Don’t study accounting just to pass and have higher grades. Hindi ung inaral at tinandaan mo ngayon, bukas mataas grade mo tapos kakalimutan mo na. Study and absorb accounting naturally. Yung mga inaaral natin must become natural part of ourselves. Resident Alien OR Citizen (Resident citizen or Non-resident citizen)- Taxable Globally Non-Resident Alien- Taxable within Philippines. Except when Reciprocity Clause is applied on Intangible Properties. It means when the other country does not tax us, then we’ll do the same. ESTATE TAXATION Gross Estate Less: Deductions Net Taxable Estate Multiply by: 6% Estate Tax Living Donor but the property is transferred, and the reason or motivating factor is he is about to die, subject to Estate Tax. GROSS ESTATE FORMULA: Physical Count of properties at death Less: Properties not owned. Trustee- Caretaker of decedent’s properties to transfer the possession and ownership in fiduciary heir at the right time, and when the trustee died, the decedent’s properties he was taking care, is not his property and excluded in the trustee’s Gross Estate. Agent- The decedent stated in his last will and testament that the 1st heir will inherit the property at the point of his death and when the 1st heir died, it will be transferred to the 2nd heir. The first heir is just an agent, when the 1st heir died, the property he inherited from the decedent must be excluded from the 1st heir’s Gross Estate. Merger of Usufruct- The decedent is just a user and has no ownership. Therefore, excluded in his Gross Estate. Legally Excluded by the GovernmentA. Transfer to Non-Profit Organizations. Provided, not more than 30% of the transfer shall be used or spent by such organizations for administration purposes. EXEMPTED PROPERTIES: B. Proceeds received from group insurance taken out by company for its employees. C. Proceeds of GSIS Policy or benefits from GSIS D. Benefits received from SSS. E. Personal Equity Retirement Account F. Cash Withdrawal by the family of decedent from its bank already subjected to 6% final withholding tax. Taxable Present Properties Add: Taxable Transfers (Properties not currently in possession and it is revocably transferred but the ownership is under the name of decedent) (Living Donor but the property is already transferred, and the reason or motivating factor is he is about to die or point of death, subject to Estate Tax.) GROSS ESTATE If the recoverable transfer has been waived by the decedent before his death, EXCLUDE. Not owned by Decedent Separate property of surviving spouse- ONLY the separate property of decedent spouse and half of the common or conjugal property of husband and wife are INCLUDED in GROSS ESTATE Irrevocable life insurance policy and the beneficiary is the estate, executor or administrator. EXCLUDED. If designated as revocable, and beneficiary is not estate, executor or administrator, INCLUDED in GROSS ESTATE. If not designated whether irre or revocable, it is EXCLUDED in GROSS ESTATE When the 10k salary of husband which is a common property used by wife to buy a gown, the 10k became separate property. Properties deducted are already included in Gross Estate. Hence, they must be deducted to get the Net Taxable Estate. Losses- If incurred within 1 year after the death of decedent. If before death, simply exclude in Gross Estate. Transfer to Government for public purpose. Vanishing Deductions to mitigate double taxation. Inheritance or donation within 5 years before the death of decedent were already taxed under Donor’s Tax. And upon his death, taxable under ESTATE Tax? No, it is deducted since it was already taxed before. Non-resident alien- Standard Deduction is P500,000 only.