Block 11

Transfer Tax – Test bank

ESTATE TAX & DEDUCTIONS

THEORIES
1. 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.
A. will C. legitime
B. Succession D. device
2. The person whose property is transmitted through succession, whether or not he left a will.
A. successor C. legatee
B. heir D. decedent
3. The person called to the succession, either by the provision of a will or by operation of law.
A. Heir C. devisee
B. legatee D. decedent
4. Succession which results from the designation of an heir, made in a will executed in the form prescribe by law.
A. Testamentary C. intestate succession
B. mixed succession D. legal succession
5. Transmission of properties where there is no will, or if there is a will, the same is void or nobody succeeds in the
will.
A. testamentary succession C. legal succession
B. mixed succession D. escheat
6. Transmission of properties which is effected partly by will and partly by operation of law.
A. testamentary succession C. legal succession
B. mixed succession D. intestate succession
7. An heir to a particular personal property given by virtue of will.
A. Legacy C. devisee
B. successor D. legatee
8. An heir to particular real property given by virtue of will.
A. devise C. successor
B. devisee D. legatee
9. Part of the testator’s property which he cannot dispose of because the law has reserved it for certain heirs who
are called compulsory heirs.
A. legitimate C. free portion
B. legitime D. estate
10. A will which is entirely written, dated and signed by the testator.
A. hieroglyphics C. holocaust
B. holographic D. own will
11. Which of the following statements is correct?
A. The gross estate of a resident citizen decedent would not include all properties, whether real or personal and
whether within or without.
B. The gross estate of an American decedent who was a resident of the Philippines includes all properties in
the Philippines only.
C. The gross estate of a Filipino decedent who was residing in Australia would include all properties
regardless of location.
D. The personal property of a non-resident alien is not included in the gross estate in the Philippines if they are
intangible.
12. In computing the gross estate of a decedent:
A. If he was a non-resident, but citizen of the Philippines, tangible and intangible properties, regardless of
location, shall be included
B. If he was a resident who was not a citizen of the Philippines, tangible and intangible properties, regardless
of location, shall be included
C. If he was a non-resident who was not a citizen of the Philippines, tangible and intangible personal properties,
located in the Philippines, shall be included.
D. All above statements are correct.
13. Which of the following is not included in the gross estate?
A. Revocable transfer where the consideration was not sufficient
B. Revocable transfer where the power of revocation was not exercised
C. Transfer under a general power of appointment where the consideration was not sufficient
D. Transfer under a special power of appointment
14. Which of the following is not included in the gross estate?
A. Transfer in contemplation of death where the consideration is not sufficient
 B. Revocable transfer where the power of revocation was not exercised
C. Proceeds of life insurance where the beneficiary designated is the executor and the designation is
irrevocable
D. Proceeds of life insurance where the irrevocably designated beneficiary is the mother
15. Which statement is wrong? The gross estate shall be valued:
A. At its fair market value at the time of death
B. At its fair market value at the return is due
C. In real property, the zonal value, which may be higher than the assessed value
D. In the case of common shares of stock, at book value
16. 1st statement: For marriages on or after August 3, 1988, the property relationship between husband and wife, in
the absence of a written agreement between them, is the system of absolute community of property.
2nd statement: There may be a property relationship of conjugal partnership of gains even if marriage was on or
after August 3, 1988.
a. Only the first statement is true
b. Only the second statement is true
c. Both statements are true
d. Both statements are false
17. Which of the following is correct? Under the system of conjugal partnership of gains and absolute community of
property:
a. Property acquired during the marriage by inheritance or gift is exclusive property under both systems
b. Property owned before the marriage is exclusive property under both systems
c. Income of property under (a) is exclusive property under both systems
d. Property under (a) may be conjugal or community when expressly declared by the benefactor as conjugal or
community
18. One of the following statements is wrong:
a. Amounts receivable under RA 4917, and during the marriage, are conjugal properties
b. Income out of the labor of the husband is conjugal property
c. Income out of exclusive property of the wife is conjugal property
d. Property inherited when the fair market value was P600,000, sold for cash during the marriage when the
value was P1,000,000 resulted in gain of P400,000. The gain is conjugal property
19. Which of the following statements is wrong? For, a decedent who was married at the time of death, there may
be deductible funeral expense
a. Whether paid or unpaid
b. By funeral expenses incurred before internment
c. Reduces the distributable estate by the allowable 5% of the gross estate
d. At not more than P200,000
20. Which of the following deductible for the purposes of computing the net distributable estate?
a. Vanishing deduction c. unpaid medical expenses
b. standard deduction d. RA 4917
21. Which of the following statements is wrong? Deduction for funeral expenses shall be allowed:
a. Shall in no case exceed 5% of the gross estate
b. Shall in no case exceed P200,000
c. Only if paid out of the estate
d. For a non-resident alien, only that which was actually incurred in the Philippines
22. Statement 1: Losses can be deducted only if incurred during the settlement of the estate.
Statement 1: Losses can be deducted only if the property lost is included in the gross estate.
a. both statement are true.
b. both statement are false.
c. the first statement is true, but the second statement is false.
d. the first statement is false, but the second statement is true.
23. Which statement is wrong? Losses are deductible from the gross estate:
a. if arising from earthquake.
b. if not compensated by insurance or other form of indemnity.
c. if the loss arises from sale of capital assets.
d. must be incurred during the settlement of the estate.
24. A resident Filipino, died on May 5, 2012 and his estate incurred losses as follow:
 1st loss: From fire on July 2, 2012 of improvement on his property not compensated by insurance.
2nd loss: From flood on July 2, 2011 of household furniture also not compensated by insurance.
a. 1st loss is not deductible and 2nd loss is deductible.
b. both losses are not deductible.
c. both losses are deductible from gross estate.
d. 1st loss is deductible and 2nd loss is not.
25. Which statement is correct? Real property with a cost of P300,000 and a fair market value at the time of death
of P1,000,000, but subject to mortgage of P200,000.
a. Shall be in the taxable net estate at P800, 000.
b. Shall be in the gross estate at the decedent’s equity of P800, 000.
c. Shall be in the gross estate at P300, 000.
d. Shall be in the gross estate at the decedent’s equity of P100, 000.
26. A resident decedent was married under the conjugal partnership of gains. An obligation of P100,000, incurred
during the marriage and secured by a mortgage of exclusive property is:
a. A deduction from the gross estate at P100,000 against conjugal property.
b. A deduction from the gross estate at P100,000 against exclusive property.
c. A deduction of P50,000 from the gross estate against conjugal property.
d. A deduction of P100,000 from the gross estate against exclusive property, but with a receivable of P50,000
from the surviving spouse.
27. Which statement is correct? Claims against the estate, as deduction from the gross estate:
a. Represents obligations enforceable during the lifetime of the decedent.
b. Should always be evidenced by a notarized document.
c. is sufficient for deductibility if a valid obligation under the law on obligations.
d. If unpaid mortgage of a non-resident, not citizen of the Philippines, the property should be included in the
Philippine gross estate.
28. Which of the following is deductible from the gross estate?
a. Income tax paid on income received after death.
b. Unpaid property taxes accrued in the year of death.
c. Donor’s tax accrued after to death.
d. Estate tax paid to a foreign country.
29. Which is wrong? Deduction for transfers for public purpose:
a. Means legacy in a last will and testament to the government.
b. Means device in a last will and testament to the government.
c. Includes properties transferred inter vivos.
d. will not include legacies to charitable institutions.
30. In determining the taxable net estate of a decedent, which of the following rules is correct?
a. Real estate abroad is not included in the gross estate of a decedent who was a resident alien.
b. Vanishing deduction must be subject to limitations.
c. Shares of stocks being intangible property shall be included in the decedent’s gross estate wherever situated.
d. Funeral expenses are deductible to the extent of 5% of the total gross estate but not exceeding P100,000.
31. Which of the following statement is correct? Property subject to vanishing deduction should be:
a. If the decedent was a not citizen nor resident of the Philippines, the property should not be located in the
Philippines.
b. If the decedent was a citizen or resident of the Philippines, the property may not be located in the Philippines.
c. If the decedent was a citizen but a resident of the Philippines, the property need not be located in the
Philippines.
d. If the decedent was a citizen and resident of the Philippines, the property should be located in the Philippines.
32. A citizen of the Philippines and resident of Baguio City, died testate on May 10, 2013. Among his gross estate are
properties inherited from his deceased father who died on April 4, 2010. What percentage of deduction will be
used in computing the amount of vanishing deduction?
a. 80% of the value taken as basis for vanishing deduction.
b. 100% of the value taken as basis for vanishing deduction.
c. 60% of the value taken as basis for vanishing deduction.
d. 40% of the value taken as basis for vanishing deduction.
33. Statement 1: For a vanishing deduction, there should always be two deaths within five years from receipt of
property.
