Estate Tax

Question 1

Explain Valuation Methods

Answer 1

Valuation Methods (at the time of death)

a) Real properties - higher between fair market value and zonal value
b) Personal properties - fair market value
c) Shares of stocks are valued at:
i. If traded – average of high and low price
ii. If not traded – using the Book Value method

Question 2

Notes for Frutis:

Fruits from conjugal: Laging common!

Frutis from exclusive during marriage: it depends if CPG (common) or ACP (exclusive)

Answer 2

Yup. pleas review your magic table

Question 3

Explain Allowable Deduction for NRA

Answer 3

1. Ratable portion of LIT:
   Gross Estate PH / Gross Estate World x World LIT
2. Transfer for public use
3. Vanishing Deduction
4. Share of SS
5. Standard Deduction of 500k (no need to substantiate

Question 4

PLEASE ALWAYS remember the Standard Deduction

Answer 4

Opo

Question 5

Note also that Vanishing Deduction is applicable for Donation/Gift/Inheritance!

Alos, remember the 2nd deduction? Yung Gross estate dun ay total of exclusive and common

Answer 5

Oks

Question 6

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

Answer 6

Succession

Question 7

Succession which results from the designation of an heir, made in a will executed in the form
prescribe by law

Answer 7

Testamentary

Question 8

An act whereby a person is permitted with the formalities prescribed by law, to control to a certain degree the disposition of his estate, to take effect after his death

Answer 8

Will

Question 9

It is a will which must be entirely written, dated and signed by the hand of the testator himself. It
is subject to no other form and it may be made in or out of the Philippines and need not be
witnessed

Answer 9

Holographic will

Question 10

Part of the testator’s property which he cannot dispose of because the law has reserved it for certain heirs who are called compulsory heirs

Answer 10

Legitime

Question 11

To classify as ‘Transfer for Public Use’, dapat kasama sa last willa and testament. Hence, Donation Intervivos is not classified as ‘Transfer for Public Use’

Question 12

It is good to note that no assumption whether ACP or CPG. Just check the facts to know the appropriate property settlement regime

Question 13

Certification from CPA is REQUIRED whenever the gross estate exceeds P5M containing the ff:
1. Itemized assets of the decedents
2. Itemized deductions
3. The amount of tax due