University of Batangas
Estate Tax
MULTIPLE CHOICE EXERCISES
1.
Estate tax is
a. A property tax because it is imposed on the
property transmitted by the decedent to his heirs.
b. An indirect tax because the burden of paying the
tax is shifted on the executor or any of the heirs of
the decedent
c. An excise tax because the object of which is the
shifting of economic benefits and enjoyment of
property from the dead to the living
d. A poll tax because it is also imposed on residents
of the Philippines whether Filipino citizens or not
2.
Estate tax accrues from:
a. The moment of death of the decedent
b. The moment the notice of death is filed
c. The moment the estate tax return is filed
d. The moment the properties are delivered to the
heirs
3.
4.
5.
6.
7.
8.
Part of the estate left by A are preference shares of
MERALCO. The shares are listed and traded in the
Philippine Stock Exchange. Which of the following rules
of valuation is correct?
a. The preference shares will be valued using the
arithmetic mean between the highest and lowest
quotation at the date nearest the date of death, if
none is available on the date of death itself.
b. The preference shares will be valued based on
their book value.
c. The preference shares will be valued based on
their par value.
d. The preference shares will be valued based on
their fair market value as determined by the
Commissioner of Internal Revenue
9.
Binat died on April 13, 2018, leaving the following
properties:
Common stocks of Sunchamp Corporation (2,000
shares) - listed in the Philippine Stock Exchange
(highest - P40; lowest - P39).
The taxpayer in estate tax is:
a. The decedent
b. The estate as a juridical entity
c. The heirs or succession
d. The administrator or executor
Common stocks of AgriNurture Corporation (1,500
shares) - not listed in the stock exchange. Cost - P50
per share; book value - P45 per share.
Who has the personal liability to pay estate tax?
a. The decedent
b. The estate as a juridical entity
c. The heirs or successors
d. The administrator or executor
Preferred stocks of Greenergy Inc. (3,000 shares) –
not listed in the stock exchange. Cost - P70 per share;
book value - P60 per share; par value – P50 per share
Car (cost - P600,000; book value - P350,000; market
value - P400,000)
One of the following is subject to estate tax on
properties situated within the Philippines only
a. resident citizen
c. nonresident citizen
b. resident alien
d. nonresident alien
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 80% of whose business is in
the Philippines.
All of the following are considered intangible 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. Shares, obligations or bonds by any foreign
corporation 75% of the business of which is
located in the Philippines
d. Shares, obligations of bonds issued by any foreign
corporation if such shares, obligations or bonds
have acquired a business situs in the Philippines;
Real properties (zonal value - P120,000; assessed
value - P72,000)
The gross estate of Binat is –
a. P817,500
c. P824,000
b. P816,500
d. P846,500
10. Lina Lamay, Filipina, died in Syria leaving the following
properties:
House and Lot in Syria
1,000,000
Vacant Lot in Manila
2,000,000
Shares of stock in a domestic corp., 60%
100,000
of the business is located in the
Philippines
Shares of stock in a foreign corp., 70%
200,000
of the business is located in the
Philippines
Car in Manila
500,000
How much is the gross estate?
a. P3,800,000
b. P2,600,000
c. P2,500,000
d. P2,000,000
11. Based on the preceding number, but assuming the
decedent is a non-resident alien, the gross estate is:
a. P3,800,000
c. P2,500,000
b. P2,600,000
d. P2,000,000
12. Based on the preceding number and assume the rule
on reciprocity applies, the gross estate is:
a. P3,800,000
c. P2,500,000
b. P2,600,000
d. P2,000,000
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13. Lolo Sot, 95 years old, was diagnosed of various
ailments on January 1, 2018. Motivated by thought of
death, he decided to dispose all his properties to his
children and relatives. He executed a last will and
testament disposing all his properties in the Philippines
to his children. On the same day, he made donations
inter-vivos to his other relatives as to his properties in
the United States.
Lolo Sot died a month after
disposing all his properties. Should the properties
donated by Lolo Sot to his other relatives be included
in his gross estate upon his death?
a. No, because they were not his properties anymore
at the time of death.
b. Yes, because the donations were donations mortis
causa and should be governed by the rules on
estate taxation.
c. No, if the donor’s tax had been paid already on
the donations.
d. No, because they were not transfers in
contemplation of death, since the donations were
not simultaneous with the execution of the last
will and testament.
