Scribd
Upload
63 views3 pages

Quiz2 Chapter2

The document contains a practice exam for estate tax theories and problems. It includes 10 multiple choice theory questions, 6 problems to work through related to estate tax calculations, and illustrations to accompany some of the problems. The questions cover topics like situs rules, various estate tax valuation methods, and life insurance proceeds.

Uploaded by

argene.malubay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
63 views3 pages

Quiz2 Chapter2

The document contains a practice exam for estate tax theories and problems. It includes 10 multiple choice theory questions, 6 problems to work through related to estate tax calculations, and illustrations to accompany some of the problems. The questions cover topics like situs rules, various estate tax valuation methods, and life insurance proceeds.

Uploaded by

argene.malubay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Name ________________________________________ Date __________________

THEORIES (1 point)
_____ 1. The law considers the service rendered by the government in the distribution of the estate of
the decedent, either by law or in accordance with his wishes.
a. Ability to pay theory c. Constraint theory
b. Benefit-received theory d. Redistribution of wealth theory
_____ 2. Inheritance is not a right but a privilege granted by the State and legatees have been acquired
only with the protection of the State.
a. State partnership theory c. Protective state theory
b. Ability to pay theory d. Redistribution of wealth theory
_____ 3. The imposition of estate tax reduces the property received by the successor, thus helping to
promote equitable distribution of wealth in society.
a. Reciprocity theory c. Prosperity theory
b. Redistribution of wealth theory d. Ability to pay theory
_____ 4. The following intangible assets have situs within the Philippines, except
a. Franchised exercised in the Philippines
b. Bond issued by a corporation organized in the Philippines
c. Shares, obligations or bonds issued by any foreign corporation, 85% of the business of
which is located in the Philippines.
d. Shares, obligations, or bonds issued by any foreign corporation if such shares, obligations
or bonds does not acquire a business situs in the Philippines
_____ 5. Situs of the receivable is
a. Residence of the creditor c. Residence of the debtor
b. Place where receivable was stipulated d. Both A and B
_____ 6. Situs of a bank deposit
a. Location of the bank certificate c. Location of the depository bank
b. Location of the depositor d. Residence of the bank’s major shareholder
_____ 7. The value of unlisted ordinary shares to be included in the gross estate of decedent is
a. Market value per share of the issuing corporation
b. Par value per share of the issuing corporation
c. Intrinsic value per share of the issuing corporation
d. Book value per share of the issuing corporation
_____ 8. The value of unlisted preference shares to be included in the gross estate of decedent is
a. Market value per share of the issuing corporation
b. Par value per share of the issuing corporation
c. Intrinsic value per share of the issuing corporation
d. Book value per share of the issuing corporation
_____ 9. It is a transfer where the terms of enjoyment of the property may be altered, amended, or
terminated by the decedent
a. Special power of appointment c. Amendable transfer
b. Irrevocable transfer d. Revocable transfer
_____ 10. The donee holds the appointed property with all the attributes of ownership thus, the
appointed property shall form part of the gross estate of the donee (beneficiary) of the power
upon his death.
a. General power of appointment c. Transfer for insufficient consideration
b. Special power of appointment d. Exclusions under special laws

Page 1 of 3
PROBLEMS (2points)

Use Illustration 1 to answer numbers 1 and 2


Illustration 1
A nonresident alien decedent left the following estate:
House and Lot - Hongkong, inherited before marriage P18,000,000
Car, acquired during marriage in Cebu 2,000,000
Shares of stocks issued by a foreign corporation, 20% of its operation is in the 300,000
Philippines
Bank deposit with PNB branch in New York, New York representing income 600,000
earned during marriage
Shares of stocks issued by PLDT group of companies, a corporation organized 600,000
under Philippine laws
5-year, 10% promissory note, received 2 years ago, during marriage. The 600,000
debtor is a resident of Q.C
_____ 1. Assume there is no reciprocity, what is the correct amount value of the gross estate?
a. 3,500,000 b. 3,620,000 c. 3,320,000 d. 2,600,000
_____ 2. Assume there is no reciprocity, what is the correct amount value of the gross estate?
a. 0 b. 2,000,000 c. 2,600,000 d. 720,000

_____ 3. Decedent owns 200,000 ordinary shares of Beta Company at the time of his death. At that time,
Beta's outstanding shares were 1,000,000 with P10 par value and Retained Earnings
amounting to P6,000,000. The shares are not traded in the stock exchange. Compute the
amount to be included in decedent’s gross estate.
a. 3,200,000 b. 2,000,000 c. 1,200,000 d. 6,000,000

Use Illustration 2 to answer numbers 4 and 5


Illustration 2
John Doe died with an existing collectible of P7,000,000 against Peter Dy whose properties are not
sufficient to satisfy his debts. Peter's properties are valued at P6,000,000 while his liabilities amounted to
P10,000,000.

_____ 4. How much should be included in the gross estate of John?


a. 0 b. 7,000,000 c. 6,000,000 d. 4,000,000
_____ 5. Assume that P2,000,000 of Peter’s liabilities are unpaid taxes from the government, how much
should be included as a deduction from the gross estate of John?
a. 3,500,000 b. 2,000,000 c. 7,000,000 d. 1,500,000

_____ 6. A life insurance worth P8,000,000 was taken out by Peter upon his life. He designated his
friend, John, as beneficiary. Compute the amount to be included in Peter’s gross estate upon
his death.
a. 8,000,000 b. 0 c. 4,000,000 d. 3,000,000

Use Illustration 3 to answer numbers 7 to 10


Illustration 3
A decedent taxpayer died leaving the following:
Family home (land and residential house) in the Philippines P9,000,000
Parcel of land with vacation house in Malaysia 5,000,000
Farm land in the Philippines, with a mortgage in favor of the Philippine 3,000,000
National Bank for P600,000

Page 2 of 3
Shares of stock of a domestic corporation 2,000,000
Shares of stock of a foreign corporation, the entire business of which is in the 500,000
Philippines
Receivable from a friend who has no property whatsoever 500,000

Receivables under the following insurance policies:


Life insurance policy, taken by the decedent on his own life, with his estate as 200,000
revocable beneficiary
Life insurance policy, taken by the decedent on his own life, with his daughter 300,000
as revocable beneficiary
Life insurance policy, taken by the decedent on his own life, with his son as 600,000
irrevocable beneficiary
Life insurance (group) taken by the employer of the decedent, with the estate as 200,000
revocable beneficiary

Determine the correct gross estate assuming the decedent was:


_____ 7. A resident citizen
a. 19,300,000 b. 20,500,000 c. 20,700,000 d. 21,000,000
_____ 8. A resident alien
a. 19,300,000 b. 20,500,000 c. 20,700,000 d. 21,000,000
_____ 9. Non-resident alien with reciprocity
a. 12,000,000 b. 9,000,000 c. 15,500,000 d. 15,700,000
_____ 10. Non-resident alien without reciprocity
a. 12,000,000 b. 9,000,000 c. 15,500,000 d. 15,700,000

Page 3 of 3

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy