Multiple Choice

Direction: Choose carefully because the wrong ones outnumber the right one.
1.) It refers to a mode of transferring and acquiring properties left by the decedent.
a. Estate transfer c. Donation
b. Succession d. Execution of a will
2.) The estate tax accrues from the moment of:
a. The filing of notice of death
b. Expiration of a months after death
c. The death of the decedent
d. The filing of estate tax return
3.) The gift tax paid on a donation mortis causa: if any:
a. Exempts the property from estate tax
b. Has no effect since the gift will still be subject to another gift tax
c. Shall form as a tax credit tobe deducted from the estate tax due
d. Is invalid and the tax will not be credited at all
4.) A person who inherits a personal property thru will:
a. Devisee c. Heir
b. Legatee d. Successor
5.) A person who inherits real property thru a will:
a. Devisee c. Heir
b. Legatee d. Successor
6.) Which statement is false about succession?
a. The successor inherits all the transmissible property of a decedent including his liabilities.
b. The successor can be made liable for the obligations of the decedent beyond the value of
the asset he received.
c. In succession, fruits and credits maturing after the death of the decedent pass to the heirs
even if they were not subjected to estate tax.
d. In succession, the successor can repudiate inheritance.
7.) Which shall not form part of the gross estate of a decedent:
a. Intangible personal property of a non-resident alien without reciprocity law
b. Revocable transfer
c. Transfer under special power of appointment
d. Life insurance proceeds where the executor is the beneficiary and it is irrevocable
8.) All of the following are considered intangible personal properties situated in the Philippines,
except:
a. Franchise which must be exercised in the Philippines
b. Shares, obligations or bonds issued by any corporation or sociedad anonima organized or
constituted in the Philippines in accordance with its laws
c. Share, obligations or bonds issued by any foreign corporation doing business in the
Philippines
d. Shares or rights in any partnership, business or industry established in the Philippines
9.) The property, rights and obligations of a person which are not extinguished by his death and
those which have accrued thereto since the opening of succession.
a. Inheritance c. Estate
b. Capital d. Devise
10.) Succession wherein the decedent did not leave any will
a. Voluntary Succession c. Mixed Succession
b. Legal Succession d. Testamentary succession
11.) One of the following statement is false
a. Estate tax is an excise tax
b. Estate tax is a transfer tax on donation mortis causa
c. The object of estate tax is to tax the property transferred from the dead to living
d. Estate tax is based on redistribution of wealth
12.) Which statement is wrong?
a. Claims against insolvent person should be included in the gross estate even if uncollectible.
b. Transfers passing under special power of appointment are excluded from the gross estate.
c. Revocable transfers are includible whether or not the right to revoke is exercised.
d. Transfer in contemplation of death for adequate and full consideration is still includible in
the gross estate.
13.) Which statement is incorrect about funeral expenses allowed:
a. The amount allowed is 5% of the gross estate or the actual expenses whichever is lower
b. The actual expenses must be paid from the estate or chargeable to it
c. The allowed deduction can never be more than the actual expenses paid
d. The expenses necessary for burial even if paid by friends are also allowed as deduction
14.) Which statement is incorrect about claims against insolvent persons?
a. They must be included in the gross estate even if uncollectible.
b. They must be duly notarized.
c. The deduction is only the uncollectible portion.
d. The insolvency of the debtor must be established.
15.) One of the following is incorrect:
a. Taxes to be deductible must accrue before the decedent’s death.
b. Losses must occur also before the decedent’s death to be deductible.
c. Medical expenses must be incurred with 2 years prior to the decedent’s death.
d. Transfer for public purposes to be deducted must be mortis causa in character.
16.) Which statement is false about Vanishing Deduction?
a. It pertains to a property presently found in the gross estate.
b. The property must be previously subjected to a transfer tax or income tax.
c. The property was received by the decedent within 5 years prior to his death.
d. The property must be located in the Philippines.
17.) A donation inter vivos due to thought of death is:
a. Subject to donor’s tax
b. Subject to estate tax if for inadequate consideration
c. Subject to estate tax if bonafide transfer
 d. Subject to inheritance tax
18.) In filing the estate tax return, a CPA Certified is required when:
a. Gross estate exceeds P2,000,000
b. Gross estate reaches P20,000
c. Gross estate exceeds P200,000
d. Gross estate reaches P2,000,000
19.) A died leaving a house and lot to B on March 31,2000 which was questioned by C. it is under
litigation but the parties have started an extra-judicial settlement. The last day for filing the
estate tax return is:
a. April 30,2001 c. September 30,2000
b. April 30,2003 d. October 30,2000
20.) Based on the preceding number, the last day for the payment of estate tax if extended,shall be:
a. March 21,2002 c. September 30,2005
b. September 30,2002 d. April 30,2002
21.) The taxpayer in estate tax is:
a. The decedent
b. The deceased person’s estate
c. The heirs or successors
d. The administrator or executor
22.) The payment of estate tax is a personal liability of:
a. The heirs or successors
b. The administrator in testamentary succession
c. The executor in Voluntary succession
d. The estate itself
23.) The notice of death must be filed when:
a. The gross estate exceeds P200,000
b. The gross estate exceeds P20,000
c. The gross estate reaches P200,000
d. The gross estate reaches P2,000,000
24.) A died leaving a farm land. In his will, he transferred the ownership thereof to B but subject to
the condition that C will have the right to use the land for a period of 10 years(Usufruct). In the
7th year, however, C died and C’s will he surrendered his right over the land to B.
a. The transfer is subject to donor’s tax.
b. The transfer is subject to estate tax.
c. The transfer is both an inclusion from the gross estate.
d. The above is a tax-exempt transfer.
25.) An excise tax on gratuitous transfer mortis causa
a. Gift tax c. Income tax
b. Estate tax d. Donors tax
26.) Which of the following is included in the income of the estate of a decedent?
a. Income received by the estate of a deceased person during the period of administration or
settlement of the estate
 b. Excess of selling price over the appraised value placed upon the property sold after the
settlement of the estate
c. Appreciation in the value of property passed to the executor or administrator upon the
death of decedent
d. Delivery of property in kind to legatee or distribute
27.) A right of property, real or personal, held by one person for the benefit of another.
a. Estate c. Co-Ownership
b. Trust d. Partnership
28.) The income distributed to the beneficiaries of estates and trusts, except income subject to final
withholding tax income exempt from tax, is subject to:
a. Creditable withholding tax of 10%
b. Creditable withholding tax of 15%
c. Final withholding tax of 20%
d. Neither final nor creditable withholding tax
29.) A trust where the income and the corpus of which do not revert to the grantor, its oncome is
accumulated and held for distribution to the beneficiary.
a. Ordinary Trust c. Irrevocable Trust
b. Revocable Trust d. Employee’s Trust
30.) One of the following is not an exemption or exclusion from the gross estate.
a. Capital or exclusive property of the surviving spouse
b. Properties outside the Philippines of s non-resident Chinese decedent
c. Shares of stock of San Miguel Corporation of a Non-resident Mexican
d. The merger of usufruct in the owner of the naked title.

