PHINMA UNIVERSITY OF ILOILO August 21, 2021
BAM 208: Business Taxation
P1 Period
Quiz #2
Number of Items: 36
Duration: 9:00am to 10:00am (1 hour)
Grace Period for Submission: 10:00-10:20 am (20mins)
Direction: Answer this quiz independently and honestly.
I - True or false.
FALSE __1. Obligation of the surviving spouse are deductions against gross estate.
____FALSE __2. The estate tax liability of the decedent is deductible in the computation
of the net taxable estate.
____FALSE____3. The vanishing deduction is applicable only if the previous estate paid
estate tax.
__ _TRUE_____4. The vanishing deduction is applicable only to properties inherited by the
decedent within 5 years before his death
___ TRUE____5. For married decedent, deductions are presumed common unless proven
to be exclusive
___FALSE_ ___6. Vanishing deduction is a special deduction.
___TRUE ____7. The share of the surviving spouse is ½ of the husband’s exclusive
property.
___ TRUE ____8. Special deductions reduce the hereditary estate of the heir.
__ TRUE ______9. Ordinary deductions do not reduce the hereditary estate of the heir.
___ FALSE____10. Non-resident decedents cannot claim the full amount of ordinary
deductions.
___ FALSE____11. An unpaid funeral expense may be deducted through claim against
the estate.
___TRUE _____12. Resident alien decedents can claim deductions for family home.
___ FALSE____13. Non-resident alien decedents can claim only a proportion of losses,
indebtedness, taxes, and transfer for public purpose.
____ FALSE___14. Vanishing deduction is applicable only on properties situated in the
Philippines.
_TRUE______15. Non-resident aliens cannot deduct special deductions except
standard deductions.
____ TRUE ____16. The standard deduction is claimable by a resident or citizen decedent
without a need to prove entitlement to the deduction.
____FALSE____17. Non-resident decedents cannot claim standard deductions.
____FALSE __18. Only taxes and obligations accruing after death are deductible from
gross estate.
____TRUE ____19. The loss of separate properties of the decedent is not deductible
against the common properties of the spouses.
_____________20. Resident citizen decedents cannot claim deduction for transfer for
public purpose for properties located abroad
II. Multiple Choices
Use the following data for the next two (2) questions:
1. Mr. X died on November 1, 2017 leaving a gross estate of P4,500,000.
The actual funeral expense on his burial is P250,000. Of the said amount, P100.000 is
unpaid. How much is the funeral expense that can be claimed in computing the
taxable net estate?
A. P100,000
B. P150,000
C. P200,000
D. P250,000
2. Assume Mr. X died on Nov. 1, 2018, how much is the funeral expense that can be
claimed in computing the taxable net estate?
A. P150,000
B. P250,000
C. P200,000
D. nil
3. Mr. X, a citizen of the Philippines and resident of Iloilo City, died testate on May 10,
2018. Among his gross estate were properties inherited from his deceased father who
died on April 4, 2014. What percentage of the deduction would be used in computing
the amount of vanishing deduction?
A. nil
B. 20%
C. 40%
D. 60%
4. If the decedent died before 2018, the estate tax return should be filed
A. At the time of death
B. Within 30 days after death
C. Within six months after death
D. Within one (1) year after death
5. The following statements are correct regarding standard deduction under the TRAIN
LAW, 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
6. Statement 1: Estate Tax credit refers to the taxpayer's right to deduct from the tax
due the amount of tax it has paid to a foreign country.
Statement 2: Estate Tax credit could be claimed as a deduction if such taxes pertain to
properties which are not included in the gross estate for Philippine estate tax
computation.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
7. If the decedent died on or after January 1, 2018, the estate tax return should be filed
A. At the time of death
B. Within 30 days after death
C. Within six months after death
D. Within one (1) year after death
8. Decedent died leaving a family home composed of the following; House, conjugal
property worth P800.000, and the land in which he exclusively owned valued at
P400.000. He also owns a vacation house in Baguio worth P700.000. The deductible
amount of family home:
A. 1,900,000
B. 1,200,000
C. 1,000,000
D. 800.000
9. Missys, a widow, a citizen of the Philippines residing in Canada, died on December
20, 2015 leaving the following properties:
Real property (inherited from her husband on May 3,
2014 valued then at P2,600,000)
Personal properties in Canada
Real and personal properties in the Philippines
Family home in Canada
Obligations:
Funeral expenses incurred in Canada
Other deductible expenses
P2,960,000
1,300,000
670,000
2,500,000
250,000
650,000
The deduction for family home is A. P2.500,000
B. P1,250,000
C. P1,000,000
D. None
10. Bibo, single and a resident citizen, died with properties constituting his gross estate of
P8,000,000. Actual funeral expenses amounted to P150,000 and other charges against
the estate amounted to P210,000. The net taxable estate is (RPCPA)
A. 7,790,000
B. 7,640,000
C. 6,790,000
D. None of these
Use the following data for the next two (2) questions:
11. Amount of claim against the debtor P50,000
Total assets of the debtor 500,000
Total liabilities of the debtor 800,000
How much should be included in the gross estate of the decedent?
A. 500,000
B. 800,000
C. 300,000
D. 50,000
12. The deductible claim against insolvent person is A. 50,000
B. 300,000
C. 31,250
D. 18,750
13. The gross estate of Mr. Dela Cruz includes P0,000 receivables which is duly notarized
from debtor Mr. Tan. whose records show:
Total Assets
P100,000
Indebtedness to:
Government (unpaid taxes)
40,000
Mr. Dela Cruz
80,000
Other creditors
20,000
The deductible claims against insolvent person is
A. P29,285
B. P32,000
C. P80,000
D. None of these
14. Mr. Nama Tay died on November 20, 2018. Some of the properties he left are the
following:
Market Value
Mode of Acquisition
Date Acquired
Date Acquired
Date of Death
Land
Purchase
7-3-14
500,000
350,000
Car
Donation
10-2-17
800,000
980,000
Other information:
The gross estate of the decedent amounts to P3,000,000.
The car was mortgaged for P50,000 when it was acquired and Mr. Nama Tay paid the
same is before he died.
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
C. P648,783
D. P637,617
Use the following data for the next two (2) questions:
The following information were from the estate of a married citizen decedent who died
on June 2020
Property:
Family home
Domestic shares inherited 6 years ago during marriage
Bank deposit, representing dividend earned during marriage
Jewelry received as gift 8 years ago during marriage
Expenses:
Claim against the estate
Funeral expenses
Judicial
Medical expenses
15. The 1/2 share of the surviving spouse is
A. 6,000,000
B. 5,000,000
C. 4,500,000
D. 3,000,000
16. The net taxable estate of the decedent is
A. P600,000
B. P500,000
C. P575,000
D. P475,000
“Believe in what you prayed for.”
***END OF QUIZ***
12,000,000
6,000,000
1,000,000
1,000,000
4,000,000
1,000,000
500,000
1,500,000