True or false

1. succession takes place upon the death of the decedent

2. unpaid funeral expenses are nevertheless deductible from gross estate as part of “claims
against the estate”
3. estate tax is property tax
4. decedent’s interest includes revocable inter vivos transfers of properties until the death of the
donor
5. the share of the surviving spouse in the community property is not included in the gross estate
of the decedent spouse.
6. the proceeds of life insurance policies payable upon death of the decedent are exempt from
the payment of estate tax.
7. if the decedent sells properties because of an impending death, the difference between the
market values at the time of sale and at the time of death, if any, is subject to estate tax.
8. if there is reciprocity, the intangible personal property in the Philippines of the non resident
alien is subject to estate tax in the Philippines
9. a power of appointment is general if the donee is authorized to appoint a beneficiary named in
the will of the prior decedent.
10. a husband cannot donate his share in the community property to his surviving spouse.
11. winnings in gambling is conjugal property. However, losses thereon shall be borne exclusively
by the loser-spouse.
12. donations to charitable institutions are deductions from gross estate
13. death benefit from the GSIS is exempt from estate tax
14. the cost of the mourning apparel of a spinster daughter of the deceased is deductible as
funeral expense
15. unpaid accountant’s fees to an accountant who signed the CPA certificate is deductible as
“claims against the estate”
16. an unpaid loan contracted by the decedent spouse which is secured by a mortgage of a
community property is deductible as a claim against the estate and not as unpaid mortgage
17. in an accommodation loan, there is an addition to and a deduction from gross estate, thus
resulting to a zero balance in the net estate.
18. casualty losses are deductible from gross estate and from gross income
19. the family home of a non resident citizen is includible in the gross estate but not deductible
therefrom
20. the estate of a nonresident alien is not entitled to a vanishing deduction.
21. net taxable estate is another term for net distributable estate
22. only the estate of resident citizen can claim tax credit on estate taxes paid to foreign
countries
23. notice of death should be made within 30 days after the death of the decedent
24. filing of the estate tax return is required if the transfer is subject to estate tax regardless of
the value of the gross estate.
25. installment payment of estate tax maybe allowed if there are no available cash of the estate.

Answers to True or false

1 Tru
e
2 Fals Funeral expenses, whether paid or unpaid, are deductible as funeral expense
e
3 Fals It is an excise tax
e
4 Tru
e
5 Fals The entire community properties of the spouses are included in the gross estate
e
6 Fals Proceeds of life insurance shall be exempt only from estate tax if the designated
e beneficiary in the policy is irrevocable and is not the estate, executor or administrator
7 Fals The sale must be for an insufficient consideration
e
8 Fals If there is reciprocity, the intangible personal property within is not taxable in the
e Philippines
9 Fals In that case, the power of appointment is special
e
1 Fals The prohibition is applicable on inter vivos donations only. Thus, it is allowed if the
0 e donation is to become effective upon the death of the donor-spouse
1 Tru
1 e
1 Fals They are exclusions from gross estate but not deductions
2 e
1 Tru All benefits from SSS and GSIS are exempt from INCOME and ESTATE tax
3 e
1 Fals The daughter must be minor and unmarried
4 e
1 Fals It is deductible as judicial expense
5 e
1 Fals It is deductible as an unpaid mortgage rather than as claims against the estate
6 e
1 Tru The amount of money borrowed is deductible as claims against the estate; however,
7 e that same amount which was loaned to accommodate the financial needs of another
person should be included in the gross estate as a receivable of the estate on the
debtor.
1 Fals It is deductible from either gross income or gross estate but not on both
8 e
1 Tru To be deductible, family home must be situated in the Philippines
9 e
2 Fals Vanishing deduction can be claimed provided that the subject property is situated in
0 e the Philippines
2 Fals Net taxable estate is the basis in computing the estate tax, while net distributable
1 e estate pertains to the amount that will be distributed among the heirs.
2 Fals Other than he resident citizens, the estate of non resident citizens and resident aliens
2 e can also claim tax credit on estate taxes paid abroad
2 Fals Notice of death must be made within 2 months after the decedent’s death, or within a
3 e like period after qualifying as executor or administrator
2 Tru Filing of estate tax return is required if the gross value of the estate exceeds 200,000
4 e and regardless of value where the said real estate consists of registered or registrable
property
2 Tru If the tax is paid by installment, a clearance shall be released only with respect to the
5 e property the corresponding tax on which has been paid.

1. Which of the following is not an element of succession?

a. Decedent c. Heir
b. Estate d. Administrator
2.Inheritance does not include
a. property
b. public office
c. rights not extinguished by death
d. obligations not extinguished by death
3.Estate tax is
a. a property tax because it is imposed o the property transmitted by the decedent to
his heirs.
b. an indirect tax because the burden of paying the tax is shifted on the executor or
any of the heirs of the decedent.
c. an excise tax because it is imposed on the privilege exercised by the decedent to
transfer ownership over the estate.
d. a poll tax because it is also imposed on residents of the Philippines whether Filipino
citizens or not.
4.Which of the following is not a distinction between estate tax and donor’s tax?
a. The tax imposed is an excise tax.
b. Extension for payment.
c. Effectivity of the transfer of property.
d. The exemption granted in the tax table.
5.Statement 1: The estate tax accrues at the moment of death of the decedent.
Statement 2: In estate taxation, the taxpayer is the decedent.
Which of the above statement is correct?
a. Statement 1 only. c. Both statements
b. Statement 2 only. d. Neither statements
6. In 2002, J. Cruz gave a loan of P150,000 to sexy, his secretary. In 2005, as an act of
generosity, J.Cruz condoned the debt of Sexy in his last will and testament. J. Cruz
died in 2008. The condonation of the debt of Sexy is
 a. A donation inter vivos subject to donor’s tax.
b. A payment or compensation for the services rendered.
c. A deduction from the gross estate of J.Cruz.
d. A donation mortis causa subject to estate tax.
7. The following are the motives of a taxpayer that preclude the transfer in
contemplation of death, except one
a. To relieve the taxpayer of the burden of management.
b. To save income and property taxes.
c. To avoid payment of estate taxes.
d. To make dependents financially independent.
8. In default of testamentary heirs, the law determines who are to succeed to the
inheritance of the deceased. Which of the following ranks first in the order of
succession?
a. legitimate children c. legitimate parents
b. surviving spouse d. illegitimate children
9. H and W are married. They have legitimate children A and B. H died, survived by W,
A and B. He estate of P12,000,000 should be divided as follows:

