ESTATE TAX (NOTES)

Estate tax is a tax levied upon the transfer of the net estate of a decedent to his
heirs.

A. Important Definitions

1. Succession is a mode of acquisition by virtue of which the property, rights

and obligations to the extent of the value of the inheritance, of a person are
transmitted through his death to another or others either by will or by
operation law.
2. Will is an act whereby a person is permitted with the formalities prescribed by
law, to control to a certain degree the disposition of his estate, to take effect
after his death.
3. Decedent. The person whose property is transmitted through succession,
whether or not he left a will.
4. Heir. The person called to the succession, either by the provision of a will or
by operation of law.
5. Estate refers to all the property, rights and obligations of a person which are
not extinguished by his death.
6. Testamentary Succession. Succession which results from the designation of
an heir, made in a will executed in the form of prescribed by law.
7. Legal or Intestate Succession. Transmission of properties where there is no
will, or if there is a will, the same is void or nobody succeeds in the will.
8. Mixed Succession. Transmission of properties which is effected partly by will
and partly by operation of law.
9. Legatee. An heir to a particular personal property given by virtue of a will.
10. Devisee. An heir to a particular real property given by virtue of a will.
11. Executor is the person nominated by the testator to carry out the directions
and requests in his will and to dispose of his property according to his
testamentary provisions after his death.
12. Administrator is a person appointed by the court, in accordance with the
governing statute, to administer and settle intestate estate and such testate
estate as no executor designated by the testator.
13. Legitime is that part of the testator’s property which he cannot dispose of
because the law has reserved it for certain heirs who are therefore, called
compulsory heirs.
14. Holographic Will a will that is entirely written, dated and signed by the
testator.

B. Inter vivos transfers which are subject to estate tax

1. Revocable transfers. – The decedent reserves for himself the power to alter,
amend, revoke or even terminate such transfer.
2. Transfers with retention or reservation of certain rights. – The decedent
retains for himself the economic benefits of the property or the power to
designate the persons who may exercise such rights.
3. Transfers in contemplation of death. – The decedent was motivated by the
thought of death to transfer the property.
 4. Transfers under general power of appointment. – The decedent was given
the authority to hold property during his lifetime and to name the
beneficiaries thereof when he dies.

C. Absolute Community of Property Regime

In the absence of a marriage settlement, or when the regime agreed upon

is void, the system of absolute community of property shall govern, unless the
marriage was celebrated prior to August 3, 1988 because those celebrated
before the effectivity of the Family Code, which had no prior agreement on the
system of property relationship were governed by the conjugal partnership of
gains.

Unless otherwise provided, the community property shall consist of:

1. All the property owned by the spouses at the time of the celebration of the
marriage; or
2. Those acquired during the marriage.

The following shall be excluded from the community property:

1. Property acquired during the marriage by gratuitous title by either spouse, and
the fruits as well as the income thereof, if any, unless it is expressly provided by
the donor, testator or grantor that they shall form part of the community
property;
2. Property for personal or exclusive use of their spouse. However, jewelry shall
form part of the community property.
3. Property acquired before the marriage by their spouse who has legitimate
descendants by a former marriage, and the fruits as well as the income, if any,
of such property.

D. Conjugal partnership of gains

All property acquired during the marriage, whether the acquisition appears to
have been made, contracted or registered in the name of one or both spouses, is
presumed to be conjugal unless the contrary is proved.

The following are not conjugal because they shall be the exclusive property of
each spouse:

1. That which is brought to the marriage as his or her own;

2. That which each acquires during the marriage by gratuitous title;
3. That which is acquired by right of redemption, by barter or by exchange
with property belonging to only one of the spouses; and
4. That which is purchased with exclusive money of the wife or of the
husband.
 E. EXCLUSIONS from gross estate (not taxable)

1. Proceeds of life insurance policy.

Requisites for exemption from estate tax:
a. The life insurance policy was not taken out by the decedent upon his
own life.
b. The beneficiary designated in the policy is irrevocable.
c. The designated beneficiary is not the estate of the deceased, his
executor or administrator.
2. Insurance proceeds or other benefits from SSS and GSIS.
3. Payments to legal heirs of deceased war veterans.
4. Amounts received from damages suffered during the World War II.
5. Benefits received from U.S. Veterans Administration.
6. Merger of usufruct in the owner of naked title.
7. The transmission or delivery of inheritance or legacy of the fiduciary heir or
legatee to the fideicommissary.
8. The transmission from the first heir, legatee or done in favour of another
beneficiary in accordance with the desire of the predecessor.
9. All bequests legacies or transfers to social welfare, cultural and charitable
institutions, no part of the net income of which inures to the benefit of any
individual. Provided, however, that not more than 30% shall be used for
administration purposes.
10. The exclusive property of the surviving spouse.

II. DEDUCTIONS from gross state

A. ORDINARY DEDUCTIONS

1. Expenses, Loses, indebtedness and taxes (ELIT) –

a. Funeral expenses. – the amount deductible shall be whichever is the lowest

among the following: the actual funeral expenses incurred, 5% of gross
estate, and the P200,000.
b. Judicial expenses. – It includes those actually and necessarily incurred during
the settlement of the estate but not beyond six (6) months, or the extension
thereof for the filing of the estate tax return. Expenses not essential to the
proper settlement of the estate but incurred of the individual benefit of the
heirs, legatees, or devisees are not allowed as deduction.
c. Claims against the estate. – This represents personal obligations of the
deceased existing at the time of his death exempt unpaid funeral expenses
and unpaid medical expenses. The claims may arise out of contract, tort or
operation of law. The requisites for the deductibility are the following:

1. Must have been contracted in good faith and for an adequate and full
consideration in money or money’s worth;
2. The debt instrument must be duly notarized except loans granted by
financial institutions where notarization is not part of the business
practice/policy of the financial institution-lender;
 3. It must not have been condoned by the creditor; and
4. The action to collect from the decedent must not have prescribed.

d. Unpaid mortgages upon the property left by the decedent. The requisites for
the deductibility are the following:

1. The mortgage indebtedness was contracted in good faith and for an

adequate and full consideration in money or money’s worth; and
2. The fair market value of the property mortgaged without deducting the
mortgage indebtedness has been included in the gross estate.

e. Claims against insolvent persons (bad debts). – Receivable of the decedent

which are not uncollectible due to insolvency of the debtor.

Its requisites for deductibility are as follows:

1. The value of the decedent’s interest therein must be included in the
gross estate.
2. The debtor’s insolvency/incapacity is proven and not merely alleged.

f. Unpaid income and property taxes which have accrued as of the death of the
decedent which were unpaid as of the time of death.
g. Losses – requisites:
1. The loss must arise during the settlement of the estate but not beyond
the deadline for the payment of the estate tax.
2. It must arise from fires, storms, shipwreck, or other casualties, or from
robbery, theft or embezzlement.
3. Such losses have not been claimed as deduction for income tax purposes.
4. Must not be compensated by insurance or otherwise.

Note:

If the decedent is a non-resident alien, pro-rate the above expenses (a to

g) as follows:

Philippine Gross Estate

Total Gross Estate x ELIT

2. Transfers for public purpose. The amount of all bequests, legacies, devisees or
transfers to or for the use of the Government of the Philippines, or any political
subdivision thereof, for exclusively public purposes.

3. Vanishing deductions
Requisites for deductibility:
a. The property is situated in the Philippines;
b. The property must have been acquired thru inheritance or donation
within five (5) years before the death of present decedent;
c. Such property can be identified as the one received from prior
decedent or donor or which can be identified as having acquired in exchange for
property so received.
d. Prior gift tax or estate tax has been paid.
 e. The property is included in the gross estate or gross gift of prior
decedent/donor.

