Tax 3 - Estate Tax

This is not part of the gross estate of the decedent

• exclusive property of the surviving spouse

• community property

• share of the surviving spouse

• conjugal property

Don Juan, a widower, died in 2016. In his will, he left his estate of P100 million to his four children. He named his compadre, Don Samuel, to be the administrator of the estate. When the BIR send a demand letter to Don Samuel for the payment of the estate tax, he refused to pay claiming that he did not benefit from the estate for not being an heir. He resigned as administrator. As a result of the resignation, who may be liable for the payment of estate tax?

• All the four children, the tax to be divided equally among them.

• Don Samuel because the tax became due prior to his resignation.

• The person designated in the will as the one liable.

• The eldest child who would be reimbursed by the others.

A mode of acquisition by virtue of which the property, rights and obligation to the extent of the extent of the value of the of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.

• Liquidation

• Donation

• Succession

• Inheritance

The term applied to the person whose property is transmitted through succession, whether or not he left a will

• transferee

• grantor

• decedent

• transferor

Estate tax is

• An income tax

• A percentage tax

• An excise tax

• A sales tax

Who of the following shall file the estate tax return?

• Executor

• Administrator

• Any of the above

• Legal heirs

Which of the following are excluded from the gross estate?

• claims against insolvent persons

• revocable transfers

• proceeds of life insurance policy payable to an irrevocable beneficiary

• transfer in contemplation of death

Dale Corporation took a keyman insurance on the life of its President, Mr. Cruz, designating Mrs. Cruz as its revocable beneficiary. In the event of death of Mr. Cruz, will the insurance proceeds form part of the gross estate of Mr. Cruz?

• No, because the premium was not paid by Mr. Cruz

• No, because Mr. Cruz had no interest in the proceeds at the time of his death, hence, this is not a property that he transferred at the time of his death.

• Yes, because the insurance proceeds form part of the benefits of Mr. Cruz enjoyed by him as an employee of Dale Corporation.

• Yes, because Mrs. Cruz was designated as a revocable beneficiary.

What shall be set forth in the estate tax return?

• The deductions allowed from the gross estate in determining the net estate.

• All of the choices.

• The value of the gross estate of the decedent at the time of his death, or in case of a nonresident who is not a citizen of the Philippines, of that part of this gross estate situated in the Philippines.

• Such part of such information as may at the time be ascertainable and such supplemental data as may be necessary to establish the correct taxes.

Which of the following is a tax exclusion obtained from the proceeds paid to beneficiaries upon the death of an individual?

• Prizes and awards

• Life insurance

• Retirement benefit

• Tax treaties