W A B Free
portion
a. P3M P 4.5M P 4.5M None
b. 3M 3M 3M P 3M
c. None 6M 6M None
d 2.25M 4.5M 4.5M 2.25M

10. Based on the following data, how mush is the value of the decedent’s interest if he
died March 31,2008?
Cash in bank, joint account of the decedent
And his wife P 254,000
Interest on the bank deposit ( January 1- June
30,2008) 9,000
Dividends from a domestic corporation: 60,000
Date of declaration- February 5, 2008
Date of record - April 15,2008
Date of payment - May 15,2008
Share in 2007 net profit of partnership,
Distributed to partners on April 15 9,000
Winnings in lotto ( Bet, March 30; April 1, 2008
Draw) 500,000

a. P 383,750 c. P145,000
b. 138,000 d. 388,250
11. For estate tax purposes, the estate of the decedent shall be valued at the time
a. of the preparation of the estate tax return
b. the estate tax is paid.
c. of death of the decedent.
d. The estate is distributed to the heirs.
12. Mamo died leaving the following properties:
Stocks of Cruz Corporation (2,000 shares )- listed in the Phisex (highest- P 40;
lowest- P 39).
Common Stocks of Hemo Corporation ( 1,500 shares)- not listed in the stock
exchange. Cost- P 50 per share; book value- P45 per share.
Car ( cost- P 600,000; book value- P 350,000; market value – P 400,000)
Real properties ( zonal value – P 120,000; assessed value- P 72,000 )
The gross estate of Mamo is-
a. P 618,000 c. P 624,000
b. 867,000 d. 666,500
13.One of the following is subject to estate tax on properties situated within the
Philippines only
a. Resident citizen c. Nonresident citizen
b. Resident alien d. Nonresident alien
Items 14 through 16 are based on the following information:
Dina Mathay, Filipina, died in the United States with the following properties

Condominium unit in New York City P

2,000,000
 Shares of stock in a foreign corporation
600,000
Interest in a partnership, domestic
475,000
Bank deposit in a New York City bank
150,000
Car in Cebu, Donated inter vivos 5 years ago to her son
500,000
14.Which property should be included in the gross estate?
a. All the above properties.
b. Only the properties located in the Philippines
c. All the above properties except the car.
d. The properties located in the Philippines except the intangibles.
15.If the decedent was a nonresident alien ( with reciprocity), how much is the gross
estate?
a. P 3,725,000 c. P 500,000
b. 975,000 d. None
16. If the decedent was a nonresident alien ( no reciprocity ), how much is the gross
estate?
a. P 3,725,000 c. P 500,000
b. 975,000 d. 475,000
Whenever a decedent is a nonresident alien ( no reciprocity ), all properties situated in the
Philippines
( real property , tangible personal property and intangible personal property are included in his
gross estate.

17. Which of the following is an intangible personal property within?

a. Franchise exercised in the United States.
b. Shares or rights in a domestic business partnership.
c. Bonds issued by an American corporation.
d. Stocks issued by foreign corporation with business situs in the Philippines.
a. B only c. All of the above properties
b. B and D d. None of the above properties
18. An example of intangible personal property without is
a. Domestic shares of stock
b. Foreign shares, 85 % of the business of the corporation is in the Philippines.
c. Foreign shares with business situs in the Philippines.
d. Foreign shares, certificate of stock are kept in Makati.
19. One of the following donations is not included as part of gross estate.
a. revocable transfers
b. transfers with reservation of certain rights
c. transfers under special power of appointment
d. transfers in contemplation of death
In a special power of appointment, the decedent is considered only as a trustee to
the property. Hence, said property should not be a part of his estate.
20. Which of the following transfers is included in the gross estate?
a. transfer inter vivos
b. transfer under general power of appointment
c. transfer under special power of appointment
d. transfer for an adequate and full consideration
21. Decedent Kulot A. has the following data:
Value of the property at the time of sale P 1,200,000
Value of consideration when sold 1,000,000
Value of property at the time of death 1,500,000
The amount includible in the gross estate is –
a. P 300,000 c. P 200,000
b. 500,000 d. 1,500,000
22. When Albino was informed by his physician that he was about to die of cancer, he
sold his properties:
Market value- Selling Market value-
Date of sale price Date of
death
Land P 2,700,000 P 1,500,000 P 2,700,000
Jewelries 500,000 300,000 300,000
Shares of stocks 200,000 220,000 250,000
Transfer under limited
Power of appointment 1,000,000 600,000 800,000
 From among the data given, how mush should be included in the gross estate of Albino upon
his death?