Vanishing rates:
More than Not More Than Percentages
1 year 100%
1 year 2 years 80%
2 years 3 years 60%
3 years 4 years 40%
4 years 5 years 20%
5 years x x 0%

B. SPECIAL DEDUCTIONS
1. Amounts received by heir from employer under RA 4917. – Amounts received
by the heirs from the decedent’s employer as a consequence of the death of the
decedent-employee. Provided, that such amount is included in the gross estate
of the decedents.

2. Medical Expenses. This includes cost of medicines, hospital bills, doctor’s fees,
etc. Incurred whether paid or unpaid at the time of death of the decedent.
Requisites:
a. Incurred by the decedent within one (1) year prior to his death.
b. Maximum amount deductible is P500,000.
c. Duly substantiated with receipts.

3. Share of surviving spouse in the net conjugal or community property

4. Family Home. The dwelling house, including the land on which it is situated,
where the husband and wife, or a head of the family, and members of their
family reside, as certified by barangay captain of the locality. The deductible
amount is the higher between the assessor’s value, however, must be included
as part of the gross estate of the decedent.

5. Standard deduction of P1,000,000.

III. ADMINISTRATIVE PROVISIONS

1. Notice of death. This required when the transfer is subject to tax or the gross
value of the estate exceeds P20,000 even if exempt from tax. This written notice should
be made within 2 months –

a. After death, or
b. After the executor or administrator qualifies.

2. Filing of estate tax return (within 6 months from the decedent’s death). An
estate tax return is required to be filed –
a. If the transfer is subject to tax, or
b. Through exempt, if the gross value exceeds P200,000.
 c. Regardless of gross value of estate, when it consists of registered or
registrable property.

3. Payment of tax – at the time the return is filed.

4. Extension for filing and payment
a. Filing – not exceeding 30 days
b, Payment –
If settled thru the court – not exceed to 5 years
If settled extrajudicially – not to exceed 2 years

5. Statements accompanying the return. – When the gross value of the estate is
P2,000,000 or more, the return should be accompanied by a statement certified by a
Certified Public Accountant containing the following:
a. Itemized assets of the decedent with corresponding value;
b. Itemized deductions from gross estate; and
c. Tax due and payable.

6. Place of filing the return and payment of the tax

a. Resident decedent – domicile of the decedent at the time of his death.
b. Non-resident decedent –
i. With executor/administrator – RDO where the administrator/executor is
registered or having jurisdiction over the latter’s legal residence if such executor or
administrator is not registered.
ii. No executor or administrator – with the Office of the Commissioner

7. Payment of Estate Tax by Installment is allowed in case the available cash of

the estate is not sufficient to pay its total estate tax liability. Clearance shall be released
only on the property, the corresponding tax on which has been paid.
ESTATE TAXATION
(Multiple Choice Questions)

A. COMPUTATION OF GROSS ESTATE

1. Benny Tai died leaving his daughter, Fina Tai, as sole heir to a residential
house and lot, his only property.

Which of the following is not an element of the succession on his

property, if the administrator of his estate is Mama Tai?

a. Benny Tai c. Fina Tai

b. House and Lot d. Mama Tai

2. Inheritance does not include –

a. property
b. public office
c. rights not extinguished by death.
d. obligations not extinguished by death.

3. Estate tax is

a. a property tax because it is imposed on the property transmitted by the

decedent to his heirs.
b. an indirect tax because the burden of paying the tax is shifted on the
executor or any of the heirs of the decedent.
c. an excise tax because it is imposed on the privilege exercised by
the decedent to transfer ownership over the estate.
d. a poll tax because it is also imposed on residents of the Philippines
whether Filipino citizens or not.

4. Which of the following is not a distinction between estate tax and donor’s
tax?

a. The tax imposed is an excise tax.

b. Extension for payment.
c. Effectivity of the transfer of property.
d. The exemption granted in the tax table.