 Statement 2: For a vanishing deduction, there should always be two transfer of property within five years
whether the first transfer be gratuitous or onerous.
a. Both statements are true.
b. Both statements are false.
c. The first statement is true, but the second statement is false.
d. The first statement is false, but second statement is true.
34. Which statement is wrong? For a non-resident, not citizen of the Philippines:
a. There are no special deductions from the gross estate
b. There can be no deduction for funeral expenses entirely incurred outside the Philippines.
c. There can be a vanishing deduction.
d. There can be a deduction for transfer for public use.
35. Only once statement is correct. Deduction for family home:
a. Shall be allowed if the family home is in the Philippines.
b. Shall be at a maximum of P1,000,000, based on cost.
c. May be allowed for family homes (one in the City and another in the Province), both in the Philippines and
with certificates of the Barangay Captains.
d. Shall be deducted at lesser than P1,000,000 if, with vanishing deduction and unpaid mortgage or
indebtedness, the value of the family home is already reduced to zero.
36. Which statement is true?
a. A single person who is not a head of family may not have a deduction for family home.
b. There can be a deduction for two family homes if their aggregate value does not exceed P1,000,000.
c. Deduction may be claimed for a family home of a non-resident of the Philippines located outside the
Philippines.
d. A family home is always conjugal/community property.
37. One of the statement is wrong. Identify. Medical expenses deductible from the gross estate:
a. Only if the decedent was a citizen or resident of the Philippines at the time of death.
b. Is actual medical expenses or P500,000, whichever is lower.
c. Need not be on the illness resulting in death.
d. Must not be paid before death.
38. The following expenses, except one, should be paid or take place within a certain period in order to be
deductible from the gross estate of a citizen or resident decedent. Which is the exception?
a. Vanishing deduction c. Medical expenses
b. Judicial expenses d. Claims against the estate
39. Estate tax credit for foreign estate tax paid is available to the estate of:
a. Resident or citizen of the Philippines
b. Non-resident alien
c. All kinds of decedents
d. None of these
40. Which of the following statements is false? When an estate tax return had been filed and the estate tax had
been paid but subsequently, because of errors in the return, a deficiency estate tax has to be paid:
a. The Bureau of Internal Revenue can ask payment from the heirs to whom the estate had been distributed.
b. The Bureau of Internal Revenue cannot ask the executor or administrator to pay because he would have been
discharged from liability for the estate tax to the heirs once the estate tax had been paid.
c. The Bureau of Internal Revenue can still ask the executor or administrator to pay, even if the heirs have
dissipated the inheritance, if the executor or administrator did not ask for a written discharge from liability from
the Bureau of Internal Revenue.
d. The Bureau of Internal Revenue shall have a lien on the properties of the estate once a demand for payment
had been made.
41. When a donation which paid a donor’s tax was actually a donation mortis causa, as ascertained by the Bureau of
Internal Revenue, which of the following is true?
a. The donation shall be required to pay the estate tax on its proper valuation at the time of death, and there
can be a refund for the wrong payment of the donor’s tax.
b. The donation shall be required to pay the estate tax so that the estate tax computed shall be reduced by the
donor’s tax already paid.
c. The donation shall not pay any transfer tax anymore.
d. The donation has to pay the estate tax in addition to the donor’s tax previously paid.
42. It refers to a mode of transferring & acquiring properties left by the decedent.
a. Estate transfer c. Donation
b. Succession d. Execution of a will
43. The property, rights & obligations of a person which are not extinguished by his death & those which have
accrued thereto since the opening of succession.
a. Inheritance c. Estate
b. Capital d. Devisee
44. The estate tax accrues from the moment of:
a. The fixing of notice of death
b. Expiration of a months after death
c. The death of the decedent
d. The filing of estate tax return
45. The gift tax paid on a donation mortis causa, if any:
a. Exempts the property from estate tax.
b. Has no effect since the gift will be subject to another gift tax.
c. Shall form as a tax credit to be deducted from the estate tax due.
d. Is invalid & the tax will not be credited at all.
46. Which shall not form part of the gross estate of a decedent:
a. Intangible personal property of non-resident alien decedent without reciprocity law
b. Revocable transfer
c. Transfer passing special power of appointment
d. Life insurance where the executor is the beneficiary & it is irrevocable
47. All of the following are considered intangible in the
Philippines, except:
a. Franchise which must be exercised in the Phil.
b. Shares obligations or bonds which issued by any corporation or sociedad anonym organized or constituted in
the Philippines in accordance with its laws.
c. Shares, obligations or bonds by any foreign corporation 75%.of the business of which is located in the
Philippines.
d. Shares, obligations of bonds issued by any foreign corporation of such shares, obligations or bonds have
acquired a business situs in the Philippines.
e. Shares or rights in any partnership, business or industry established in the Philippines.
48. A person who inherits personal property thru a will:
a. Devisee c. Heir
b. Legatee d. Successor
49. A person who inherits real property thru a will:
a. Devisee c. Heir
b. Legatee d. Successor
50. Succession wherein the decedent did not leave any will:
a. Voluntary succession c. Mixed succession
b. Legal succession d. Testamentary succession
51. Which statement is false about succession?
a. The successor inherits all the transmissible property of a decedent including his liabilities.
b. The successor can be made liable for the obligations of the decedent beyond the value of the asset he
received.
c. In succession, fruits and credits maturing after the death of the decedent pass to the heirs even if they were
not subjected to estate tax.
d. In succession, the successor can refuse the inheritance.
52. One of statement is false:
a. Estate tax is an excise tax.
b. Estate tax is transfer tax on donation mortis causa.
c. The object of estate tax is to tax the transfer of the property from the dead to the living.
d. Estate tax is synonymous to inheritance tax.
53. Which statement is wrong?
a. Claims against insolvent person should be included in the gross estate even if uncollectible.
b. Transfer passing under special power of appointment is excluded from the gross estate.
c. Revocable transfers are includible whether or not the right to revoke is exercised.
d. Transfer contemplation of death for adequate consideration is still includible in the gross estate.
54. Which statement is incorrect about funeral expenses allowed?
a. The amount allowed is 5% of the gross estate or the actual expenses whichever is lower.
b. The actual expenses must be paid from the estate or chargeable to it.
c. The allowed deduction can never be more than the actual expenses paid.
d. The expenses necessary for burial even if paid by friends are also allowed as deduction.
55. Which statement is incorrect about claims against insolvent persons?
a. They must be included in the gross estate even if uncollectible.
b. They must be duly notarized.
c. The deduction is only the uncollectible portion.
d. The insolvency of the debtor must be established.
56. One of the following is incorrect:
a. Taxes to be deductible must accrue before the decedent’s death.
b. Losses must occur also before the decedent’s death to be deductible.
c. Medical Expenses must be incurred within 1 year prior to the decedent’s death.
d. Transfer for public purposes order to be deducted must be mortis causa in character.
57. Which statement is false about vanishing deduction?
a. It pertains to a property presently found in the gross estate.
b. The property must be previously subjected to a transfer tax or income tax.
c. The property was received by the decedent within 5 years prior to his death.
d. The property must be located in the Philippines.
58. A donation inter vivos but due to thought of death is;
a. Subject to donor’s tax
b. Subject to estate tax if for inadequate consideration
c. Subject to estate tax a bona fide transfer
d. Subject to inheritance tax
59. In filing the estate tax return, a CPA certificate is required when:
a. Gross estate exceeds P2,000,000
b. Gross estate reaches P20,000
c. Gross estate exceeds P200,000
d. Gross estate reaches P2,000,000
60. A died leaving a house and lot to B March 31, 2009which was questioned by C and it is under litigation but the
parties have stated an extra-judicial settlement. The last day for filing the estate tax return is
a. April 30, 2010 c. September 30, 2009
b. April 30, 2013 d. October30, 2009
61. The last day for the payment of estate tax may be extended, until;
a. March 21, 20028 c. September 30,2015
b. September 30, 2011 d. April 30, 2013
62. The taxpayer in estate tax is:
a. The decedent
b. The estate as a juridical entity
c. The heirs or succession
d. The administrator or executor
63. The payment of estate tax is a personal liability of
a. The heirs or successors
b. The administrator in testamentary succession
c. The executor in voluntary succession
d. The estate itself
64. 1st statement: The court may authorize the executor or administrator to distribute the estate if in its sound
discretion it believes that the heir badly needs his share.
2nd statement: The administrator or any of the heirs may however upon authorization of BIR withdraw from the
decedent’s bank up to P50,000 even without required certification that the estate tax has been paid.
a. True, True c. True, False
b. False, False d. False, True
65. 1st statement: A died giving B power to appoint a person who will inherit A’s house and lot. B, however can only
choose among C, D and F. B decided to transfer the property to C, in B’s will when he was old already. The
transfer from B to C is subject to estate tax.
2nd statement: During A’s lifetime, he decided to give B as gift his (A) car subject to the condition that if B does
not become a CPA within 3years. A shall revoke the transfer. In the second year however, A died. The car should
form part of A’s gross estate.
a. True, True c. True, False
b. False, False d. False, True
66. A died leaving a farm land, In his will, he transferred the ownership thereof to B but subject to the condition that
C will have the right to use the land fora period of ten years (Usufruct) in the seventh year, however, C died and
C’s will be surrendered his over the land to B.
a. The transfer is subject to donor’s tax
b. The transfer is subject to estate tax
c. The transfer is both an inclusion and exclusion from the gross estate
d. The above is a tax-exempt transfer.
67. The notice of death must be filed when:
a. Gross estate exceeds P200,000
b. Gross estate exceeds P20,000
c. Gross estate reaches P200,000
d. Gross estate reaches P2,000,000
68. One of the following is not an exemption or exclusion from the gross estate:
a. Capital or exclusive of the surviving spouse
b. Properties outside the Philippines of non-resident Chinese decedent
c. Shares of stocks of San Miguel Corporation of a non-resident Mexican.
d. The merger of usufruct in the owner of the naked title
69. The following are included in the gross estate, except
a. Decedent’s interest
b. Prior interest
c. Appraisal surplus
d. Revocable transfer
70. 1st statement: The perfection of a donation inter vivos is at the moment when the donor knows the acceptance
of the done.
2nd statement: Donation mortis causa is subject to donor’s tax
a. Both are true
b. Both are false
c. 1st statement is true
d. 2nd statement is true
71. 1st statement: If the gift is personal property, the fair market value of the property given before the time of the
gift shall be the value of the gross gift.
2nd statement: If the gift is real property, the fair market value at the time of donation or the value fixed by the
assessor, whichever is lower?
a. 1st statement is true
b. 2nd statement is true
c. Both are true
d. Both are false
72. The following shall file the estate tax return, except
a. Administrator
b. Executor
c. Decedent
d. Any legal heir
73. 1st statement: Only the estate of a citizen or a resident alien at the time of death can claim tax credit for any
estate taxes paid in a foreign country.
2nd statement: Estate tax credit is a remedy against international double taxation.
a. Both are true
b. Both are false
c. 1st statement is true
d. 2nd statement is true
74. When the done or beneficiary is stranger. The tax payable by the donor shall be
a. 10%
b. 30%
c. 5%
d. 20%
75. Estate tax return is required in cases of
a. Transfers subject to tax
b. Estates are unregistered
c. Where gross value of estate exceeds Php 20,000
d. Annulment
 PROBLEMS
Problem 1
Liwayway died leaving the following properties:
a. House and lot in the Philippines (mortgaged for P300,000) 1,250,000
b. Condominium unit in Hongkong 1,000,000
c. Car in Philippines 70,000
d. Car in Hongkong 60,000
e. Franchise exercised in the Philippines 300,000
f. Franchise exercised in New York, USA 25,000
g. Domestic shares, certificate kept in New York, USA 55,000
h. Foreign shares, 90% of business in the Philippines 60,000
i. Foreign shares, 30% of business in the Philippines, with business
situs in the Philippines. 15,000
j. Foreign shares, 60% of business in the Philippines 75,000
1. The gross estate if the decedent was a resident citizen, resident alien or a non-resident
citizen-
A. 2,910,000 C. 1,620,000
B. 1,770,000 D. 1,750,000
2. The gross estate if the decedent was a non-resident alien (no reciprocity)-
A. 2,910,000 C. 1,825,000
B. 1,750,000 D. 1,320,000
3. The gross estate if the decedent was a non-resident alien (with reciprocity)-
A. 2,910,000 C. 1,825,000
B. 1,750,000 D. 1,320,000
Problem 2
Juan, married to Juana, died. The following properties were left upon his death:
a. Durian plantation in Davao, brought into marriage by H. - 3,000,000
b. Income of plantation in Davao earned during marriage - 250,000
c. Shares of stocks with Aga corp. earned by Juana during
marriage - 420,000
d. Dividends from Aga Corp. earned during marriage - 52,000
e. Bus in Cebu, inherited by Juan during the marriage - 760,000
f. Income of passenger bus earned during the marriage - 23,000
g. Riceland in Legazpi, inherited by Juana before marriage - 460,000
h. Income of Riceland in Legazpi earned during the marriage - 50,000
i. Underwear(panties, brassiere) of Juana brought into Juana - 85,000
j. Cash, unidentified when and by whom acquired - 55,000
k. Jewelries inherited by Juana during marriage from her mother - 320,000
4. The exclusive properties of Juan under conjugal partnership of gains--
A. 5,475,000 C.3,760,000
B. 3,815,000 D. 4,610,000
5. The gross estate of Juan if the spouse were under conjugal partnership of gains--
A. 5,475,000 C. 4,560,000
B. 4,610,000 D. 3,975,000
6. The community property of the spouses under absolute community of property regime--
A. 4,287,000 C. 4,560,000
B. 5,475,000 D. 3,975,000
7. The gross estate of Juan if the spouses were under the absolute community of property
regime--
A.5,070,000 C. 4,287,000
B. 5,475,000 D. 4,610,000
Problem 3
Market value – date of
Transfer Death Consideration
1. Revocable transfer:
a. Coconut plantation P1,500,000 P1,800,000 P1,000,000
b. Mitsubishi pajero 1,200,000 1,000,000 750,000
c. Shares of stock 300,000 220,000 250,000
d. Delivery truck 400,000 450,000 420,000
2. Townhouse, in contemplation of
death 2,000,000 2,300,000 1,500,00
8. The amount includible in the gross estate is--
A. 1,080,000 C. 1,050,000
B.1,850,000 D. 1,500,000

Problem 4
Al, decedent, had the following data at the time of his death on July 20, 2013:
Prior decent – father Present decedent
Car P250,000 P 200,000
Land 500,000 900,000
The land had an unpaid mortgage of P300,000 at the time it was inherited from his father on
January 5, 2010. Al was able to pay P200,000 before his death. The gross estate of Al was
P4,000,000 while the expenses amount to P900,000 broken down as follows:
Actual funeral expenses P 175,000
Claims against the estate 3 0,000
Claims against insolvent persons 20,000
Transfer to City of Manila for public purpose 50,000
Medical expenses 545,000
RA 4917 80,000
Included in the gross estate is his family home. It was purchased on Feb. 2012 at P1.8M. At the
time of his death, it had a value of P2,000,000
9. The amount of vanishing deduction is—
A. 77,500 C. 173,125
B. 90,625 D. 181,250

5. 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
Value to include in the gross estate is:
A. 300,000 C. 100,000
B. 250,000 D. 50,000
6. A citizen of Japan, residing in Hongkong, with properties in Hongkong and the Philippines, had
the following data on properties and rights at the time of his death and their values.

Real estate, Hongkong P1,000,000

Real estate, Philippines 2,000,000
Shares of stock of a domestic corporation 200,000
Shares of stock of a Japanese corporation 300,000
Shares of stock of a Canadian corporation, doing business in the 100,000
Philippines only
Philippine peso deposit in Metrobank 500,000
Receivable under a life insurance with an insurance company 250,000
doing business in Hongkong
The gross estate that should be reported in the Philippines is:
A. P4,350,000 C. P 2,800,000
B. P3,700,000 D. P4,000,000
7. Personal property with a cost of P400,000 and a fair market value at the time of death P900,000,
but subject to a mortgage of P250,000
a. Shall be in the taxable net estate at P500,000
b. Shall be in the gross estate at the decedent’s equity of P650,000
c. Shall be in the gross estate at P400,000
d. Shall be in the gross estate at P900,000
8. A citizen and resident of the Philippines died on October 5, 2010. He was a married and the
property relationship during the marriage was absolute community of property. He left behind
properties with market values as follows:

Agricultural land P 100,000

House and lot acquired by inheritance before the marriage 4-1/2 yrs. 500,000
ago, used as family home (with a FMV of P420,000and a mortgage of
P120,000 when acquired: P20,000 was paid by the decedent before he
died)
Jewelry of wife, acquired during the marriage with her income 50,000
Clothes acquired during the marriage , with income during the
marriage:
For use of the decedent 60,000
For us of the wife 70,000
Cash on hand and in banks:
Income from unidentified sources 300,000
From a sale at a loss of exclusive property 1,500,000
Received as gift six yrs. ago and before the marriage (current account) 40,000
Other properties:
Owned before the marriage 90,000
Acquired during the marriage 20,000
The gross estate is:
a. P1,560,000 c. P2,660,000
b. P1,100,000 d. P3,660,000
ITEMS 9 THROUGH 11 ARE BASED ON THE FOLLOWING INFORMATION:
A resident citizen died with properties constituting his gross estate of 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.
9. The allowable deduction for funeral expenses is:
a. 220,000 c. 200,000
b. 250,000 d. None given
10. The taxable net estate is:
a. P3,600,000 c. P 3,700,000
b. P2,600,000 d. P3,580,000
11. The distributable estate was diminished by:
a. P 1,420,000 c. P 1,200,000
b. P 1,400,000 d. Some other amount
ITEMS 12 and 13 ARE BASED ON THE FOLLOWING INFORMATION:
Properties in the Philippines – P500,000; Properties outside the Philippines – P300,000; Actual
funeral expenses in the Philippines – P20,000; Actual funeral expenses outside the Philippines –
P10,000.
12. If the decedent was a citizen or resident of the Philippines, the deductible funeral expenses is:
a. P30,000 c. P18,750
b. P40,000 d. P25,000
13. If the decedent was a non-resident, not citizen of the Philippines, the deductible funeral
expenses is:
a. P15,625 c. P18,750
b. P40,000 d. P25,000
14. Kenkoy inherited property on November 1, 2012, with a fair market value and a mortgage at
that time of P200,000 and P100,000, respectively. He married on January 10, 2013, under the
property relationship of conjugal partnership of gains. On March 5, 2014, he borrowed P200,000
from a bank and mortgaged the same property. Kenkoy died without paying any of the mortgage
indebtedness. Disregarding accrued interest on the mortgage indebtedness, deduction against
exclusive property is:
a. P200,000 c. P300,000
b.P100,000 d. None of these
15. A citizen and resident of the Philippines, married, died, leaving the following properties:

Real and personal properties acquired during the marriage P3,000,000

Land and building inherited from the father 11/2 years ago (with
a fair market value at that time of P1,500,000), and used at the
time of his death as home for his family. 2,000,000
Car, purchased with cash received as gift from the mother
during the year 500,000
Cash (including P500,000 received by inheritance from the 1,500,000
father )
 Claims against conjugal properties 600,00
Unpaid mortgage on the land and building inherited (from an
original of P600,000 when inherited) 100,000
The vanishing deduction is:
a. P1, 530,000 c. P450, 000
b. P1, 080,000 d. P1, 130,000
16. A resident decedent was married at the time of death and under the system of conjugal
partnership of gains. 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
Deduction for family home is:
a. P900,000 c. P400,000
b. P500,000 d. P450,000
Items 17 through 21 are based on the following information:
A citizen and resident of the Philippines, died on October 10, 2010, leaving the following properties,
rights, obligations and charges:
Conjugal properties (including a family home of P3,000,000
and amount receivable under RA 4917 of P200,000) P6,000,000
Exclusive properties (including cash of P500,000 inherited 4 /2
1