a. P 1,200,000 c. P 1,430,000
b. 1,230,000 d. 1,400,000

23. On the belief that he was about to die of a liver cancer, Bongbong sold to Bengbeng
a property valued at P 1,100,000 for the same amount. Six months later, Bongbong
died of a car accident. At that time, the property had already a value of P 1,300,000.
For Philippine estate tax purposes, the amount includible in the gross estate of
Bongbong is-

a.P 1,100,000 c. P 200,000

b. 1,300,000 d. None
24. Amounts received by the estate of the deceased, his executor or administrator as
an insurance under policy taken by the decedent upon his own life is-
a. excluded from the gross estate.
b. part of the gross estate whether the beneficiary is revocable or irrevocable
c. part of the gross estate if the beneficiary is revocable.
d. part of the gross estate if the beneficiary is irrevocable

25. Case 1 – Designation of the beneficiary is revocable.

Case 2-- Designation of the beneficiary is irrevocable.
Case 3—Policy is silent as to whether the designation is revocable or irrevocable.
In which of the above cases will the proceeds be exempt from estate tax,
assuming that the beneficiary of the life insurance proceeds is neither the estate,
the executor nor the administrator of the estate?
a. Case 1 only c. Case 2 only
b. Cases 1 and 3 d. All of the above cases
26. Proceeds of life insurance not payable to estate, executor or administrator shall be
excluded in the gross estate if the beneficiary appointed in the policy is
a. Revocable c. Irrevocable
b. Revocable or irrevocable d. the executor
27. Proceeds of life insurance includible in the taxable gross estate
a. Insurance proceeds from SSS and GSIS.
b. Amount receivable by any beneficiary irrevocably designated in the policy by the
insured.
c. Amount receivable by any beneficiary revocably designated in the insurance
policy.
d. Proceeds of a group insurance taken out by a company for its employees.
28. Which of the following proceeds of life insurance policies is exempt from estate
tax?
1. Life insurance policy on the life of Kristine, appointing her sister as the irrevocable
beneficiary.
11. Life insurance policy on the life of Kristine, appointing her brother as the
revocable beneficiary.
111. Life insurance policy on the life of Kristine, appointing her executor as the
irrevocable beneficiary.
1V. Life insurance policy on the life of Kristine, appointing her children as the
beneficiary. The policy is silent as to whether the appointment is revocable or
irrevocable.
a. 1 only c. 11 and 111
b. 1 and 1V d. All of them
29. The following are transactions and acquisitions exempt from transfer tax, except
a. Transmission from the first heir or done in favor of another beneficiary in
accordance with the desire of the predecessor.
b. Transmission or delivery of the inheritance or legacy by the fiduciary heir or
legatee to the fideicommissary.
c. The merger of usufruct in the owner of the naked title.
d. All bequests, devisees, legacies or transfers to social welfare, cultural and
charitable institutions.
30. A devised in his will a piece of land; naked title to B and usufruct to C for as long as
C lives, thereafter to B. the transmission from A to B and C is subject to estate tax
but the merger of the usufruct and the naked title to B upon the death of C is
exempt.
 X devised in his will real property to his brother Y who is entrusted with the
obligation to preserve and transmit the property to Z, a son of Y, when Z becomes
of age. The transmission from Y to his son Z is subject to tax.
a. First statement is correct, second statement is wrong.
b. Both statement are not correct.
c. Both statement are correct.
d. First statement is wrong , second statement is correct.
31. One of the following is included in the gross estate.
a. Benefits received from GSIS
b. Benefits received from U.S Veterans Administration.
c. Benefits received from damages during world war 2.
d. Benefits received from a tax exempt employer as a consequence of death of the
employee.
32. Which of the following distinguishes conjugal property from community property?
a. Properties inherited during marriage.
b. Those acquired through occupation during marriage
c. Fruits of exclusive property.
d. Income earned by each spouse during marriage.
33. One of the following is a conjugal property of the spouses.
a. That which is brought to the marriage as his or her own.
b. That which each acquires during the marriage by inheritance.
c. The fruits of an exclusive property.
d. That which is purchased with the exclusive property of the wife.
34. One of the following is not a community property of the spouses
a. Property inherited by the husband before marriage.
b. Winnings in gambling.
c. Fruits of property inherited during the marriage.
d. Fruits of property inherited before the marriage.
35. Which of the following is not a part of the gross estate?
a. conjugal property
b. community property
c. exclusive property of the decedent
d. exclusive property of the surviving spouse
36. When a person dies and during the marriage the property relationship between the husband
and the wife was that of conjugal partnership of gains, the gross estate of the decedent
would include
a. His exclusive properties only.
b. His exclusive properties and one –half of the conjugal properties.
c. All the properties of the husband and wife.
d. His exclusive properties and all conjugal properties.
37. A. Share of the decedent in the community property.
B. Share of the surviving spouse in the community property.
C. Exclusive property of the decedent.
D. Exclusive property of the surviving spouse.
Which of the above properties are included in the gross estate of the decedent?
a. A and B c. A and C
b. A, B, and C d. All of the above properties
38. Properties acquired by gratuitous title before the marriages are generally classified as:
A. Community properties under absolute community of property regime.
B. Conjugal properties under conjugal partnership of gains.
Which of the above statement is correct?
a. A only c. B only
b. A and B d. Neither A nor B

Numbers 39 through 42 are based on the following information.