14. The following are subject to estate tax, except
a. While still alive, the decedent donated property
where the donation will take effect at the time
of his death.
b. The decedent transferred a property in the
regular course of the business operation.
c. The decedent donated a property with the
condition that he/she will enjoy the fruits of
such while he/she is still alive.
d. The decedent transferred a property to take
effect after his/her death
15. One of the following donations is not included as part
of gross estate
a. Revocable transfers
b. Transfers with reservation of certain rights
c. Transfers under special power of appointment
d. Transfers in contemplation of death
16. Statement 1: Aguinaldo devised in his will a piece of
land; naked title to Bonifacio and usufruct to Rizal for
as long as Rizal lives, thereafter to Bonifacio. The
transmission from Aguinaldo to Bonifacio and Rizal is
subject to estate tax but the merger of the usufruct
and the naked title to Bonifacio upon the death of Rizal
is exempt.
Statement 2: Erap devised in his will real property to
his brother Alfredo who is entrusted with the obligation
to preserve and transmit the property to Isko, son of
Alfredo, when Isko becomes of age. The transmission
from Alfredo to his son Isko is subject to tax.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
17. Pedro, decedent, owns a property valued at
P1,500,000 at the time of his death. The said property
was sold by Pedro during his lifetime to Juan for
P700,000 when its value was P1,200,000. It was
agreed by Pedro and Juan that the former will enjoy
the income of the property as long as he lives. For
Philippine estate tax purposes, how much will be
included in determining gross estate?
a.
P500,000
c. P800,000
b.
P1,200,000
d. P0
18. Based on the preceding number, if the fair market
value of the property at the time of death is only
P600,000, how much will form part of gross estate?
a.
b.
P500,000
P1,200,000
c. P800,000
d. P0
19. Vlad died on October 20, 2018. During his lifetime,
upon knowing that he had Stage 4 cancer, sold his
Lamborghini car to his son for P4,000,000. The fair
market value of the car at the time of sale is
P3,000,000 while it is already valued at P5,000,000 at
the time of death. The amount that will be added to
gross estate is:
a.
P1,000,000
c. P2,000,000
b.
P5,000,000
d. nil
20. Based on the preceding number, if the consideration is
fictitious, how much will form part of gross estate?
a. P1,000,000
c. P2,000,000
b. P5,000,000
d. nil
21. Who among the following transferors is not liable for
estate tax on the property transferred during his
lifetime?
a. The testator who bequeaths property to his heirs in
a last will and testament executed and probated
during his lifetime.
b. The donor who reserves his right to amend or
revoke the donation of property in favor of the
donee.
c. The donee of an appointed property who is
required under a power of appointment to transfer
such property upon death to his eldest child.
d. The transferor of personal property who sold it for
insufficient consideration.
22. Which of the following life insurance proceeds shall not
be included in the computation of gross estate?
a. Beneficiary is the estate, executor or administrator
and the designation of the beneficiary is revocable;
b. Beneficiary is the estate, executor or administrator
and the designation of the beneficiary is
irrevocable;
c. Beneficiary is other than the estate, executor or
administrator and the designation of the
beneficiary is revocable;
d. Beneficiary is other than the estate, executor or
administrator and the designation of the
beneficiary is irrevocable.
23. The list provided below is not included in the gross
estate of a decedent, except:
a. Share in common properties of the surviving
spouse;
b.
Exclusive property of the surviving spouse;
c.
Properties outside the Philippines of a nonresident alien decedent;
d.
Intangible personal property in the Philippines
of a non-resident alien when the rule of Reciprocity
applies.
24. The following are transactions and acquisitions exempt
from transfer tax, except
a. Transmission from the first heir or donee in favor
of another beneficiary in accordance with the
desire of the predecessor
b.
Transmission or delivery of the inheritance or
legacy by the fiduciary heir or legatee to the
fideicommissary
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
25. Statement 1: In the absence of marriage settlements
executed
before
the
marriage,
the
property
relationship between husband and wife shall be
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governed by local custom and by the provisions of law,
respectively.
Statement 2: Claims against insolvent persons may be
charged against exclusive property
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
fair market value of P4,000,000
after construction of the house.
Other properties acquired during
marriage
Jewelry inherited on Feb. 14, 2017,
during marriage, then with a fair
market value of P1,300,000
Property in U.S., received as gift
during marriage from a friend on Jan.
12, 2017 (the applicable donor’s tax
was not paid by the donor)
Rental income on the above property
up to time of death
Expenses/Claims:
Funeral expenses
Judicial expenses
Casualty losses incurred on Dec. 10,
2018
Claims against the estate
Medical expenses within 1 year prior
to death, only half was receipted
26. One of the following is a conjugal property of the
spouses
a. That which is brought to the marriage as his or her
own.
b. That which each acquires during the marriage by
inheritance.
c. The fruits of an exclusive property.
d. That which is purchased with the exclusive
property of the wife.
27. One of the following is not a community property of
the spouses
a. Property inherited by the husband before marriage
b. Winnings in gambling
c. Fruits of property inherited during the marriage
d. Fruits of property inherited before the marriage
28. If the decedent is married under the conjugal
partnership of gains, vanishing deduction shall be
chargeable against?
a. Exclusive Properties
b. Conjugal Properties
c. Either Exclusive Properties or Conjugal Properties
d. Neither Exclusive nor Conjugal Properties
Use the following data for the next two questions:
Pedro, married to Susan, died leaving the following:
Car acquired before marriage by Pedro
Car acquired before marriage by Susan
House and lot acquired during marriage
Jewelries of Susan
Personal properties inherited by Pedro
during marriage
Land inherited by Susan during
marriage
Rental income on land inherited by
Susan (25% of which was earned after
Pedro’s death)
Benefits from SSS
Retirement benefits
Proceeds of group insurance taken by
Juan’s employer
29.
1,000,000
200,000
350,000
480,000
175,000
c. P2,600,000
d. P3,600,000
How much is the correct gross estate if the property
relationship is absolute community of property?
a. P1,950,000
b. P2,200,000
2,500,000
2,300,000
1,200,000
420,000
800,000
600,000
1,600,000
4,000,000
31. How much is the net taxable estate under Conjugal
Partnership of Gains?
a. P3,926,000
c. P3,426,000
b. P6,426,000
d. P1,348,000
32. How much is the net taxable estate under Absolute
Community of Property?
a. P4,836,000
c. P1,174,000
b. (P2,174,000)
d. P2,174,000
33. The following data were taken from the estate of Oslo:

Claims against Juan (insolvent), P100,000, fully
uncollectible.

Claims against Manuel (insolvent), P200,000, 50%
collectible.

Claims against a person who absconded,
P300,000.

Based on the data provided, how much should be
deducted from Pedro’s gross estate?
a. P600,000
c. P200,000
b. P500,000
d. nil
34. 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 as a rule.
c. The deduction is only the uncollectible portion.
d. The insolvency of the debtor must be established.
How much is the correct gross estate if the property
relationship is conjugal partnership of gains?
a. P1,950,000
b. P2,200,000
30.
P300,000
450,000
1,500,000
100,000
250,000
6,000,000
c. P2,600,000
d. P3,600,000
Use the following data for the next two (2) questions:
The estate of Pedro, resident citizen decedent, married,
who died on April 1, 2018 are as follows:
House and lot (Family Home)
P14,000,00
The lot was acquired at a cost of
0
P3,000,000 before marriage while
the house was constructed on
March 1, 2018, during marriage,
at a cost of P10,000,000 from
partnership funds. The lot had a
35. Mr. Pobre is in need of money to start a small
business. However, he has no property to secure a
loan from a bank so he sought the help of his good
friend Mr. Rich. Mr. Rich then obtained a loan from
Banco de Uro amounting to 1million pesos secured by
a real property worth 2million pesos to accommodate
the request of Mr. Pobre. If subsequent to securing the
loan and delivering to Mr. Pobre the proceeds, Mr. Rich
died, how much gross estate should be reported?
a. P1,000,000
c. P3,000,000
b. P2,000,000
d. nil
36. Which of the following is not deductible from the gross
estate of a decedent?
I. Income taxes on income received after death
II. Property taxes not accrued before death
III. Estate Tax
a. I and II only
c. All of the above
b. II and III only
d. None of the above
37. The following are the requisites for vanishing deduction
to be allowable, except one.
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a.
b.
c.
d.
38.
The estate tax of the prior succession must have
been finally determined and paid.
The present decedent died within five (5) years
from date of death of the prior decedent.
The property with respect to which deduction is
sought can be identified as having been received
by the present decedent from the prior decedent.
