ILLUSTRATION TAXABLE

ESTATE AND ESTATE TAX

DUE
Mr. AA, single and a resident of the
Philippines died leaving the following
properties and
their corresponding fair market values
at the date of death, June 20,2020:

Family home, P5,000,000 Jewelry, P600,000

Agricultural land,
Accounts receivable, P500,000 P3,000,000
Apartment,
Cash in bank, P4,000,000 P8,000,000
Shares of stock,
Van, P1,500,000 P6,000,000

Additional information:
1. On October 30, 2020 and during the
settlement of the estate, the van was
totally destroyed by
fire. The van was insured for P800,000.
2. Mr. AA's debtor is 30% insolvent.
3. Mr. AA owed Mr. B P300,000 in a
personal loan. The debt instrument is
notarized.
4. The agricultural land was mortgaged for
P1,000,000 which was unpaid at the date
of death.
5. Unpaid real property tax for
calendar year 2020, P10,000

Compute for the estate tax due.

Family home 5,000,000.00

Accounts receivable 500,000.00
Cash in bank 4,000,000.00
Van 1,500,000.00
Jewelry 600,000.00
Agricultural land 3,000,000.00
Apartment 8,000,000.00
Shares of Stock 6,000,000.00
Gross estate 28,600,000.00
Less: Ordinary deductions
1. Casualty loss 700,000.00
2. Claims against insovent person (500,000x30%) 150,000.00
3. Claims against the estate 300,000.00
4. Unpaid mortgage 1,000,000.00
5. Unpaid taxes 10,000.00 2,160,000.00

Special deductions:
1. Family Home 5,000,000.00
2. Standard deduction 5,000,000.00 10,000,000.00
Net Taxable Estate 16,440,000.00