Gross Estate Reviewer

Multiple Choice

1. 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 his will or by operation of law.\
a. Succession c. inheritance
b. Donation d. liquidation
2. The general term applied to the person whose property is transmitted through succession
whether he left a will or failed to do so.
a. Successor c. trustor
b. Decedent d. administrator
3. A person whose property is transmitted through succession in accordance with a will he left.
a. Intestate c. testator
b. Heir d. executor
4. A person called to succession either by the provision of a will or by operation of law.
a. Successor c. devisee
b. Heir d. legatee
5. 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. Contract C. WILL
b. Trust d. legacy
6. It refers to the mass of all property, rights and obligations of a person which are not
extinguished by his death.
a. Estate c. co-ownership
b. Trust d. partnership
7. The gross estate of the following decedents shall include all properties wherever situation,
except which one?
a. Resident citizen c. non-resident citizen
b. Resident alien d. non-resident alien
8. The gross estate of this decedent shall only be comprised of properties situated in the
Philippines.
a. Filipino residing in the Philippines.
b. American residing in the Philippines.
c. Filipino residing in the US.
d. American residing in the US
9. Mr. Domingo Padilla, testator, appointed Mr. Generoso Valiente as the executor of the estate.
Mr Padilla was a citizen of Argentina and a resident of QuezonCity. He was in California, USA
visiting his son when he died. He owned a Mercedes sports car and had several bank deposits in
the USA. The executor asked you whether or not the car and the bank deposits in the USA will
 still have to be declared as part of the Philippine gross estate of Domingo Padilla. Argentina does
not impose transfer taxes of any kind. What answer will you give him?
a. The car and the bank deposits in the USA have to be declared as part of the Philippine gross
estate because the decedent was a resident at the time of his death and, as such, properties
wherever situated are included in the gross estate.
b. The car and the bank deposits in the USA need not be declared as part of the Philippine
gross estate because when Mr. Padilla died he was in California, USA making him a non-
resident alien.
c. The car and the bank deposits in the USA have to be declared as part of the Philippine gross
estate only when the decedent specified in his will and testaments that such properties
must form part of his gross estate.
d. The car and the bank deposits in the USA need not be declared as part of the Philippine
gross estate because Argentina does not impose transfer tax of any kind.
10. When the reciprocity rule applies the gross estate of a non-resident alien, decedent shall not
include which of the following properties?
a. Tangible personal properties in the Philippines.
b. Real properties in the Philippines.
c. Intangible personal properties in the Philippines.
d. Intangible personal properties outside the Philippines.
11. Which of the following is not included in the decedent’s gross estate?
a. Extent of decedent’s interest in property.
b. Transfer in contemplation of death.
c. Revocable transfer.
d. Property passing under special power of appointment.
12. The amounts withdrawn from the deposit accounts of a decedent subjected to the 6% final
withholding tax imposed under section 97 of the NIRC, shall be:
a. Excluded from the gross estate for purposes of computing the estate tax.
b. Included from the gross estate for purposes of computing the estate tax.
c. Claimed as tax credit against estate tax due.
d. Claimed as deduction the gross estate.
13. A resident decedent left the following properties:
Real properties P10,000,000
Personal properties excluding bank deposit 15,000,000
Bank deposit (P1,000,000 was withdrawn from
.the account after the decedent died) 3,000,000

The gross estate of the decedent was:

a. P28,000,000
b. P27,000,000
c. P26,000,000
d. P25,000,000
14. Which of the following proceeds from a life insurance shall not be included in the decedent’s
gross estate?
a. Proceeds of life insurance, where the estate of the decedent is designated as revocable
beneficiary.
b. Proceeds of life insurance, where the executor of the estate is designated as an irrevocable
beneficiary.
c. Proceeds of life insurance, where the administrator is designated as beneficiary.
d. Proceeds of life insurance, where the son of the decedent is designated as irrevocable
beneficiary.
15. Which of the following proceeds shall be included in the taxable gross estate?
a. Insurance proceeds from SSS and GSIS.
b. Amount receivable by any beneficiary, irrevocable designated in the insurance policy.
c. Amount receivable by any beneficiary designated in the insurance policy.
d. Proceeds of group insurance taken out by a company for its employees.
16. Mr. Benson Chan procured a life insurance upon his own life. He designated his estate’s
executor as an irrevocable beneficiary. For estate tax purposes, the proceeds of life insurance
is:
a. Included in the gross estate of Mr. Chan because when the executor of the estate is a
beneficiary, the proceeds are included in the gross estate regardless of the designation.
b. Not included in the gross estate of Mr. Chan because the designation of the beneficiary is
irrevocable.
c. Included in the gross estate of Mr. Chan because the proceeds of life insurance are always
subject to estate tax.
d. Not included in the gross estate of Mr. Chan because, as a rule, proceeds of life insurance
are generally not subject to estate tax.
17. If transfer in contemplation of death, revocable transfer or property passing under general
power of appointment is made, created, exercised or relinquished for consideration in money or
money’s worth, but there is no bona fide sale for an adequate and full consideration in money
or money’s worth, the gross estate will include:
a. Fair market value of such property at the time of transfer.
b. Historical cost of such property at the time acquired.
c. Excess of the fair market value of the property at the time of death over the value of the
consideration received thereof.
d. Fair market value or the assessed value of such property, at the time of death, whichever is
higher.
18. One of the following transfers is not included in the gross estate.
a. Transfer with reservation and retention of certain rights
b. Transfer passing under general power of appointment.
c. Transfer for adequate and full consideration.
d. Transfer in contemplation of death.
19. Mr. Orly Pinto transferred his properties to his relatives due to his poor health thinking that he is
going to die soon. This is an example of:
 a. Transfer with retention or reservation of certain rights.
b. Transfer passing under general power of appointment.
c. Transfer for insufficient consideration.
d. Transfer in contemplation of death.
20. One of the following is not a motive which precludes a transfer from category of one made in
contemplation of death:
a. To relieve the donor from burden of management.
b. To settle family litigated and non-litigated disputes.
c. To reward services rendered.
21. X, decedent, owns a property valued at P1,500,000 at the time of his death. The said property
was sold by X during his lifetime to Y for P700,000 when its value was P1,200,000. It was agreed
by X and Y that the transfer of ownership will take effect after X’s death.
For Philippine estate tax purposes, which of the following statements is correct?
a. The transaction is a transfer for inadequate consideration, hence, the amount of P800,000
shall be included in the gross estate.
b. The transaction is a bona fide sale for adequate considerations, hence, no amount shall be
included in the gross estate.
c. The transaction is a transfer in contemplation of death, hence, the amount of the
P1,500,000 shall be included in the gross estate.
d. The transaction is a transfer for inadequate consideration, hence, the amount of the
P500,000 shall be included in the gross estate.
22. A property which is firmly fixed, settled or fastened is called:
a. Real or immovable property.
b. Tangible personal property.
c. Intangible property
d. None of the choices.
23. Which among the following should be treated as a real property?
a. A Manansala painting
b. A BMW sports car
c. A contract for the construction of a public road.
d. Shares of stocks of Meralco.
24. Which of the following things are deemed to be personal property?
a. Those movables susceptible of appropriation which are not included under Article 415 of
the Civil Code.
b. Real property which by any special provision of law is considered as personality.
c. Forces of nature which are brought under control by science.
d. All of the above.
25. Which of the following shall also be considered as personal property?
I. – Obligation and actions which for their objects movables or demandable sums.\
II. – shares of stock of agricultural, commercial and industrial entities, although they
may have real estate
a. Both I and II c. I only
 b. Neither I nor II d. II only
26. One of the following is not an intangible personal property situated in the Philippines.
a. Shares, obligations or bonds issued by any corporation or sociedad anonima organized or
constituted in the Philippines in accordance with its laws.
b. Shares, obligations or bonds issued by any foreign corporation 85% of the business of which
is located in the Philippines.
c. Shares, obligations or bonds issued by any foreign corporation if such shares, obligations or
bonds have acquired business situs in the Philippines.
d. Shares, obligations or bonds issued by a non-resident foreign corporation.
27. For estate tax purposes, one of the following is not an intangible personal property.
a. Accounts receivable c. bank deposit
b. Investment in stock d. livestock
28. For estate tax purposes, the rule of reciprocity applies:
I. – When the decedent is a non-resident alien.
II. – With respect to intangible personal properties situated in the Philippines.
a. Only I is correct.
b. Only II is correct.
c. Both I and II are correct.
d. Neither I nor II are correct.
29. John Dewey, an American resident in USA, died in 2018. He left the following property:
a. Rest house in Hawaii;
b. A villa in Switzerland;
c. Shares of stock in La Corporation, USA;
d. Shares of stock in San Miguel Corporation, Philippines;
e. Shares of stock in Union Corp, foreign corporation where 85% of its business is in the
Philippines;
f. Time deposit, Philippine National Bank, Manila;
g. Lease contract over his Manhattan, New York, USA apartment leased to the Philippine
Consulate.

