Module 3 Illustrations

Solutions
  Learning Activity 1.
Thomas bought a new car with cash price of P3,000,000. He bought the
Answer: car on installment with the following terms: down payment of P500,000
P3,000,000 and annual installment of P700,000 for four years. On his way, he run
over an approaching truck and died. Determine the gross estate.
  Learning Activity 2.
The decedent devised to his son a 1,000 sq.m. lot in Global City, Taguig
with the following valuation:
Fair value as determined by city assessors P20,000/sq.m.
Answer:
P20,000,000 Zonal value as determined by the CIR 17,000/sq.m.
FB determined by independent assessors 18,500/sq.m.
Determine the gross estate.
 Learning Activity 3.
Don Valentin died leaving his wife Tina, his legitimate children, Val and
Valen, and illegitimate children Tine, Alen, and Valerie. The spouse has
the following properties:
Exclusive property of Don Valentin P18,000,000
Exclusive property of Donya Tina 16,000,000
Net common properties 36,000,000
Determine the distributable estate and compute for the inheritance of
each heir.
Exclusive property of Don Valentin 18,000,000.00
Net common properties (36000000 / 2) 18,000,000.00
Distributable estate 36,000,000.00
 Heir Share Partition Inheritance
Tina (SS) 1.0 1/4.5 8,000,000.00
Val (LC) 1.0 1/4.5 8,000,000.00
Valen (LC) 1.0 1/4.5 8,000,000.00
Tine (IC) 0.5 0.5/4.5 4,000,000.00
Alen (IC) 0.5 0.5/4.5 4,000,000.00
Valerie (IC) 0.5 0.5/4.5 4,000,000.00
Total 4.5 36,000,000.00
Illustration 1
A decedent leaves behind the following property:

Compute for the Gross Estate under the following

situation:
1. the decedent is a resident citizen
2. the decedent is a resident alien
3. the decedent is a non-resident citizen
4. the decedent is a non-resident alien without reciprocity
5. the decedent is a non-resident alien with reciprocity
 Philippines Abroad Total
Real Property 2,000,000.00 3,000,000.00 5,000,000.00
Tangible personal property 1,000,000.00 500,000.00 1,500,000.00
Intangible personal property 800,000.00 1,200,000.00 2,000,000.00
Total 3,800,000.00 4,700,000.00 8,500,000.00

Compute for the Gross Estate under the following situation:

1. the decedent is a resident citizen 8,500,000.00
2. the decedent is a resident alien 8,500,000.00
3. the decedent is a non-resident citizen 8,500,000.00
4. the decedent is a non-resident alien without reciprocity

3,800,000.00
5. the decedent is a non-resident alien with reciprocity
3,000,000.00
Illustration 2
A decedent died on December 17, 2019 but an
inventory of his properties was drawn only on May 1, 2020
where the properties had a total fair value of P5,000,000,
P100,000 of which represents income earned after death
while P400,000 represents income earned before death. A
total of P500,000 was paid for funeral and judicial
expenses. The decedent has P200,000 obligations during
his death but was paid after his interment.
Compute for the Gross Estate.
Properties as of May 1, 2020 5,000,000.00
Less: Increase in properties since death (100,000.00)
Add: Funeral and judicial expenses 500,000.00
Add: Credits (obligations)paid 200,000.00
Gross Estate 5,600,000.00
 Illustration 3
The following properties were identified upon the death of Mrs. Dela Cruz:
Car, registered in the name of her brother P800,000
Merchandise, consigned to Mrs. Dela Cruz 200,000
House and lot 2,400,000
Motorcycle, borrowed from a friend 150,000
Boarding house, held as trustee 4,000,000
Van 1,000,000
Van franchise 600,000
Clothes, books, and other personal belongings 400,000
1. Compute for the gross estate
2. Compute for the exclusions from the gross estate
House and lot 2,400,000.00
Van 1,000,000.00
Van franchise 600,000.00
Clothes, books, and other personal belongings 400,000.00
Gross Estate 4,400,000.00
Car, registered in the name of her brother 800,000.00
Merchandise, consigned to Mrs. Dela Cruz 200,000.00
Motorcycle, borrowed from a friend 150,000.00
Boarding house, held as trustee 4,000,000.00
Exclusions from Gross Estate 5,150,000.00
 Illustration 4
Mr. and Mrs. X had the properties respectively before marriage:
Mr. X
Lot (purchased) P1,000,000
House and Lot (inherited) 2,000,000
Mrs. X
Car (purchased) 700,000
Cash 500,000

During their marriage, they acquired a condo worth P1,500,000, house

and lot in an exclusive subdivision (family home) worth P3,000,000, and
family car worth P1,200,000. Mr. X sold his inherited property at
P5,000,000 while Mrs. X inherited P900,000 (land) from her parents
(under the title Mrs. X married to Mr. X).
Compute for the separate and shared properties under the following:
1. CPG
2. ACP
CONJUGAL PARTNERSHIP OF GAINS (CPG)
 Exclusive of Mr. X Exclusive of Mrs. X Conjugal
Lot (purchased) 1,000,000.00
House and Lot (inherited) 2,000,000.00
Car (purchased) 700,000.00
Cash 500,000.00
Condo 1,500,000.00
House and Lot (fruits of labor) 3,000,000.00
Car (fruits of labor) 1,200,000.00
Income from sale of inherited property 3,000,000.00
Land (under Mrs. X married to Mr. X) 900,000.00
Total 3,000,000.00 2,100,000.00 8,700,000.00
ABSOLUTE COMMUNITY OF PROPERTIES (ACP)
 Exclusive of Mr. X Exclusive of Mrs. X Communal
Lot (purchased) 1,000,000.00
House and Lot (inherited) 2,000,000.00
Car (purchased) 700,000.00
Cash 500,000.00
Condo 1,500,000.00
House and Lot (fruits of labor) 3,000,000.00
Car (fruits of labor) 1,200,000.00
Income from sale of inherited property 3,000,000.00
Land (under Mrs. X married to Mr. X) 900,000.00
Total - 900,000.00 12,900,000.00
 Illustration 5
The following are the properties of Mr. and Mrs. Alibaba:
Before marriage During marriage
Residential lot (inherited by Mr. Alibaba) 2,000,000.00
Commercial lot (inherited by Mrs. Alibaba) 5,000,000.00
Income of residential lot 400,000.00 800,000.00
Income of commercial lot 1,400,000.00
Income from own labor – Mr. Alibaba 200,000.00 800,000.00
Income from own labor – Mrs. Alibaba 300,000.00 1,000,000.00
Assume that Mrs. Alibaba died on January 6, 2020 leaving Mr. Alibaba
and their 3 children, determine the following:
1. the exclusive and common properties
2. the estate partition (intestate)
 Exclusive to Mr. AlibabaExclusive to Mrs. Alibaba Communal
Residential lot (inherited by Mr. Alibaba) 2,000,000.00
Commercial lot (inherited by Mrs. Alibaba) 5,000,000.00
Income of residential lot 1,200,000.00
Income of commercial lot 1,400,000.00
Income from own labor – Mr. Alibaba 1,000,000.00
Income from own labor – Mrs. Alibaba 1,300,000.00
Total - 6,400,000.00 5,500,000.00
Exclusive property of Mrs. Alibaba 6,400,000.00
Net common properties (5500000 / 2) 2,750,000.00
Distributable estate 9,150,000.00
 Heirs Share Partition Inheritance
Mr. Alibaba (SS) 1.0 1/4 2,287,500.00
LC 1 1.0 1/4 2,287,500.00
LC 2 1.0 1/4 2,287,500.00
LC 3 1.0 1/4 2,287,500.00
Total 4.00 9,150,000.00