Assignment No.

3 – Transfer Tax Computation

Instruction: Please write your solution and answer in a piece of paper. Kindly double rule your
final answer. We will check your answer on Saturday, October 10, 2020. After checking your
answer, take a picture and send it to my gmail: jeremaeannceriaco@gmail.com with a subject of
ASSIGNMENT – ESTATE TAX COMPUTATION. TOTAL POINTS is 60.

1. In the last will and testament, a decedent provided that the properties he leaves must not
be sold or disposed of for ten years following his death. He had real estate in his gross
estate as follows:

At the time of death – zonal value of P500,000

At the end of ten years after death:
Fair Market Value – P2,500,000
Declared value in the estate tax return – P1,500,000
Zonal Value – P3,000,000
How much is the gross estate of the decedent? (3 points)
2. Mr. X, a resident alien, died leaving following properties:

Location of Net estate Value Foreign Estate Tax paid

Philippines P 6,000,000 -------
Y Country 6,000,000 P 400,000
Z Country 3,000,000 100,000
How much is the amount of credit to which Mr. X is entitled? (5 points)
3. Bob died on May 10, 2020. His property valued P8,000,000. Included in his property is a
lot amounting P2,000,000 inherited by him from his father who died last March 15, 2018.
Total deductions in the gross estate of Bob is P300,000. Is the lot inherited by Bob from
his father subject to vanishing deduction? If yes, how much? (5 points)

4. Abner, single, died in a car accident on May 31, 2020. At the time of his death he has the
following properties and deductions:

Tangible properties owned P4,000,000

Intangible properties owned 2,000,000
Funeral Expense 300,000
Judicial Expenses 100,000
 Claims against the estate 200,000
Medical Expenses 700,000
How much is the Estate Tax Payable? (4 points)
5. Natoy died on Nov. 2, 2019, leaving the following properties:
● Common stocks of Sana Corp. (5,000 shares) - listed in the PSE (highest - P50; lowest
- P39)
● Common stocks of Mahal Corp. (2,500 shares) - not listed in the PSE. Cost - P79 per
share; book value - P69 per share.
● Preferred stocks of MoRinAko Inc. (4,000 shares) - not listed in PSE. Cost - P80 per
share; book value- P50 per share; par value - P85 per share
● Car (cost - P400,000; book value- P599,000; market value - P600,000)
● Real properties (zonal value - P120,000; assessed value - P112,000)

How much is the gross estate of Natoy? (5 points)

6. Sowon, a Filipino citizen and unmarried, died on December 31, 2019 and left the
following properties.
Real and personal properties 16,000,000
Family home 7,000,000
Actual funeral expenses 200,000
Judicial expenses 250,000
Unpaid real estate tax 200,000
Actual medical expense 500,000
Claim against insolvent person 200,000
Claim against the estate 150,000

Compute for the following:

a. Gross Estate (5 points)
b. Ordinary Deductions (2 points)
c. Special Deductions (3 points)
d. Total Deductions (2 points)
e. Net Taxable Estate (5 points)
f. Estate Tax Due (3 points)

7. Mr. Big, made a donation in one year (2019) as follows:

February 14 P 90,000
July 25 300,000
October 6 500,000
Total 890,000
How much were the donor’s taxes in 2019? (5 points)
 8. Donations by Cathy, citizen and resident of the Philippines, as follows:

To D, of property in the Philippines P200,000

To E, of property outside the Philippines 300,000
There was a foreign donor’s tax payment on the donation outside the Philippines of
P10,000.
Donor’s tax still due on Philippines donation after credit for the foreign donor’s tax
paid? (5 points)

9. Mr. Karlo owns real property with a cost of P1,300,000. On December 31, 2017, with a
air market value of P1,500,000 and a zonal value of P2,000,000 he donated one-half of
the property pro-indiviso interest to his son. On January 31, 2018, he donated the other
half pro-indiviso to the same son. How much is the gross gift on December 31, 2017? (3
points)

10. Cather donated a farm lot to her daughter, Tiffany. The lot has a mortgage of P 3,000,000
which was assumed by Tiffany; value of 10,000,000; and an unpaid property tax of
300,000 which was assumed by Cather. She also donated to Tiffany a Honda Civic
bought a year ago for 2,000,000 with a resale value at the date of donation for 1,800,000
and mortgage of 300,000 which was assumed by Cather. Cather also donated a piece of
land to City of Bacolod valued for 2,000,000 for public use. How much is the donors tax
due of Cather? (5 points)