ine the estate tax due and payable. sed: Deter™ due and payable is computed , Req angwer, The estate follows: exclusive Conjugal Tora 5,000,000 13,000,000 F 18,000,099 ee eee ea Gross estate Less: Deductions 200,000 200,009 ral ,) et 350,000 Actual 000 5% x 18,000,000 = 900: Limit = 200,000 dicial expenses 400,000 400,000 = 500,000 500,000 Claims against the estate Claims against insolvent person 600,000 600,000 Transfer for public purposes 800,000 800,000 Vanishing deduction 465,000 465,000 Total ordinary deductions 465,000 2,500,000 2,965,000 Net estate before special deductions #4,535,000° 10,500,000F 15,03 000 Less: Special deductions Family home 1,000,000 Standard deductions i 1,000,000 Medical expenses - limit 500,000 Net estate before share of the surviving Spouse 12,535,000 Less: Share of the surviving spouse (F'10,500,000 x 1/2) 5,250,000 000 7,285 Net taxable estate The estate tax due is computed as follows: On net taxable estate of 5,000,000 On excess of 5,000,000 (P°7,285,000 - 5,000,000) x 15% Total amount of estate tax F 465,000 362 | Simplified and i ; -rocedural Handbook on Transfer and Business TaxationThe valuation Of the — 73,000,000. One-hare of home based td exceeds the thre. © fair Ww On fair Sholg Mather yoy Ut Market Value amount for the fami) ome, 000 009, ie Py 009 | The F 465,000 Vanish; Only Fy] ©, th , ‘Uctib] "B dedtuctign 00. ° Value of Property (whi tion ise 0 : : : Never is low, Muted ag follows ume of Mhetitance et) F 3,000, ; date of death B00 ___ less: Mortgage Prd bY deceden 4.500.009 Balance Less: Deduction 2,700,099 118,009 * 2.700.000 F 2,500,009 0,000) x Basis for cony Utation of Vanishing deductig sen Multiplied by n 2395, 2,325,000 Vanishing deduction - en The 2,500,000 “multiplier” is the total ordinary deductions determined as follows; Funeral (limit) i 200,000 Judicial expenses 400,000 Claims against the estate 500,000 Claims against insolvent person 600,000 Transfer for Public purposes F 800,000 Total ordinary deductions °2,500,000 NET DISTRIBUTABLE ESTATE lent of t estate of e decedent, is igo eee paid, has to be distributed to ane the amoun ein pala hipceaa ing the items that thei” = Sean receive after daketingt beng a le - Wi he als of the grin al Y Teduce the v; the decedent, ne | 960 retate Tax: Deductions and Net Estate impuration of the net distributable rds, the 6° om the computation of the ne, Md jously. as giscussed previously ' el puting © net estate had een lenge eres assumed data on net distributable mode 0! | The g the net distributable estate i wi discussed in Chapter : Oe estate. The mechanics © g, basic procedures may be followin 4 f the net estate: followed Peandling the distribution ae ~ Compute the etae ax de 28 paya' : Step ! voles on gross estate, allowable deductions The basic Oe 4 other deductions), and the concept on (i on of the share of the surviving spouse should be followed. istri le estate Step 2 - Compute the net diseributab : : In the computation of the net distributable estate, consider only the actual gross estate and actual expenses incurred after the death of the decedent. Thus, claims against insolvent person will not form part of the gross estate and will not be deducted accordingly. Likewise, the provisions for family home, standard deductions, vanishing deductions and other similar items where no actual cash outlays are involved will not be allowed as deductions from the gross estate. The basic guideline is to include only properties that are physically present and deduct expenses actually incurred after the death of the decedent. Step 3 - Distribute the net estate following either the rules on testamentary of or intestate procedures Mustration 8.9 Mr. erence in the immediate preceding illustration, Children survived by his spouse Elena, their three legitimate ren, and one illegitimate child. Required: D i fein fe the distribution of the net estate under ‘ouowing situations: