1.

__________, a resident citizen, died on January 13, 2018, leaving a significant

number of properties, including a family home in ____________ valued at Php7
Million; three (3) condominium units in Makati City valued at Php5 Million each;
and a life insurance policy valued at Php10 Million. __________, her only heir
and beneficiary of the policy, reported her death on September 13, 2018 and filed
the estate tax return on December 4, 2018. Because _________ needed to sell
some of the properties in the estate of Mrs. ___________ to pay for the estate tax,
______________ asked the Commissioner of Internal Revenue to give her one
year to pay the estate tax due. The Commissioner approved the request for
extension of time provided that the estate tax be computed on the basis of the
value of the property at the time of payment of the tax.

a. Does the Commissioner of Internal Revenue have the power to extend the
payment of estate tax? If so, what are the requirements to allow such
extension? (5%)

b. Does the condition that the basis of the estate tax will be the value at the
time of payment have legal basis? State your legal basis. (5%)

2. After failing to conceive a baby for 5 years, Spouses __________ adopted a baby
girl. However, their families were strongly against their decision and agreed not
to support the girl in the event that the spouses will not have the means to do.
Thus, when the girl celebrated her 16 th birthday on April 27, 2018, Spouses
___________ transferred their house and lot under the name of the girl and
opened a bank account with Php2 Million under her name to ensure the girl’s
future.

a. Are the transfer of house and lot and opening of a bank account subject to
donor’s tax? If yes, at what rate? (3%)

b. When is the deadline for filing and payment of the donor’s tax? (3%)

3. Atty. __________ is the in-house counsel of a manufacturing company. She

inherited 10 residential units from her father, who died in June 2016. After
renovating the units, Atty. ____________ decided to lease the units for
Php17,500.00 a month beginning February 2018.

a. Is the income from the lease of the residential units subject to VAT? How
about the salary of Atty. ________ from the manufacturing company
subject to VAT? (6%)

b. What is the rate and basis of VAT on sale of services? (3%)

c. When should the VAT returns be filed? When should the VAT payments
be made? (5%)