Chapter 5: Estate Tax Credit and Distributable Estate

Question 1

Fill in the blanks

Allowable deductions are deductions from the ____ while tax credit is deduction from Philippine ______.

Answer 1

gross estate; estate tax

Question 2

Term

Taxpayer’s right to deduct from the tax due the amount of tax it has paid to a foreign country

Answer 2

Estate Tax Credit

Question 3

True or False

The amount could be claimed as deduction if such taxes pertain to properties which are included in the gross estate for Philippine estate tax computation

Answer 3

True

Question 4

True or False

NRA decendents are entitled to estate tax credit

Answer 4

False

since properties outside PH of NRA decedents are not subject to estate taxation

Question 5

Term

result of the application of the law under estate taxation

Answer 5

Net taxable estate

Question 6

Term

amount arrived at from gross estate consisting all properties in the possession and control of decedent at time of death and actual expenses, charges, and payments from the gross estate

Answer 6

Net distributable estate

Question 7

Question

Formula for computation of estate tax credit if there is only one foreign country

Answer 7

(Net estate, foreign country / Net estate, world) x Philippine estate tax due = Limit

Allowed tax credit = Lower of Limit and Actual tax paid in foreign country

Question 8

Formula for computation of estate tax credit if there are more than one foreign country

Answer 8

Limit = (NE, foreign country / NE, world) x Philippine estate tax due
do this per foreign country

Limit 1 = Sum of the amounts lower between limit and actual tax paid of each foreign country

Limit 2 = (NE, all foreign countries / NE, world) x Philippine tax estate due

Allowed tax credit = Lower of Limit 1 and Limit 2