TAX02 Comprehensive Quiz

PART 1

CASE 1 ESTATE TAX (50points)

Mr. Tony Stark died on April 26, 2019 due to radiation. He is a resident citizen of the Philippines. Mr.
Stark is married to Ms. Pepper in 1995 and he has a legitimate child and an illegitimate child. Ms.Pepper
presented the following properties of Mr. Stark:

 Residential house and lot 8,000,000

 *Apartment he inherited from his father 2 years ago 5,000,000
 Rent income from the apartment 300,000
 Property brought to marriage by his wife 2,000,000
 Jewelry acquired by the decedent before marriage 300,000
 CAR inherited by his wife during marriage 2,000,000
 Vacation house acquired during marriage 6,000,000
 Life insurance with estate as revocable beneficiary 500,000

**The inherited apartment has an unpaid mortgage worth 600,000

Ms.Pepper also showed the following deductions:

 Paid funeral expenses 240,000

 Unpaid judicial expenses 300,000
 Donations to National Government 2,500,000
 Claims against insolvent person 2,000,000
 Unpaid mortgage on inherited apartment 600,000

Prior to the death of Mr. Stark, he was hospitalized in WALANG PAG-ASA HOSPITAL for 6 months from
March 6, 2013 to August 28, 2013. They incurred the following:

Medicine 320,000
Doctor’s fee 200,000
TAX02 Comprehensive Quiz

Foods 90,000

OBITUARY
A noble and caring soul a pleasing assiduous and dynamic personality
like you will never depart from loved ones. It is a known fact that you
have always been a shining and guiding force for all of us. We

promise you that we will follow the path shown by you. Your
virtues and deeds shall always be a beacon light in our hearts.
We miss you a lot in every moment of our life. We offer our
heartfelt condolences.

Deeply remembered by:

Ms. Pepper (wife)

Howard Stark I (brother)
BLACK WIDOW (daughter)
SCARLET WITCH (daughter)
MR.TONY STARK

QUESTIONS 50 POINTS
1. HOW MUCH IS THE TOTAL PROPERTIES AND EXPENSES OF TONY STARK ENUMERATE ALL 5pts.
2. HOW MUCH IS THE TOTAL GROSS ESTATE, EXCLUSIVE AND COMMUNITY SPECIFY EACH 10 Pts.
3. HOW MUCH IS THE TOTAL VANISHING DEDUCTIONS 10 pts.
4.HOW MUCH IS THE TOTAL NET ESTATE BEFORE DEDUCTIONS, EXCLUSIVE AND COMMUNITY10pts.
5. HOW MUCH IS THE TOTAL SPECIAL DEDUCTION 5pts.
6.HOW MUCH IS THE TOTAL NET TAXABLE ESTATE 10pts.
TAX02 Comprehensive Quiz

PART II
DONORS TAX
10 POINTS EACH
Q1.
TiaKemi donated all his properties to his relatives in the
Philippines.
Property A in Baguio to Mr. Angkin 1,500,000
Property B in Canada to Mr. Amin 2,500,000
Total 4,000,000

1.If TiaKemi is a resident, how much is the Gross Taxable

Donation?
2.If TiaKemi is a nonresident, how much is the Gross
Taxable Donation?

Q2.
Mr and Mrs Galante, spouses and citizens of the Philippines, donated to their legitimate
daughter the following properties:

Vacation House (conjugal property- Hong Kong 1,500,000

Car (conjugal property)- Phil 750,000
Jewelry (exclusive property of Mrs.Galante) 475,000

Total 2,725,00

HOW MUCH IS THE GROSS GIFT PER SPOUSE?

Q3
Rista donated 300,000 to Huthut on condition that the latter will give
60,000 of the total gift to the charity.

Q4
Don Pepot donated his 100 hectares land valued at the date ofdonation at 1,000,000 as follows:

National Government 500,000

Solano Local Government 300,000
Mar Roxas, friend 200,000

Q5
Mr. Eloh Canoe, a nonresident alien, donated 1,000,000 to an
accredited NGO. Compute for the Net Gift. IF NOT MORE THAN 30% AND MORE THAN 30%
TAX02 Comprehensive Quiz

ANSWER TO QUESTIONS P1

Properties:

1. Residential house and lot 8,000,000

2. Apartment he inherited from his father during marriage 5,000,000
3. Rent income from the apartment 300,000
4. Property brought to marriage by his wife 2,000,000
5. CAR inherited by his wife during marriage 2,000,000
6. Vacation house acquired during marriage 6,000,000
7. Life insurance with estate as revocable beneficiary 500,000
a. TOTAL 23,800,000 (1)

Expenses and Obligations:

1. Paid funeral expenses 240,000

2. Unpaid judicial expenses 300,000
3. Donations to National Government 2,500,000
4. Claims against insolvent person 2,000,000
5. Unpaid mortgage on inherited apartment 600,000
6. Medical Expense 500,000
a. TOTAL P6,140,000 (1)
TAX02 Comprehensive Quiz

Exclusive Community Total

Residential house and lot (family home) P8,000,000
Apartment 5,000,000
Income from Apartment 300,000
Jewelry 300,000
Property brought by wife during marriage 2,000,000
Vacation House 6,000,000
Life insurance 500,000
Claims against insolvent ____________2,000,000_______
Gross Estate(2) 7,300,000 16,800,000 24,100,000
Less: Ordinary Deductions
EILTE:
Funeral Expense 240,000
Judicial Expense 300,000
Paid Mortgage (apartment) 600,000
Claims against insolvent debtor 2,000,000
Transfer for Public use 2,500,000
Vanishing deduction 2,702,074.69
Total Ordinary Deduction 5,802,074.69 2,540,000 8,324.074.69
Net Estate before Special Deductio (4) 1,497,925.31 14,260,000 15,757,925.69
Less: Special Deductions
Standard Deduction 1,000,000
Family Home 1,000,000
Medical Expenses 500,000
Total Special Deductions (5) 2,500,000
Net Estate before share of Spouse 13,257,925.69
Less: Share of Surviving Spouse 7,130,000
Net Taxable Estate (6) 6,127,925.69
TAX02 Comprehensive Quiz

Supporting Computation for Vanishing Deduction

Value taken P 5,000,000

Less: Mortgage paid 600,000
Initial Basis 4,400,000
Less: Proportionate deduction
4,400,000
___________ x 5,600,000 1,022,406.64
24,100,000
Final Basis 3,377,593.36
Level of vanishing 80%
Vanishing Deduction (3) 2,702,074.69
TAX02 Comprehensive Quiz

ANSWER TO QUESTIONS PART II

A1. 1.Answer: 4,000,000

2.Answer:1,500,000

A2.
The Gross Gift of the Spouses are computed as:
Mr. Galante Mrs.Galante
Vacation House (1,500,000/2) 750,000 750,000
Car (750,000/2) 375,000 375,000
Jewelry
475,000
Gross Gift per Spouse 1,125,000 1,600,000

A3.

The net gift of Rista would be:

Gross Gift 300,000
Less: Deduction- diminution to charity 60,000
Net Gift 240,000

A4.

The Net Gift of Don Pepot would be:

Gross Gift 1,000,000
Less: Deductions (500,000+300,000) 800,000
Net Gift 200,000

A5.

a. If not more than 30%

Gross Gift 1,000,000
Less: Deduction 1,000,000
Net Gift –
b. If more than 30%
Gross Gift 1,000,000
Less: Deduction –
Net Gift 1,000,000
TAX02 Comprehensive Quiz