estates of Ms. Noh undergo judicial settlement. The following relates to the gross income
of Ms. Noh, Gay and Bald in 2009.

Bald and Gay received P80,000 distribution each from the executor of Ms. Noh's estate
during the year. 1⁄2 of the respective distributions to Bald and Gay came from the corpus
of the estate.
Compute the 2009 taxable income of the estate.

P200,000
8. A decedent who has a will upon death
Testator
9. Miguela, Marciana and Carmi are heirs of Bayle who died on November 1, 2017. The
properties of Bayle comprised solely of real property valued at P50,000,000 at the time
of her death. The property is subject to lease earning rental income. During 2018, the
property remained undivided and it derived a net rental income of P15,000,000. For
income tax purposes, the heirs will be tax on net rental income from the inherited
property for the year 2018 as:

Co-owners
10. Which of the following statements is correct?

The taxable year of estates and trusts maybe calendar or fiscal year
11. The beneficiary of an estate during the period of administration is the:
Neither a nor b
12. Angel created two irrevocable trusts, Trust 1 and Trust 2 with different trustee but with
common beneficiary, the following data pertain to the trust and the beneficiary's own
account:
 Compute the taxable income of the Grantor if Trust 2 is designated as revocable
P357,000
13. The person to whom a gift of real property is given by virtue of a will
Devisee
14. Who files the income tax return and pays the tax thereon, on the income derived by an
estate that is under judicial administration?
Executor or administrator
15. The property, rights and obligations of a person which are not extinguished by his death
and those which accrued thereto since the opening of succession
Estate
16. What is the treatment of the income of an estate or trust which is properly distributed to
the beneficiary during the taxable year on the part of the said beneficiary?
The beneficiary shall include the income received from the estate or trust as part of the
gross income in his personal income tax return.
17. Determine which of the following trusts shall be taxable income be consolidated and the
income tax thereon computed on the basis of such consolidated income?
Trust No. 1 and Trust No. 2 have the same grantor and the same beneficiary
18. The deductible expense of a taxable trust in addition to the regular expenses also
allowed to individual taxpayers, include:
Both a and b
19. What amount should be reported as taxable income of the co-ownership in 2018? (refer
to number 16)
РО
20. Angel created two irrevocable trusts, Trust 1 and Trust 2 with different trustee but with
common beneficiary, the following data pertain to the trust and the beneficiary's own
account:
 Compute the income tax due of the beneficiary.
P102,500
21. The person called to the succession either by the provision of a will or by operation of
law
Heir
22. On January 1, 2019, Trillanes established a trust fund for the benefits of his comrade,
Paulo. Trillanes appointed Atty. Digong as the trustee. The property transferred to the
trust is a piece of land with a dormitory earning rental income.
During the year, the trust earned P40,000,000 revenues and incurred expenses of
P10,000,000. Out of the trust's income, Atty. Digong gave Trillanes P10,000,000 cash. In
the same year, Trillanes earned compensation income of P3,000,000;
The taxable income of the trust is:
P 20,000,000
23. Ms. Hair Noh died during the year on July 1, 2009, leaving 2 heirs, Gay and Bald. The
estates of Ms. Noh undergo judicial settlement. The following relates to the gross income
of Ms. Noh, Gay and Bald in 2009.

Bald and Gay received P80,000 distribution each from the executor of Ms. Noh's estate
during the year. 1⁄2 of the respective distributions to Bald and Gay came from the corpus
of the estate.
Compute the 2009 taxable income of Bald.
P320,000
24. First statement: for taxation purposes, the taxable income of the estate shall be
determined in the same manner and basis as in the case of individual taxpayers.
Second statement: Prior to the effectivity of the TRAIN law, the income from the estate is
allowed with a personal exemption of P20,000.
Statement 1 Statement 2
True
True
25. The income of one of the following trusts is not subject to income taxation?
Employee trust
26. Miguela, Marciana and Carmi are heirs of Bayle who died on November 1, 2017. The
properties of Bayle comprised solely of real property valued at P50,000,000 at the time
of her death. The property is subject to lease earning rental income. During 2018, the
property remained undivided and it derived a net rental income of P15,000,000. For
income tax purposes, the heirs will be tax on net rental income from the inherited
property for the year 2018 as:
What amount should each heir report in their individual returns as their share in the net
rental income of the property they inherited in 2018.

P 5,000,000
27. One of the following items marks the significant difference of the income taxation of an
estate or trust from an individual taxpayer:
Amount of personal exemption
28. The person for whose benefit the trust has been created
Beneficiary
29. Which of the following transactions is taxable on the part of the estate?
Sale of property prior to the partition of the estate by the executor or administrator for
more than the appraised value at the time of decedent's death.
30. Who files the income tax return and pays the tax thereon, on the income derived by an
estate that is not under judicial administration?
Any of the heirs
31. Ms. Hair Noh died during the year on July 1, 2009, leaving 2 heirs, Gay and Bald. The
estates of Ms. Noh undergo judicial settlement. The following relates to the gross income
of Ms. Noh, Gay and Bald in 2009.

Bald and Gay received P80,000 distribution each from the executor of Ms. Noh's estate
during the year. 1⁄2 of the respective distributions to Bald and Gay came from the corpus
of the estate.
Compute the 2009 taxable income of Ms. Noh.
P350,000
32. The person in whom confidence is reposed as regards property for the benefit of another
person

Trustee
33. Ms. Mho designated a trust in favor of his minor boyfriend, Bacleito. Both the P2,000,000
corpus and all future income of the trust is designated by Ms. Mho as irrevocable. During
 the year, the trust earned P400,000 gross income, paid P40,000 as management fees to
the trustee and distributed P200,000 as allowance to Bacleito. Bacleito has other income
from part-time employment. Compute the taxable income of the trust and the taxable
income of Bacleito.

P140,000; P150,000
34. A created a trust for his daughter, B, a minor and appointed C as the trustee. A
transferred an apartment where rent income of 380,000 (net of 5% withholding tax) was
received by the trust with an expense of 90,000 during the year. 50% of the gross
income was given to B, while 20% based on the net receipts was recorded as valid
expenses of the trust, compute the income tax due or refundable of the trust and the
taxable income of B.
(P15,300); P150,000
35. The person to whom a gift of personal property is given by virtue of a will

Legatee
36. The taxable year of an estate or trust shall be:
Calendar year
37. Angel created two irrevocable trusts, Trust 1 and Trust 2 with different trustee but with
common beneficiary, the following data pertain to the trust and the beneficiary's own
account:

Compute the income tax due of the consolidated trust.

P29,350
38. On January 1, 2019, Trillanes established a trust fund for the benefits of his comrade,
Paulo. Trillanes appointed Atty. Digong as the trustee. The property transferred to the
trust is a piece of land with a dormitory earning rental income.
During the year, the trust earned P40,000,000 revenues and incurred expenses of
P10,000,000. Out of the trust's income, Atty. Digong gave Trillanes P10,000,000 cash. In
the same year, Trillanes earned compensation income of P3,000,000;
The taxable income of the trust if it is administered abroad is?
P30,000,000
39. The person who establishes a trust
Trustor
40. For income tax purposes, any person or corporation that holds in trust an estate of
another person or persons
Fiduciary
41. The deductible expenses of an estate may consists of:
Both a and b
42. Which of the following trusts holds the grantor liable for its income tax?
None of the foregoing
43. The income tax return of a trust is filed, and the tax thereon is paid, by the:

Fiduciary
44.