TEST 1 THEORY
1.
2.
3.
4.
5.
D
D
C
A
A
6.
7.
8.
9.
10.
C
A
C
C
D
11.
12.
13.
14.
15.
B
D
C
B
C
16.
17.
18.
19.
20.
D
C
A
D
D
21. D
26. A
31. B
36. A
22. B
27. A
32. A
37. A
23. C
28. A
33. D
38. D
24. D
29. C
34. C
39. B
25. D
30. B
35. D
40. D
41. A
46. D
51. A
56. A
42. A
47. B
52. C
57. A
43. D
48. D
53. C
58. D
44. C
49. B
54. D
59. D
45. D
50. C
55. C
60. D
2.
3.
4.
5.
Answer: B
NRA (no
Reciprocity)
P 3,000,000
Resident
or citizen
P
3,000,000
2,500,000
700,000
650,000
350,000
225,000
7,425,000
350,000
.
4,050,000
6.
27
700,000
NRA (with
Reciprocity)
P
3,000,000
700,00
0
.
3,700,00
0
7.
Answer: D
8.
Answer: B
Conjugal
Family home
Exclusive
P
2,650,000
Farm in Batangas
Farm in Guam
Furnitures, Manila
500,000
750,000
125,00
0
80,00
0
18,00
0
500,00
0
300,00
0
150,00
0
110,00
0
1,250,00
0
825,000 ________
6,008,000 1,250,00
0
Bank deposit
Cash (12,000 x 1 )
Car
Interest in partnership
Proceeds of life insurance
Accounts receivable
Patent, U.S.A.
Other personal properties
Total s
Gross estate 7,258,000
9.
Answer: A
Domestic shares
P1,000,00
0
3,000,00
0
Foreign shares
Tangible personal property
Total
Gross estate
4,000,00
0
6,000,0
00
10,000,00
0
6,000,00
0
720,0
00
5,280,0
00
Answer: C
Shares, domestic
Tangible personal property
Gross estate
Less: Deductions (2,000,000/2,500,000 x P500,000)
28
500,00
0
1,500,0
00
2,000,0
00
400,0
00
Net estate
1,600,0
00
Tax on P 500,000
1,100,000 x 8%
Estate tax
P 15,000
88,000
103,000
500,00
0
500,000
1,500,00
0
2,500,00
0
Answer: C
Value at the time of death
1,500,00
0
1,000,00
0
500,00
0
Value of consideration
Amount includible in the gross estate
12.
Answer: D
No amount of money shall be included in the gross estate of the decedent
because the transfer is for an adequate and full consideration. This is despite the
agreement between the seller and the buyer that the transfer shall take effect upon
the death of the seller.
13.
Answer A
Actual funeral expenses
140,00
0
125,0
00
125,0
00
Answer: B
Gross estate
2,500,00
0
Less: Deductions
Funeral expenses
125,0
00
1,125,00
0
1,000,00
0
Other deductions
Standard deduction
Net taxable estate
15.
2,250,0
00
250,0
00
Answer: D
Exclusive real property
750,00
0
29
850,00
0
450,000
30,000
85,000
20,000
Special Standard
Net estate
Less: Share of surviving spouse (1,300,000 135,000)
x
Net taxable estate
16.
150,000
210,00
0
1,000,0
00
Standard deduction
Net taxable estate
Answer: D
Expenses incurred during the wake
Payable to funeral parlor
5% of gross estate (1,700,000 x 5%)
Deductible funeral expense
95,000
20,000
1,360,00
0
2,640,0
00
115,000
85,000
85,000
Answer: C
Loans payable
300,00
0
60,0
00
200,0
00
1,000,00
0
1,560,0
00
Bad debts
RA 4917
Standard deduction
Deductions
19.
(1,000,00
0)
915,000
582,50
0
332,50
0
4,000,00
0
Less: Deductions
Funeral expenses, actual
Other charges
18.
( 135,00
0)
Answer: A
Gross estate
17.
1,300,00
0
2,050,00
0
Answer: B
Unpaid 2007 real estate taxes
Unpaid 2008 real estate taxes
Income tax
Casualty loss
Total deductions
P 40,000
40,000
35,000
450,000
565,000
30
20.
Answer: B
Inherited land (exclusive)
Dwelling house, conjugal (850,000/2)
Family home
21.
