1.
2.
3.
4.
5.
6.
Which of these is a donation mortis causa? d. all of these
Donation made on the decedent's last will and testament is A. A donation mortis causa
Who is the taxpayer in estate taxation? Decendent
A donation mortis causa is effected by the death of the decedent. true
Which is subject to donor's tax? B. Donation inter-vivos
Mr. Bonifacio purchased a piece of land in 2011 for P500,000 when it was worth P450,000. He
transferred the property when it was worth PI,000,000. Subsequently, Mr. Bonifacio died when
the property was worth P1,200,000 Assuming that the donation is a donation inter-vivos, what
is the value to be subjected to donor's tax? c. 1,000,000
7. The reciprocity rule applies to intangible properties of any alien located in the Philippines.
False
8. The shares and bonds of domestic corporations are presumed situated in the Philippines for
purposes of transfer taxation. True
9. . Estate tax a are higher than donor's tax rates. TRUE
10.Mr. Bonifacio purchased a piece of land in 2011 for P500,000 when it was worth P450,000. He
transferred the property when it was worth PI,000,000. Subsequently, Mr. Bonifacio died when
the property was worth P1,200,000 Assuming that the donation is a donation mortis-causa,
what is the value to be subjected to estate tax? 1,200,000
11.Transfer tax on donation inter-vivos applies to a C. both natural and juridical persons
12.The transfer of wealth should be taxed so that it will benefit the entire society. Which theory
does the statement describe? Wealth redistribution
13.a non-resident alien is B. subject to transfer tax on phil properties
14.Transfer tax on donation mortis causa applies to a natural person
15.Who is subject to transfer tax? TRANSFEREE
16.. Which is not a characteristic of transfer tax? C. Local tax
17.Which is not a characteristic of a donation inter-vivos? INSPIRED BY THOUGHT OF DEATH
18.The transferee in a donation is referred to as the donee. True
19.All forms of gratuitous transmission of property while the donor is living is considered donation
inter-vivos. True
20.The following relate to the disposition of proprty made by the seller Selling Price P 4,200,000
Fair value on the date of sale P 4,000,000 Fair value at death of the seller P5,000,000 What is
the amount subject to donor's tax? 0
21.Which is incorrect regarding the taxation of incomplete transfers which are eventually
completed? either
22.Statement 1: The amount of transfer tax is dependent upon the value of of the thing
transferred. Statement 2: Donor's tax is imposed upon the properties of a decedent while
estate tax is imposed on the donor. Which is incorrect? statement 2
23.Transfers in contemplation of death are donations made inter-vivos but are actually donation
mortis causa. FALSE
24.Wealth accumulation could not be possible without the government's indirect participation. The
transfer of wealth should be subject to tax because it is just fair for the government to take its
just share on the wealth. The statement describes a state partnership theory
25.Cash is considered an intangible property. true
26.Which is a complete transfer? IRREVOCABLE
27.Conditional transfers and revocable transfers which are still' pending completion at the point of
the transferor's death are C. subject to estate tax
28.Transfers can be structured in such a way to avoid payment of income tax. Thus the gratuitous
component of transfer must be taxed. The statement describes B. Tax evasion theory
29.Transfer tax is an indirect tax False
30.The transferee in a donation mortis causa is the decedent. True
1. Bilateral transfers include inheritance and donations. FALSE
2. Complex transfers are subject to both income tax and transfer tax.TRUE
3. Transfer tax supports income taxation. TRUE
4. Unilateral transfers are subject to transfer tax, TRUE
5 Donations inter-vivos are subject to estate tax. FALSE
6. Transfer tax is intended to recoup future reduction in business taxes TRUE
7. The transferee in a donation mortis causa is a decedent. FALSE
8. Transfer taxis a tax on the privilege to transfer property gratuitously. TRUE
9. A donation mortis causa is subject to donor's tax. FALSE
10. Transfer tax can be viewed as a mode of redistribution of wealth to society. TRUE
11. Bilateral transfers are subject to income tax. TRUE
12. Transfer tax is a form of specific tax. FALSE
13. Transfer tax is an indirect tax. FALSE
14. Citizens are subject to tax on transfers of properties regardless of location. TRUE
15. Unilateral transfers are subject to transfer tax, TRUE
Multiple Choice
1. Which is subject to transfer tax?
a. Sale c. Donation
b. Barter d. Loan
2. A property is transferred for less than full consideration when it is sold
a. above the fair value of the property.
b. below the fair value of the property.
c. at the fair value of the property.
d. at any price which is deemed unacceptable to the seller
3. Transfers for full or adequate consideration is subject to
a. Income tax c. Both A and B
b. Transfer tax d. Neither A nor B
4. Which is not a rationalization of transfer taxation?
a. Tax evasion c. State partnership
b. Tax recoupment d. All of these
5. Transfer tax is imposed to partially recover future reduction in income tax which will arise
from the split of income producing property to few or several taxpayers. What theory
statement does the statement describe?
a. Tax evasion theory c. Benefit received theory
b. Tax recoupment theory d. Wealth redistribution theory
6. Which is not a characteristic of transfer tax?
a. Direct tax c. Privilege tax
b. National tax d. local tax
7. Transfer taxes are not
a. Ad valorem taxes c. Fiscal taxes
b. Progressive taxes d. Transaction taxes
8. Who is subject to transfer tax?
a. Transferor c. Both transferor and transferee
b. Transferee d. None of these
9. Transfer tax on donation mortis causa applies to a
a. Juridical person c. Both A and B
b. Natural person d. Neither A nor B
10. Which is not subject to estate tax?
a. Resident alien c. Domestic corporation
b. Non-resident alien d. Non-resident citizen
TRUE OR FALSE
1. Only testamentary dispositions are subject to estate tax. FALSE
2. The succession by operation of law is called intestate succession. TRUE
3. The will may be prepared by the heirs of the decedent. FALSE
4. The right to succession is transmitted from the moment of death of the decedent. TRUE
5. A testator can designate any heirs even if in violation of his legitimate. FALSE
6. A decedent with a last will and testament is said to be intestate . FALSE
7. In intestate succession, the surviving spouse is treated as a legitimate child qualified for a
share while illegitimate children are allowed half-share each. TRUE
8. Succession is a mode of acquisition of property similar to donation. FALSE
9. A person who died with a will is said to be testate. TRUE
10. A person who prepared a will is referred to as the executor. FALSE
11. Successions whether testamentary, intestate, or mixed are subject to estate tax. TRUE
12. The will may be prepared after the death of the decedent. FALSE
13. Inheritance refers to the property which will be transmitted to the heirs. TRUE
14. A debt can be inherited by heirs. FALSE
15. The succession over properties of a decedent who prepared a will but covers only a
portion of his estate is called mixed succession. TRUE
16. In testamentary disposition, the heirs must always be relatives of the decedent. FALSE
17. The computation of the estate requires understanding of the legitime. TRUE
18. The decedent's successors in interest are referred to as the heirs. TRUE
19. With a last will and testament, the decedent can name any person which he wants as
heir. TRUE
20. The concurring heirs shall inherit together with the primary heirs or in their default, the
secondary heirs. TRUE
MULTIPLE CHOICE
1. Statement 1: No estate tax is due if the net taxable estate is negative.
Statement 2: Once there is death, the estate tax is always payable. Which is incorrect?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement
2. Who shall inherit from the following potential heirs?
a. 1st cousins c. nieces and nephews
b. brothers and sisters d. second cousins
3. This is a person appointed by the court to manage the distribution of the estate.
a. Guardian c. Administrator
b. Executor d. Trustee
4. This is a person handpicked by the decedent to implement his Will.
a. Guardian c. Administrator
b. Executor d. Trustee
5. Statement 1: Succession will not effect until and unless the estate tax is paid.
Statement 2: Estate tax is payable even in the absence of relatives who may inherit the
estate.
Which is correct?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement
6. Statement 1: A resident citizen is taxable on his estate wherever situated.
Statement 2: A non-resident citizen is taxable only on his estate situated in the Philippines.
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement
7. Which is not an element of succession?
a. Decedent c. Estate tax
b. Estate d. Heirs
8. The donor in a donation mortis causa is
a. dead. c. either living or dead.
b. living. d. in a coma.
9. It is a mode of gratuitous acquisition of property out of the generosity of a person
a. Succession c. Loan
b. Donation d. None of these
10. It is a mode of gratuitous acquisition of property by the death of a decedent
a. Donation c. Inheritance
b. Succession d. Testate
11. A decedent died intestate with P1,000,000 net estate. If he has four legitimate children
and two illegitimate children, how much shall each legitimate and each illegitimate child
respectively receive?
a. P0; P0 c. P 200,000; PI00,000
b. PI00,000, P50,000 d. P 166,667; P166,667
SOLUTION:
Leg 1
1
1/5 x 1,000,0000 = 200,000
Leg 2
1
1/5 x 1,000,0000 = 200,000
Leg 3
1
1/5 x 1,000,0000 = 200,000
Leg 4
1
1/5 x 1,000,0000 = 200,000
Illeg 1
0.5
0.5/5 x 1,000,000 = 100,000
Illeg 2
0.5
0.5/5 x 1,000,000 = 100,000
5
12. Which is correct?
a. Estate tax is determined per piece of property transferred to the heir.
b. Estate tax is collected by the local government.
c. Estate tax is a property tax.
d. Estate tax is an excise tax.
13. A married decedent died intestate leaving behind P1,500,000 of his separate property and
P6,000,000 common properties with his surviving spouse. If he has three children and one
illegitimate child. How much shall each legitimate child receive?
a. P 1,666,667 c. P 666,667
b. P1,000,000 d. P 333,333
SOLUTION:
Separate Property
Common Property
Total
1,500,000
6,000,000
7,500,000
Divide 2
(3,000,000)
4,500,000
Leg 1
1/4.5 x 4,500,000 = 1,000,000
14. In the immediately preceding problem, compute the total properties of the surviving spouse
after partition of the properties.
a. P 3,000,000 c. P 4,666,667
b. P 4,000,000 d. P 3,666,667
Spouse
1 / 4.5 x 4,500,000 = 1,000,000
Common Property (6M /2)
= 3,000,000
Total
4,000,000
15. The reciprocity exemption on intangible personal properties situated in the Philippines is
applicable only to a
a. Non-resident citizen c. Resident alien
b. Non-resident alien d. All of these
1.
2.
3.
4.
5.
6.
A decedent if he left a will is called a testator. TRUE
A non-resident citizen is taxable only on his estate situated in the Philippines. FALSE
Succession will not effect until and unless the estate tax is paid. FALSE
A resident alien is taxable only on his estate located within the Philippines. FALSE
Who is not a compulsory heir? D. A brother
A married decedent died intestate leaving behind P8,000,000 of his separate properties and
P6,000,000 common properties with his surviving spouse. If he has four legitimate children and
one illegitimate child, how much shall is the share of the illegitimate child? B. P1,000,000
7. A married decedent died intestate leaving behind P8,000,000 of his separate properties and
P6,000,000 common properties with his surviving spouse. If he has four legitimate children and
one illegitimate child, compute the total properties of the surviving spouse after partition of the
properties. D. P5,000,000
8. The successor in interest of the decedent. HEIR
9. An illegitimate child is not a compulsory heir. FALSE
10.A decedent died intestate with P3,000,000 net estate. If he has two legitimate children and four
illegitimate children, how much shall each legitimate and each illegitimate child respectively
received? A. P500,000; P500,000
11.Estate tax is an excise tax. TRUE
12.Excise tax is determined per piece of property transferred to the heir. FALSE
13.Estate tax is a property tax. FALSE
14.A transfer is said to be gratuitous when there is a consideration for the transfer. FALSE
15.Which of the following heirs will not inherit? C. NEPHEW
16.It is a done of a real property in a last will and testament. B. DEVISEE
17.It is succession in the absence of a will. B. INTESTATE
18.A married decedent died intestate leaving behind P8,000,000 of his separate properties and
P6,000,000 common properties with his surviving spouse. If he has four legitimate children and
one illegitimate child, how much shall each legitimate child received? C. P2,000,000