Aldo died leaving the following properties:

a. Real property in Baguio City brought into marriage P 300,000

b. Income of real property in Baguio 60,000
c. Real property in Cebu City, brought into marriage
by wife 240,000
d. Income of real property in Cebu City 25,000
e. House in Pili, Camarines Sur, acquired by Aldo during
marriage 375,000
f. Income of house in Pili 50,000
g. Real property in Iloilo City, earned by wife during marriage 225,000
h. Income of real property in Iloilo City 80,000
i. Tangible personal properties in Manila, inherited
 by Aldo during marriage 500,000
j. Income of properties in Manila 175,000
k. Intangible personal properties in Singapore
inherited by wife during marriage 430,000
l. Income of intangibles in Singapore 85,000
m. Tangible personal property in Dagupan City,
inherited by Aldo before marriage 20,000
n. Income of property in Dagupan City 10,000
o. Intangible personal property in Canada,
inherited by wife before marriage 350,000
p. Income of personal property in Canada 85,000

39. under the conjugal partnership of gains, the total conjugal properties of the spouses is:
a. 1,170,000
b. 1,820,000
c. 1,990,000
d. 2,495,000

40. under conjugal partnership of gains, the gross estate of Aldo is

a. 1,170,000
b. 2,495,000
c. 1,990,000
d. 1,820,000

41. under absolute community of property regime, the total community property of the spouses
is:
a. 1,820,000
b. 1,990,000
c. 2,495,000
d. 1,170,000

42.under absolute community of property regime, the gross estate of Aldo is

a. 1,170,000
b. 2,495,000
c. 1,990,000
d. 1,820,000

Pepe married Pilar on January 20,1995 without any agreement in writing as to the system of
property relationship that will govern their properties when they are already married. Pepe
brought into the marriage an old Spanish house in Vigan, Ilocos Sur worth 2,000,000 while
Pilar brought with her a 200 hectare pineapple plantation in Bukidnon which she acquired
while she was still single.

As a consequence of her marriage, she received as gift from her parents another 200 hectare
banana plantation in Cagayan de Oro City on January 31, 1995.

Twelve years thereafter, she died of a car accident. The joint account deposit of the spouses
with Metrobank was 5,000,000.

She was insured with an insurance company for 2,500,000 with Pepe as the appointed
irrevocable beneficiary

For numbers 43 to 47, classify the properties identified above by choosing your answer from the
option below:

Options: a. exclusive property of Pepe

b. exclusive property of Pilar
c. Conjugal property of Pepe and Pilar
d. Community property of Pepe and Pilar

43. the old Spanish house in Ilocos Sur

. Community property of Pepe and Pilar
44. the banana plantation in Cagayan de Oro
exclusive property of Pilar
45. the income of the banana plantation
exclusive property of Pilar
46. the deposit with metrobank
Community property of Pepe and Pilar
47. the proceeds of the insurance policy is
a. excluded from gross estate
b. included in the gross estate
c. deductible from gross estate
d. none of the above

DEDUCTIONS FROM GROSS ESTATE

48. an example of a funeral expense which is not deductible

a. most of coffin assumed by a family friend
b. funeral services paid out of decedent’s estate
c. mourning clothing of deceased’s unmarried minor children and surviving spouse
d. cost of tombstone

49. statement 1: the amount of funeral expenses within the 200,000 threshold, which are still
payable shall be allowed as a deduction from the gross estate

Statement 2: the unpaid portion of the actual funeral expenses incurred which is in excess of
the 200,000 threshold shall be allowed as deduction under “claims against the estate”

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

50. which of the following is included in the term “ funeral expenses”

a. mourning apparel of a 40- year old legitimate child of the deceased
b. hospital bills during the last illness of the deceased
c. burial expenses defrayed by the relatives of the deceased
d. obituary notices to relatives and friends

51. the amount of funeral expenses that may be deducted from gross estate
a. 5% of the gross estate or actual funeral expenses or Php 200,000, whichever is lower
b. always 5 % of the gross estate
c. actual funeral expenses incurred
d. 5% of the gross estate or actual funeral expenses incurred whichever is higher

52. the deductible amount of funeral expense is 200,000 if the actual expenses and the gross
estate amount to

a. actual-195,000, gross estate-4,500,000

b. actual-210,000, gross estate-4,300,000
c. both A and B
c. neither a nor b

53. which of the following are requisites in order that claims against the decedent’s estate may
be deductible except
a. they must be existing against the estate
b. they must be reasonably certain as to amounts
c. they must have been prescribed
d. they must be enforced by the claimants

54. which of the following is not included in the value of the gross estate
a. judicial expenses
b. claims against insolvent persons
c. benefits received under RA 4917
d. the undiminished value of the property mortgaged

56. one of the following is deductible as claim against the estate

a. an obligation contracted by the decedent one (1) day before he died
b. an obligation of the decedent prescribed while the decedent was still alive
c. an obligation which was not reduced in writing under statutes of fraud
d. an obligation which shall be paid by the heirs

57. all of the following except one, are deductible from the gross estate of a decedent who died
September 30, 2006
a. income tax on income earned from January to September 29, 2006
b. gift taxes on donations given June 12, 2006
c. real property taxes payable during the last quarter of 2006
d. income tax on income earned during the last quarter of 2006

hint:
to be deductible, taxes must accrue before the death of the decedent. Real property taxes
accrue on the 1st day of January of every year although the payment is allowed in the
succeeding quarters of the year.

58. statement 1: if the proceeds of a mortgage loan is merely an accommodation loan, its
value must be included in the gross estate as a receivable amount and as a deduction
thereof.