P 200,000
425,000
625,000
Answer: B
Conjugal
Family home
Conjugal real estate
Conjugal personal property
Gross estate
Less: Deductions
Ordinary Funeral, actual
Judicial
Unpaid mortgage
950,000
2,000,00
0
2,950,000
120,000
7,000
35,000
Net estate
Net conjugal
1,500,0
00
4,450,00
0
( 162,00
0)
2,950,00
0
202,00
0
2,748,00
0
Share (2,748,000/2)
1,374,0
00
874,00
0
________
40,00
0)
(1,000,00
0)
(1,000,00
0)
2,248,0
00
Standard deduction
Total
Family home
Exclusive
1,500,00
0
Answer: B
Real properties
3,200,0
00
1,100,00
0
1,500,00
0
800,000
50,000
100,00
0
6,750,00
0
Family home
House and lot, Australia
Other personal properties
Shares of stocks
Claims against insolvent persons
Gross estate
31
23.
Answer: C
Funeral expenses
120,0
00
100,000
30,000
1,000,00
0
1,250,00
0
Bad debts
Unpaid mortgage
Family home
Total deductions
24.
Answer: D
Conjugal
Family home
Conjugal personal property
2,000,000
800,000
90,000
124,500
16,000
1,000,000
1,000,000
Net estate
Less: Share of surviving spouse
Gross conjugal
Less: Conjugal deductions
Net conjugal
Share (2,569,500/2)
Answer: A
26.
Answer: C
27.
Answer: A
( 230,50
0)
(2,000,00
0)
1,789,2
50
2,800,000
230,500
2,569,500
1,284,7
50
504,5
00
2,800,0
00
1,219,7
50
4,019,7
50
Conjugal
Residential land
Commercial land
House and lot, Manila
House and lot, California
3,000,000
2,000,00
0
100,00
0
200,00
0
140,00
0
32
Exclusive
850,00
0
500,000
________
Total
Gross estate
Deductions:
Ordinary Funeral expenses
Bad debts (200,000 x 40%)
Transfer for public purpose
Vanishing deduction (Schedule 1)
Total
200,000
74,757
274,757
Special
Family home
(1,000,00
0)
(1,000,00
0)
4,270,2
43
Standard deductions
Net estate
Less: Share of surviving spouse
Gross conjugal
Less: Conjugal deductions
5,440,000
245,00
0
5,195,00
0
Net conjugal
Share (5,195,000 / 2)
(2,597,50
0)
1,672,74
3
Answer: B
29.
Answer: C
( 519,75
7)
P 400,000
.
400,000
26,215
373,785
20
%
74,757
House in Cebu
House in Japan
Domestic shares
Appliances, Japan
Accounts receivable
Claims against insolvent person
85,00
0
6,585,00
0
Gross estate
Less: Deductions
Ordinary Funeral expenses, limit
200,00
33
Exclusive
Total
100,00
0
450,0
00
135,000
_______
685,0
00
7,270,0
00
0
120,000
65,000
85,000
50,000
( 520,00
0)
(1,000,00
0)
(1,000,00
0)
4,750,0
00
Standard deductions
Net estate
Less: Share of surviving spouse
Gross conjugal
6,585,0
00
520,0
00
6,065,0
00
(3,032,50
0)
1,717,50
0
Answer: A
Lower value
Less: Mortgage paid
Initial basis
Less: Deductions (300/3,000 x 95,000)
Base
Rate (more than 4 years, not more than 5 years)
Vanishing deduction
P
350,000
50,0
00
300,0
00
9,50
0
290,5
00
20
%
58,1
00
Note: Bequests to charitable institutions and medical expenses are not included in
the multiplier deductions. Only the deductions under ELIT and Transfers for
Public Purposes, if any, are part of said deductions.
31.
32.
33.
34.
Answer: A
Real property
Personal properties, Canada
2,960,000.00
1,300,000.0
0
670,000.0
34
0
2,500,000.0
0
7,430,000.0
0
P
200,000.00
850,000.
00
1,786,056.
50
1,000,000.
00
2,836,056.5
0
4,593,943.5
0
1,000,000.0
0
3,593,943.5
0
Answer: B
House (conjugal)
Land
Family home
36.
P 800,000
400,000
1,200,000
Answer: A
House (800,000 x )
Land
Deductible family home
37.
P 400,000
400,000
800,000
Answer: C
Lot, Davao City
Other tangible properties
Gross estate
38.
P2,600,000.
00
367,429.3
0
2,232,570.7
0
80
%
1,786,056.5
0
P 500,000
500,000
1,000,000
Answer: D
Funeral expenses
Judicial expenses
Claims against the estate
200,000
5,000
25,000
35
Total
230,000
(1,000,000/2,500,000 x 230,000)
39.