None of the above
Mr. Sabillo, resident decedent, married, died,
leaving the following properties:
Real and personal properties
acquired during the marriage
House and lot inherited from his
father one year and 3 months before
he died (fair market value when
inherited, P1,500,000) used as the
decedent's family home
Car purchased with cash received as
gift from his mother during the year
he died
Cash (inclusive of P500,000 received
as inheritance from the father)
P 3,000,000
2,000,000
500,000
1,500,000
The following obligations and expenses were also made
available:
Claims against conjugal properties
600,000
Unpaid mortgage on the inherited house
100,000
and lot (original mortgage was for
P600,000)
How much is the vanishing deduction?
a. P1,530,000
c. P1,000,000
b. P1,080,000
d. None of the choices
39. Teh Pok died on November 20, 2018 .
properties he left are the following:
Some of the
Asset
Mode
of
Acquisition
Date
Acquired
Date
Acquired
Date of
Death
Land
Car
Purchase
Donation
7-3-14
10-2-17
500,000
800,000
350,000
980,000
The deductible amount of family home is:
a. P8,000,000
c. P4,000,000
b. P12,000,000
d. P10,000,000
42. Based on the preceding number, if the house is also an
exclusive property, how much is the deductible family
home allowance?
a. P8,000,000
c. P4,000,000
b. P12,000,000
d. P10,000,000
43. The following statements are correct regarding
standard deduction, except:
a. A deduction in the amount of P5,000,000 shall be
allowed as an additional deduction without need of
substantiation.
b. The full amount of P5,000,000 shall be allowed as
deduction for the benefit of the decedent.
c. Standard deduction is not allowed to decedents
who are non-resident aliens.
d. None of the above
44. One of the following cannot be claimed as deduction
from the gross estate of a non-resident alien decedent:
a. Vanishing deduction
b. Family home allowance
c. Share of surviving spouse
d. Transfer for public use
45. In computing the estate tax, which of the following
shall not be allowed to claim tax credit for taxes paid
abroad?
a. Resident alien decedent
b. Non-resident alien decedent
c. Resident citizen decedent
d. Non-resident citizen decedent
Market Value
Other information:
a) The gross estate of the decedent amounts to
P3,000,000.
b) The car was mortgaged for P50,000 when it
was acquired and Teh Pok paid the same
before he died.
c) The allowable deductions totaled P325,000,
which includes judicial expenses of P30,000
and funeral expenses of P150,000.
The vanishing deduction is –
a. P581,000
b. P571,000
valued at P4,000,000. He also owns a vacation house
in Baguio worth P7,000,000.
46. Jiraiya, non-resident Japanese, died on May 1, 2018
leaving the following:
Exclusive properties, Philippines
P5,600,000
Conjugal properties, Philippines
4,200,000
Conjugal properties, Abroad
18,200,000
Claims against insolvent persons
1,000,000
Funeral expenses
200,000
Judicial expenses
850,000
Claims against the estate
1,500,000
Losses: occurring 8 mos. after death
due to fire
1,700,000
Donation mortis causa to Makati City
Hall
1,800,000
Family Home (inc. above), located
abroad
10,000,000
Standard deduction
10,000,000
c. P648,783
d. P637,617
The taxable net estate is:
40. Which of the following statements is incorrect in
connection with family home?
a. Family home deduction shall be allowed only if
such family home is situated in the Philippines
b. The total value of the family home must be
included as part of the gross estate of the
decedent
c. For purposes of availing family home deduction, a
person may constitute only one family home
d. Family home deduction may not be lower than
P10,000,000
a. P5,165,000
b. P4,665,000
c. P4,165,000
d. P21,000,000
47. If decedent is a Filipino citizen, the taxable net estate
is:
a. P11,490,000
c. P4,100,000
b. P12,645,000
d. P7,900,000
Next two (2) questions are based on the following:
A citizen-decedent died in 2018 with the following data:
Philippines
USA
Gross Estate
P14,200,00
P4,400,000
0
41. Pedro died on Nov. 1, 2018 leaving a family home
composed of the following: Conjugal house worth
P8,000,000, and the land which he exclusively owned
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Allowable Deductions
(excluding standard
deduction)
6,400,000
2,200,000
Estate tax paid
-
150,000
48. How much is the estate tax payable in the Philippines
assuming the decedent is a non-resident citizen?
a. P168,000
c. P150,000
b. P132,000
d. P300,000
49. How much is the estate tax payable in the Philippines
assuming the decedent is a non-resident alien?
a. P168,000
c. P150,000
b. P438,000
d. P300,000
50. Lola Trining died in 2019 leaving a gross estate
amounting to P150,000 only. No estate tax is due
based on the tax code. The gross estate is composed
of a second hand car worth P80,000, shares of stocks
valued at P50,000 and P20,000 time deposit.
The
administrator believes that only notice of death should
be filed since the value of the gross estate is exempt
from tax. What will you tell him?
a. Notice of death and estate tax return have to be
filed because the gross estate exceeds P20,000
and when the gross estate consists of registered or
registrable properties, estate tax is required to be
filed regardless of the value of the gross estate.
b. Only notice of death is required to be filed because
the gross estate exceeds P20,000.
Estate tax
return is required to be filed only when the gross
estate exceeds P200,000 and/or there is estate tax
due.
c. Neither notice of death nor estate tax return need
to be filed in this particular case.
d. Only estate tax return has to be filed.
51. Which of the following is not correct?
a. When a compulsory heir is given by will less than
his legitime, the provisions of the will should be
modified in such a way that he will receive his
legitime.
b. The CIR may examine the bank deposit of a
decedent for the purpose of determining his gross
estate even if the estate did not request for a
compromise on the ground of financial incapacity.
c. The sharing of heirs in testamentary succession
must satisfy the rules on legitime.
d. If an extension to pay the estate tax is granted,
the Commissioner or his duly authorized
representative may require the administrator, or
executor, or beneficiary, to furnish a bond in such
amount exceeding double the amount of the tax
and with such sureties as the Commissioner deems
necessary, conditioned upon the payment of said
tax in accordance with the terms of the extension.
52. Statement 1: Any amount paid beyond the statutory
due date of the tax, but within the extension period,
shall be subject to interest but not to surcharge.
Statement 2: No extension for payment of estate tax
shall be granted where the request for extension is by
reason of negligence, intentional disregard of rules and
regulations, or fraud on the part of the taxpayer.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
53. In case of a resident decedent, the administrator of
executor shall register the estate of the decedent and
secure new TIN from the the
a. Office of the Commissioner.
b. RDO where the administrator or executor is
registered.
c. RDO where the decedent was domiciled at the
time of his death.
d.
Duly authorized treasurer of the city or
municipality where the decedent is domiciled
at the time of his death.
54. Can the estate tax be paid in installment?
a. Yes, in case the available cash of the estate is
not sufficient to pay its estate tax liability.
b. Yes, at the option of the heirs with
corresponding interest charges.
c. No, tax is the lifeblood of the State, hence,
collection cannot be delayed under any
circumstance.
d. None of the above
55. Statement 1: If a bank has knowledge of the death of
a person, who maintained a bank account alone, or
jointly with another, it shall allow the withdrawal from
said deposit account, subject to a final withholding tax
of 6% of the amount to be withdrawn, provided, that
the withdrawal shall only be made within one year
from the date of said decedent.
Statement 2: In all cases, the final tax withheld shall
not be refunded, or credited on the tax due, on the net
taxable estate of the decedent.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
56. Which of the following statements is correct?
a. There shall not be transferred to any new owner in
the books of any corporation, sociedad anonima,
partnership, business, or industry organized or
established in the Philippines any share, obligation,
bond or right by way of gift inter-vivos or mortis
causa, legacy or inheritance, unless an eCAR is
issued by the Commissioner or his duly authorize
representative.
b. In instances where the deposit accounts have been
duly included in the gross estate of the decedent
and the estate tax due thereon paid, the executor,
administrator, or any of the legal heirs shall
present the eCAR issued for the said estate prior to
withdrawing from the bank deposit account.
c. The withdrawal describe in letter b shall no longer
be subject to the 6% withholding tax by the bank.
d. All of the above
57. In filing the estate tax return under the TRAIN Law, a
CPA certificate is required when:
a. Gross estate exceeds P 2,000,000
b. Gross estate exceeds P 5,000,000
c. Gross estate exceeds P10,000,000
d. Gross estate reaches P 2,000,000
58. A died leaving a house and lot to B on March 31, 2018
which was questioned by C and it is under litigation
but, subsequently, the parties executed an extrajudicial settlement. The last day for filing the estate
tax return is
a. April 30, 2018
c. September 30, 2018
b. April 30, 2019
d. March 31, 2019
59. The last day for the payment of estate tax may be
extended, until;
a. March 31, 2021
c. September 30, 2019
b. September 30, 2021
d. April 30, 2022
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