Statement 2: if there is legal impediment to recognize the accommodation loan as receivable of

the estate, the unpaid mortgage payable shall not be allowed as a deduction from the gross
estate
a. true, false
b. true, true
c. false, true
d. false, false

59. the following expenses and obligations were left by Boning upon his death

Notes payable, not notarized 30,000

Loans payable, PNB 300,000
Accounts receivable, debtor not insolvent 40,000
Accounts receivable, debtor is insolvent 60,000
Death benefits from employer 200,000
Mortgage paid 50,000
Income taxes on income of decedent’s estate 7,500

The total amount deductible from gross estate is

a. 600,000
b. 550,000
c. 1,560,000
d. 560,000

HINT:
to be deductible, claims against the estate out of debt instrument must be duly notarized
(except for loans by financial institutions where notarization is not part of the business
practice or policy of the financial institution)

claims of the estate against other persons are deductible only if the debtor is declared insolvent

mortgages paid are allowed only as deduction from the value of the property in computing a
vanishing deduction. In computing the net estate, the deductible item is unpaid mortgage

taxes must have accrued before the death of the decedent. Taxes on income of properties which
accrued after death are not deductible

60. casualty losses are deductible from the gross estate if

Statement 1: such loss was incurred during the settlement of the estate
Statement 2: such loss was incurred not later than the last day for the payment of the estate
tax
a. false, false
b. false, true
c. true, false
d. true, true

61. Y, a Filipino resident, died on November 5, 2006 and his estate incurred losses due to

1st loss: from fire on Feb 2, 2006 of improvements on his property; not compensated by
insurance
2nd loss: from flood on Feb 25, 2007 of household furniture; also not compensated by insurance

a. 1st loss is not deductible, second loss is deductible

b. both losses are not deductible
c. both losses are deductible from gross estate
d. 1st loss is dductible and 2nd loss is not

62. which of the following losses is deductible

a. destruction of a house by an earthquake which killed the decedent
b. shipwreck which occurred before the death of the decedent but was only discovered after his
burial
c. total wreckage of a car in an accident but was fully compensated by a comprehensive
insurance
d. theft which occurred during burial of the decedent

63. liza died on July 5, 2007 leaving the following data on deductions
Unpaid 2006 real estate taxes 40,000
Unpaid 2007 real property taxes 40,000
Inocme tax on income from Jan 1 to July 4, 2007 35,000
Losses from fire that occurred on July 3 (60 % was insured) 800,000
Casualty loss on september 2007 450,000
Building destroyed by earthquake on Feb 2007 1,300,000

Based on above data, The deduction from gross estate is

a. 1,365,000
b. 565,000
c. 845,000
d. 525,000

64. Che, a non resident alien, died leaving the following assets
domestic shares 1,000,000
foreign shares 3,000,000
tangible personal property, Philippines 6,000,000
Expenses (deductible) 1,200,000

Note: the country where she is a citizen and resident does not impose transfer tax on
transmission of intangibles of filipinos

The net estate subject to tax in the philippines is

a. 5,280,000
b. 3,800,000
c. 4,800,000
d. 4,280,000

65. Ta, a nonresident alien, single died leaving the following properties and deductions

Shares-domestic corporation 500,000

Shares-foreign corporation 500,000
Tangible personal properties 1,500,000
Deductible expenses 500,000

Assuming there is no reciprocity, the estate tax payable is

a. 1,600,000
b. 1,500,000
c. 103,000
d. 95,000

66-67 information

Mhar, a German residing in Munich, Germany had the following data at the time of his death

Expenses
Funeral expenses incurred in the philippines 25,000
Funeral expenses incurred abroad ?
Accountants fee and audit fees 5,000
Medical expenses -2 months before he died 50,000
Unpaid mortgage on his property loctaed abroad 40,000
Claims against the estate 25,000
Properties
Real property located in Japan 2,400,000
Lot in Davao City 1,000,000
Share of stock in Japanese Corporation 600,000
Other tangible personal properties-phils 1,000,000

66. gross estate on the estate of Mhar is

a. 5,000,000
b. 1,000,000
c. 2,000,000
d. 2,600,000

67. in number 66 above, if the total deductions allowed amount to 60,000, how much is the
amount of funeral expenses abroad
a. 100,000
b. 80,000
c. 145,000
d. 55,000

68. which of the following properties of Etang who died December 4, 2008 is subject to
vanishing deduction

Property 1-Car purchased 3 years ago from batangas city

Property 2- land inherited from her mother in 2005 the estate tax thereon have not been paid

Property 3-donation from a friend in 2004

Property 4-community property inherited december 2, 2003 or five days before marriage

Property 1 property 2 property 3 property 4

a. no no yes yes
b. no no yes no
c. yes no no yes
d. yes yes no no

69. which of the following is a multiplier deduction for purposes of computing vanishing
deduction
a. benefits received under RA 4917
b. medical expenses
c. standard deduction
d. transfer for public purpose

70. statement 1: vanishing deduction is always a deduction from the exclusive properties of the
decedent
Statement 2: a property is subject to vanishing deduction if it has been acquired thru exchange
with a property inhetrited within 5 years prior to the death of the present decedent

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

71. christopher died on October 5, 2006 leaving a parcel of land valued at 800,000 to his
nephew, mendell. On June 10, 2008, Mendell married Cristita, prior to the celebration of the
marriage, they orally agreed that they shall be governed by the conjugal partnership of
gains

Which statement is correct

a. the spouse shall be governed by the conjugal partnership of gains. Thus, if Mendell dies on
May 20, 2009 the vanishing deduction shall be classified as deduction from the exclusive
properties
b. the spouses shall be governed by the absolute community of property regime. Thus if cristita
dies on may 20, 2009 the land shall be subject to vanishing deduction of ½ of its value.
c. the spouse shall be governed by the absolute community of property regime. Nonetheless,
the death of cristita on may 20, 2009 will not subject her share in the land to a vanishing
deduction
d. the spouse shall be governed by the absolute community of property regime. Thus, if mendell
dies on may 20, 2009 only his ½ share in the land shall be subject to a vanishing deduction

72. all of the following, except one, are not deductible from the gross estate of a nonresident
alien
a. vanishing deduction
b. medical expenses
c. family home
d. standard deduction

73. Rodolfo, a filipino died testate on May 10, 2006. Among his gross estate are properties
inherited from his deceased father who died april 4, 2003. What percentage of deduction will
be used in computing the amount of vanishing deduction
a. 80% of the value taken as basis for vanishing deduction
b. 100 % of the value taken as basis for vanishing deduction
c. 60 % of the value taken as basis for vanishing deduction
d. 40% of the value taken as basis for vanishing deduction