John Dewey’s Philippine gross estate shall consist of:

a. All property enumerated above

b. Only property d, e, and f
c. Only property a, b, and d.
d. None of the property enumerated above.
30. Using the data in no. 29, assuming there is no reciprocity, John Dewey’s Philippine gross estate
shall consist of:
a. All properties enumerated above.
b. Only properties d, e, and f.
c. Only property f.
d. None of the properties enumerated above.
 31. Mr. Roberto Caluma, a citizen and resident of Puerto Rico, dies during the year. Puerto Rico
does not impose transfer taxes on properties of decedent not residing therein. He left the
following properties among others:
Shares of stocks, San Miguel Corporation, Manila
House and lot, Puerto Rico
Leasehold on a condominium unit, Philippines
Contract for public works, Philippines

The executor of his estate in the Philippines asked you what properties are to be included in his
Philippine gross estate. What answer will you give him?

a. Include all the properties.

b. Include contract for public works only.
c. Include all properties except shares of stocks and house and lot
d. Include all properties except house and lot in Puerto Rico.
32. Mr. Pablo dela Cruz, Filipino citizen, died in the United States of America in 2018. He left the
following properties:
a. House and lot, California, USA;
b. Shares of stock in PLDT, domestic corporation;
c. Bank deposit, First Bank of California, USA;
d. Bank deposit, BPI-manila;
e. Tax-free long-term Philippine Government bonds;
f. Car, registered in the name of his 21 years old son.

The Philippine gross estate shall consist of:

a. All properties enumerated above.

b. All properties enumerated above except f.
c. All properties enumerated above except e and f.
d. Only properties a and d.
33. Case I – X transfers shares of stock to Y on the condition that X shall receive or enjoy the
dividends during X’s lifetime, thereafter to Y or his estate.
Case II – B makes a transfer of property in trust, income payable to himself for six (6) years,
thereafter to C or his estate. B dies before the six (6) years lapsed.
a. Both transfers are with retention and reservation of certain rights, hence, taxable.
b. Both transfers are exempt from estate tax.
c. The first transfer is taxable, the second is exempt.
d. The first transfer is exempt, the second is taxable.
34. Mr. Antonio Carbonel died leaving a painting to his son, Arman, by last will and testament. The
will of Antonio gave Arman the power to appoint by will Pedro as successor to the painting.
When Arman died, Pedro succeeded to the property. Which following statements is incorrect?
a. The value of the painting should be included in the gross estate of Antonio.
b. The value of the painting should be included in the gross estate of Arman.
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d. Pedro is succeeding to the estate of Antonio and not Arman.
35. Which of the following cancellation or forgiveness of debt shall be included in the gross estate
of the creditor?
a. Forgiveness and cancellation of debt where the debtor did not render service in favor of the
creditor to take effect while the creditor is alive.
b. Forgiveness or cancellation of debt where the debtor rendered service in favor of the
creditor.
c. Forgiveness or cancellation of debt by a creditor-corporation in favor of a debtor-
stockholder.
d. Forgiveness or cancellation of debt where the debtor did not render service in favor of the
creditor to take after the creditor dies.
36. A property was transferred mortis causa. The following data were gathered from the
transaction:
Fair market value, time of transfer – P500,000
Fair market value, time of death – P300,000
Consideration received when transferred – P350,000