5. Statement 1: The estate tax accrues at the moment of death of the decedent.
Statement 2: In estate taxation, the taxpayer is the decedent.

a. Statement 1 only. c. Both statements

b. Statement 2 only. d. Neither statements

6. Which of the following statements is wrong?

a. An essentially mortis causa transfer which has been titled as inter

vivos shall be subject to donor’s tax.
b. Estate tax is more of a revenue tax rather than a special tax.
 c. If the decedent died September 5, 2011 but the actual transfer of
possession of the property to the heirs took place in June 5, 2015, the estate
tax will be computed based on the prevailing law on September 5, 2011.
d. Under the Benefit-Recovered Theory in estate taxation, the state is a
partner of the decedent in the distribution of the latter’s estate.

7. In 2009, J. Cruz gave a loan of P150,000 to Sexy, his secretary. In 2012, as

an act of generosity, J. Cruz condoned the debt of sexy in his last will and
testament J. Cruz died in 2015. The condonation of the debt of Sexy is
(RPCPA)

a. A donation inter vivos subject to donor’s tax.

b. A payment or compensation for the services rendered.
c. A deduction from the gross estate of J. Cruz
d. A donation mortis causa subject to estate tax.

8. The following are the motives of a taxpayer that preclude the transfer
contemplation of death, except one (RPCPA)

a. To relieve the taxpayer of the burden of management.

b. To save income and property taxes.
c. To avoid payment of estate tax.
d. To make dependents financially independent.

9. In default of testamentary heirs, the law determines who are to succeed to

the inheritance of the deceased. Which of the following ranks first in the
order of succession? (RPCPA)

a. legitimate children c. legitimate parents

b. surviving spouse d. illegitimate children

10. H and W are married. They have legitimate children A and B. H died,
survived by W, A and B. His estate of P12,000,000 should be divided as
follows:

W A B Free portion

a. P 3M P 4.5M P 4.5M None

b. 3M 3M 3M P 3M
c. None 6M 6M None
d. 2.25M 4.5M 4.5M 2.25M

11. Based on the following data, how much is the value of the decedent’s interest
if he died March 31, 2015?

Cash in bank, joint account of the decedent and his wife P254,000
Interest on the bank deposit (Jan 1 – June 30, 2015) 9,000
Dividends from a domestic corporation:
Date of declaration – February 5, 2015
Date of record – April 15, 2015
Date of payment - May 15, 2015
Share in 2014 net profit of partnership, distributed to
Partners on April 15 9,000
 Winnings in Lotto (Bet, March 30; April 1, 2014 draw) 500,000

a. P383,750 c. P 145,000
b. 138,000 d. 388,250

12. For estate tax purposes, the estate of the decedent shall be valued at the
time

a. of the preparation of the estate tax return.

b. the estate tax is paid.
c. of death of the decedant.
d. the estate is distributed to the heirs.

13. Mamo died leaving the following properties:

Stocks of Cruz Corporation (2,000 shares) – listed in the Phisex (highest –

P 40; lowest – P 39)
Common Stocks of Hemo Corporation (1,500 shares) – not listed in the
stock exchange. Cost – P 50 per share; book value – P 45 per share.
Car (cost – P 600,000; book value – P 350,000; market value – P
400,000)
Real properties (zonal value – P 120,000; assessor’s value – P 72,000)
The gross estate of Mamo is –

a. P 618,500 c. P 624,000
b. 867,500 d. 666,500

14. Ulyanov Kerivsky, Ukrainian, died in the Philippines. The properties situated
in his own country will not be subject to estate tax if he was –

a. Resident citizen c. Nonresident citizen

b. Resident alien d. Nonresident alien

Items 15 through 17 are based on the following information:

Dina Mathay, Filipina, died in the United States with the following
properties:

Condominium unit in New York City P2,000,000

Shares of stock in a foreign corporation 600,000
Interest in a partnership, domestic 475,000
Bank deposit in a New York City bank 150,000
Car in Cebu, donated inter vivos 5 years ago to her son 500,000

15. Which property should be included in the gross estate?

a. All the above properties.

b. Only the properties located in the Philippines.
c. All the above properties except the car.
d. The properties located in the Philippines except the intangibilities.

