General Principles-Estate Tax-Donors Tax

1.
The proportional contribution by persons and property levied by the lawmaking body of the
State by virtue of its sovereignty for the support of the government and all public needs is
referred to as:
A. Taxes
B. Special assessment
C. License fee
D. Penalty
2. In case of deductions and exemptions on income tax returns, doubts shall be resolved:
A. Liberally in favor of the taxpayer
B. Strictly against the government
C. Liberally in favor of the employer
D. Strictly against the taxpayer
3. One of the characteristics of tax is that it is generally:
A. Based on contract
B. Payable in money
C. Assignable
D. Optional
4. Which of the following is not an example of excise tax?
A. Transfer tax
B. Value-added tax
C. Real property tax
D. Income tax
5. Which of the following is not a scheme of shifting the incidence of taxation?
A. The manufacturer transfers the tax the consumer by adding the tax to the selling price of the
goods sold
B. The purchaser asks for a discount or refuses to buy at regular prices unless is reduced by the
amount equal to the tax he will pay.
C. Changing the terms of the sale like FOD shipping point in the Philippines to FOB destination
abroad, so that the title passes abroad instead of in the Philippines.
D. The manufacturer transfers the value-added tax to the distributor, then in turn to the
wholesaler, to the retailer to the consumer.
6. Which of the following distinguishes tax from license fee?
A. Non-payment does not necessarily render the business illegal.
B. A regulatory measure.
C. Imposed in the exercise of police power.
D. Limited to cover cost of regulation.
7. Value added tax, as to rate, is an example of:
A. Graduated tax
B. Progressive tax
C. Regressive tax
D. Proportional tax
8. The distinction of a tax from permit or license is that a tax is:
A. Imposed for regulation.
B. One which involves an exercise of police power
C. One in which there is generally no limit on the amount that may be imposed.
D. Imposed through the provisions of the Constitution.
9. Tax of a fixed proportion of the value of property with respect to which the tax is assessed
and requires the intervention of assessors or appraisers to estimated the value of such
property before the amount due from each taxpayer can be determined is known as:
A. Specific
B. Ad valorem
C. Special or regulatory
D. Fiscal
10. The basic community tax of P5.00 for an individual is a/an:

A. Property tax
B. Direct tax
C. National tax
D. Ad valorem tax
11. Which of the following term describes the statement, “that the State has complete
discretion on the amount to be imposed, after distinguishing between a useful and non-useful
activity”?
A. Tax
B. License fee
C. Toll
D. Customs duty
12. A tax on business is:
A. Direction tax
B. Indirect tax
C. Property tax
D. Poll tax
13. Which statement is wrong?
A. A tax is a demand of sovereignty
B. A toll is a demand of ownership
C. A special assessment is a tax
D. Customs duty is a tax
14. There can be a classification of the subject matter being required to shoulder the burden.
Which is the exception?
A. Tax
B. License fee
C. Toll
D. Eminent domain
15. Statement 1: The value-added tax is property tax
Statement 2: The estate tax is a direct tax.
A. The two statements are correct
B. Statement1 is correct while statement 2 is wrong
C. The two statements are wrong
D. Statement 1 is wrong while statement 2 is correct
16. The amount required as directed by the needs of the government is:
A. License fee
B. Tax
C. Toll
D. Tariff
17. This is a demand of ownership:
A. License fee
B. Tax
C. Toll
D. Franchise
18. Which is not an essential characteristic of tax?
A. Unlimited as to amount
B. Proportionate in character
C. Payable in money
D. Regular payment
19. All of the following, except one, are essential characteristics of a tax. Which the exception?
A. It is based on the ability to pay
B. It is generally payable in money
C. It is an enforced contribution
D. It is proportionate in character
20. One is not a characteristic or an element of tax;
A. It is levied by the legislature
B. It is proportionate in character
C. It is payable in money or in kind
D. It is an enforced contribution
21. One of the characteristic of tax is that:
A. It is generally based on contract
B. It is generally assignable
C. It is generally payable in money
D. Answer not given
22. The distinction of tax from permit or license is that tax is:
A. Imposed for regulation
B. One which involves an exercise of police power.
C. One in which there is generally no limit on the amount that may be imposed.
D. It is an inherent power of the Sovereign State.
23. A kind of tax system where rate increases as the tax base increases.
A. Digressive tax
B. Proportional tax
C. Regressive tax
D. Progressive tax
24. Which of the following is not a direct tax?
A. Immigration tax
B. Transfer tax
C. Income tax
D. Value-added tax
25. Which of the following is not an example of direct tax?

A. Income tax
B. Transfer tax
C. Community tax
D. Business tax
26. The following, except one, are exceptions to the rule that tax exemptions must be strictly
construed.
A. Where the statute granting the exemption provides for the liberal interpretation thereof.
B. The taxpayer does not fall within the purview of exemption by clear legislative intent.
C. Case of special taxes relating to special cases and affecting only special cases of persons.
D. Exemptions refer to public property.
27. It comprises of all kinds of funds derived by the government, including taxes:
A. License fee
B. Income
C. Customs duties
D. Revenue
28. The following are kinds of taxes as to graduation. Which one is not?
A. Digressive
B. Proportional
C. Regressive
D. Progressive
29. It is collected for the use of somebody else’s property:
A. Toll
B. Debt
C. Tax
D. Special assessment
30. In case of conflict between the code and the Philippines Accounting Standards (PAS) or the
Philippine Financial Reporting Standards (PFRS):
A. PAS/PFRS shall prevail over the Tax Code.
B. Tax Code shall prevail over PAS/PFRS
C. PAS/PFRS and Tax Code shall be both disregarded.
D. The taxpayer may choose between PAS/ PFRS or Tax Code.
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1. The property, rights and obligations of a person which are not extinguished by his death and
those which have been accrued thereto since the opening of succession:
A. Assets
B. Capital
C. Estate
D. Income
2. A successor to an estate, whether in a last will testament or not:
A. Heir
B. Legatee
C. Devisee
D. None of these
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1. A succession to properties mentioned in the last will and testament, where the values of the
properties shall have increased from the time the last will and testament was executed is:
A. Testamentary succession
B. Mixed succession
C. Intestate succession
D. Escheated to the state on the increased value
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1. Which of following statements is wrong?

A. The gross estate of a non-resident citizen would include all properties regardless of location.
B. The gross estate of a non-resident, not citizen of the Philippines would include intangible
properties in the Philippines
C. The gross estate of a resident, not citizen of the Philippines, would include all properties
regardless of location.
D. The gross estate of non-resident citizen of the Philippines would include only properties in
the Philippines.
2. The personal properties of a non-resident, not citizen of the Philippines would not be
included in the gross estate if:
A. The intangible personal property is in the Philippines.
B. The intangible personal property is in the Philippines and the reciprocity clause of the estate
tax law applies.
C. The tangible personal property is in the Philippines.
D. The personal property is shares of stock of a domestic corporation 90% of whose business is
in the Philippines.
3. 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 the above statements are correct
4. 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 father
one and one-half years ago P2,000,000
Personal property in the Philippines inherited from father 1,600,000
Family home in the United States 1,400,000
The gross estate subject to the Philippine estate tax is:

A. P3,400,000
B. P5,000,000
C. P1,600,000
D. P3,000,000
5. A citizen of Japan, residing in Tokyo, with properties in the Japan and the Philippines, had
the following data on properties and rights at the time of his death and their values.
Real estate, Japan 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 Chinese corporation, doing business
in the Philippines only 100,000
Philippines pesos deposit in Banco De Oro 500,000
Receivable under a life insurance with an insurance
company doing business in Japan 250,000
The gross estate that should be reported in the Philippines is:
A. P4,350,000
B. P3,700,000
C. P4,000,000
D. P2,800,000
6. Which statement is wrong? A forgiveness or cancellation of indebtedness:
A. May result in an income to the debtor.
B. May result in a donation to the debtor.
C. May result in an inclusion of value in the gross estate.
D. None of the above.
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1. Which of the following is not true? A transfer in contemplation of death for less than full and
adequate consideration in money may result in:
A. Value included in the gross estate.
B. Value included in the net estate.
C. Nothing included in the gross estate.
D. Value to consider as taxable income.
2. 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 limited power of appointment.
3. 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. P300,000
B. P250,000
C. P100,000
D. P50,000
4. A revocable transfer with the following circumstance: Fair market value at the time of
transfer- P300,000; fair market value at the time of death- P180,000; consideration received
when transferred- P200,000:
A. Shall be included in the gross estate at P180,000
B. Shall be included in the gross estate at P200,000
C. Shall be included in the gross estate at P100,000
D. Shall not be included in the gross estate.

5. A citizen and resident of the Philippines died leaving the following properties and rights:
Cash on hand and in banks P1,000,000
Real property in the Philippines:
Assessed value per assessment rolls of the City 100,000
Zonal value per Bureau of Internal Revenue 500,000
Selling price of adjacent piece of land the day preceding the
date of death 600,000
Real property abroad, fair market value 450,000
Car in the Philippines, with a mortgage of P200,000 400,000
Receivables:
From a friend from whom there is no possibility of recovery 20,000
From a sister whose ratio of assets to liabilities is 1:3 15,000
Amount under insurance contract:
Receivable under life insurance, with the father as revocable
beneficiary 250,000
Receivable under life insurance, with the mother as
Irrevocable beneficiary 200,000
Receivable under accident insurance, for accident that
happened one year ago 50,000
Receivable under property insurance, for damage caused to
his car 12,000
Revocable transfers:
To sister (fair market value at the time of transfer was
P40,000 and consideration received was P10,000) 50,000
To father (fair market value at time of transfer was
P30,000 and consideration received was P30,000) 60,000

To mother (fair market value was P40,000 and consideration
received was P50,000) 70,000
The gross estate is:
A. P2,737,000
B. P2,807,000
C. P2,627,000
D. P1,350,000
1. The following are transactions and acquisitions exempt from transfer tax, except:
A. Transmission from the first heir on done in favor of another 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
fideicommisary.
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.
2. Which of the following exempt transmissions will still require inclusion of the property in the
gross estate?
A. Merger of the usufruct in the owner of the naked title.
B. Legacy to a charitable institution whose administrative expenses did not exceed 30% of the
legacy.
C. Transfer from a first heir to a second heir designated by the decedent.
D. Death benefits under the GSIS and SSS.
3. Which of following is not included in the gross estate?
A. Revocable transfer 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 estate and the designation
is irrevocable.
D. Proceeds of life insurance where the beneficiary designated is the mother and the
designation is irrevocable.
4. Proceeds of life insurance includible in the taxable gross estate:
A. Insurance proceeds from SSS or GSIS.
B. Amount payable to any beneficiary, irrevocable, designated in the insurance policy by the
insured.
C. Amount payable to any beneficiary designated in the insurance policy by the insured.
D. Proceeds of group insurance taken out by a company for its employees.
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1. 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 time the return is due.
C. In real property, the zonal value, which may be higher than the fair market value.
D. In the case of shares of stock, at book value.
2. Real proper with a cost of P300,000 and a fair market value at the time of death of
P1,000,000, but subject to a mortgage of P200,000
A. Shall be in the table net estate at P100,000.
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 P1,000,000
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1. 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.
2. Which statement 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. Proper under (a) may be conjugal or community when expressly declared by the [P]
benefactor as conjugal or community
3. One of the following statements is wrong:
A. Amounts receivable under Republic Act 4914, and during the marriage, are conjugal
properties.
B. Income out of the labor of the husband is conjugal property.
C. Income out of the 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 a gain of P400,000. The gain is conjugal
property.
4. A citizen of the Philippines and a resident of the United State, under the system of conjugal
partnership of gains, died in the United States and was shipped to and buried in the Philippines.
He had, among others, the following data:
Real property in the Philippines (inherited 3-1/2 years ago,
with a fair market value of P500,000 when inherited) P600,000
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
Claim against an insolvent person in the Philippines 100,000
A. P800,000
B. P4,000,000
C. P3,900,000
D. P900,000
5. A citizen and resident of the Philippines died on October 5, 2018. He was married and the
property relationship during the marriage was the absolute community of property. He left
behind properties with market values as follows:
Agricultural land P100,000
House and lot acquired by inheritance before the marriage 4-1/2 year
ago, used as family
home (with a fair market value of P420,000 and a mortgage of P120,00
when acquired;
P20,000 was paid by the decedent before he died) 500,000
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 use 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 years ago and before the marriage (current account) 40,000
Other properties:
Owned before the marriage 90,000
Acquired during the marriage 20,000
A. P1,560,000
B. P1,100,000
C. P2,660,000
D. P3,660,000
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Items 1 through 3 are based on the following information:
A resident citizen died with properties constituting his gross estate of P8,000,000. Actual funeral
expenses amounted to P220,000 and claims against the estate amounted to P1,200,000.
1. The allowable deduction for funeral expenses is:
A. P220,000
B. P250,000
C. P200,000
D. None
2. The taxable net estate is:
A. P1,580,000
B. P1,800,000
C. P6,580,000
D. P6,800,000
3. The distributable estate was diminished by:
A. P1,420,000
B. P1,400,000
C. P1,400,000
D. P6,420,000
4. Statement 1: Losses can be deducted only if incurred during the settlement of the estate.
Statement 2: Losses can be deducted only if incurred prior to the last day for the filling of the
estate tax return and payment of the estate tax.
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 the second statement is true.
5. 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. Should be of property included in the Philippines gross estate.
D. Must be sustained during the settlement of the estate.
6. A resident Filipino, died on November 5, 2018 and his estate incurred losses as follows:
1st loss: From fire on February 2,2018 of improvement on his property not compensated by
insurance.
2nd loss: From flood on February 25, 2019 of household furniture also not compensated by
insurance
A. 1st loss is not deductible and 2nd loss is deductible.
B. Both losses are deductible from gross estate.
C. Both losses are not deductible.
D. 1st loss is deductible and 2nd loss is not.
7. Which of the following statements is wrong? A claim against an insolvent person, with no
properties whatsoever:
A. Is included in the gross estate.
B. is not included in the taxable net estate.
C. If arising out of a debt instrument of the insolvent, the debt instrument must be notarized.
D. Needs no preliminary filing of a case against the insolvent person.
8. One of the following statements is wrong. Claims against insolvent persons:
A. Should always be included in the gross estate.
B. If entirely uncollectible may be omitted in the computation of the taxable net estate.
C. Is a deduction even if the debtor had some properties.
D. Can be a deduction even if secured by a mortgage.

9. Alicia died with a receivable from Bertol. Bertol 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 Alicia. The estate of Alicia has
a deduction for claim against insolvent person of:
A. P60,000
B. P41,250
C. P20,000
D. P0
10. The following are the requisites in order that claims against the decedent’s estate may be
deductible except:
A. They must be existing against the estate.
B. They must have been prescribed.
C. They must be reasonably certain as to amounts.
D. They must be enforced by the claimants.
11. 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 a 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.
12. Kenkoy inherited property on November 1,2017, with a fair market value and a mortgage at
that time of P200,000 and P100,000, respectively. He married on January 10, 2018, under the
property relationship of conjugal partnership of gains. On March 5,2019, 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
B. P100,000
C. P300,000
D. None of these
13. 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.
14. 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 Philippines gross estate.
15. Which of the following is deductible from the gross estate?
A. Income tax paid on income received after death.
B. Donor’s tax accrued prior to death.
C. Property taxes not accrued prior to death.
D. Estate tax paid to a foreign country.
16. Which of the following is not a deduction from the gross estate under the National Internal
Revenue Code?
A. Taxes
B. Losses
C. Legacy to the government
D. Legacy to a charitable institution.
17. Which is wrong? Deduction 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 any kind of transfer to the government for public purpose.
D. Will not included legacies to charitable institutions.
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1. 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 P200,000
2. The following are requisites for vanishing deduction to be allowable except one:
A. The estate tax of the prior succession must have been paid.
B. The present decedent died with five (5) years from date of death of the prior decedent.
C. The property with respect to which deduction is sought for can be identified as one inherited
by the present decedent.
D. The property must have formed part of the gross estate situated in the Philippines of the
prior decedent.
3. Which of the following statement is wrong? Property subject to vanishing deduction should
be:
A. If the decedent was a citizen or resident of the Philippines, the property should be located in
the Philippines.
B. If the decedent was not a citizen nor should resident of the Philippines, the property be
located in the Philippines.
C. If the decedent was not a citizen but a resident of the Philippines, the property should be
located in the Philippines.
D. If the decedent was a citizen and resident of the Philippines, the property may be located
anywhere.
4. One of the following statements is wrong. Vanishing deduction shall be allowed to the estate
of a resident citizen:
A. As long as the property is included in the gross estate.
B. If no vanishing deduction was allowed to the estate of the prior decedent.
C. Even if the grantor of the property is still alive
D. Even on substitute property
5. A resident decent, during his lifetime, was under the conjugal partnership of gains. Among
his allowable deductions from the gross estate is vanishing deduction and following:
Funeral expenses P80,000
Judicial expense 100,000
Claims against conjugal properties 120,000
Mortgage on exclusive property 40,000
Bequest to charitable institution 5,000
Bequest to the Philippines Government 60,000
Medical expenses 300,000
Amount received under R.A. 4917 60,000
In the formula for vanishing deduction where:
Initial basis of property X Deduction

Gross estate
The multiplier “deduction” is:
A. P220,000
B. P280,000
C. P400,000
D. P765,000
6. A citizen of the Philippines and resident of Baguio City, died testate on May 10,2018. Among
his gross estate are properties inherited from his deceased father who died on April 4,2015.
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.
7. Statement 1: For a vanishing deduction, there should always be two deaths with five years
from receipt of property.
Statement 2: For two acquisitions by gratuitous title at different dates, but both within five
years to present death, there may be one consolidated computation for the vanishing
deduction.
8. 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 1 ½ 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
Father) 1,500,000
Claims against conjugal properties 600,000
Unpaid mortgage on the land and build inherited (from an

original of P600,000 when inherited) 100,000
The vanishing deduction is:
A. P1,530,000
B. P1,080,000
C. P450,000
D. P1,300,000
9. Statement 1: Vanishing deduction for the estate of a non-resident, not citizen of the
Philippines, is allowable only if the property is located in the Philippines
Statement 2: Deduction for transfers for public purpose for the estate of a non-resident, not
citizen of the Philippines, is allowed only if the property is located in the Philippines.
A. Both statements are correct.
B. Both statements are wrong.
C. The first statement is correct and the second statement is wrong.
D. The first statement is wrong and the second statement is correct.
10. Which statement is wrong? For a non-resident, not citizen of the Philippines:
A. There can be a special deduction from the gross estate.
B. There can be a deduction for funeral expenses.
C. There can be a vanishing deduction.
D. There can be a deduction for transfer for public use.

1. Only one statement is correct. Deduction for family home of resident citizen or resident alien
decedent:
A. Shall be allowed if the family home is in the Philippines.
B. Shall be at a maximum of P10,000,000, based on cost.
C. may be allowed for two family homes (one in the City and another in the Province), both in
the Philippines and with certification each of the Barangay Chairman.
D. Shall be deducted at lesser than P10,000,000if, with vanishing deduction and unpaid
mortgage or indebtedness, the value of the family home is already reduce to zero.
2. 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 of their aggregate value does not exceed
P10,000,000.
C. Deduction may be claimed for a family home of a non-resident citizen of the Philippines
located outside the Philippines.
D. A family home is always conjugal/community property.
Items 3 and 4 are based on the following information:
A. Filipino decedent died single (but head of family), leaving a family home which consists of a
piece of land that he inherited 3- ½ years ago (with a value at that time of P6,000,000) with
fair market value of P8,000,000 at the time of his death, and a house thereon which he built at
cost of P6,500,000 and a fair market value at the time of his death of P4,500,000. Other
properties in his gross estate have a fair market value of P5,500,000. Unpaid obligations at the
time of his death amounted to P3,000,000
3. The vanishing deduction is:
A. P2,000,000
B. P5,000,000
C. P4,000,000
D. P2,250,000
4. The total deduction for family home is:
A. P4,500,000
B. P5,500,000
C. P10,000,000
D. P12,500,000
5. 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 P5,000,000
Family home built by the spouses on the inherited land 8,000,000
Deduction for family home is:
A. P8,000,000
B. P9,000,000
C. P10,000,000
D. P13,000,000
6. Statement 1: The standard deduction from the gross estate is always P5,000,000, whether
the decedent was married or not.
Statement 2: For a married person with exclusive and conjugal/community properties, the
standard deduction need not be classified as exclusive conjugal deduction.
7. A, non-resident, not citizen of the Philippines, single, who died with gross estate in the
Philippines of P4,000,000 and out the Philippines of P6,000,000 left the following obligations
and charges:
Medical expenses, Philippines, in the year of death P1,000,000
Funeral expenses, foreign 800,000
Claim against insolvent person, Philippines 250,000

Judicial expenses of testamentary proceedings, Philippines 300,000
Judicial expenses of testamentary proceedings, foreign 350,000
Other claims against the estate, Philippines 900,000
Transfer to the Philippines Government, for public use of property
in the foreign country 400,000
Unpaid taxes, foreign country 20,000
Mortgage payable foreign country 180,000
Losses, Philippines 100,000
The deduction from the Philippines gross estate is:
A. P580,000
B. P1,080,000
C. P1,450,000
D. P980,000
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A citizen of Philippines and a resident of the United State, under the system of conjugal
partnership of gains died in the United States, and was shipped to and buried in the Philippines.
He had the following data:
Real property in the Philippines (inherited 3 ½ years ago,
with a fair market value of P9,000,000 when inherited) P11,000,000
Real property in the U.S., used as family home 13,000,000
Tangible personal properties in the Philippines 200,000
Tangible personal properties in the United States 700,000
Funeral expense in the United States 110,000
Funeral expense in the Philippines 100,000
Unpaid obligations 600,000

Claim against an insolvent person in the Philippines 100,000
Estate tax paid to the United States 120,000
1. The gross estate is:
A. P3,520,800
B. P23,000,000
C. P24,900,000
D. P25,000,000
A. P2,565,000
B. P2,650,800
C. P9,150,800
D. P7,650,800
A citizen and resident of the Philippines, died on October 10,2018, leaving the following
properties, rights obligations and charges:
Conjugal properties (including a family home of
P22,000,000 and amount receivable under
Republic Act 4917 of P200,000) P26,000,000
Exclusive properties (including cash of P500,000
inherited 4 ½ years ago) 4,000,000
Medical expenses unpaid, January 2018 600,000
Funeral expenses 350,000
Judicial expenses 500,000
Other obligations 300,000
3. The deduction for family home is:
A. P1,000,000
B. P5,000,000
C. P10,000,000
D. P11,000,000
A. P99,000
B. P100,000
C.P495,000
D. P500,000
A. P651,000
B. P751,000
C. P1,651,000
D.P1,751,000
A citizen of the Philippines, single but head of family, died a resident of the United States,
leaving the following properties, expenses and obligations:
Real property in the United States P14,000,000
Personal property in the Philippines inherited from the father
one and one-half years ago 1,600,000
Family home in the United States 9,400,000
Actual funeral expense paid in the United States 500,000
Other obligations contracted within the last two years 250,000
6. The gross estate subject to Philippines estate tax is:
A. P9,400,000
B. P14,000,000
C. P25,000,000
D. None of these
7. The deduction for family home is:
A. P0
B. P9,400,000
C. P10,000,000
D. None of these
A. P1,080,000
B. P1,267,200
C. P1,280,000
D. None of these
A. P18,482,800
B. P9,082,800
C. P14,082,800
D. None of these
A non-resident, not a citizen of the Philippines, single, 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 obligations 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 Philippine Government of property outside the Philippines of P100,000.
10. The allowable deduction from the Philippine gross estate is:
A. P162,500
B. P562,500
C. P850,000
D. None of these
11. The taxable net estate in the Philippines is:
A. P437,500
B. P837,500
C. P937,500
D. None of these
12. A non-resident Australian citizen, died leaving properties and obligations in Australia and in
Philippines. Data on his properties expenses and obligations follow:
Properties in Australia (inherited within the
Year of which P1,000,000 is family home) P3,000,000
Properties in the Philippines 1,000,000
Funeral expenses in Australia 250,000
Unpaid obligation in Australia 700,000
Medical expenses in the Philippines 200,000
The taxable net estate in the Philippines is:
A. Exempt
B. P500,000
C. P325,000
D. P825,000
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1. Estate tax credit for foreign estate tax paid is available to the estate of:
A. Resident or citizen of the Philippines
B. All kinds of decedents
C. Non-resident alien
D. None of these

Country A: Net estate of P100,000 and estate tax paid of P4,500; Country B: Net estate of
P200,000 and estate tax paid of P15,000; Philippines: Net estate of P200,000. The decedent
was a citizen and resident of the Philippines.
2. The estate tax credit for foreign estate taxes paid is:
A. P19,500
B. P8,500
C. P18,000
D. P16,500
3. The estate tax still due after credit for foreign estates taxes paid is:
A. P10,500
B. P13,500
C. P12,000
D. P21,000
Philippines Foreign
Gross estate P6,000,000 P4,000,000
Claims against the estate 1,000,000 1,000,000
4. How much was the Philippines estate tax due if the decedent was a non-resident, not citizen
of the Philippines, and there was a foreign estate tax payment of P200,000?
A. P0
B. P258,000
C. P172,800
D. P88,000
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1. Which statement is wrong? An estate tax return is required to be filed:
A. When the gross value of the estate exceeds P5,000,000.
B. Where the gross estate consists of registrable motor vehicle and shares of stock.
C. Where the gross estate includes registered real property.

D. In all cases of transfers subject to the tax.
2. When an estate is settled extra judicially, the estate tax return may be filed and the estate
tax paid:
A. By any of the heirs, with a right of reimbursement from the other heirs
B. Only by the heir with written authority from the other heirs.
C. By each of the heirs, the payment being for his distributive share in the estate tax.
3. The estate tax return should be accompanied by a certificate of an independent CPA if the
gross estate is:
A. P2,000,000
B. P5,000,000
C. Over P5,000,000
D. Below P5,000,000
4. Statement 1: The estate tax return should be filed with the Authorized Agent Bank, Revenue
District Officer, Collection Agent or duly authorized Treasurer of the City or Municipality in which
the decedent was domiciled at the time of his death.
Statement 2: If the decedent was a non-resident, not a citizen of the Philippines, the estate tax
return may be filed with Commissioner of Internal Revenue.
5. Statement 1: Payment by installment of the estate tax due shall be allowed within 2 years
from the statutory date for its payment without any civil penalty and interest.
Statement 2: The estate tax return may be signed by any one of the heirs if the estate is not
settle judicially.

6. Statement 1: The payment of the estate tax may be extended for period not exceeding five
years if there is judicial settlement of the estate.
Statement 2: The payment of the estate tax may be extended for a period not exceeding two
years if there is extrajudicial settlement of the estate.
7. Which of the following statements is not correct?
A. No judge shall order a distribution of any part of the estate to an heir without a certification
from the Bureau of Internal Revenue that the tax has been paid.
B. If a bank has knowledge of the death of a person who maintained a deposit account alone or
jointly with another it shall allow any withdrawal from said deposit account but subject to a final
withholding estate tax of 6%.
C. No Register of Deeds shall transfer to any heir the title of a decedent to real property without
a certification from the Bureau of Internal Revenue that the tax has been paid.
D. None of the above
8. An executor or administrator, after paying the estate tax, and to escape a future liability for a
deficiency estate tax, must secure a written discharge from personal liability from:
A. The heirs
B. The court where the estate was being settle
C. The Commissioner of Internal Revenue
D. None of these
9. Which of the following statement 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 heir 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 state, and 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.
10. 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 shall be reduce 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.
11. Statement 1: When an estate under administration has income-producing properties, the
annual income of the estate become part of the estate subject to the estate tax.
Statement 2: When an estate under administration has income-producing property, the annual
income is not part of the estate subject to estate tax but when distributed in the year that the
income was earned becomes income to the heir subject to income tax.
C. The 1st statement is correct and 2nd is wrong.
D. The 1st statement is correct and the 2nd is correct.
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1. Taxpayer died February 2, 2018. No judicial proceedings were instituted for the settlement of
his estate. Return was filed and tax of P60,000 was paid May 2, 2019. (Assume a 10% legal
interest rate for loans.)
The estate tax due, including increments, as of May 2, 2019 is:
A. P78,000
B. P78,750
C. P93,000
D. P94,500
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1. Statement 1: A donation inter vivos is an act of liberality where a person disposes of

gratuitously property in favor of another who accepts it.
Statement 2: A donation mortis causa is an act of liberty where a person disposes of

gratuitously property in favor of another who accepts it.
C. First statement is true while second statement is false.
D. First statement is false while second statement is true.
2. Which of the following statement is wrong? A distinction between a donation inter vivos and
donation mortis causa is:
A. The first takes effect during the lifetime of the grantor while the second takes effect after the
death of the grantor.
B. The first is subject to the donor’s tax while the second is subject to the estate tax.
C. The first always requires a public document while the second may not require a public
document.
D. The first is valued at fair market value at the time the property is given while the second is
value at fair market value at the time of the death of the grantor.
3. Who is not subject to the donor’s tax?
A. An individual making a donation.
B. A corporation making a donation.
C. A partnership making a donation.
D. An individual who pays premiums on the life insurance of another.
4. The following are the requisites of a donation for purpose of the donor’s tax, except one:
A. Capacity of the donor

B. Delivery of a the subject matter of gift
C. Capacity of the done
D. Donative intent
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1. 1st statement: A sold his car (cost P300,000) to B for P500,000. The car has a fair market
value of P900,000 at the time of sale. The difference of P400,000 in selling price and fair
market value constitutes a gift subject to donor’s tax.
2nd statement: C purchase a lot and cottage in Alaminos City (home of 100 Islands) in 2017 for
P1,000,000. It was used as a summer vacation house by his family. In 2018, C decided to sell
the lot and cottage to D for P2,000,000 although its present market value is P2,500,000. The
P500,000 difference in selling price and market value is a gift but not subject to donor’s tax.
2. E sold his car to F. E’s car cost P300,000 and has a fair market value of P400,000 at the time
of sale. The car was sold for P100,000. For donor’s tax purposes, which of the following
statements is correct?
A. There is a taxable gift of P300,000.
B. There is a taxable gift of P200,000
C. The transfer is for insufficient consideration, hence not subject to gift tax.
D. The transfer involves a personal property, hence not subject to gift tax.
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1. Statement 1: the gross gifts of a donor who is a citizen or resident alien will include all
properties, regardless of location.
Statement 2: The gross gifts of a donor who is a non-resident, not citizen of the Philippines, will
include only property located in the Philippines.

C. First statement is correct while second statement is wrong.
D. First statement is wrong while second statement is correct.
2. The reciprocity clause in the donor’s tax law applies to a:
A. Non-resident citizen
B. Resident alien
C. Resident citizen
D. Non-resident alien
3. In the previous question, the reciprocity clause applies to:
A. Real property
B. Intangible personal property
C. Tangible personal property
D. All of these
Questions 4 and 5 are based on the following data:
F made the following donations.
- To G, a land worth p450,00 in Cubao
-To H, Jewelry worth P100,000 in Hongkong
-To I, PLDT shares amounting to P150,000
-To J, a building in Italy, P1,600,000, mortgaged for P50,000 assumed by the done.
-To K, land in Pampanga, P300,000.
-P300,000 cash, PNB New York to L.
He also transferred the following properties:
Selling Price FMV

Car, Phil. P200,000 P300,000
Car, USA 300,000 200,000
Land, Phil. 1,000,000 2,000,000
4. If he a resident alien his gross gift is:

A. P2,100,000
B. P1,950,000
C. P2,950,000
D. P3,000,000
5. If he is non-resident Japanese, and there is reciprocity law, his gross gift is:
A. P850,000
B. P650,000
C. P1,050,000
D. P700,000
6. Which of the following statements is correct? A donation vivos by husband and wife, jointly
during the marriage
A. I a donation of conjugal property that will require one computation of the donor’s tax, if the
spouses are under the system of conjugal partnership of gains.
B. Is a donation of community property that will require one computation of the donor’s tax, if
the spouses are under the system of absolute community of property.
C. Is a donation of exclusive property by either spouse that will require one computation of the
donor’s tax, if the spouses are under the system of conjugal partnership of gains.
D. Is a donation of each spouse to the extent of one-half that will require separate computation
for two donor’s taxes, under whichever property relationship exist between the spouses.
----------------------------------------------------
1. Situation 1: M, in trading business, had a receivable of P150,000 from N. Without exerting

utmost effort utmost effort to collect, M cancelled the indebtedness of N.
Situation 2: O sold to P personal property worth P200,000 for a consideration of P50,000, to

take effect immediately upon receipt of the consideration. Which statement is correct?
A. Situation 1 involves a donation of P150,000 and should be covered by a donor’s tax return
within thirty days from the date of cancellation of the indebtedness.
B. Situation 1 is bad debt expense of the business and should not be treated as involving a
taxable donation.
C. Situation 2 shall be considered a bad bargain and not involving a taxable donation.
D. Situation 2 involves a donation of P200,000 and should be covered by a donor’s tax return
within thirty days from the date of the sale.
2. Q sold his land (capital asset) on September 5, 2018 to his best friend for P300,000 when the
market value was P600,000. Cost of the land to taxpayer was P100,000. He gave a commission
of P20,000 to the broker and spent for documentary stamp taxes and transfer fees the amount
of P4,000. The internal revenue tax payable is:
A. Final capital gain tax of P36,000.
B. Final capital gain tax of P18,000.
C. Donor’s tax of P3,000.
D. Donor’s tax of 18,000.
----------------------------------------------------
1. All of the following statements are correct, except one. If the donor is a nonresident, not
citizen of Philippines:
A. Property situated abroad but donated to a citizen of the Philippines will not pay the donor’s
tax.
B. Property situated in the Philippines but donated to done abroad will pay the donor’s tax.
C. Property outside the Philippines donated on account of marriage to a resident of the

Philippines will pay a donor’s tax.
D. Property in the Philippines with a value of P450,000 donated to a citizen of the Philippines
will pay a donor’s tax.
2. Three of the following are exempt or excluded from the donor’s tax. Which is the exception?
A. P300,000 cash given by a nonresident alien donor to his legitimate son who is getting
married in the Philippines to a Filipina.
B. P100,000 cash given by a resident alien donor to a charitable institution organized as a

nonstick entity
C. Donation of a condominium in Hongkong to a Filipina by a British national not residing in the

Phils.
D. P150,000 donation to a nonprofit school
3. On a contribution to the Roman Catholic Church by an individual, which of the following

correctly state/s the rule/s in computing the donor’s tax?
A. There is no deduction from the gross gift.
B. It is not considered a gift on which there will be a donor’s tax.
C. it is considered a gross gift and a deduction from the gross gift.
D. It pays the donor’s tax at the time of the contribution at the rate of 6%.
4. Since a donation to a charitable institution has deduction without any ceiling,
Statement 1: The net gift will be zero, so that in computing the donor’s tax, the donation may
be omitted in gross gift if it is likewise omitted in deductions.
Statement 2: The gross gifts should be reported and deduction shall be claimed.
5. Which of the following donations is not entitled to deduction?
A. Donation to charitable institution
B. Donation to social welfare institution
C. Donation to scientific organization
D. Donation to a political party
6. First statement: Gift in favor of non-profit educational and/or religious organization are
exempt from donor’s tax.
Second statement: Transfers to non-profit educational and/or religious organization are exempt
from income tax also.
B. Only the first statement is correct.
C. Both statements are incorrect.
D. Only the second statement is correct.
7. R donated a total amount of P1,000,000, ½ to the Quezon City Hall and ½ to a charitable
institution, TAHANANG WALANG HAGDAN. Upon inquiry, it was verified that the charitable
institution’s total receipts from donation amounted to P10M and its total administrative
expenses reached P4.0M. R can claim a total deduction/exemption of:
A. P250,000
B. P500,000
C. P1,000,000
D. None
8. All of the following except one are exempt from gift tax under special laws:
A. Donation to Integrated Bar of the Philippines.
B. Donation to Development Academy of the Philippines.
C. Donation to Philippine Institute of Certified Public Accountants.
D. Donation to International Rice Research Institute.
9. Which of the following examples is not taxable?
A. A Filipino citizen donated a parcel of land located in the United States to S, a non-resident
alien.
B. On June 1, 2018, T made a gift of P300,000 to his daughter on account of her marriage
celebrated on May 1,2017
C. U gives his wife a diamond ring worth P500,000 as a birthday gift.
D. V and W are the only heirs of X. V renounces his share of inheritance in favor of W.
10. One of the following statements is false:
A. Contracts of donation between husband and wife are void in all cases.
B. A donation by Mocha Uson to Digong, the President of the Philippines, in view of his public
office is void in all cases.
C. Donations between persons guilty of adultery or concubinage are void.
D. Donations to conceived or unborn children are valid.
----------------------------------------------------------------
1. Which statement is wrong? The donor’s tax on donations to non-strangers:
A. Is computed on the basis of the total net gifts each calendar year.
B. Is computed and paid within thirty days from the date of donation.
C. Is computed separately for each spouse in case of a joint donation.
D. Is computed at once bases on total gift without any exemption.
2. Statement 1. All gifts made on the same date pay one donor’s tax only.
Statement 2. A donation to a legitimate child on account of marriage, when the property

donated was already delivered, will not pay the donor’s tax if the donee’s marriage did not
actually take place.
3. In computing the donor’s tax on a subsequent donation, the donor must also consider:
A. All prior net gift during his lifetime.
B. All prior net gifts during the calendar year.
C. The present and the immediately preceding donation.
D. Only the present donation.
4. Donations on one date by H, a father, of property and cash, as follows: To I, a legitimate

daughter, on account of marriage, land with a fair market value of P500,000 but subject to a
mortgage of P100,000 which is assumed by I. To J, a legitimate son, on account of marriage,
cash of P200,000. The taxable net gifts made are:
A. P350,000
B. P580,000
C.P600,000
D. P700,000
5. In 2018, K made the following gifts:
-On June1, 2018, P150,000 to L his son, on account of his marriage celebrated on May
1, 2017;
-On July 10, 2018, a parcel of land worth P180,000 to his father, subject to the
condition that the father would assume the mortgage indebtedness of K in the amount of
P40,000
-On September 30, 2018, P150,000 dowry to his daughter M, on account of her
scheduled marriage on October 25,2018, and another wedding gift worth P20,000 on November
23, 2018
How much is the total taxable net gift?
A. P200,000
B. P210,000
C. P450,000
D. P460,000
Questions 6 through 8 are based on the following data:
Mr. and Mrs. W gave the following donations:
Date Amount Donee
3/01/2018 P250,000 X, legitimate daughter
5/01/2018 200,000 Y, legitimate daughter, on account of marriage on June 1, 2018
7/01/2018 200,000 Z, legitimate daughter
6. Gift tax payable by Mr. W on the first donation is:
A. None
B. P7,500
C. P14,400
D. P15,000
7. Gift tax payable by Mrs. W on her second donation is:
A. None
B. P6,000
C. P12,000
D. P13,500
8. The gift tax due by both Mr. and Mrs. W on 7/01/2018 is:
A. P4,500
B. P9,000
C. P19,500
D. P39,000
Question 9 through 11 are based on the following data:
Mr. T, widower, gave the following donations:
Date Amount Donee
1/03/2018 P150,000 U, sister, gave on account of marriage on January 1,2018
2/05/2018 150,000 V, legitimate child, given on account of marriage on May 5,2018
6/05/2018 150,000 W, legitimate child, given on account of marriage on June 2,2017
9. Total exemption that may be claimed by the donor on the three donations is:
A. P10,000
B. P260,000
C. P250,000
D. None
10. Gift tax on the total net gift is:
A. P11,400
B. P12,000
C. P26,400
D. None
11. Gift tax due on the last donation is:
A. P3,000
B. P9,000
C. P12,000
D. None
12. N made donations to O and P, son and daughter-in-law, on account of marriage, of real
property with a fair market value of P1,500,000, but subject to a mortgage of P300,000 which
was assumed was assured by the donees.
The total donor’s tax is:
A. P28,500
B. P57,000
C. P72,000
D. P90,000
Questions 13 through 16 are based on the following data:
Mr. and Mrs. K, made the following donations.
1/25/2018 - To L, their legitimate son, on account of marriage last 1/20/2017, car worth
P400,000, with P200,000 mortgage, ½ was assumed by the donee.
5/31/2018 -To M, brother of Mr. K, his capital property worth P200,000 on account of
marriage 6 months ago of M with a condition that the done will pay the donor’s
tax thereon.
7/15/2018 -To N, daughter of Mrs. K former marriage, on account of her marriage 12

months ago, Mrs. K paraphernal property worth P100,000.
8/20/2020 -To N on account of the same marriage, conjugal car of the couple worth
P400,000 with P200,000 unpaid mortgage, ½ assumed by N. And P500,000
worth of land to their four sons on account of their graduation, 20% of which
was owned by their Kumpadre who agreed to donate his share thru a public
document.
13. The gift tax due of Mr. K as of May 31, 2018 is:
A. P3,000
B. P6,000
C. P12,000
D. P15,000
14. The gift tax due of Mrs K as of July 15, 2018 is:
A. None
B. P9,000
C. P12,000
D. P15,000
15. The gift taxes due of Mr. and Mrs. K on Aug. 20,2018 are:
A. P9,000 & P9,000, respectively
B. P12,000 and P12,000, respectively
C. P21,000 and P21,000 respectively.
D. P42,000 and P36,000 respectively.
16. The gift tax due of their Kumpadre is:
A. P15,000
B. P9,000
C. P6,000
D. None
Q, a citizen of the Philippines, made the following donations is 2018:
01/10/2018: To R, a legitimate daughter, on account of marriage, cash of P200,000
05/10/2018: To S, a legitimate son, on account of marriage, property with a fair market value
of P200,000 and a mortgage thereon, which was assumed by S, of P40,000
10/10/2018: To T, a friend, an ordinary donation of P10,000
12/10/2018: To U, a niece, a donation on account of marriage of P15,000
17. The donor’s tax on the donation of January 10, 2018:
A. None
B. P6,000
C. P11,400
D. P12,000
18. The donor’s tax on the donation of May 10,2018:
A. P6,600
B. P9,600
C. P12,000
D. P21,600
19. The donor’s tax on the donation of October 10, 2018:
A. P24,000
B. P9,600
C. P7,200
D. P600
20. The donor’s tax on the donation of December 10,2018:
A. P600
B. P900
C. P1,500
D. P8,100
Mr. and Mrs. V, citizens and residents of the Philippines, made the following donations:
06/06/2018 : To W, a legitimate son, on account of marriage. P460,000
To X, a legitimate daughter, property with mortgage of
P4,000 which was assumed by X. Fair market value. 20,000
10/08/2018 :To Y, a legitimate son of Mrs. V, by a prior marriage, on
Account of marriage 60,000
04/04/2019 :To the Dagupan Catholic Church 10,000
To Z, a family friend 4,000
21. On the donation of June 6, 2018, the donor’s tax of Mr. V is:
A. None
B. P13,680
C. P14,160
D. P14,280
22. On the donation of October 8,2018, the donor’s tax of Mr. V is:
A. P2,760
B. P2,880
C. P1,080
D. None
23. On the donation of April 4, 2019, the donor’s of Mr. V is:
A. None
B. P120
C. P300
D. P420
24. Mr. and Mrs. J made the following donations out of their community property during the
year.
Jan.15, 2018 :To K, legitimate son, on account of marriage on January 14, 2017, P300,000
cash
Mar. 15, 2018 : To L, legitimate daughter, on account of passing the CPA Board Examination,
car with FMV of P500,000
June 30, 2018 :To M, Mr. J’s brother, who is going abroad, P100,000 cash.
Sept. 12, 2018 :To N, Mrs. J’s favorite hair stylist, on account of marriage, P10,000 cash.
Nov. 15, 2018 : To O, their favorite helper, who is getting married, P10,000 cash.
The total tax liability of the husband and wife for all of their donations is:
A. P55,200
B. P40,200
C. P25,200
D. P12,600
-----------------------------------------------------------------
1. Statement 1. Tax credit for donor’s tax paid to foreign country is allowed only if the donor is
a citizen or resident of the Philippines.
Statement 2. There can be a donor’s tax paid to a foreign country even if the citizen or resident
donor had no donation of property in the Philippines.
2. A, a citizen and resident of the Philippines, made donations on January 10, 2018, as follows:
Donation to B, a legitimate son, on account of marriage,
to be celebrated on February 14,2018, property in the United
States (on which a U.S. donor’s tax of P9,000 was paid), with
a fair market value of P300,000
Donation to B, cash in the Philippines of 200,000
Donor’s tax credit for donor’s tax paid to the U.S.:
A. P1,500
B. P7,500
C. P9,000
D. None of these
3. Donations by a citizen to be a legitimate child of:
Property in the Philippines P400,000
Property outside the Philippines, on account of marriage 200,000
Donor’s tax paid to foreign country 6,000
Donor’s tax due after tax credit for foreign donor’s tax paid:
A. P13,000
B. P14,000
C. P15,000
D. None of these
Questions 4 and 5 are based on the following data:
Mr. O, resident, made the following donations for the year 2018:
April 15 -To P, legally adopted child on account of marriage last week, car worth
P700,000 in Philippines.
-To Q, his daughter, car in USS worth P300,000. They paid $180 donor’s tax in
US. ($1-P51)
July 20 -To R niece Manila, P200,000 worth of personal property.
-To S, legitimate daughter on account of marriage in Cebu, last July 18, 2017,
car worth P400,000 but mortgage for P200,000, ½ of which was assumed by the done.
4. The gift tax due after tax credit on April 15,2018 is:
A. P28,500
B. P30,000
C. P31,500
D. P35,820
5. The gift tax due on July 20, 2018 is:
A. P28,500
B. P30,000
C. P31,500
D. P35,82
Question 6 through 8 are based on the following data:
During the current year, Mr. and Mrs. C, nonresident citizens, donation the following:
September 25: To D, a legitimate child , on account of marriage last month, a conjugal property
located in the Philippines, FMV, P400,000. To E, niece of Mr. C, on account of marriage, a
property location in USA exclusively owned by the husband, FMV, P200,000 (gift tax in USA,
P5,500)
October 9: To F, a legitimate child, conjugal property in the Philippines, FMV, P200,000

6. The gift payable on the September 25 gifts of the husband is:
A. P3,500
B. P4,500
C. P5,000
D. P5,500
7. The gift tax payable on the October 9 gift of the husband is:
A. P3,500
B. P4,500
C. P5,000
D. P5,500
8. The gift tax payable on the October 9 of the wife is:
A. None
B. P3,000
C. P15,000
D. P18,000
9. L, a citizen and resident of Philippines, made the following donations on February 14, 2018:
To M, a legitimate child, on account of marriage on the same
day, property in Japan, which paid the Japanese government a
donor’s tax of P25,000 and with a fair market value of P600,000
To N, a friend, ordinary donation of property in the Philippines,
subject to a mortgage of P60,000 which was assumed by N. Fair
market value of the property 360,000
The tax credit for foreign donor’s tax paid is:
A. P14,000
B. P25,000
C. P36,000
D. P39,000
10. Mr. O made the following gifts to his relatives:
Phil. USA UK Italy
Gross gift P750,000 P500,000 P250,000 P500,000
Deductions 250,000 200,000 150,000 150,000
Tax paid 16,000 6,000 15,000
The gift tax due after credit is:
A. P21,200
B. P23,000
C. P24,000
D. P25,000
11. On one date, a resident alien donor made donations of property in the Philippines to a non-
stranger and of property outside the Philippines to a stranger. In taking a credit for the foreign
donor’s tax paid, the credit shall be against the Philippines donor’s tax on the:
A. Donation to the non-stranger.
B. Donation to the stranger.
C. Donation to the non-stranger and stranger.
D. None of these.
---------------------------------------------------
1. One of the following statements is correct. Which is it? In the preparation of the donor’s ta
return.
A. Dowries are no longer allowed as deductions from the gross gifts.
B. Dowries are not shown anymore as gross gifts and as deductions.
C. Spouses making donations of conjugal or community property prepare one donor’s tax
return.
D. Donor’s tax on donations to strangers and to non-strangers are computed and shown in
separate return.
2. One of the following statements is correct. The donor’s tax return:

A. Must be filed within thirty days after the end of the calendar year.
B. Must be filed within thirty days from the date of donation.
C. Must be accompanied by a certificate of an independent Certified public Accountant if the

gross gift is over P250,000 or more.
D. In the case of husband and wife making donations, one donor’s tax return shall be filed and
signed by either the husband or the wife.
3. W was the President of a highly profitable corporation which was engaged in the marketing
of BMW cars. When W’s daughter got married to the son of a senator, the corporation gave the
newly-wedded couple a brand new BMW sedan worth P2,500,000 and entered the wedding gift
in its books as an advertising expense.
Statement 1: The BMW car is not taxable income to the couple because it is truly a wedding
gift, but they should pay gift tax.
Statement 2: The donor corporation should pay the donor’s tax and deduct it from its gross
income.
4. One of the statements that follow is correct. Which is it? A deed of donation was executed by
G, resident of Dagupan City, in favor of H, a resident of Baguio City. H executed a deed of
acceptance in Baguio City. The donor’s tax return must be filed with the Bureau of Internal
Revenue Office:
A. At the residence of the donor.
B. At the residence of the done.
C. At the residence of the donor or of the done, whichever the donor chooses.
5. Statement 1. A donation on which the donor’s tax was not paid is not a valid donation.
Statement 2. Title to the donated real property cannot be transferred to the done in the
Register of Deeds unless the donor’s tax on the donation had been paid.

6. One of the following statements is wrong:
A. The Commissioner may, in meritorious cases, grant extension of time within which the
donor’s tax return may be filed, and such extension shall not exceed thirty days.
B. The donor’s tax return may be filed in one municipality and the tax paid in another
municipality.
C. When a donor’s tax is assessed by reason of negligence, intentional disregard of rules and
regulations, or fraud on the part of the taxpayer, no extension of time for payment of the tax
may be granted by the Commissioner of Internal Revenue.
D. A gross gift P250,000 for the whole calendar year need not be covered by a donor’s tax
return
--------------------------------------------------------------
1. Statement 1: When a donor’s tax return was filed and it was found by the Bureau of Internal
revenue to have errors which gave rise to a deficiency donor’s tax, the donor may be required
to pay the deficiency although he does not possess or own the property anymore.
Statement 2: The Government is not bound by any agreement between the donor and the done
that the latter shall pay the tax on the donation.
2. One of the following statements is wrong. When a donor with several donations during the
year fails to file the donor’s tax return for each of the dates that donations were made:
A. Such failure shall be cured by filling a donor’s tax return at the end of the year reflecting all
donations made within the year and paying the taxes shown in that one return.
B. Each failure is subject to penalties for non-filing of return and non-payment of the tax on
time.
C. He can voluntarily file late the donor’s tax return for each date that donations were made
and make payments on the tax due shown on each return, with penalties
D. If the different donor’s taxes were not paid on the original due dates because of requests for
extension reasonably filed with the Commissioner of Internal Revenue, each required payment
of tax shall have an extended period of not more than six months.
3. On March 6, 2018, a Filipino citizen donated house and lot with fair market value of P500,000
to his illegitimate child on account of marriage on January 1, 2018. Gift tax return was filed and
tax paid on July 5, 2018. (Assume a 10% legal interest rate for loans).
The donor’s tax due, including increments, as of July 5, 2018 is:
A. P15,000
B. P15,750
C. P19,500
D. P23,250

General Principles-Estate Tax-Donors Tax

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General Principles-Estate Tax-Donors Tax

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1.

A. Liberally in favor of the taxpayer

B. Strictly against the government

C. Liberally in favor of the employer

D. Strictly against the taxpayer

3. One of the characteristics of tax is that it is generally:

4. Which of the following is not an example of excise tax?

C. Real property tax

5. Which of the following is not a scheme of shifting the incidence of taxation?

6. Which of the following distinguishes tax from license fee?

A. Non-payment does not necessarily render the business illegal.

C. Imposed in the exercise of police power.

D. Limited to cover cost of regulation.

7. Value added tax, as to rate, is an example of:

8. The distinction of a tax from permit or license is that a tax is:

A. Imposed for regulation.

B. One which involves an exercise of police power

D. Imposed through the provisions of the Constitution.

10. The basic community tax of P5.00 for an individual is a/an:

12. A tax on business is:

13. Which statement is wrong?

A. A tax is a demand of sovereignty

B. A toll is a demand of ownership

C. A special assessment is a tax

D. Customs duty is a tax

Statement 2: The estate tax is a direct tax.

A. The two statements are correct

B. Statement1 is correct while statement 2 is wrong

C. The two statements are wrong

D. Statement 1 is wrong while statement 2 is correct

17. This is a demand of ownership:

18. Which is not an essential characteristic of tax?

A. It is based on the ability to pay

B. It is generally payable in money

A. It is levied by the legislature

C. It is payable in money or in kind

21. One of the characteristic of tax is that:

A. It is generally based on contract

C. It is generally payable in money

D. Answer not given

A. Imposed for regulation

B. One which involves an exercise of police power.

D. It is an inherent power of the Sovereign State.

24. Which of the following is not a direct tax?

25. Which of the following is not an example of direct tax?

D. Exemptions refer to public property.

29. It is collected for the use of somebody else’s property:

A. PAS/PFRS shall prevail over the Tax Code.

B. Tax Code shall prevail over PAS/PFRS

C. PAS/PFRS and Tax Code shall be both disregarded.

D. The taxpayer may choose between PAS/ PFRS or Tax Code.

2. A successor to an estate, whether in a last will testament or not:

D. Escheated to the state on the increased value

1. Which of following statements is wrong?

A. The intangible personal property is in the Philippines.

C. The tangible personal property is in the Philippines.

3. In computing the gross estate of a decedent:

D. All the above statements are correct

Real property in the United States, inherited from father

one and one-half years ago P2,000,000

Personal property in the Philippines inherited from father 1,600,000

Family home in the United States 1,400,000