DEDUCTIONS IN GROSS ESTATE

1. Which among the following statements is correct?

I. An obligation that had prescribed already during the lifetime of the decedent, or that was
unenforceable against him when still alive, will not be claim against his estate when he shall be dead.

II. If a monetary claim against the decedent did not arise out of a debt instrument, the
requirement on a notarized debt instrument does not apply.

a. I only

b. II only

c. Both I and II

d. Neither I nor II

2. The following statements pertain to indebtedness for estate tax purposes. Which is false?

I. When a person leaves property encumbered by a mortgage or indebtedness, his gross estate
must include the fair market value of the property, undiminished by the mortgage of indebtedness.

II. Include in the computation for the gross estate only the equity of the decedent on the property.

III. If the loan is merely an accommodation loan, where the proceeds of the loan went to another
person, the value of the unpaid loan must not be included in the receivable of the estate

a. I only

b. II only

c. I and II only

d. II and III only

3. Claims against the estate of the decedent who died in February 2018:

Notes payable for money borrowed, not notarized Php 500,000

Accounts payable for supplies used in business Php 200,000

Debts from gambling losses Php 120,000

How much is the deductible claims against the estate?

a. Php 200,000
b. Php 320,000

c. Php 470,000

d. Php 850,000

4. On June 30, 2018, Lena Danvers passed away. The following unpaid taxes relate to her property,
income on her property, and estate. Estate tax was filed and paid early on December 31, 2018.

2017 Income tax from practice of profession Php 300,000

Income tax-practice of profession from January to June 2018 Php 100,000

Income tax of the estate, July to December 2018 Php 200,000

Real property taxes for 2016 and 2017 Php 150,000

Business taxes for 2017 Php 100,000

The total taxes that may be deducted from the gross estate is:

a. Php 550,000

b. Php 750,000

c. Php 850,000

d. Php 650,000

5. Sam Arias transferred a 3,000 square meter lot purposely to be converted as a zoo to be
administered by the city government of Tawi-Tawi. The lot was acquired by the decedent 10 years ago
for Php 50,000. Its fair market value at the time of Sam Arias’ death was Php 5,000,000. The deduction
from the gross estate relative to this transfer is:

a. Php 50,000

b. Php 2,500,000

c. Php 5,000,000

d. Php 0