92,000
Answer: B
Lower value
Less: Mortgage paid
Initial basis
Less: Deductions
Funeral
Judicial
Bad debt
Unpaid mortgage (60,000 20,000)
Bequest to Naga City
Total
(150,000/5,000,000 x P350,000)
170,00
0
20,000
150,000
180,000
50,000
50,000
40,000
30,000
350,000
10,50
0
139,500
40%
55,800
Base
Rate
Vanishing deduction
40.
Answer: B
Lower value
Less: Mortgage paid
Initial basis
Less: Deductions (pro-rated)
(400,000 / 5,000,000 x 350,000)
Base
Rate
Vanishing deduction
41.
400,000
.
400,000
28,000
372,000
20%
74,400
Answer: D
Conjugal Family home
1,500,00
0
2,500,00
0
300,000
50,00
0
Other properties
Car
Claims against insolvent
Exclusive Land
House
250,000
400,000
Gross estate
Less: Deductions
Ordinary Conjugal
Judicial expenses
Bad debts
Funeral expenses
180,000
50,000
50,000
Exclusive
36
280,00
0
4,350,00
0
650,00
0
5,000,0
00
200,20
0
20,000
750,000
1,000,00
0
Net estate
Less: Share of surviving spouse (4,350,000
280,000) x
Net taxable estate
42.
43.
44.
Answer: D
Property, within
Property, without
(1,770,00
0)
2,749,80
0
2,035,00
0
714,80
0
2,000,000
3,000,00
0
5,000,00
0
Total
Gross estate
Less: Deductions
Funeral expenses (2,000,000 x 5%)
Unpaid mortgage, within
Total
(2/5 x P350,000)
2,000,000
100,000
250,000
350,000
140,00
0
1,860,00
0
( 480,20
0)
Answer: A
Personal property within
Real property within
Personal property without
Real property without
RA 4917
Gross estate
Less: Deductions
Ordinary Funeral (2,000,000 x 5%)
Judicial
Claims against the estate
RA 4917
700,000
600,000
300,000
300,000
100,000
2,000,000
100,000
120,000
30,000
100,000
( 350,00
0)
(1,000,000)
(
85,000)
565,000
37
46.
Answer: D
Net estate, Philippines
Net estate, United States
3,000,000
1,000,00
0
4,000,00
0
135,00
0
220,00
0
355,00
0
2,000,000 x 11%
Estate tax
Less: Tax credit
Tax paid, US
80,000
Limit (1/4 x 355,000)
88,750
Allowed (lower)
80,00
0
275,00
0
Answer: B
Net estate, Philippines
600,00
0
300,00
0
100,00
0
400,00
0
1,000,00
0
15,000
40,00
0
55,00
0
16,500
P
(1/10 x 55,000)
5,500
Allowed
4,00
0
20,50
0
22,00
0
20,50
0
34,50
0
38
48.
Answer: C
Net taxable estate, Philippines
3,000,00
0
1,000,000
4,000,000
135,00
0
220,00
0
355,00
0
2,000,000 x 11%
Estate tax
Less: Tax credit
Tax paid in US (squeeze)
80,000
Limit (1/4 x 355,000)
88,750
Credit allowed (lower)
80,00
0
275,00
0
Answer: A
Gross estate, Philippines
Less: Deductions, Phils.
4,000,000
3,000,00
0
6,000,00
0
2,000,00
0
A foreign country
Deductions, A foreign country
Net estate
Less:
Share of surviving
spouse
Net taxable estate
(5,000,000 x 60%) /
2
Tax on P 2,000,000
50.
4,000,00
0
5,000,00
0
1,500,00
0
3,500,00
0
135,00
0
165,00
0
300,000
1,500,000 x 11%
Estate tax due
Less: Tax credit
Tax paid, A foreign
country
Limit (4/5 x 300,000)
Estate tax payable
1,000,0
00
124,500
240,000
124,500
175,50
0
Answer: D
Net estate, Philippines
500,00
0
300,00
0
( 50,000
)
39
450,00
0
700,0
00
1,200,0
00
15,000
56,00
0
71,00
0
Estate tax
Less: Tax credit
Tax paid, Hongkong
P 45,000
Limit (450/1,200 x
26,625
71,000)
Allowed
Tax paid, Japan
P 20,000
Limit (300/1,200 x
17,750
71,000)
Allowed
Total credits, 1st limitation
2nd limitation (700/1,200 x
71,000)
Estate tax due
40
26,625
17,750
44,375
41,417
41,417
29,583