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Taxation R. C.

GLORIA
Handout No. 005 Comprehensive Quizzer May 2006 Batch

Instruction: Select the best answer to each of the following questions.


1
. A revocable transfer with a consideration received:
Consideration received P200,000
Fair market value of property at the time of transfer 300,000
Fair market value of property at the time of death 250,000

Amount to be included in the gross estate is:


a. P300,000.
b. P250,000.
c. P100,000.
d. P 50,000.
2
. A decedent was married at the time of death and under the system of conjugal partnership
of gains regime. Among the properties in the gross estate were:
Land, inherited before the marriage, fair market value P100,000.
Family home built by the spouses on the inherited land 800,000
The amount of deduction for family home allowance is
a. P900,000.
b. P500,000.
c. P400,000.
d. P450,000.

Questions 3 through 5 are based on the following information:


Mr. Digna, a resident citizen, died with properties consisting of his gross estate,
P5,000,000. Actual funeral expenses amounted to P220,000 and other expenses and claims
which are deductions from the gross estate amounted to P1,200,000.
3
. The allowable deductions for funeral expenses is
a. P220,000.
b. P250,000.
c. P200,000.
d. P-0-
4
. The net taxable estate is:
a. P3,600,000.
b. P3,550,000.
c. P3,700,000.
d. P3,580,000.
5
. The distributable estate was diminished by:
a. P1,420,000.
b. P1,400,000.
c. P1,200,000.
d. P1,450,000.

Questions 6 & 7 are based on the following information:


6
. Properties in the Philippines P500,000.
Properties outside the Philippines 300,000
Actual funeral expenses in the Philippines 20,000
Actual funeral expenses outside the Philippines 10,000

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If the decedent was a citizen or resident of the Philippines, the deductible funeral
expenses amounts to:
a. P30,000.
b. P40,000.
c. P18,750.
d. P25,000.
7
. If the decedent was a non-resident alien, the deductible funeral expenses amount to:
a. P30,000.
b. P40,000.
c. P18,750.
d. P25,000.
8
. Mr. Arias died with a receivable from Mr. Bernas. Mr. Bernas has properties worth
P220,000 and obligations of P320,000. Included in the obligations are P20,000 owed to
the Government of the Republic of the Philippines for unpaid taxes and P60,000 owed to
Mr. A. The deductible claim against insolvent persons amount to:
a. P60,000.
b. P41,250.
c. P20,000.
d. P40,000.
9
. The decedent, during his lifetime, was under the conjugal partnership of gains. Among
his allowable deductions from the gross estate is vanishing deduction and the following:
Funeral expenses P 80,000.
Judicial expenses 100,000.
Claims against conjugal properties 120,000.
Mortgage on exclusive property 40,000.
Bequest to charitable institution 5,000.
Bequest to the Philippine Government 60,000.
Medical expenses 300,000.
Amount received by heirs under R.A. 4917 60,000.
In the formula for vanishing deduction where:
Initial basis of property
------------------------------ x Deductions,
Gross Estate
The multiplier “deduction” is equal to:
a. P400,000.
b. P405,000.
c. P 40,000.
d. P100,000.

Questions 10 & 11 are based on the following:


A decedent died single, leaving a family home which consists of a piece of a piece of land
that he inherited 3-1/2 years ago (with value at that time of P600,000) with a fair market value of
P800,000 at the time of his death, and a house thereon which he built at a cost of P650,000, and a
fair market value at the time of his death of P450,000. Other properties in his gross estate have a
fair market value of P550,000. Unpaid obligations at the time of his death amounted to
P300,000.
10
. The vanishing deduction is equal to:
a. P200,000.
b. P500,000.
c. P 40,000.
d. P225,000.

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11
. The total deduction for family home is:
a. P 450,000.
b. P 550,000.
c. P1,000,000.
d. P1,250,000.
12
. Mr. Javier, single, a non-resident, not a citizen of the Philippines, died leaving a gross
estate in the Philippines of P1,000,000 and a gross estate outside the Philippines of
P3,000,000. His expenses and transfers were: Funeral expenses outside the Philippines
of P100,000, mortgage of property outside the Philippines of P200,000 and in the
Philippines of P50,000 and transfer to the Philippine Government of property outside the
Philippines of P100,000.

