SITUATIONAL PROBLEMS

PROBLEM#1

The decedent was a resident decedent.

Properties left at FMV were:
Family home (land & residential house) in the Philippines P2,000,000
Piece of land with vacation house in Malaysia 1,500,000
Family land in the Philippines with a mortgage in favor of
PNB for P600,000 1,000,000 400,000
Shares of stock:
Of a domestic corporation deposited in a bank safety
deposit box in Malaysia 200,000
Of a foreign corporation, the entire business of which is
in the Philippines, deposited in a bank safety deposit box
in Malaysia 100,000
Receivable from a friend who has no property whatsoever 50,000
Receivable under insurance policies:
Life insurance policy taken by the decedent on his own
life with his estate as revocable beneficiary 500,000
Life insurance policy taken by the decedent on his own
life with a daughter as revocable beneficiary 400,000
Life insurance policy taken by the decedent on his own
life with a son as irrevocable beneficiary 300,000x
Life insurance (group) taken by the employer of the
Decedent with the estate as revocable beneficiary 50,000x
Property insurance for loss of property 250,000
Accident insurance for injury sustained 20,000

HOW MUCH IS THE GROSS ESTATE?

PROBLEM#2

A resident citizen of the Philippines died leaving the following properties with their
corresponding fair market values:
Residential house and lot in Makati City used as family home
(with an unpaid mortgage of P500,000) P2,000,000
Agricultural land in Macabebe, Pampanga
(with zonal value of P3,000,000) 3,500,000
Furniture and appliances in the family home 1,500,000
Farm equipment 1,800,000
Receivable from a friend who is insolvent 50,000
Receivable from a brother who is not insolvent 90,000

HOW MUCH IS THE GROSS ESTATE?

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PROBLEM#3

Mr.Garry M. Clara a citizen and resident of Manila died leaving:

Real properties in Manila with a zonal value of P2,000,000
Real and personal properties in JAPAN 1,800,000
Receivable from insurance companies in the Philippines on
policies taken out by the decedent himself:
Life insurance with estate as revocable beneficiary 200,000
Life insurance with a son as revocable beneficiary 300,000
Life insurance with a daughter as irrevocable beneficiary 250,000
Accident insurance for an injury during his life time 100,000
Property insurance for loss during his lifetime 600,000
Receivable from group insurance taken out by the employer 200,000
100 shares of common stock of San Miguel Co., a domestic corp.
listed in the PSE, (quoted in the exchange on the date of death
at P150 as highest and P130 as lowest per share), par value 10,000 14,000
Shares of B Co., a domestic corporation not listed in PSE:
Common, with par value of P5,000, FMV of 4,200
and a book value of 4,800
Preferred with a par value of P2,000 and FMV of 1,600

HOW MUCH IS THE GROSS ESTATE?

PROBLEM#4

The decedent was a citizen of and residing in USA who left the following properties at
FMV:
Land in the Philippines P1,000,000
Land and building in USA 2,000,000
Car in the Philippines 600,000
Shares of stock of a domestic corporation with a certificate in
a foreign bank 700,000
Shares of stock of TIGERWOODS Co, foreign corporation
(with no business in the Philippines) 200,000
With certificates in a foreign bank:
Shares of stock of SHARAPOVA Co, foreign corporation
(90% of its business is in the Philippines) 500,000
Shares of stock of HILTON Co, foreign corporation
(85% of its business is in the Philippines) 400,000
USA has no death tax on a succession.

HOW MUCH IS THE GROSS ESTATE IN THE PHILIPPINES?

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PROBLEM#5

The decedent, a non resident, not citizen of the Philippines died leaving the following
properties:
Residential condominium unit in the Philippines P2,000,000
Residential house and lot in SWITZERLAND used as family home 3,000,000
Furniture and appliances in the residential condominium unit
in the Philippines 1,000,000
Furniture and appliances in the family home 1,200,000
Shares of stock of a domestic corporation with their certificates
in SWITZERLAND 500,000
Shares of a stock of a foreign corporation with business in foreign
countries only with their certificates in Pasig 400,000
Shares of stock of a foreign corporation with 60% of its business
in the Philippines and 40% in foreign countries with their
certificates in SWITZERLAND 6,000,000

HOW MUCH IS THE GROSS ESTATE IN THE PHILIPPINES?

PROBLEM#6

The decedent was a citizen and resident of a foreign country. (Foreign country has no
estate tax). He left the following properties:
Personal properties in the Philippines P500,000
Real property in his country 5,000,000
Shares of stock of a corporation in his country 500,000
Shares of stock of a domestic corporation 200,000

HOW MUCH IS THE GROSS ESTATE IN THE PHILIPPINES?

PROBLEM#7
FAIR MARKET VALUE
At transfer At death Consideration Received
Revocable Transfers:
Land P4,000,000 P5,200,000 P3,000,000
Car 1,000,000 -0- 600,000
Shares of stock 500,000 300,000 400,000
Bonds 200,000 200,000 250,000
Transfer under power of appointment:
Land & building, general 2,000,000 1,800,000 1,000,000
Farm land, limited power 1,500,000 500,000 1,200,000

HOW MUCH IS THE GROSS ESTATE?

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PROBLEM#8

In a revocable transfer of property, where the value of the property at the time of transfer
was P2,000,000, consideration received was P1,500,000, and fair market value at the time
of death was P1,800,000.

HOW MUCH VALUE IS TO BE INCLUDED IN THE GROSS ESTATE?

PROBLEM#9

A transfer in contemplation of death of property, where the value of the property at the
time of transfer was P2,000,000, consideration received was P1,700,000, and fair market
value at the time of death was P1,500,000.

HOW MUCH VALUE IS TO BE INCLUDED IN THE GROSS ESTATE?

PROBLEM#10

The decedent was married at the time of death.

a)Cash owned by the decedent before the marriage P5,000,000 B
b)Real property inherited by the decedent during the marriage 6,000,000 A
c)Personal property received by the wife as gift before the marriage 400,000 B
d)Property acquired by the decedent with cash owned before the marriage 600,000 B
e)Clothes of the decedent, purchased with the exclusive money of wife 500,000 A
f)Jewelry purchased with the exclusive cash of the decedent 1,000,000 A
g)Property unidentified when and by whom acquired 1,200,000 B
h)Cash-income during the marriage 2,000,000 , B

A) EXCLUSIVE GROSS ESTATE IF THE SPOUSES WERE UNDER THE

SYSTEM OF CONJUGAL PARTNERSHIP OF GAINS?
B) COMMUNITY GROSS ESTATE IF THE SPOUSES WERE UNDER THE
SYSTEM OF ABSOLUTE COMMUNITY OF PROPERTY?

PROBLEM#11
On June 15 of the current taxable year before his death, Mr. Ibos transferred his
P3,000,000 farm land to Ms. Daisy with the condition that should Ms. Daisy transfer such
property, she could transfer it to anybody. 2 years after Ms. Daisy died, the property was
transferred to Mr. Arman, her brother. Will the farm valued at P3,000,000 be included in
the gross estate of Ms. Daisy? Ms. Daisy had a general power over the property and
therefore, the same shall be included in her gross estate.

PROBLEM#12
Mr. Marlboro executed a document transferring his P2,500,000 resthouse to Mr.
Wilfredo, his brother, with the condition that should Mr. Wilfredo transfer such property,
it should be transferred only to the youngest son of Mr. Marlboro. At the time of death of
Mr. Wilfredo, will the P2,500,000 resthouse be included in the gross estate? Mr. Wilfredo

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had only a limited power over the property and therefore the same shall not be included
in his gross estate.