16. If the decedent was a non-resident alien (with reciprocity), how much is the
gross estate?
 a. P 3,725,000 c. P 500,000
b. 975,000 d. None

17. If the decedent was a non-resident alien (no reciprocity), how much is the
gross estate?

a. P 3, 725,000 c. P 500,000
b. 975,000 d. 475,000

18. Which of the following is an intangible personal property within?

A. Franchised exercised in the United States.

B. Shares or rights in a domestic business partnership.
C. Bonds issued by an American corporation.
D. Stocks issued by the foreign corporation with business situs in the
Philippines.

a. B only c. All of the above properties

b. B and D d. None of the above properties

19. An example of intangible personal property without is

a. Domestic shares of stock

b. Foreign shares, 85% of the business of the corporation is in the
Philippines.
c. Foreign shares with business situs in the Philippines.
d. Foreign shares, certificate of stock are kept in Makati.

20. One of the following donations is not included as part of gross estate

a. revocable transfers
b. transfers with reservation of certain rights
c. transfers under special power of appointment
d. transfers in contemplation of death

21. Which of the following transfers is included in the gross estate?

a. transfer inter vivos

b. transfer under general power of appointment
c. transfer under special power of appointment
d. transfer for an adequate and full consideration

22. Decedent Jose Llamaldo has the following data:

Value of the property at the time of sale P 1,200,000

Value of consideration when sold 1,000,000
Value of property at the time of death 1,500,000

The amount includible in the gross estate is –

a. P 300,000 c. P 200,000
b. 500,000 d. 1,500,000

23. When Albino was informed by his physician that he was about to die of
cancer, he sold his properties:
 Land P2,500,000 P1,500,000 P2,700,000
Jewelries 500,000 300,000 300,000
Shares of stocks 200,000 220,000 250,000
Transfer under limited power
Of appointment 1,000,000 600,000 800,000

From among the data given, how much should be included in the gross
estate of Albino upon his death?

a. P 1,200,000 c. P 1,430,000
b. 1,230,000 d. 1,400,000

24. On the belief that he was about to die of a liver cancer, Bongbong sold to
Bengbeng a property valued at P1,100,000 for the same amount. Six months
later, Bongbong died of a car accident. At that time, the property had already
a value of P1,300,000. For the Philippine estate tax purposes, the amount
includible in the gross estate of Bongbong is –

a. P1,100,000 c. P200,000
b. 1,300,000 d. None

25. On February 1, 2005, Angel prepared a will on his property in favour of his
children. Angel died September 5, 2005 survived by his children Bersabe and
Contado who immediately took over the possession and made an extrajudicial
partition on September 20, 2005 but without registering the same in the
Register of Deeds. Bersabe sold the property to Contado on May 7, 2015
inorder to finance his expenses for hospitalization. Which date should be used
as the basis in valuing the property for purposes of computing the estate tax?

a. February 1, 2005 c. September 20, 2005

b. September 5, 2005 d. May 7, 2015

26. Amounts received by the estate of the deceased, his executor or

administrator as an insurance under policy taken by the decedent upon his
own life is (RPCPA) –

a. excluded from the gross estate.

b. part of the gross estate whether the beneficiary is revocable or
irrevocable.
c. part of gross estate if the beneficiary is revocable.
d. part of gross estate if the beneficiary is irrevocable.

27. Case 1 – Designation of the beneficiary is revocable.

Case 2 – Designation of the beneficiary is irrevocable.
Case 3 – Policy is silent as to whether the designation is revocable or
irrevocable.

In which of the above cases will the proceeds be exempt from estate tax,
assuming that the beneficiary of the life insurance proceeds is neither the
estate, the executor nor the administrator of the estate?

a. Case 1 only c. Case 2 only

 b. Cases 1 and 3 d. All of the above cases

28. Proceeds of life insurance not payable to estate, executor or administrator

shall be excluded in the gross estate if the beneficiary appointed in the policy
is

a. Revocable c. Irrevocable
b. Revocable or irrevocable d. The executor

29. Proceeds of life insurance includible in the taxable gross estate (RPCPA)

a. Insurance proceeds from SSS and GSIS.

b. Amount receivable by any beneficiary irrevocably designated in the policy
by the insured.
c. Amount receivable by any beneficiary revocably designated in the
insurance policy.
d. Proceeds of a group insurance taken out by a company for its employees.