74. van died on November 20, 2006. Some of the properties he left are the following
 Asset Mode of Date of Market Market
acqui acqui value value
sition sition -date -
acqui deat
red h of
Van
Land Donatio 7-3-02 500,000 350,000
n
Car Purchas 10-2-05 800,000 980,000
e

Other info:

1. Gross estate of decedent amounts to 3,000,000

2. The land was mortgaged for 50,000 which was deducted in prior estate and van paid the same
before he died
3. The allowable deductions total 125,000, which includes medical expenses of 30,000. It excludes
bequest to a charitable institution in the amount of 50,000
The vanishing deduction is
a. 58,100
b. 57,500
c. 67,783
d. 67,083

75. in determining the net estate of the decedent, which of the following rules is correct
a. real estate abroad is included in the gross estate of a decedent who is a nonresident alien
b. shares of stocks being intangible property shall be included in the decedents gross estate
wherever situated
c. vanishing deduction must be subject to limitations
d. funeral expenses are deductible to the extent of 5% of the total gross estate but not
exceeding 100,000

76.pepe died on August 15, 2006. His data are as follows

Community properties 2,000,000

Exclusive properties of pepe 3,000,000
Exclusive properties of pepe’s wife 1,000,000
Deductions (except standard deduction) 700,000

Included in the 3,000,000 is a parcel of land worth 200,000 and a car worth 400,000

The land was donated to him by his uncle on May 4, 2004 with a value of 150,000. At the time
of donation, the land wasb mortgaged for 30,000 which was paid by his uncle. The car had a
avalue of 500,000 when it was paid by his uncle. The car had a value of 500,000 when it was
inherited by his Pepe from his mother 2.5 years ago and mortgaged for 50,000 which was
paid by Pepe before he died.

The vanishing deduction on the estate of Pepe is

a. 258,000
b. 262,520
c. 283,600
d. none

77. elopre, married June 5,2004 died on April 29, 2006 with the following data: Gross estate—
community property, 3,000,000; exclusive, 2,000,000. Said amount includes a land which he
received as gift from his father a month before the marriage; valued at 540,000. His father
mortgaged the land for 20,000 which was paid by elopre. Elopre mortgaged also said land
for 50,000 but was able to pay only 20,000 until his death. Expenses claimed (excluding the
unpaid mortgage) amounted to 170,000.

The vanishing deduction is

a. 388,800
b. none
c. 384,000
d. 380,000

78. in number 77, the net taxable estate is

a. 2,016,000
b. 1,208,000
c. 3,416,000
 d. 2,208,000

79. statement 1: unpaid loans contracted prior to death may be deducted even if not notarized
if notarization of contracts is not business policy of the creditor
Statement 2: for estate tax purposes several family homes may be deducted provided the
maximum amount is 1,000,000.

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

80. statement 1: an unmarried individual cannot constitute a family home

Statement 2: unpaid medical expenses at the time of death are deductible as claims against
the estate

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

81. mama, widow, a Filipino residing in Canada, died on December 20, 2007 leaving the
following properties

Real property (inherited from her husband on May 3, 2006 valued 2,960,0
then at 2,600,000) 00
Personal properties in Canada 1,300,0
00
Real and personal properties in the Philippines 670,00
0
Family home in Canada 2,500,0
00
Obligations:
Funeral expenses incurred in Canada 250,00
0
Other deductible expenses 850,00
0

The gross estate of mama is

a. 7,430,000
b. 7,070,000
c. 6,760,000
d. 670,000

82. in 81, the deduction for family home is

a. 2,500,000
b. 1,000,000
c. 1,250,000
d. none

83. in 81, the vanishing deduction is

a. 1,786,056.52
b. 1,772,059.20
c. 1,773,708.20
d. none

84. decedent died leaving a family home composed of the following: house, conjugal property
worth 800,000 and the land in which he exclusively owned valued at 400,000. He also owns
a vacation house in Baguio worth 700,000.

The deductible amount of family home

a. 800,000
b. 1,200,000
c. 1,900,000
d. 1,000,000
85. the decedent married, died leaving a family home valued at 1,500,000 composed of the
house which is 70% of the total amount (conjugal property) and the lot 30% of total amount
(exclusive property)
 The amount deductible from gross estate is
a. 1,500,000
b. 1,000,000
c. 975,000
d. 525,000

86. bong, single and a resident citizen, died with properties constituting his gross estate of
4,000,000. Actual funeral expenses amounted to 150,000 and other charges against the
estate amounted to 210,000. The net taxable estate is
A. 3,640,000
b. 2,640,000
c. 3,740,000
d. 2,590,000

87. decedent, married in 1976, died leaving the following

Real properties 3,000,000
Family home 1,000,000
Other real properties, exclusive of 2,000,000
decedent
Family lot, exclusive of decedent 400,000
Funeral expenses 275,000
Medical expenses 650,000
Taxes and losses 1,300,000

The net taxable estate is

a. 2,450,000
b. 1,150,000
c. 2,250,000
d. 1,250,000
88.
Paid medical expenses for confinement at Tigok Hospital from May 15-23, 80,0
2007 (20,000 remain unpaid) 0
0
Hospitalizationexpenses (June 3-6, 2005) 21,5
0
0
Expenses for the settlement of the estate:
Acceptance fee, June 28,2007 20,0
0
0
Court fees, July 16,2007 12,0
0
0
Appearance of lawyer in court, 9-5-2007 2,00
0
Appearance of lawyer in court,11-29-2007 2,00
0

Based on above data, how much is the deductible medical and judicial expenses respectively if
the decedent died may 23,2007

a. 80,000 and 36,000

b. 100,000 and 36,000
c. 80,000 and 34,000
d. 100,000 and 34,000

89. statement 1: under the conjugal partnership of gains, the vanishing deduction is always a
deduction from exclusive properties
Statement 2: under the absolute community of property regime, the vanishing deduction is
deductible also against community property

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

90. the following data relates to Carl, married (2) years ago, died leaving the following:
Gross Estate 14,000,0
00
Land acquired by donation from his father
3.5 years ago:
Market value, date of donation 200,000
Market value, date of death 300,000
Funeral expenses 35,000
Judicial expenses 15,000
Unpaid mortgage on land at the time of 100,000
donation
Unpaid taxes 10,000
Losses 25,000
Transfer for public purposes 35,000
Medical expenses 45,000

Carl paid 60,000 to the mortgagee of the land a year before his death.

Assuming carl was under conjugal partnership of gains, the total ordinary deductions from
exclusive property is
a. 49,600
b. 89,600
c. 124,600
d. none

91. in problem 90, assuming that Carl was under absolute community of property regime the
total amount deductible from the community property is
a. 125,000
b. 134,600
c. 174,600
d. none

92. Alladin, Filipino, married, died January 1, 2006, leaving the following properties:

Inherited from his brother who died May 3, 2004:

Rice Land 1,000,0
00
Residential land 2,000,0
00
Inherited from his mother who died April 12, 2002 or five days after his
marriage:
Coconut land 420,00
0
Acquired thru Alladin’s wife’s labor
Family home 2,000,0
00
Car 500,00
0
Commercial Land 1,000,0
00
Gold necklace(acquired by Aladdin during a previous marriage which had a 80,000
legitimate descendant)

The Riceland and the residential land were previously mortgaged for 350,000 when inherited
where 200,000 was paid by Alladin during his lifetime.

The coconut land was mortgaged for 94,000 of which 14,000 was paid before his death. Also,
Aladdin, by will, bequeathed to Marikina City the sum of 200,000 for exclusive public purpose.

The estate incurred the following expenses:

Funeral Expenses 140,0

00
Judicial Expenses 80,00
0
Portion of Family home destroyed by fire on 100,0
Jan 5, 2006 00
Medical expenses 40,00
 0

The gross estate of Aladdin is

a. 3,500,000
b. 7,000,000
c. 5,250,000
d. 3,957,020

93. in number 92, the vanishing deduction is

a. 2,032,000
b. 220,980
c. 2,145,000
d. none

94. in number 92, the net taxable estate is

a. 2,217,500
b. none
c. 515,000
d. 535,000

95. Luis died leaving the following:

Exclusive properties 2,000,0

00
Conjugal properties 2,500,0
00
Judicial expenses 45,000
Funeral expenses 150,00
0
Notes payable (only ½ is notarized) 100,00
0
Claims against insolvent persons (50 % is 120,00
collectible) 0
Proceeds of life insurance (beneficiary is wife 200,00
revocable) 0
Death benefits under RA 4917 180,00
0
Medical expenses (1/2 is not supported by 550,00
receipts) 0

The net taxable estate is

a. 1,892,500
b. 2,450,000
c. 1,520,000
d. 1,862,500

96. the following data is relates to the estate of Abandonado:

House and lot (family home) In Quezon City, zonal value (assessed 2,230,0
value, 1,150,000) 00
Personal properties 2,500,0
00
Benefits received from employer as a consequence of his death 150,00
0
Unpaid mortgage on Riceland with a value of 1,000,000 200,00
0
Claims against Dimalupig, insolvent 35,000

Based on above information, the value of the gross estate of Abandonado is:

a. 5,915,000
b. 4,835,000
c. 4,685,000
d. 5,730,000

97-99
On October 15, 2006, Benjamin, a Filipino citizen and resident of Manila, died intestate leaving
his wife, Diana and his two illegitimate children, Aubrey and Barbara. The estate of the deceased
consisted of the following:

Real property- conjugal

House and lot (family home) – Manila. This property has an assessed value of 2,500,000 at
the time of death but valued in the zonal valuation of the BIR for 2,900,000.

Personal Property- conjugal

The total value was placed at 1,600,000.
Included in the 1,600,000 are proceeds of an irrevocable life insurance policy of 100,000
taken by Benjamin with Barbara as the beneficiary. The premiums were paid out of conjugal
property of the spouses.

The following deductions were claimed by the heirs:

Funeral Expenses 100,0
00
Unpaid loans, notarized 75,00
0
Losses incurred during the settlement of 25,00
the estate 0

97. the total gross estate of Benjamin is

a. 4,500,000
b. 4,100,000
c. 4,000,000
d. 4,400,000

98. the deductible amount of Family Home is

a. 2,900,000
b. 1,450,000
c. 1,000,000
d. none

99. the net taxable estate is

a. 100,000
b 150,000
c. 950,000
d. none

100. which of the following deductions cannot be claimed by a non resident alien
I. Vanishing deductions on a property situated in the Philippines
II. Funeral expenses incurred abroad
III. Family Home situated abroad
IV. Donation of a property for use by a foreign government

a. I only
b. I and II
c. III and IV
d. I and IV

101-103

Wilson died of a car accident. He died intestate on October 10, 2006, survived by his wife, Ging
and a son.

