Aguirre, Arian

Nacalaban, Chary Mae

Pajente, Jo Arrne
Viernes, Maila
The decedent died in the Philippines with receivables as follows:

• From a debtor who has no properties P 100, 000

whatsoever
• From a debtor whose assets in relation P 300, 000
to liabilities is 1:3
• From a debtor with assets of
P 3, 100, 000, a tax liability of P 100, 000
and other indebtedness of P 4, 000, 000. P 800, 000

Deduction from the gross estate for claims against insolvent person?
 Debtor A Debtor B Debtor C
Assets 0 P 100, 000 P 3, 100, 000
(300,000 / 3)
Other
Accounts 0 0 P 4, 000, 000
payable
Tax liability 0 0 P 100, 000

Amount of
claims P 100, 000 P 300, 000 P 800, 000
Debtor A = P 100, 000
Debtor B = 300, 000
Debtor C = 800, 000
P 1, 200, 000
 Debtor A 0 0

Debtor B P 100, 000 (3/3) P 100, 000

Debtor C Asset: P 3, 100, 000

Tax: (100, 000) P 500, 000
P 3, 000, 000 (800K /4.8
M)

Recoverable amount: P 600, 000

Total Amount of claims P 1, 200, 000
Less: Recoverable Amount 600, 000

Uncollectible Accounts/
Deduction from P 600, 000
the gross estate
The entire amount of P1,200,000
collectibles should still be reported as part
of the gross estate of the decedent.
However, the uncollectible claims against
insolvent person shall be part of ordinary
deductions against the gross estate in the
determination of the net taxable estate.