30. Which of the following proceeds of life insurance policies is exempt from
estate tax?

I. Life insurance policy on the life of Kristine, appointing her sister as the
irrevocable beneficiary.
II. Life insurance policy on the life of Kristine, appointing her brother as
the revocable beneficiary.
III. Life insurance policy on the life of Kristine, appointing her executor as
the irrevocable beneficiary.
IV. Life insurance policy on the life of Kristine, appointing her children as
the beneficiary. The policy is silent as to whether the appointment is
revocable or irrevocable.

a. I only c. II and III

b. I and IV d. All of them

31. Bodol-bodol insured his life for P500,000 with Philcharter Insurance
Company designating his estate as the revocable beneficiary. Are the
proceeds subject to estate tax?

I. in the event of death of Bodol-bodol?

II. if he designates his estate as the irrevocable beneficiary?
III. if he designates his brother as the irrevocable beneficiary?
IV. ff the policy was taken by his employer in his favour as the irrevocable
beneficiary?

a. Yes, Yes, No, No c. Yes, No, Yes, No

b. Yes, No, No, Yes d. No, No, Yes, Yes

32. The following transactions and acquisitions exempt from transfer tax, exempt
(RPCPA)

a. Transmission from the first heir or donee in favour of another beneficiary

in accordance with the desire of the predecessor.
b. Transmission or delivery of the inheritance or legacy by the fiduciary heir
or legatee to the fideicommissary.
 c. The merger of usufruct in the owner of the naked title.
d. All bequests, devisees, legacies or transfers to social welfare,
cultural and charitable institutions.

33. A devised in his will a piece of land, naked title to B and usufruct to C for as
long as C lives, thereafter to B. The transmission from A to B and C is subject
to estate tax but the merger of the usufruct and the naked title to B upon the
death of C is exempt.

X devised in his will real property to his brother Y who is entrusted with
the obligation to preserve and transmit the property to Z, a son of Y, when Z
becomes of age. The transmission from Y to his son Z is subject to tax.
(RPCPA)

a. First statement is correct, second statement is wrong.

b. Both statements are not correct.
c. Both statements are correct.
d. First statement is wrong, second statement is correct.

34. One of the following is included in the gross estate

a. Benefits received from GSIS.

b. Benefits received from U.S. Veterans Administration.
c. Benefits received from damages during World War II
d. Benefits received from a tax exempt employer as a consequence
of death of the employee.

35. Which of the following distinguishes conjugal property from community

property?

a. Properties inherited during marriage.

b. Those acquired through occupation during marriage.
c. Fruits of exclusive property.
d. Income earned by each spouse during marriage.

36. Malakas is married to Maganda. From among the properties below, which
one is considered as their conjugal property?

a. That which is brought to the marriage as his or her own.

b. That which each acquires during the marriage by inheritance.
c. The fruits of an exclusive property.
d. That which is purchased with the exclusive property of the wife.

37. One of the following is not a community property of the spouses

a. Property inherited by the husband before marriage.

b. Winnings in gambling.
c. Fruits of property inherited during the marriage.
d. Fruits of property inherited before the marriage.

38. Fat Tai died. From among the properties enumerated below, which one is
not considered as part of his gross estate.

a. conjugal property
 b. community property
c. exclusive property of the decedent
d. exclusive property of the surviving spouse

39. When a person dies and during the marriage the property relationship
between the husband and the wife was not that of conjugal partnership of
gains, the gross estate of the decedent would include (RPCPA)

a. His exclusive properties only.

b. His exclusive properties and one-half of the conjugal properties.
c. All the properties of husband and wife.
d. His exclusive properties and all conjugal properties.

40. A. Share of the decedent in the community property.

B. Share of the surviving spouse in the community property.
C. Exclusive property of the decedent.
D. Exclusive property of the surviving spouse.

Which of the above properties are included in the gross estate of the
decedent?

a. A and B c. A and C
b. A, B AND C d. All of the above properties

41. Properties acquired by gratuitous title before the marriage are generally
classified as:

A. Conjugal properties under absolute community of property regime.

B. Conjugal properties under conjugal partnership of gains.

Which is of the above statement is correct?

a. A only c. B only
b. A and B d. Neither A nor B

Numbers 42 through 45 are based on the following information

Aldo died leaving the following properties:

a. Real property in Baguio City, brought into the marriage P 300,000

b. Income of real property in Baguio 60,000
c. Real property in Cebu City, brought into marriage by wife 240,000
d. Income of real property in Cebu City 25,000
e. House in Pili, Camarines Sur, acquired by Aldo during 375,000
marriage
f. Income of house in Pili 50,000
g. Real property in Iloilo City, earned by wife during the
marriage 225,000
h. Income of real property in Iloilo City 80,000
i. Tangible personal properties in Manila, inherited by Aldo
during marriage 500,000
j. Income of properties in Manila 175,000
k. Intangible personal properties in Singapore, inherited by
 wife during marriage 430,000
l. Income of intangibles in Singapore 85,000
m. Tangible personal property in Dagupan City, inherited by
Aldo before marriage 20,000
n. Income of property in Dagupan City 10,000
o. Intangible personal property in Canada, inherited by wife
Before marriage 350,000
p. Income of personal property in Canada 85,000

42. Under the conjugal partnership of gains, the total conjugal properties of the
spouses is:

a. P1,170,000 c. P1,990,000
b. 1,820,000 d. 2,495,000

43. Under conjugal partnership of gains, the gross estate of Aldo is –

a. P1,170,000 c. P1,990,000
b. 2,495,000 d. 1,820,000

44. Under absolute community of property regime, the total community property
of the spouses is:

a. P1,820,000 c. P2,495,000
b. 1,990,000 d. 1,170,000

45. Under absolute community of property regime, the gross estate of Aldo is:

a. P1,170,000 c. P1,990,000
b. 2,495,000 d. 1,820,000

Pepe married Pilar on January 20, 2015 without any prior agreement in writing
as to the system of property relationship that will govern their properties when they are
already married. Pepe brought into the marriage an old Spanish house in Vigan, Ilocos
Sur worth P2,000,000 while Pilar brought with her a 200 hectare of pineapple plantation
in Bukidnon which she acquired while she was still single.
As a consequence of her marriage, she received as gift from her parents another
200 hectare banana plantation in Davao City on January 31, 2015.
Twelve (12) years thereafter, Pilar died of a car accident. The joint account
deposit of the spouses with Metrobank was P5,000,000.
She was insured with an insurance company for P2,500,000 with Pepe as the
appointed irrevocable beneficiary.

For numbers 46 to 50, classify the properties identified above by choosing your
answer from the options below:

Options:

a. Exclusive property of Pepe

b. Exclusive property of Pilar
c. Conjugal property of Pepe and Pilar
d. Community property of Pepe and Pilar

46. The old Spanish house in Ilocos Sur

 d. Community property of Pepe and Pilar

47. The banana plantation in Davao City

b. Exclusive property of Pilar

48. The income of the banana plantation

b. Exclusive property of Pilar

49. The deposit with Metrobank

d. Community property of Pepe and Pilar

50. The proceeds of the insurance policy is –

a. Excluded from gross estate

b. Included in the gross estate
c. Deductible from gross estate
d. None of the above

Items 51 through 54 are based on the following data:

Angelo, married to Angel 3 years ago, died leaving the following properties:

Condo Unit at the West Tower Condominium, Makati City,

acquired by him and his wife 2,500,000
Apartment unit in Vancouver, Canada inherited from his parents
who died 2 ½ years ago 3,500,000
Volvo car registered in Canada, donated to him by his mother
four (4) years ago 2,000,000
Toyota Fortuner in the Philippines, purchased by Angelo out
of his exclusive property 1,200,000
Jewelry in the Philippines, inherited last year by his wife, Angel,
from her mother 500,000
Cash in bank – Banco de Oro; 50% was earned by Angelo before
marriage; 50% was earned by the spouses 840,000
Interest on bank deposit (net of withholding tax) 8,000
Interest in a domestic partnership, acquired by Angel before marriage 300,000
Investment with Acer Corp., foreign corporation, 85.5% of business
in the Philippines 1,000,000
Dividends with the Acer Corporation, date of record was made after
death of Angelo 45,000
Investment with Filipinas Company, domestic, 25,000 shares, traded
in the stock exchange (highest: P23.00; lowest: P22.83)
Dividends from Filipinas Company, date of record, one month before
Angelo’s death (gross of dividends tax) 7,500
Receivable on a foreign insurance company for an accident insurance
suffered six months before death 50,000
Proceeds of a life insurance taken by the employer corporation of
Angelo on his life 200,000
Receivable on life insurance taken by Angelo on his own life appointing
his estate as the irrevocable beneficiary; common funds of the spouses
were used in paying the Insurance premium 150,000
51. The gross estate if Angelo was a non-resident citizen under the absolute
community of property regime –

a. P12,127,625 c. P6,577,625
b. 11,827,625 d. 3,700,000

52. The gross estate if Angelo was a resident alien under the conjugal
partnership of gains –

a. P10,127,625 c. P3,700,000
b. 11,827,625 d. 6,577,625

53. The gross estate if Angelo was a non-resident alien without reciprocity under
the absolute community of property regime –

a. P10,127,625 c. P3,700,000
b. 11,827,625 d. 6,577,625

54. The gross estate if Angelo was a non-resident alien, with reciprocity, under
the conjugal partnership of gains –

a. P10,127,625 c. P6,577,625
b. 11,827,625 d. 3,700,000

55. Sol, Terito, a bachelor, bought a parcel of land on instalment basis

measuring 200 square meters. In his deed of sale, the ownership shall be
vested in him even before full payment of the purchase price. A year before
he could fully pay the price, Sol got married to Roma Raga and out of the
conjugal funds, the balance was paid. Who owns the land?

a. Sol because he paid more than what was assumed by the conjugal fund.
b. Roma because she is the wife of Sol.
c. The conjugal partnership because the full payment was made during the
marriage.
d. Sol because the ownership was vested to him before the
marriage.

56. Rufino is engaged in the business of lending money at a usurious rate of

interest. On September 30, 2014, he lent P100,000 to Pepito payable in one
(1) year at 5% interest per month. On December 30, 2014 he got married to
V. Gomez. Based on the above data, how much is the exclusive property of
Rufino? How about the conjugal property?

Exclusive Conjugal
a. P100,000 P60,000
b. 100,000 60,000
c. 115,000 45,000
d. 160,000 None

57. Ivan and Sarah are married. Ivan inherited a residential lot valued at
P1,000,000 from his parents. Out of the conjugal funds, the spouses
constructed a house on the land which cost them P2,000,000. Who owns the
land immediately upon the death of either the wife or the husband? How
about the residential house?
 Residential Lot Residential House
a. Conjugal Conjugal
b. Exclusive of Ivan Conjugal
c. Exclusive of Ivan Exclusive of Ivan
d. Conjugal Exclusive of Ivan

58. Tong Siok, a Chinese billionaire and a Canadian resident, died and left assets
in China valued at P80 billion and in the Philippines assets valued P20 billion.
For the Philippine estate tax purposes the allowable deductions for expenses,
losses, indebtedness, and taxes, property previously taxed, transfer for public
use, and the share of his surviving spouse in their conjugal partnership
amounted to P15 billion. Tong’s gross estate for Philippine estate tax purpose
is

a. P20 million c. P100 million

b. 5 million d. 85 million