ILLUSTRATIO

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1. TRANSFER FOR PUBLIC PURPOSE
Mr. AA died on Jan. 15, 2020 leaving properties with fair market value
at the date of his
death amounting to P30,000,000 which includes land with a zonal
value of P4,000,000 and
a market value per assessor's roll of P3,900,000. He executed a will
which will transfer the
said land to the city of Bacolod upon his death.
Questions:
1. What is the value of the land in the gross estate? 4,000,000
2. What is the allowable deduction for transfer for public purpose? 4,000,000
3. Assuming that the land is not included in the inventory of assets in
the gross estate, zero
how much is the allowable deduction for transfer for public purpose?
2. VANISHING DEDUCTION
Mr. AA died on Jan. 15, 2020 leaving properties with fair market value at the
date of his
death amounting to P30,000,000 which includes land with a zonal value of
P4,000,000 and
a market value per assessor's roll of P3,900,000. It was mortgaged for
P2,500,000 and
Mr. AA was able to pay P500,000 before he died. Lossess, indebtedness and
taxes as well
as transfer for public purpose is P6,000,000 (unpaid mortgage included).
Question:
1. Assuming that the said land was inherited by Mr. AA from his father and
Mr. AA's father
died on June 20, 2018 when the land has a zonal value (BIR) of P3,400,000
and market value of
the assessor of P3,500,000. Mr. AA assumed the above stated mortgage of
P2,500,000.
Compute for the vanishing deduction.

date of death of the prior date of death of the present decedent

decedent (Mr. AA)
Zonal Value 3,400,000.00 4,000,000.00
MV assessor 3,500,000.00 3,900,000.00

Fair Market
value to
be included in
the
gross estate 3,500,000.00 4,000,000.00