years ago) 4,000,000

Medical expenses unpaid, January 2012 600,000
Funeral expenses 350,000
Judicial expenses 500,000
Other obligations 100,000
17. The deductible funeral expenses is:
a. P350,000 c. P500,000
b. P100,000 d. P200,000
18. The vanishing deduction is:
a. P460,000 c. P92,000
B.P184,000 d. P138,000
19. The deduction for family home is:
a. P3,000,000 c. P1,000,000
b. P1,500,000 d. P500,000
20. The deductible medical expenses is:
a. P600,000 c. P500,000
b. P300,000 d. 250,000
21. The taxable net estate is:
a. P4,808,000 c. P3,808,000
b. P4,908,000 d. P3,908,000
Questions 22 through 24 are based on the following information:
A decedent left the following properties:
Land in Italy (with P1M unpaid mortgage) P2,000,000
Land in Davao City, Phil. (zonal value 750,000) 500,000
Franchise in USA 100,000
Receivable from debtor in Phil. 50,000
Receivable from debtor in USA 100,000
Bank deposit in Phil. 20,000
Bank deposit in USA 80,000
Shares of stocks of PLDT, Phil. 75,000
Shares of stock of ABC, foreign corporation 125,000
75% of the business in the Phil.
Other personal properties 300,000
22. If the decedent is a non-resident citizen his gross estate is:
a. P3,650,000 c.P2,500,000
b. P3,600,000 d.P2,650,000
23. If the decedent is non-resident alien his gross estate is:
a. P1,195,000 c.P1,250,000
b. P945,000 d.P1,070,000
24. If in the preceding number, reciprocity law can be applied the gross estate is:
a. P1,050,000 c.P1,250,000
b. P945,000 d.P1,070,000
25. Based on the original problem but assuming the PLDT shares of stocks (PLDT) are not listed in
the Local Stock Exchange, & there are 1,000 shares at the time of death, the company’s
outstanding shares were10,000 shares. Its retained earnings was P2,000,000, par value per
share was P50/share. The gross estate should show the said shares at:
a. Still at P75,000 c.P200,000
 b. P250,000 d. P0
26. The gross estate of a non-resident alien is P2,000,000, 75% of which is from abroad. The actual
funeral expenses totaled to P80,000, ¼ of which was paid by his employer. The deductible
funeral expense is:
a. P25,000 c. P6,250
b. P20,000 d. P80,000
27. Based on the preceding number (the same world G.E.)but the decedent is a non-resident citizen,
the deductible funeral expense is:
a. P25,000 c. P5,000
b. P60,000 d. P80,000
28. On January 1, 2011, the commercial land was mortgaged at the Phil. National Bank for
P200,000 at 24%per annum. The residential house (certified family home is mortgaged with
unpaid balance of P180,000 as of the date of death). The 900 sq. m. residential land is the
family home’s lot. Actual funeral expenses amounted to P250,000 but ½ of which is non-
deductible. Medical expenses reached P600,000 but ¼ only was incurred with in 1 yr before
death. Judicial expenses reached P150,000.
The gross estate is:
a. P4,280,000
b. P2,730,000
c. P4,480,000
d. P4,160,000
29. The total deductions excluding share of surviving spouse and special deduction is:
a. P655,000 c.P855,000
b. P891,000 d.P1,016,000
30. The deduction for family home is:
a. P1,000,000 c.P900,000
b. 950,000 d.P750,000
31. The taxable net estate is:
a. P401,500 c.P201,500
b. P326,500 d.P101,500

Ana, Filipina, died in Syria leaving the ff. properties:

*House and lot in Syria 1M
*Vacant Lot in Manila 2M, Shares of stock in a domestic corp, 60% of the business located in
the Phil. 100k
*Shares of stock in a foreign corp, 70% of the business is located in the phil. 200k
*Car in Manila 500k.
32. Q: How much is the gross state?
A: 3,800,000
33. Based on the preceding number, but assuming Ana is a non-resident alien, the gross state is:
A: 3,800,000
34. Continuing the preceding number, and the rule of reciprocity applies, the gross state is:
A: 2,500,000

Mr. J. Mondo died leaving the ff. properties:

*Rest house in Cebu, acquired before marriage 6M
*Income from rest house in Cebu 600k
*Condominium in Davao, brought to marriage by wife 3.6M
*Income from condominium in Davao 360k
*Town house in Quezon City, acquired during marriage 10.5M
*Income from town house in Quezon City 1,050,000
*Car, inherited by wife during marriage (the decedent provided in his Will that it shall form part
of the common properties of the spouses) 1.3M
*Jewelry, acquired during marriage for exclusive use of the wife 200k
35. Q: how much is the conjugal properties under conjugal partnership of gains?
A: 12,510,000
36. How much is the gross estate under Conjugal partnership of gains?
A: 18,510,000
37. How much is the community properties under absolute community of property?
A: 23,610,000