 Arising from casualty losses such as fire,

storm, shipwreck, robbery, theft,

embezzlement and other similar casualty
 Not compensated by insurance
 Not claimed as a deduction in an income
tax
 Incurred during the settlement of the
estate which is one year from the death of
decedent.
Among the properties included in the gross estate of
the decedent at the time of his death was a newly
developed resort in Siargao valued at P20,000,000.
George is the sole heir to the property. During the
settlement of the estate and before the last day of
filing the estate tax return, a super typhoon hit Siargao
destroying entirely the newly developed resort. It was
determined that the fair value of the property after the
incident was reduced to P500,000.

Q1. What amount should be included as part of the

decedent’s gross estate?
Q2. What amount should be included as part of the
allowable deduction from the gross estate?
Q3. Assuming the property was insured to
P25,000,000, what amount should be included as part
of allowable deduction from the gross estate?
Q4. What amount should be included as part of
allowable deduction from the gross estate assuming
that the incident happened after the settlement of the
estate and the property was not insured?
Q5. What amount should be included as part of the
gross estate assuming that the incident happened one
day before the death of decedent?
Q6. In relation to Q5, what amount should be included
as part of allowable deduction from the gross estate
assuming that the incident happened one day before
the death of decedent?
A resident decedent left the following upon his
death:
Cash in BPI P 5,000,000
Cash in Hongbank 3,000,000
Condominium in Cebu 8,000,000
Car 4,000,000
The condominium was mortgaged for
P5,000,000
How much is the total gross estate of decedent?
How much is the unpaid mortgage as part of
the allowable deductions from the gross estate?
- Taxes accrued prior to the death of decedent.

- Examples: Local taxes, Income taxes,

Business Taxes, Donor’s taxes and other
assessments prior to death of decedent.
 The amount should be included in the gross
estate.
 The incapacity of the debtor to his obligation
should be proven
 If the insolvent could only pay partial amount,
the full amount owed shall be included in the
gross estate, and the amount uncollectible
shall be allowed as a deduction.
 The present decedent died within 5 years from
the date of death of prior decedent.
 The property with respect to which deduction is
sought can be identified as the one received
from the prior decedent.
 The said property must be located in the
Philippines.
 The said property must have formed part of the
gross estate of prior decedent.
 The estate tax on said property mush have
finally determined and paid by the prior
decedent.