19.Which is not a form of succession. B. COMPULSORY
20.Once there is death, the estate tax is always payable. FALSE
1. Transfers inter-vivos made before death are included in gross estate. FALSE
2. The payment for obligations and expenses after death is added back to the amount of gross estate.
TRUE
3. Properties held by the decedent as a trustee must be included in the gross estate. FALSE
4. Income earned before death is included in gross estate TRUE
5. Properties held by the decedent which must be transmitted to an heir in accordance with the desire
of a predecessor are excluded from gross estate. TRUE
6. The proceeds of an irrevocable life insurance is included in gross estate FALSE
7. Transfers made for adequate considerations are excluded from gross estate. TRUE
8. The proceeds of an irrevocable life insurance is included in gross estate FALSE
9. Properties held by the decedent as a fiduciary heir are included in gross estate. FALSE
10. Listed stocks are valued at their par value. FALSE
11. The gross estate includes only the separate properties of the decedent FALSE
12. The proceeds of group insurance is included in gross estate. FALSE
13. The gross estate of a non-resident citizen includes tangible properties wherever situated. TRUE
14. The gross estate is valued at the point of death. TRUE
15. The proceeds of GSIS, policy and SSS benefits are included in gross estate. FALSE
MULTIPLE CHOICE
1. Gross estate means
a. properties, whether or not owned by the decedent, existing at the point of death
b. properties owned by the decedent at the point of death
c. present properties in the possession of the decedent at the point of death
d. Any of these
2. Which has reciprocity exemption?
a. Resident alien c. Non-resident alien
b. Non-resident citizen d. All of these
3. Which of these properties may be excluded from gross estate by reason of reciprocity?
a. Cash c. Paintings
b. Car d. Land
4. If inventory-taking of properties is conducted after the death decedent, which is deducted
from the inventory list?
a. Income accruing after death
b. Expenses paid after death
c. Income accruing before death
d. Expenses paid before death
5. Which is an inclusion in gross estate?
a. Separate properties of the surviving spouse
b. Common properties of the spouses
c. Separate properties of the heirs
d. Properties acquired from group insurance
6. The gross estate of resident or citizen decedents does not include
a. Properties located abroad
b. properties located in the Philippines
c. Intangible personal property located abroad
d. Properties not owned
7. Mr. A devised in his will a piece of land to Mrs. B. Mrs. B shall enjoy usufructuary right over the
property and shall pass the same to Mr. C upon her death. Who shall include the property in his or
her gross estate upon death?
a. Mr. A c. Mr. C
b. Mrs. B d. Mr. A and Mr. C
8. Mrs. A appointed Ms. B as fiduciary heir over an agricultural land which Ms. B shall turn over to Mr.
C upon Ms. B's death. Which is incorrect?
a. The land must be included in Mrs. A's gross estate upon her death.
b. The land must be excluded in Ms. B's gross estate upon her death.
c. The land must be excluded in Mr. C's gross estate upon his death.
d. None of these
9. Which is not deducted from the inventory list of properties in computing gross estate?
a. Properties held as a trustee
b. Properties held as a fiduciary heir
c. Properties held under a general power of appointment
d. Properties held under a special power of appointment
10. Mr. A designated his wife as the revocable beneficiary of the proceeds of his life insurance. Which
is correct?
a. The proceeds must be included in the gross estate of Mr. A
b. The proceeds must be excluded in the gross estate of Mrs. A upon her death.
c. The proceeds must be treated as donation subject to donor's tax.
d. The proceeds must be excluded in the gross estate of Mr. A.