Exclusive Properties of Ging:

Car 400,00
0
Lot in Quezon City 2,000,0
00
Other real and personal properties 800,00
0
Exclusive properties of Wilson:
House and lot in Laguna, family house 1,900,0
00
 Other personal properties 800,00
0
Other real properties 1,500,0
00
Conjugal properties of the spouses:
Cash on hand and in bank 500,00
0
Receivable as prize in a raffle sponsored by PICPA 50,000
Receivable from an insurance company where the son, Gino, was designated as a 150,00
revocable beneficiary. The premiums were paid out of the conjugal funds 0

The following deductions were claimed:

Funeral expenses 195,0
00
Judicial expenses 15,00
0
Claims against the estate, not notarized 50,00
0
Claims against insolvent persons 30,00
0
Unpaid mortgage on other real properties (contracted for the benefit of the conjugal 200,0
property) 00
Unpaid mortgage on house and lot in Laguna (the proceeds of which did not redound to 350,0
the benefit of the family) 00
Accrued income taxes 35,00
0
Income tax on income earned from October 11 to Dec 31, 2006 7,500

101. the gross estate is

a. 4,930,000
b. 4,900,000
c. 4,850,000
d. 8,130,000

102. the deductible share of surviving spouse is

a. 255,000
b. 127,500
c. 112,500
d. 2,227,500

103. the net estate subject to tax is

a. 1,962,500
b. 1,977,500
c. 112,500
d. 2,227,500

104. Alanis, a resident citizen, single but head of the family, died January 3, 2008. The following
are his data:

Properties:
Real Properties (excluding Family Home of 3,200,0
1,100,000) 00
House and Lot in Australia 1,500,0
00
Other personal properties 800,00
0
Deductions:
Funeral expenses 120,00
0
Claims against insolvent persons 100,00
0
Claims against the estate, not notarized 50,000
0
Unpaid mortgage on the family home 30,000
The personal properties do not include shares of stocks valued at 50,000 which were purchased
by the decedent from Astra Company one month prior to his death.

The house in Australia was inherited by Alanis from his father who died 2.25 years ago. Said
property was mortgaged for 200,000 which was paid by the decedent before his death.

The gross estate is

a. 4,050,000
b. 6,750,000
c. 6,650,000
d. 5,550,000

105. the total deductions (excluding standard deductions) is

a. 250,000
b. 300,000
c. 1,250,000
d. 2,001,111

Hint: the house in Australia is not subject to vanishing deduction because the property is situated
outside the Philippines. To be subject to the deduction, the property must form part of the gross
estate situated in the Philippines (Sec. 86 [ A,2], NIRC)

106. trillo, a resident of Quezon city, died on June 5, 2007 with the following data:
Property acquired by Trillo before marriage 1,500,0
00
Property acquired by his wife before marriage 1,000,0
00
Conjugal family house and lot, Quezon City, certified by Barangay 1,600,0
Chairman 00
House in Marbel City (exclusive of Trillo) , certified as family home by 1,000,0
barangay captain 00
Proceeds of life insurance, irrevocable, beneficiary is the estate 500,00
0
Claims against insolvent debtors (40 % uncollectible) 100,00
0
Inter vivos donations to City Government of Quezon 200,00
0
Actual Funeral expense (50 % paid by relatives) 300,00
0
Judicial Expenses 250,00
0

The net taxable estate is

a. 6,040,000
b. 1,580,000
c. 1,550,000
d. 1,370,000

Hint: house in quezon city is the true family home because it is the place where family resides.

107-110

Penduko married in 2005 under the absolute community of property regime, died on August 30,
2007. He left the following properties and obligations:

Properties:
Cash in bank 200,00
0
Residential lot inherited from his father on June 12, 1,200,0
2004 00
Family home: house (community property) 1,300,0
00
Lot (exclusive property of 1,000,0
Penduko) 00
Personal properties acquired by the spouses during 200,00
marriage 0
 Receivable from his sister (insolvent) 100,00
0
Inter vivos donation from his mother on July 2007, 150,00
revocable 0
Receivable from SSS as indemnity for hospitalization 12,000
Deductions:
Unpaid mortgage on the residential lot contracted by
the father:
At the time of death of father 300,00
0
At the time of death of Penduko 100,00
0
Funeral expenses (40 % were shouldered by relatives) 80,000
Judicial expenses (30 % were incurred after 6 months) 35,000
Claims against the estate (includes unpaid medical 35,000
expenses of 12,000)
Unpaid mortgage on the house (loaned to penduko’s 100,00
sister) 0
Casualty loss (50 % was indemnified by the Insurance 60,000
company)

Donation to Barangay Engkantao (verbal donation) 25,000

107. the gross estate on the estate of Penduko is

a. 4,062,000
b. 3,900,000
c. 3,962,000
d. 4,000,000

108. the vanishing deduction on the estate of Penduko is

a. 357,450
b. 375,540
c. 300,500
d. 367,450

109. the ordinary deductions from the community property of penduko is

a. 807,950
b. 582, 900
c. 782,950
d. 682,950

110. the net taxable estate is

a. None
b. 46, 525
c. 96,525
d. 122,025

111. Eleanor, resident Citizen, married and under the absolute community of property regime,
died on August 20, 2007. The following are the data on properties and obligations:

Exclusive properties of Eleanor:

Personal properties 2,500,0
00
Family home 2,000,0
00
Community Properties:
Real properties 1,400,0
00
Personal properties 1,750,0
00
Funeral expenses 220,00
0
Judicial expenses incurred until Feb 30,000
20, 2008
Judicial Expenses incurred after Feb 20,000
20, 2008
Unpiad taxes 12,500
Medical expenses 550,00
0
Casualty loss incurred November 2, 350,00
2007 0
Casualty loss incurred March 5, 130,00
2008 0

How much is the net taxable estate

a. 3,268,500
b. 3,278,750
c. 3,238,000
d. 3,228,000

112. the net distributable estate is

a. 3,278,750
b. 3,483,750
c. 5,483,750
d. 5,418,750