The allowable deduction from the Philippine gross estate is:


a. P 87,500.
b. P100,000.
c. P 37,500.
d. P150,000.
13
. Refer to the same information in no. 12, how much is the net taxable estate in the
Philippines?
a. P3,500,000.
b. P 912,500.
c. P 300,000.
d. P 850,000.
14
. Mr. Alana inherited property on November 1, 2001, with a fair market value and a
mortgage, at that time, of P200,000 and P100,000, respectively. He married on January
10, 2002. On March 5, 2002, he borrowed P200,000 from a bank and mortgaged the
same property. Mr. Alana died without paying any of the mortgage indebtedness.
Disregarding accrued interest on the mortgage indebtedness, deduction against exclusive
property amounts to:
a. P100,000.
b. P200,000.
c. P300,000.
d. None.
15
. Mr. Benetiz died on June 30, 2003, leaving, among others, the following charges and
obligations: Real property tax for the calendar year 2003 – P20,000; On an interest-
bearing promissory note (notarized): face value of the note – P10,000; accrued interest
on the note at the time of death – P600; and interest to accrue on the note from the date of
death to the date of maturity – P400. The deduction from the gross estate is:
a. P20,600.
b. P30,600.
c. P31,000.
d. P21,000.
Questions 16 & 17 are based on the following information:
Mr. Juanito Mendoza, a citizen and resident of the Philippines, died on June 1, 2003,
survived by his wife. The property relationship in the marriage was the conjugal partnership of
gains. He left the following properties and charges thereon:
Fair
Cost Market Value
Family home:
Residential house, constructed during the marriage P400,000 P900,000
Residential lot, TCT # 318, inherited 10 years ago 200,000 450,000
Furniture and appliances in the residential house 600,000 490,000

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Receivable from insolvent friend 10,000
Cash, owned before the marriage 150,000
Other properties owned before the marriage 1,000,000
Actual funeral expenses 100,000
Judicial expenses 120,000
Unpaid mortgage 50,000
Unpaid taxes 20,000
Legacy (per will) of P50,000 cash to DSWD 50,000
Loss of household furniture and appliances on December 9, 2003

12,000

16
. The deduction for family home amounts to:
a. P450,000;
b. P900,000;
c. P1,000,000;
d. P1,350,000.
17
. The net taxable estate is equal to:
a. P1,200,000;
b. P 200,000;
c. P1,700,000;
d. P1,000,000.

Questions 18 through 21 are based on the following information:


Mr. Dencio Cayetano, a citizen of the Philippines, single, died a resident of the United
States, leaving the following properties:
Real property in the United States, inherited from the father one and
one-half years ago

P2,000,000
Personal property in the Philippines inherited from the father

1,600,000
Family home in the United States

1,400,000
and incurred/paid the following expenses:

Actual funeral expenses paid in the United States

100,000
Other obligations contracted within the last two years

250,000
18
. The taxable gross estate is:
a. P3,400,000;
b. P5,000,000;
c. P1,600,000;
d. P3,000,000.
19
. The allowable deduction for family home is equal to:
a. P – 0 -

4 TAX 1104
b. P 700,000;
c. P1,400,000;
d. P1,190,400.
20
. The deduction allowed for property previously taxed is:
a. P1,488,000;
b. P2,678,000;
c. P1,190,400;
d. P1,400,000.
21
. The net taxable estate is:
a. P2,459,600;
b. P1,971,600;
c. P3,162,000;
d. P2,678,000.

The following information should be used to answer questions 22 & 23:


The decedent is a citizen and resident of the Philippines:
Gross estate P10,000,000
Claims against the estate 3,000,000
22
. How much is the net taxable estate if the decedent was single?
a. P7,000,000;
b. P6,000,000;
c. P9,000,000;
d. P5,000,000;
23
. How much is the net taxable estate if the decedent was married and under the conjugal
partnership of gains or absolute community of property and the conjugal/community property
was P3,900,000?
a. P5,550,000;
b. P6,550,000;
c. P6,050,000;
d. P5,505,000.
Questions 24 & 25 are based on the following information:
Mr. Alaberde, a citizen of the Philippines and a resident of the United States, under the system
of conjugal partnership of gains, died in the United States, and was shipped to and buried in the
Philippines. His estate had the following details:
Real property in the Philippines, inherited 3-1/2 years ago, when its fair
market value was P500,000

P 600,000
Real property in the U.S., used as family home

2,400,000
Tangible personal properties in the Philippines

200,000
Tangible personal properties in the United States

700,000
Funeral expenses in the United States, paid in cash from the estate

110,000
Funeral expenses in the Philippines, paid in cash from the estate

100,000

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Medical expenses, incurred within 1 year prior to death (P550,000 paid, the
rest still payable)

900,000
Unpaid obligations (excluding portion of medical expenses)

600,000
Claim against an insolvent person in the Philippines

100,000
Estate tax paid in the United States

300,000
24
. The gross estate is equal to:
a. P 800,000;
b. P4,000,000;
c. P3,900,000;
d. P 900,000.
25
. The net taxable estate amounts to:
a. P695,000;
b. P445,000;
c. P195,000;
d. P860,000;
Questions 26 & 27 are based on the following information:
Mr. Antonio Mitras, a citizen and resident of the Philippines, died on October 5, 2003. He was
married and the property relationship during the marriage was the absolute community of property.
He left the following properties, with their market values, and obligations and charges thereon:
Agricultural land

P100,000
House and lot acquired by inheritance before the marriage and 4-1/2 years
ago, used as family home (with a fair market value of P420,000 and a
mortgage of P120,000 when acquired; P20,000 was paid by Mr. Mitras
before he died)

500,000
Jewelry of Mrs. Mitras, acquired during the marriage with the exclusive money
of Mrs. Mitras

50,000
Clothes acquired during the marriage from income earned during (P60,000 for
use of Mr. Mitras, and P70,000 for use of Mrs. Mitras)

130,000
Cash on hand and in banks: income from unidentified sources

300,000
Cash in bank:
From sale at a loss of exclusive property

1,500,000
Received as gift six years ago and before the marriage (current account)

40,000
Other properties:
Owned before the marriage

90,000

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Acquired during the marriage

20,000
Deductions and other information are also presented as shown on the next
page:
Total funeral expenses of P300,000. Paid from the estate

P 58,000
Judicial expenses

120,000
Unpaid mortgage (already on the property at the time acquired):
On agricultural land

20,000
On house and lot

100,000
Other obligations

20,000
Legacy to the Government of the Philippines from the current account

10,000
26
. The amount of allowable vanishing deduction is:
a. P 70,135.34;
b. P114,758.32;
c. P140,270.68;
d. P 86,068.97.
27
. The net taxable estate is:
a. P660,932.33;
b. P857,310.34;
c. P698,620.70;
d. P767,310.34.
Questions 28 through 32 are based on the following information:
Mr. Benjamin Contina, a citizen and resident of the Philippines, died on October 10, 2003, leaving
the following properties, rights, obligations and charges:
Conjugal properties (including a family home of P3,000,000 and
amount receivable under R.A. 4917 of P200,000)

P6,000,000
Exclusive properties (including cash of P500,000 inherited 4-1/2
years ago)

4,000,000
Medical expenses unpaid, January 2003

600,000
Funeral expenses

350,000
Judicial expenses

500,000
Other obligations

100,000
28
. The deductible medical expenses amount to:

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a. P600,000;
b. P300,000;
c. P500,000;
d. P250,000.
29
. The amount of deductible funeral expenses is:
a. P350,000;
b. P100,000;
c. P500,000;
d. P200,000.
30
. The family home allowed should be:
a. P3,000,000;
b. P1,500,000;
c. P1,000,000;
d. P 500,000;
31
. The amount of allowable vanishing deduction is:
a. P460,000;
b. P184,000;
c. P 92,000;
d. P138,000.
32
. The net taxable estate is:
a. P3,808,000;
b. P5,058,000;
c. P1,150,000;
d. P2,250,000.
33
. Miss Laura Praningna, a citizen and resident of Sydney, Australia, died leaving properties
and obligations in Australia and in the Philippines; Data on her properties and obligations
follow:

Properties in Australia P3,000,000


Properties in the Philippines 1,000,000
Funeral expenses in Australia 250,000
Unpaid obligations in Australia 700,000

The net taxable estate in the Philippines is:


a. P1,000,000;
b. P 800,000;
c. P 775,000;
d. P-0-
34
. You are given the following information about the estate of a resident citizen decedent:

Columbia: Net estate of P100,000 and estate tax paid of P1,500;


Indonesia: Net estate of P200,000 and estate tax paid of P1,800;
Philippines: Net estate of P1,200,000.

The allowable amount of tax credit for estate tax paid in foreign countries amount to:
a. P2,800;
b. P3,000;
c. P3,300;
d. P5,500;
35
. Assume the same information given in no. 35, compute the estate tax still due after credit
for foreign estate taxes paid:
a. P 6,000;
b. P12,200;

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c. P 7,500;
d. P-0-
 END 

9 TAX 1104
1
. Letter “D” is the correct answer.
2
. Letter “B” is the correct answer.
3
. Letter “C” is the correct answer.
4
. Letter “A” is the correct answer.
5
. Letter “A” is the correct answer.
6
. Letter “A” is the correct answer.
7
. Letter “C” is the correct answer.
8
. Letter “C” is the correct answer.
9
. Letter “A” is the correct answer.
10
. Letter “A” is the correct answer.
11
. Letter “C” is the correct answer.
12
. Letter “A” is the correct answer.
13
. Letter “B” is the correct answer.
14
. Letter “A” is the correct answer.
15
. Letter “C” is the correct answer.
16
. Letter “B” is the correct answer.
17
. Letter “B” is the correct answer.
18
. Letter “B” is the correct answer.
19
. Letter “A” is the correct answer.
20
. Letter “C” is the correct answer.
21
. Letter “A” is the correct answer.
22
. Letter “B” is the correct answer.
23
. Letter “A” is the correct answer.
24
. Letter “B” is the correct answer.
25
. Letter “C” is the correct answer.
26
. Letter “A” is the correct answer.
27
. Letter “A” is the correct answer.
28
. Letter “C” is the correct answer.
29
. Letter “D” is the correct answer.
30
. Letter “C” is the correct answer.
31
. Letter “C” is the correct answer.
32
. Letter “A” is the correct answer.
33
. Letter “C” is the correct answer.
34
. Letter “A” is the correct answer.
35
. Letter “B” is the correct answer.