How much shall be included in the gross estate?

a. P500,000 c. P150,000
b. P300,000 d. none of the choices
37. Which of the following is incorrect?
a. A transfer in contemplation of death for less than full and adequate consideration may
result in a taxable amount for estate tax purposes.
b. A transfer in contemplation of death for less than full and adequate consideration may not
result in a taxable amount for estate tax purposes.
c. A transfer in contemplation of death for less than full and adequate consideration may
result in a taxable amount for income tax purposes.
d. None of the choices.
38. One of the following is not included in the gross estate of a decedent.
a. Cash dividend that accrued before death.
b. Shares of stock transferred in contemplation of death.
c. Land held in trust but in decedent’s possession before death.
d. Rent income on property that accrued before death.
39. The widow and children of a passenger who died in an airplane crash were paid P3,500,000 by
the airline. This figure was released after negotiation between the heirs of the deceased and
the insurer of the airline, the latter having received indubitable evidence that the deceased had
a net income of P350,000 at the time of his death and that 10 productive years would have
insured financial stability for his family. Should the heir declare this mount in the estate tax
return?
 a. No. The heirs should not declare the P3,500,000 in the estate tax return because the
amount is not part of the decedent’s property at the time of death.

b. No. The heirs should not declare the P3,500,000 in the estate tax return because it was a
result of a negotiation between the heirs and the airline company.
c. Yes. The heirs should declare the P3,500000 in the estate tax return because the
designation of the beneficiary is not known, hence, revocable.
d. Yes. The heirs should declare the P3,500,000 in the estate tax return because the amount
would have been earned by the decedent if he did not die.
40. Mr. Eustaquio Corpuz owned one hundred (100) hectares of agricultural land. The Government
took ninety-five (95) hectares under the Agrarian Reform Act, with payment for it not yet
received. Mr. Corpuz died. What value shall be included in the gross estate of the decedent?
a. One hundred hectares of agricultural land.
b. Five hectares of agricultural land plus the amount receivable from the Government on the
appropriation on ninety-five hectares.
c. Five hundred hectares of agricultural land.
d. None of the choices.
41. The following are transactions and acquisitions exempt from transfer taxes except:
a. Transmission from first heir or done in favor 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
fide commissary.
c. The merger of usufruct in the owner of the naked title.
d. All bequests, devises, legacies or transfers to social welfare, cultural and charitable
institutions.
42. Which of the following exempt transactions will still be require the inclusion of the property in
the gross estate?
a. Merger of the usufruct in the owner of the naked title.
b. Bequests, devises, legacies, or transfers to social welfare, cultural and charitable institutions
the administration expenses of which do not exceed 30% of such bequests, devises, legacies
or transfers.
c. Transfers from the first heir to a second heir designated by the decedent.
d. Death benefits received from SSS and GSIS.
43. Which among the following should be included as part of the gross estate of resident alien
decedent?
a. The transmission from the first heir, legatee or done in favor of another beneficiary, in
accordance with the desire of the predecessor.
b. Revision of the right of usufruct to the owner of the naked title.
c. Property transferred under a general power of appointment.
d. Property transferred for the use of the Government of the Republic of the Philippines.
44. The property comprising the gross estate shall be valued based on their:
a. Historical cost at the time of death.
b. Adjusted cost at the time of death.
c. Fair market value at the time of death.
d. Book value at the time of death.
45. If the property included in the gross estate is a real property, which shall be the fair market
value?
a. Zonal value
b. Assessed value
c. Zonal value or assessed value whichever is higher.
d. Zonal value or assessed value whichever is lower.