GROUP PREPARATION 1

GROSS ESTATE
1. What Law Governs the Imposition of estate tax law? What is Escheat? (1 sentence
each)
2. What is Reciprocity clause? First: relate to instance of law, second: to intangible
property?
3. What is the effect of Reciprocity clause? Give the 5 classes of Intangible Personal
property(IPP) with a Situs in the Philippines?
4. What properties comprise the Gross Estate of the decedent?
(Answer in this manner: 1. Property Valuation)
e.g.
Real property Fair market value etc etc
5. What are properties not physically in the estate but included in the computation
of gross estate?
6. What are the different regimes that govern property relations between Husband
and Wife? (just state their names)
What is the difference between disposition by will and disposition by donation of
COMMUNITY property by either spouse?( 1 sentence)
7. What it the formula to compute the net estate of a married decedent?
8. What are Exempt Transmissions? Give 4 types of exempt transmissions?
9. Compute for the Gross Estate (in good Form):
Assume:
A. Resident Citizen
B. Non resident alien (no reciprocity)
C. Non resident alien (with reciprocity)
Nata Himik, decedent, single, left the following properties:
a. Vacation house in Switzerland
b. Land in Negros Occidental
c. House in San Fernando, Pampanga
d. Jewelries in Kyoto, Japan
e. Car in Singapore
f. Tricycle in Quezon City

1,000,000
100,000
2,500,000
135,000
800,000
200,000

g. Domestic shares, stock certificate in Philippines

290,000
h. Domestic shares, stock certificate in Canada
150,000
i. Foreign shares, 85% of business in Philippines
200,000
j. Foreign shares, 84% of business in Philippines but with
acquired local business situs
220,000
k. Foreign shares, 84% of business in Philippines
325, 000
l. Franchise exercised in
Philippines
450,000
Czechoslovakia
330,000
Zimbabwe
275,000
m. Accounts receivable where debtor resides at
Davao City
150,000
Denmark
285,000
Kyrgyzstan
400,000
n. Investment in partnership established in
Nanlo Co. China
850,000
Nagpala Co. U.S.
600,000
Nilo Co. - Philippines
225,000
10. Compute for the Gross Estate of the decedent:
Particulars:
A. A car worth P200,000 delivered by a friend for sale on approval, on trial, or on
satisfaction.
B. A rolex wristwatch worth P200,000 pledged by a debtor on a loan of P150,000
C. Coconut land mortgaged by decedent on a bank loan of P50,000(assessed value
P40,000; zonal value P80,000)
D. Second hand appliances held on consignment from an appliance store, P40,000
E. Riceland received as donation from his wife, P170,000
F. A store space worth P150,000 in decedents possession. Sold to a buyer but
delivered with a constitutum possessorium stipulation(consult OBLICON).
G. Purchase of Risograph equipment thru agent. Paid purchase price of P150,000
although sale has not yet been known to principal.
H. Residential lot valued at P200,000 purchased for P180,000 thru an agent who
was orally authorized by the owner to sell the parcel.
11. For this problem consult the rules on Transfer for insufficient consideration:
Compute for the amount to in included in the Gross Estate of B:
B made the following transfers inter-vivos
To B
To C
To D
To E
COST
100,000
100,000
100,000
100,000
FMV at time of transfer
140,000
100,000
100,000
80,000
Consideration received
100,000
140,000
80,000
10,000

FMV at time of death of A

90,000

120,000

200,000

70,000

12. Compute for Gross Estate of the Xavier if the marriage was governed by:
A. Absolute Community of Property
B. Conjugal Partnership of Gains
Xavier and Yula are husband and wife, respectively
Cash
250,000
Accounts Receivable
78,000
Car inherited by Xavier BEFORE marriage
350,000
Car purchased by Yula DURING marriage
600,000
Fishpond acquired by Xavier when he was single
200,000
Jewelries bought by Xavier for his wife
60,000
Residential house and lot received as a gift by Yula
from her parents. The deed provides that it shall form part
of the property of the spouses.
1,500,000
Property for exclusive use of Yula
75,000
Property for exclusive use of Xavier
120,000
Beach resort acquired by Xavier DURING marriage
420,000
Cash brought into the marriage by Yula
130,000
Bank Loan acquired by Yula DURING marriage to
finance renovation of the house
150,000
Mortgage on fishpond acquired by Xavier
to finance its operation
75,000
13. What system of property relationship governs the spouses in the absence of a
marriage settlement or if the settlement they have agreed upon is VOID?