Transfer and Business Taxation
College of Accountancy
NAME: ___________________________________________
SCORE:_______________
PART 1: ESTATE TAX
A. TRUE OR FALSE. Write True if the statement is true and write FALSE if the statement is not
true.
_______ 1. All gratuitous transfers of properties, whether real or personal, are subject to estate
tax.
_______ 2. All transfers of property that happen prior to the death of a decedent will not be
subject to estate tax.
_______ 3. Estate tax usually accrue at the time of the transfer of property to the heir.
_______ 4. All decedents are subject to estate tax on their properties located within and outside
the Philippines that have been transferred by way of succession to the heirs.
_______ 5. Non-resident citizens of the Philippines are subject to estate tax for their properties
located within the Philippines only.
______ 6. The real properties of a decedent are included in the gross taxable estate based on the
expected selling price of the properties.
______ 7. The transfer of property in contemplation of death is subject to either donor’s tax or
estate tax depending on the transfer tax that will provide the higher amount of tax payable.
______ 8. Proceeds from GSIS or SSS on account of retirement benefits are not included in the
gross taxable estate of the decedent.
______ 9. Exclusive properties of the surviving spouse that were used by the decedent during
his/her lifetime may be included in the gross taxable estate of the decedent.
______ 10. The transfer of property during the lifetime of a decedent in order to settle a family’s
litigated issues is classified as a transfer in contemplation of death.
______ 11. A receivable from an insolvent person determined to be uncollectible shall not be
included as part of the gross estate of a decedent in the full amount since the amount is
considered worthless.
______ 12. The right to succeed or the concept of succession takes effect during the lifetime of
a decedent.
______ 13. The gross estate of a non-resident citizen decedent includes properties located within
the Philippines.
______ 14. For non-resident aliens, the principle of reciprocity applies to tangible and intangible
personal properties located in the Philippines.
______ 15. Shares of stock issued by foreign corporations with 85% of its business operations
located abroad are classified as intangible properties located within the Philippines.
______ 16. The gross estate shall include properties not physically present at the time of death.
______ 17. The taxpayer in estate taxation is the decedent, creditor, or debtor.
______ 18. Properties transferred under the limited power of appointment shall form part of the
gross estate of a decedent.
______ 19. Properties transferred with the condition that the decedent will enjoy the fruits of
the properties while he/she is still alive is considered a transfer in contemplation of death.
______ 20. Under the general power of appointment, the right to transfer can be exercised by
the present transferor in favor of anybody.
______ 21. The net taxable estate is the amount to be distributed to the heirs of a decedent.
______ 22. Correctly computing the legitime of the primary compulsory heirs is the objective of
determining the amount of net taxable estate.
______ 23. A conjugal family home is deducted from the conjugal gross estate of a decedent.
______ 24. The ordinary deductions of non-resident alien who died in the Philippines shall be
deducted in full from gross taxable estate within the Philippines.
______ 25. The share of a surviving spouse in the computation of net taxable estate represents
his/her legitime.
______ 26. Special deductions are considered as such because of some preferential treatment of
the items.
______ 27. Claims against insolvent persons are deducted from the gross taxable estate of the
decedent.
______ 28. The amount of estate tax payable is computed based on the net distributable estate.
______ 29. It is necessary to classify a gross estate as exclusive or conjugal properties, in all
instances, and identify the related deductions in the determination of the net taxable estate.
B. MULTIPLE CHOICE. Write the letter of the correct answer.
______ 1. In relation to estate taxation, decedents are classified as follows, except:
a. Resident citizens
b. Non-resident citizens
c. resident aliens
d. special individuals
______ 2. Estate tax is considered as _____________
a. Direct tax
b. Personal tax
c. excise tax
d. percentage tax
______ 3. The following persons are considered primary compulsory heirs, except:
a.
b.
c.
d.
Surviving spouse
Parents of the decedent
Legitimate children and their descendants
Illegitimate children and their descendants
______ 4. The following statements, terms, and conditions make the last will and testament valid,
except:
a.
b.
c.
d.
Statement that reduces the free portion of the will
Terms that increase the legitime of the compulsory heirs
Condition that transfer part of the free portion to the compulsory heir
Statement that transfer a portion of the legitime to other successors other than a
compulsory heir
_____ 5. It refers to the property rights and obligations of a person which are not extinguished
by death and those which have been accrued since the opening of the succession
a. Income
b. Assets
c. estate
d. capital
_____ 6. The following transfers are considered transfers in contemplation of death and should
be included as part of the gross taxable estate of the decedent, except:
a.
b.
c.
d.
Donation mortis causa
Revocable transfer
Property passing under the general power of appointment
Transfer where the decedent has retained for his/her life the possession or enjoyment
of a property.
_____ 7. The following statements are true, except:
a. The right to succeed on the property will take effect only upon death of the decedent.
b. Decedents are classified into resident or citizen and non-resident alien
c. A non-resident alien is subject to estate tax for properties located within the
Philippines.
d. The gross estate of a non-resident citizen consists of properties located within the
Philippines only.
______ 8. The following are intangible properties located in the Philippines, except:
a. Shares of stock of a foreign corporation where such stocks have business situs in the
Philippines.
b. Shares of stock of a foreign corporation where at least 50% of the business operation
is located in the Philippines.
c. Rights in any industry established in the Philippines
d. Shares of stock of a domestic corporation
______ 9. The following properties are considered as not physically present at the time of death,
except:
a. Properties transferred under the limited power of appointment
b. Properties transferred in contemplation of death
c. Properties transferred with revocable terms and conditions
d. Properties transferred for insufficient consideration
______ 10. The following transfers are deemed transfers in contemplation of death, except:
a. While still alive, the decedent donated a property where the donation will take effect
at the time of his death
b. The decedent transferred a property in the regular course of a 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, which will take effect after his/her death.
C. PROBLEM SOLVING. Answer the problem, show your solution in a separate paper.
1. Jose died on November 1, 2020, with the following properties at the time of death:
Cash in bank
House and lot – Philippines
Acquisition cost
Estimated selling price
Assessed value by the Assessor’s Office
Zonal Value of the BIR
Farm lot
Acquisition cost
Estimated selling price
Assessed value by the Assessor’s Office
Zonal value of the BIR
P 450,000
5,600,000
8,900,000
7,500,000
8,300,000
5,000,000
9,000,000
7,500,000
7,300,000
Compute for the gross taxable estate of the decedent.
2. Mhakimuotha, a non-resident alien,, died during the current taxable year with the following
properties:
House and lot – Japan
Acquisition cost
Estimated selling price
Assessed value by the Assessor’s Office
Zonal value of the BIR
Processing plant – Philippines
Acquisition cost
Estimated selling price
Assessed value by the Assessor’s Office
Zonal value of the BIR
P 8,000,000
9,800,000
10,500,000
11,800,000
18,000,000
29,500,000
28,000,000
27,600,000
Ten thousand shares of stock of SMC listed in
Stick exchange
Acquisition price per share
Highest quotation 2 days before death
Lowest quotation 2 days before death
10.00
18.50
17.25
Compute for the gross taxable estate of the decedent.
3. A resident citizen died during the current taxable year with the following properties at the time
of death:
Tangible personal properties
P 6,000,000
Intangible personal properties
Franchise to be exercised outside the Philippines
4,000,000
Franchise to be exercised within the Philippines
3,000,000
Shares of stock of a foreign corporation where 40%
of the business operates in the Philippines
2,000,000
Shares of stock of a foreign corporation where 90%
business operates in the Philippines
1,000,000
Compute for the gross taxable estate under the principle of reciprocity.
4. Bernie, just before his death, has total claims against a debtor amounting to P2,000,000. One
of the debtors whom Bernie has a claim of P500,000 has assets of P3,000,000 and liabilities of
P10,000,000. The court accordingly declared the said debtor insolvent.
Compute for the gross estate of Bernie.
5. On January 2 of the current taxable year, Franklin, a resident decedent, made a recoverable
transfer with consideration. The following information is provided:
Consideration received
P 700,000
FMV of the property at the time of transfer
900,000
FMV of the property at the time of death
800,000
At the time of death, the properties physically present totaled
P5,000,000.
How much is the valuation of the gross estate?
6. Nye Wang, a non-resident alien, died with the following properties:
Bank deposits in Beijing
Shares of stock in foreign corporation
A housing unit in Beijing
A commercial building in Cebu City donated
P 800,000
1,200,000
3,000,000
Inter vivos to his daughter six years ago
Interests in a domestic partnership
4,000,000
500,000
Compute for the gross estate of a non-resident alien under the principle of reciprocity.
7. Ryan, just before his death, his claims against his debtor for P2,000,000. One of the debtors
whom Ryan has a claim of P500,000 has total assets of P3,000,000 and total liabilities of
P10,000,000. The court accordingly declared the said debtor insolvent.
Compute for the probable collectible amount of Ryan.
8. Magdalene, spouse of the decedent who died in a bus accident, received P2,500,000, which is
broken down as follows:
From Apex Insurance Life Company where the policy is revocable
From Lifelong Insurance Company where the policy is irrevocable
From Midtransport Company where a settlement was made outside
Court proceedings
P 900,000
1,200,000
400,000
Compute for the gross estate of the decedent.
9. Antonio has a gross estate amounting to P6,000,000 which was physically present at the time
of his death. Prior to his death, he transferred the following properties:



A 3 hectare agricultural land to Janice, youngest daughter of Mike, where the value at
the time of transfer was P900,000. This property was acquired by Antonio from the
predecessor decedent, Mike, with the condition that should Antonio transfer the
property, it should be given to the youngest daughter of Mike. At the time of death,
the FMV of the property was P1,200,000.
A 400-square meter vacant commercial lot to Mylene valued at P1,200,000 at the time
of transfer. The transfer imposed a condition that the transferor has the power to
revoke or amend the terms of the transfer. While still alive, the decedent exercised
the power to revoke. The fair market value at the time of death was P1,500,000.
15,000 shares of stock, with a par value of P100 to Susan for a cash consideration of
P1,800,000 when the market price was at P200 per share. The shares of stock were
issued by a foreign corporation with 60% of its business operation in the Philippines.
At the time of death, the shares were quoted in the stock market at P210.
Compute for the gross taxable estate of the decedent.
10. Felix left the following properties upon his death:
1. Personal tangible properties
Acquisition cost
P1,200,000
Book value
400,000
FMV
600,000
2. Real properties
Assessed value
800,000
Zonal value
1,300,000
3. Tangible personal properties
a. Stocks of Camix Company, 3,000 shares listed in the local stock
exchange (highest P35, lowest P33)
b. Stocks of Dam Company, 2,000 shares not listed in the local
Stock exchange (cost per share, P60, book value per share P55)
Compute for the gross estate of the decedent.
11. Nye Hwang, a resident alien decedent, died with the following properties:
A house and lot in the Philippines
A car in the Philippines
A commercial building in Japan
Shares of stock issued by a foreign corporation
with 70% of its business operation in the Phils.
P4,000,000
1,200,000
6,000,000
2,000,000
Compute for the gross estate of the decedent.
12. The following items comprised the gross estate of MacPeter, a non-resident alien decedent:
A house and lot located in Australia
A sedan car located in the Philippines
A 3-door apartment in Australia
Shares of stock of SMC Corp in the Philippines
Shares of stock of a foreign corporation with business
In the Philippines
A franchise exercisable in Australia
P6,000,000
1,800,000
5,000,000
4,000,000
2,000,000
1,000,000
Compute for the gross taxable estate of the decedent:
1. under the principle of reciprocity.
2. Without applying the principle of receiprocity
13. Albert, a non-resident Filipino, died during the taxable year with the following information:
A house and lot in the Philippines
A car in Singapore
Jewelries in the Philippines
Receivables in Singapore where 15% is proven to be
uncollectible due to insolvency of the debtor
P2,000,000
800,000
500,000
900,000
Compute the gross taxable estate of the decedent.
14. Neneng Kamot, a non-resident Filipino, died in Singapore leaving behind the following
properties:
A house and lot in the Philippines
P2,000,000
A car and other tangible personal properties in Singapore 1,200,000
A farmland in the Philippines
800,000
A franchise exercisable in Singapore
600,000
Total income of a partnership established in the Philippines
where the interest of the decedent was 30%. Sixty percent
of the income was earned before death, while the
remaining 40% is earned after death.
4,000,000
Shares of stock of a foreign corporation without business
situs in the Philippines
1,500,000
Determine the gross estate of the decedent.
15. Lhinag Pang, married and a resident citizen, died with the following properties:
Tangible personal property in Iligan City, acquired through
Succession by Lhinag Pang before marriage
Income from inherited property in Iligan City
Intangible personal property in Singapore, acquired by
Lhinag Pang through succession before marriage
Income of personal property in Singapore
Real property brought in to marriage by the spouse located
In Pigcawayan, Cotabato
Income of real property in Pigcawayan
Real property in Midsayap brought into marriage
Income of real property in Midsayap
P120,000
18,000
650,000
92,000
560,000
45,000
510,000
40,000
Determine the following:
a. Gross estate of Lhinag Pang under the Conjugal Partnership of Gains
b. Gross estate of Lhinag Pang under absolute community of Property
16. Turak Shuy, married and a resident citizen, died on March 1 leaving the following properties:
A house and lot, acquired by Turak Shuy during marriage in
Dumaguete City
Income of house in Dumaguete City
Real property in Bacolod City, acquired by the wife during marriage
Income of real property in Bacolod City
Tangible personal properties in Cebu City, acquired through
Succession by Turak Shuy during marriage
Income of personal properties in Cebu City
Intangible personal properties, acquired through succession by the
wife in Australia during marriage
Income of personal properties in Australia
P1,200,000
110,000
800,000
90,000
700,000
50,000
650,000
75,000
Determine the following:
a. Total conjugal properties of the spouses under the conjugal partnership of gains
b. Total community properties of the spouses under the absolute community of
property.
17. Five years ago, Edison borrowed P4,000,000 from Countryside Premier Bank by mortgaging
his three-door apartment with a fair market value of P5,200,000. At the time of his death, Edison
has paid 75% of the mortgage and the fair market value of the property was P5,800,000.
How much is the allowable deduction of Edison from his gross estate?
18. Among the properties included in the gross estate of Laurence at the time of his death was a
two-storey commercial building with a fair market value of P6,000,000. During the settlement of
the estate and before the last day of paying the estate tax, the said property was destroyed by
fire. The fair market value of the property at the time of fire was P6,500,000.
Compute the following:
a. The amount of deductible loss
b. If the property was insured for P5,000,000, and the amount recovered from the
insurance company was P4,500,000, how much is the deductible loss?
c. Assume that 70% of the property was destroyed by fire and property was not
insured, how much is the deductible loss?
19. Albert, a non-resident Filipino, died during the taxable year with the following information:
A house and lot in the Philippines as the family home
P2,000,000
A car in Singapore
Jewelries in the Philippines
Receivables in Singapore where 15% is proven to be
Uncollectible due to insolvency of the debtor
Funeral expenses
Judicial expenses
800,000
500,000
900,000
150,000
60,000
How much is the amount of ordinary deductions?
20. Israel, a non-resident Filipino, died during the taxable year with the following information:
A house and lot in the Philippines as the family home
A car in Singapore
Jewelries in the Philippines
Receivables in Singapore where 15% is proven to be
Uncollectible due to insolvency of the debtor
Funeral expenses
Judicial expenses
P15,000,000
3,000,000
2,000,000
2,000,000
5,000,000
1,500,000
How much is the net estate if the decedent is single?
21. Johnny, married and a resident Filipino, died during the taxable year with the following
information:
A house and lot in the Philippines as the family home
A car in Singapore, exclusive
Jewelries in the Philippines, exclusive
Receivables in Singapore where 15% is proven to be
Uncollectible due to insolvency of the debtor
Funeral expenses
Judicial expenses
P13,000,000
4,000,000
6,000,000
2,000,000
5,000,000
1,500,000
How much is the net taxable estate?
22. The following information relates to the predecessor, Alfonso Sr., and present decedent,
Alfonso Jr:
Data on Alfonso, Sr.
A two-storey commercial building, FMV at the time of death
A Hi-ace van, FMV at the time of death
P3,000,000
900,000
Data on Alfonso, Jr.
At the time of death of Alfonso Jr who died three years after the death of his father, the
two-storey commercial building had a fair market value of P4,000,000, while that of the
Hi-ace van was P800,000. The mortgage has an unpaid balance of P300,000.
The total amount of ordinary expenses was P1,200,000,comprising the funeral expenses,
judicial and administrative expenses, and transfers for public use. The gross estate of
Alfonso, Jr. at the time of his death amounted to P15,500,000.
Compute the following:
a. The initial basis for computing the amount of vanishing deduction
b. The amount of allocated portion of ordinary expenses to be deducted from the
initial basis
c. The amount of vanishing deduction
23. On July 1, of the current taxable year, a non-resident alien died with the following
information:
Properties within the Philippines
Properties outside the Philippines
Deductions for losses, indebtedness, and taxes
P4,000,000
16,000,000
2,000,000
How much is the allowable deductions from the gross taxable estate?
24. When Headstrong, a resident Australian, died, he had P120,000 receivable from Phala Utang.
The following data were provided:
Total assets of Phala Utang
Total obligations of Phala Utang (including unpaid taxes
Of P35,000 to the Philippine government)
P685,000
1,035,000
How much is the allowable deductions from claims against insolvent persons?
25. Rafael died during the current taxable year. The following data pertain to his assets and
liabilities:
Gross estate
Exclusive
P4,000,000
Conjugal
8,000,000
Medical expenses incurred before death
300,000
Claims against insolvent persons
180,000
Other Ordinary expenses
Land inherited during marriage, 2 years before death,
Not included in the above-mentioned gross estate
Mortgage loan on land inherited, including P400,000
Payment
320,000
2,000,000
600,000
Compute for the following:
1. The amount of vanishing deduction
2. The share of the surviving spouse
3. The net taxable estate
PART 2: DONOR’S TAX
A. TRUE OR FALSE. Write True if the statement is true and write FALSE if the statement is
not true.
______ 1. A donation is an onerous transfer of property from the owner to another person.
______ 2. The done should willingly accept the donated property for a donation to become valid.
______ 3. Donor’s tax is levied upon the property being transferred and not on the act of
transferring.
______ 4. Both direct and indirect donations are subject to donor’s tax.
______ 5. One of the underlying reasons for imposing donor’s tax is to prevent the avoidance of
payment of estate tax.
______ 6. Donation inter vivos is made between persons who are alive at the timeof donation.
______ 7. The donor does not need to know the acceptance of the done.
______ 8. Donation mortis causa is subject to estate tax.
______ 9. Donors are generally categorized as either a resident citizen or a non-resident citizen.
______ 10. A donation should be partially paid in order to be valid.
______ 11. When the donee performs services on account of the donation, the transfer of
property is with consideration.
______ 12. In a valid donation, both the donor and the done should be alive.
______ 13. For donation to be valid, the done should have the capacity to receive.
______ 14. An oral donation will suffice if the value of movable property is P5,000 or less.
______ 15. The acceptance of the done should be made only in the same public instrument
executed by the donor.
______ 16. When the donation is a real property, it should be made in a public instrument.
Otherwise, the donation is void.
______ 17. A donation is void in case the done is capable of accepting.
______ 18. If a donor is a non-resident alien, the gross gifts will include properties within the
Philippines only.
______ 19. The donation of intangible properties located outside the Philippines by a nonresident alien donor is subject to the rule of reciprocity.
______ 20. The value of a personal property donated is determined by its fair market value at
the time of donation.
B. MULTIPLE CHOICE. Write the letter of the correct answer.
1. The following statements are correct, except:
a. Donor’s tax isimposed to prevent taxpayers from avoiding estate tax payment.
b. Donor’s tax is imposed to compensate for the income losses of the government when
large income-generating properties are divided by the owner through donations.
c. Properties transferred to the heirs upon the death of the owner are subject to donor’s
tax if they are exempted from estate tax.
d. Donor’s tax is imposed on the act or right of transferring the property and not on the
property being transferred.
2. Donor’s tax is classified as what type of tax?
a. Property tax
c. excise tax
b. Business tax
d. personal tax
3. The following acts or donations are subject to donor’s tax, except:
a. Donation inter vivos
b. Donation mortis causa
c. Transfer of property with insufficient consideration
d. Splitting of a large property with the intention of splitting the income
4. The following are the elements of a valid donation, except:
a. The donation should be without consideration.
b. The donation should be made while the donor and the done are still alive.
c. The done shall have the legal capacity to accept the donation.
d. There should be an actual or constructive delivery of the donated property.
5. The following should be observed for a donation to be vaid, except:
a. A real property donated with a value higher than P5,000 shall always be made in
public instrument indicating the value and the property donated.
b. A movable property donated with a value higher than P5,000 shall be made in a public
instrument, and the acceptance must be done in the same instrument.
c. A movable property donated with a value of P5,000 or less may be made orally with
the delivery of the donated property.
d. A real property donated with a value of P5,000 or less may be made orally with the
simultaneous delivery of the property.
6. Statement 1 In the donation of a real property, acceptance by the done is necessary so
that the donation becomes valid.
Statement 2 To be valid, the donation of a movable property with a value of P5,000 or
less, if done in writing, must be accepted by the donee. However, if the donation is made
orally, acceptance is not necessary.
a. Only statement 1 is correct
c. Both statements are correct
b. Only statement 2 is correct
d. Neither statement is correct
7. The following statements are correct, except:
a. For a donation to be valid, it shall be made within the period where both the donor
and done are still alive.
b. In a valid donation, both the donor and the done have the legal capacity to donate
and accept.
c. Properties that will be acquired in the future by a donor cannot be an object of a valid
donation.
d. The donation of real properties, regardless of the value, must be made in public
instrument.
8. Donations made by a non-resident alien that will be subject to donor’s tax include the
following properties, except:
a. Real properties located in the Philippines
b. Tangible personal properties located in the Philippines
c. Intangible personal properties located in the Philippines without reciprocity
d. Intangible personal properties located in the Philippines with reciprocity
9. The following properties are classified as intangible personal properties located in the
Philippines, except:
a. A franchise exercisable in the Philippines
b. Shares of stock by a foreign corporation
c. Shares of stock by a foreign corporation with 85% of its business operation in the
Philippines
d. Shares of stock issued by a domestic corporation
10. The following are the valuation procedures made on donated properties, except:
a. Personal properties donated are valued based on their fair market value at the time
of donation.
b. Shares of stock are valued based on the book value or earnings per share of the stock
at the time of donation.
c. Bonds issued by a foreign corporation are valued on the quoted price of the bonds.
d. Real properties are valued based on the fair market value or zonal value, whichever is
higher.
C. PROBLEM SOLVING. Answer the problem, show your solution in a separate paper.
1. Franklin, a non-resident alien, donated the following properties during the current
taxable year on the occasion of his son’s marriage in the Philippines:
A Toyota car in the Philippines
Jewelry in the Philippines
A house and lot in Australia
P1,300,000
700,000
2,500,000
How much is the amount of Gross Gift?
2. Sikat Tin, a resident citizen, donated the following properties during the current taxable
year:
 To Cynthia, his daughter, on account of her marriage, a house and lot, not classified
as a capital asset, costing P3,000,000 with a fair market value of P4,500,000 at the
time of donation
 To Fred, a close friend, on account of his marriage, a second-hand motor vehicle
acquired a year ago for P600,000 with a fair market value of P400,000. The motor
vehicle has unpaid mortgage of P50,000, which will be paid by Mr. Sikat Tin.
How much is the amount of net gifts subject to donor’s tax?
3. On April 30 of the current taxable year, Langitnon correctly paid donor’s tax amounting to
P240,000 on account of his donation to his close friend on April 5 of the same year. The property
donated is mortgaged for P200,000 which was agreed to be assumed by the donee.
How much is the amount of gross gift?
4. On June 30 of the current taxable year, a non-resident citizen donor made the following transfers
of property deemed as donation:
A motor vehicle to his cousin (subject to revocation)
Pieces of jewelry to his aunt
Cash to the national government
A Rolex watch to his best friend
Cash to his daughter on account of marriage
P1,200,000
900,000
500,000
300,000
3,000,000
How much is the donor’s tax payable?
5. During the current taxable year, Bobby made the following donations:
 March 15 – To Rafael, his legitimate son, on account of his marriage on January 12 of the
same year, a house and lot not classified as a capital asset, currently valued at P3,500,000
 July 1 – To Josephine, his legally adopted daughter, on account of her marriage two years
ago, a commercial building not classified as a capital asset with a fair market value of
P2,800,000.
Determine the following:
a. Donor’s tax on the March 15 donation
b. Donor’s tax on the July 1 donation
6. Mr. and Mrs. Tulingan, resident citizens, have made the following donations during the current
taxable year:
 January 18 – A house and lot, not calssified as a capital asset, valued at P2,800,000 to their
son as a wedding gift held on December 15 last year from conjugal properties
 April 12 – Cash amounting to P800,000 to the sister of Mrs. Tulingan from her exclusive
property
 August 20 – A commercial building, not a capital asset, with a fair market value of
P3,500,000 as a gift to their daughter’s wedding on December 10 of the current taxable year
from conjugal properties
Determine the total amount of donor’s tax to be paid on the above donations.
7. During the current taxable year, Peterfan, a non-resident alien, had the following donations:
 January 1 – Cash amounting to P200,000 to the provincial government of Cotabato for relief
operations of the flood victims
 March 20 – A house and lot in Davao City valued at P6,000,000 on account of his daughter’s
marriage in Davao
 June 18 – A commercial building in Australia with a prevailing market value of P5,000,000 to
his son as a birthday gift. The donor’s tax paid in Australia was P450,000.
 October 10 – Shares of stock of a foreign corporation with a total quoted price of
P3,000,000 as an additional gift on account of the marriage of his daughter on March 20.
The principle of reciprocity is applied to this property, and the foreign corporation had 35%
of its business operation in the Philippines.
Determine the total amount of donor’s tax to be paid in the Philippines on the above
donations.