CIR v.

Pineda

FACTS:
BIR investigated the income tax liability of the patriarch Pineda’s estate and it found that the corresponding
income tax returns were not filed. Thereupon, the representative of the Collector of Internal Revenue filed said returns
for the estate. Respondent, who received the assessment, contested the same. Subsequently, he appealed to the Court
of Tax Appeals alleging that he was appealing "only that proportionate part or portion pertaining to him as one of the
heirs."
CTA ruled that Pineda is liable only for taxes corresponding to his share in the estate. CIR appealed to the SC and
has proposed to hold respondent liable for the payment of all the taxes found by the Tax Court to be due from the
estate instead of only for the amount of taxes corresponding to his share in the estate.

ISSUE:
WON the respondent could be held answerable to pay the full amount of the tax assessed.

HELD:
Yes. Pineda is liable for the assessment as an heir and as a holder-transferee of property belonging to the
estate/taxpayer. As an heir he is individually answerable for the part of the tax proportionate to the share he received
from the inheritance. His liability, however, cannot exceed the amount of his share.
As a holder of the property belonging to the estate, he is liable for the tax up to the amount of the property in
his possession. The reason is that the Government has a lien on such property. But after payment of such amount, he
will have a right to contribution from his co-heirs.
Dizon v. CTA

FACTS:

Jose P. Fernandez (Jose) died. Thereafter, a petition for the probate of his will was filed. The probate court then
appointed retired Supreme Court Justice Arsenio P. Dizon (Justice Dizon) and petitioner, Atty. Rafael Arsenio P. Dizon
(petitioner) as Special and Assistant Special Administrator, respectively, of the Estate of Jose (Estate). In a letter, Justice
Dizon informed respondent Commissioner of the Bureau of Internal Revenue (BIR) of the special proceedings for the
Estate.
Justice Dizon passed away. Thus, the probate court appointed petitioner as the administrator of the Estate.
Petitioner requested the probate court's authority to sell several properties forming part of the Estate, for the purpose
of paying its creditors.
However, the Assistant Commissioner for Collection of the BIR issued Estate Tax Assessment Notice demanding
payment of deficiency estate tax. The petitioner moved for reconsideration of the said estate tax assessment. However,
the BIR Commissioner denied the request and reiterated that the estate is liable for the payment of deficiency estate
tax. Petitioner filed a petition for review before respondent CTA. Court finds the petition unmeritorious and denies the
same. CA affirmed the CTA's ruling.

ISSUE:
WON the actual claims of the aforementioned creditors may be fully allowed as deductions from the gross
estate of Jose despite the fact that the said claims were reduced or condoned through compromise agreements entered
into by the Estate with its creditors.

HELD:

No. The deductions allowable are the amounts determined at the time of death. Post-death developments are
not material in determining the amount of deduction. Thus, the Court applied the “date-of-death valuation rule” which
is the US rule on deductions and which is applicable also in the Philippines. The amount deductible is the debt which
could have been enforced against the deceased in his lifetime.
CIR v. Rueda

FACTS:

Antonio Campos Rueda is the administrator of the estate of the late Estrella Soriano Vda. de Cerdeira, liable for
the sum of P161,874.95 as deficiency estate and inheritance taxes for the transfer of intangible personal properties in
the Philippines, the deceased, a Spanish national having been a resident of Tangier, Morocco from 1931 up to the time
of her death in 1955. In an earlier resolution promulgated May 30, 1962, the Court on the assumption that the need for
resolving the principal question would be obviated, referred the matter back to the Court of Tax Appeals to determine
whether the alleged law of Tangier did grant the reciprocal tax exemption required by the aforesaid Section 122.

ISSUE:
WON reciprocity in exemption requires the “foreign country” to possess international personality.

HELD:
No. The fact that the laws of Tangier, Morocco, do not impose transfer or death taxes upon intangible personal
properties of our citizens not residing therein, entitles to a reciprocal exemption similar properties belonging to the
decedent who at the time of his death resides in Tangiers, no matter that the latter country does not possess
international personality in the traditional sense.