True or False

1.) The court may authorize the distribution of estate, to an heir if in its sound discretion it believes
that the heir badly needs his share. FALSE
2.) Unpaid mortgage indebtedness is a deductible from the gross estate provided the said property
subject to the indebtedness is included in the gross estate net of the mortgage indebtedness.
FALSE
3.) A note receivable against an insolvent person contracted by the decedent before his death must
be included in the gross estate in full even if only 50% is collectible. TRUE
4.) Where the estate is under judicial administration, the income of the estate shall be taxable to
the fiduciary or trustee who shall pay file the return for the estate and pay the income tax
thereon. TRUE
5.) An allowance paid a widow or heir out of the corpus of the estate is not deductible from the
gross income of the estate. TRUE
6.) A note payable contacted 11 years ago is a deduction from the gross estate if notarized. FALSE
7.) The amount of income of the estate for the taxable year, which is properly paid and credited
during such year to any legatee, heir, or beneficiary, is a special item of deduction from the
gross income of the estate. TRUE
 8.) The taxable income of the estate or trust shall be computed in the same manner and on the
same basis as in the case of an individual. TRUE
9.) A donation inter vivos by the decedent to the Philippine government few months before his
death is a deduction from the gross estate. FALSE
10.) Where the estate is not under judicial administration, the income of the state shall be taxable to
the heirs and beneficiaries who shall include in their returns their distributive share of the net
income of the estate. TRUE