1. The gross estate is valued at the point of death. TRUE
2. The maximum allowable amount of standard deduction is 5,000,000
3. Which is deductible by a non-resident alien decedent? TRANSFER FOR PULIC USE
4. Transfers made for adequate considerations are included in gross estate. FALSE
5. Which of these do not diminish the hereditary estate of the decedent? MEDICAL EXPENSE
BEFORE DEATH
6. The standard deduction is claimable by a resident or citizen decedent without the need to prove
entitlement to the deduction. TRUE
7. A decedent died with a gross estate of 4M. Which of the following is required? ESTATE TAX
RETURN
8. An unpaid funeral expense may be deducted through claim against the estate. FALSE
9. Properties held by the decedent as a trustee must be included in the gross estate. FALSE
10. The gross estate includes only the separate properties of the decedent. FALSE
11. The loss separate properties of the decedent is not deductible against common properties of
spouses. TRUE
12. What is the maximum extension allowed in filing the estate tax return? 2 YEARS
13. Who is directly liable to pay c, the estate tax? ADMINISTRATOR EXECUTOR
14. Resident alien decedents can claim deduction for family home. TRUE
15. The estate tax return shall be filed within 1 YEAR FROM THE DATE OF DEATH
16. In computing the actual share in common properties, funeral expenses are deductible against
COMMON PROPERTY OF THE SPOUSES
17. Transfers in contemplation of death are included in gross estate. TRUE
18. Which obligation is deductible against gross estate? INCOME TAX OF THE DECEDENT
BEFORE DEATH
19. A CPA Certification is requires if the gross estate EXCEEDS 5M
20. Losses of property before the death of the decedent are deductible. FALSE
1. Only taxes and obligations accruing after death are deductible from estate. FALSE
2. For married decedents, deductions are presumed common unless proven be exclusive. TRUE
3. The share of the surviving spouse is 1/2 of the husband's exclusive FALSE
4. Non-resident decedents cannot claim the full amount of deductions. TRUE
5. The estate tax liability of the decedent is deductible in the net taxable estate. FALSE
6. The deduction for share of surviving spouse does not apply to decedents. TRUE
7. An unpaid funeral expense may be deducted through claim against estate. FALSE
8. Non-resident decedents cannot claim standard deductions. FALSE
9. A family home is a claimable deduction up to P500,000 FALSE
10. Losses of property before the death of the decedent are deductible. FALSE
11. Resident alien decedents can claim deduction for family home TRUE
12. The loss of separate properties of the decedent is not deductible against common properties of
the spouses. TRUE
13. As a rule, deductions are allowed if they are taken from gross estate chargeable to gross estate.
TRUE
14. The vanishing deduction is applicable only if the previous estate paid estate tax. TRUE
15. Non-resident alien decedents can claim only a proportion of losses, indebtedness, taxes, and
transfers for public purpose. TRUE
MULTIPLE CHOICE — Theory:
1. Which of the following losses is not deductible? A
a. Losses of properties compensated for by insurance
b. Losses arising from fires
c. Losses arising from theft or embezzlement
d. Losses arising from storms or shipwreck
2. Which of the following decedents cannot claim special deductions for family home? A
a. Non-resident alien c. Resident citizen
b. Non-resident citizen d. Resident alien
3. Which is correct regarding deductible obligations of the estate? C/A/D
a. It must always be notarized.
b. It must be incurred before filing of the estate tax return.
c. It must be paid before the filing of the estate tax return.
d. It must be incurred before the death of the decedent.
4. Vanishing deduction is allowed if' the property subject to vanishing deduction is acquired C
a. one year before death.
b. more than one year before death.
c. within five year before death.
d. more than five year before death.
5. Which of these taxes is deductible against gross estate? D
a. Income tax paid before death
b. Real property tax accruing after death
c. Income tax of the estate
d. Real property tax accruing before death
MULTIPLE CHOICE — Problem
1. Mr. Maestro died leaving a family home valued at P 18,000,000 which he inherited during the
marriage when it was worth P 8,000,000. What is the deduction for family home? D/C/B
a. –O- c. P 9,000,000
b. P 8,000,000 d. P10,000,000
2. The spouses own a residential lot as their only real property. The lot had an assessed value of
P15,000,000, zonal value of P18,000,000 and an independent appraisal value of P25,000,000. What
is the deductible family home? D
a. –O- c. P 9,000,000
b. P 7,500,000 d. P10,000,000
3. A non-resident alien decedent died leaving a substantial estate in the Philippines. He is married
with six dependents. How much standard deduction can he claim? C
a. P 0 c. P500,000
b. P200,000 d. P 1,000,000
4. A Chinese citizen residing in Quezon City, Philippines , died leaving several properties in the
Philippines. How much standard deduction can his estate claim? C
a. P 0 c. P5,000,000
b. P500,000 d. P 10,000,000
5. A decedent died leaving an estate with the following properties and deductions: D/C
Gross estate (2M is exclusive) P4,000,000
Expenses and obligations
Funeral Expense 200,000
Judicial Expense 100,000
Indebtedness and taxes 250,000
Losses 150,000
What is the share of the surviving spouse?
a. P2,000,000 c. P850,000
b. P1,650,000 d. P650,000
SOLUTION:
Common Property
2,000,000
Actual Deductions
700,000
Net Common Properties
Divided by
1,300,000
2
Share of Surviving Spouse 650,000