SHORT PROBLEMS

1.) Anna, resident citizen, single, died with properties constituting her gross estate P4,000,000.
Actual funeral expenses amount to P150,000 and the other charges against the estate
amounted to P210,000. The net taxable estate is:
2.) Isla, an unmarried resident of the Philippines died leaving real properties in Manila with fair
market value of P1,700,000. Deductions claimed by the administrator of the decedent’s estate
are as follows:
Medical expenses during the decedent’s sickness-
Paid out of the decedent’s cash P45,000
Expenses during the wake paid out of the decedent’s cash 95,000
Unpaid expenses payable to the funeral parlor 20,000
Coffin donated by the friends of decedent 40,000
Claims against insolvent persons 100,000

How much funeral expense is allowed as a deduction from the gross estate?
3.) Lola, died on August 2011 leaving the following data on deductions:
Unpaid 2009 real estate taxes P40,000
Unpaid 2010 real property taxes 40,000
Income tax on income from January 1 to August, 2011 35,000
Losses from fire that occurred in July (60% was
Compensated by insurance) 800,000
Casualty loss on September 450,000
The deduction from gross estate based on the data above is:
4.) Etienne St. Clair, married under conjugal partnership of gains, died leaving a parcel of land which
he inherited from his brother during marriage, valued at P200,000 and a family hose, conjugal
property, constructed on the inherited land, with a market value of P850,000. The deductible
amount of family home is:
5.) Josh, married, resident of Quezon City, died. He left an estate consisting of the following:
Exclusive real estate P1,219,750
Conjugal real estate (family home) 2,000,000
Conjugal personal property 800,000
 At the time of his death, the conjugal real estate is mortgaged at the Philippine National Bank
for P90,000. Actual funeral expenses amounted to P124,500 and a judicial expense of P16,000.
The net estate subject to estate tax is:
6.) Cricket, Filipino, died leaving the following:
Net estate, Philippines P3,000,000
Net estate, United States 1,000,000
U.S estate tax paid 80,000
` The estate tax due after tax credit is:
7.) Meredith, a non-resident alien decedent, single, left the following assets:
Domestic shares P1,000,000
Foreign shares 3,000,000
Tangible personal property,Philippines 6,000,000
Expenses(deductible) 1,200,000

The country where she is a citizen and a resident does not impose transfer tax on transmission
of intangibles of Filipinos. Taxable net estate in the Philippines is:
8.) Calliope, a non-resident alien, single, died leaving the following properties and deductions:
Shares, domestic corporation P 500,000
Shares, foreign corporation 500,000
Tangible personal property 1,500,000
Deductible expenses 500,000
Assuming there is no reciprocity, the estate tax payable is:
LONG PROBLEMS

1.) Alladin Bujok, Filipino, residing in the Philippines, married to Lina Llagas, died on February 15,
2011. The inventory of the properties shos the following:
a. House and lot in Manila(family home) P2,650,000
b. Farm in Batangas, inherited by Alladin during Marriage 500,000
c. Farm in Guam, inherited by Alladin before marriage 750,000
d. Furnitures in Manila, purchased from conjugal funds 125,000
e. Fishpond in Sorsogon,donated to Lina by her mother 240,000
f. Bank deposit, PCIB, Makati 80,000
g. Jewelries brought into the marriage by Lina 46,700
h. Cash,representing rental of fishpond in(e) for January and
February 2010 at P12,000 per month 24,000
i. Car in manila 500,000
j. Value of his interest in professional partnership 300,000
k. Proceeds of life insurance,payable to Lina 150,000
l. Proceeds of GSIS Insurance 70,000
m. Accounts receivable from debtor, Dina Dinero of Hongkong 110,000
n. Patent in USA 1,250,000
o. Death benefits from SSS 200,000
 p. Other personal properties in Manila,mode of
acquisition unknown 825,000
A. How much is the total conjugal properties under CGP?
B. How much is the total exclusive properties of Alladin?
C. How much is the gross estate of Alladin?
D. How much is the total common properties under ACP?
E. How much is the total exclusive properties of Alladin?
F. How much is the gross estate of Alladin?
2.) Alanis, a resident citizen, single but head of the family, died leaving the following data:
Properties:
Real properties(excluding a family home valued @ P1,100,000) P3,200,000
House and Lot in Sydney, Australia 1,500,000
Other personal Propeties 800,000
Deductions:
Funeral P 120,000
Claims against insolvent persons 100,000
Claims against the estate, not notarized 50,000
Unpaid mortgage on the family home 30,000
The personal properties do not include shares of stocks valued at P50,000 which were
purchased by the decedent from Astra Company one month prior to his death.
The house and lot in Sydney, Australia was inherited by Alanis from his father who died 2 ¼
years ago. Said property was mortgaged for P200,000 which was paid by the decedent before
his death.
A. The gross estate is:
B. The total deductions(excluding standard deductions) is:
3.) Carmen, married, died on April 25,2012. An inventory of her properties show the following:
a. Residential land inherited from her father who died march 31,2008:
FMV, March 31,2008 P400,000
FMV, April 25,2012 P850,000
b. Commercial land inherited from her mother who died April 1,2006:
FMV, April 1,2006 P200,000
FMV, April 25,2012 P500,000
c. House and lot in Manila, used as family home acquired during marriage – P3,000,000
d. House and lot in California, USA acquired during marriage – P2,000,000
e. Notes receivable, debtor resides in USA – P100,000
f. Notes receivable, debtor resides in the Philippines (40% is uncollectible) – P200,000
g. Other personal properties – P140,000

Deductions claimed by estate:

a. Funeral expenses – P165,000
b. Legacy given to the daughter of her beautiful secretary in her will – P200,000
c. Legacy given to the City Government of Manila in her will – P200,000
 The spouses are under the regime of conjugal partnership of gains.
A. The gross estate is:
B. The vanishing deduction is:
C. The net estate subject to estate tax is:
4.) Desiderio, Filipino, died intestate on October 1,2012. He left the following properties:
Real estate, conjugal:
House in Cebu City (family home) P4,000,000
House in Japan 2,500,000
Personal Properties, separate:
Domestic shares 100,000
Household Appliances in Japan 450,000
Accts Rec. from debtor residing in the Philippines 135,000
Expenses:
Cost of Cemetery lot 60,000
Expenses of interment 265,000
Accounts payable,notarized 120,000
Mortgage on house in Japan 65,000
Claims against debtor in Japan,insolvent 85,000
Mortgage on house in Cebu City 50,000

A. How much is the gross estate?

B. How much is the net estate subject to tax?
5.) The following are the expenses incurred by a non-resident alien:
Funeral expenses incurred abroad P200,000
Accountant’s Fees and Audit Fees 5,000
Medical expenses incurred 2 months prior to decedent’s
death 50,000
Unpaid mortgage on a property located abroad 40,000
Claims against the estate 25,000
The properties left by the decedent are the following:
Family home located in Osaka, Japan 1,200,000
Lot situated in Davao City 500,000
Shares of stock in Japanese corporation 300,000
Other tangible personal properties in the Philippines 500,000
A. The gross estate of the decedent is:
B. The total deductions from estate:
6.) Chua Fang, single, a non-resident alien, died leaving a property in the Philippines of P2,000,000
and a property outside the Philippines of P3,000,000. Deductions claimed are: Funeral expenses
within the Philippines, P120,000, mortgage on the property inside the Philippines of P250,000
and outside the Philippines of P400,000 and devise to the Philippine government on the
property outside the Philippines of P200,000.
A. The gross estate of Chua Fang is:
B. The deductible expense from the Philippine gross estate is:
C. The net taxable estate is: