TRANSFER TAXES & BASIC PRINCIPLES OF TAXATION The modes of property transfer may be diagramed as follow: Properties: 1.

Real Property 2. 2. Personal Property (Tangible & Intangible Property) Transfer of Property Through Gratuitous Transfer Fact of Death Subject to Estate Tax Donation Subject to Donors Tax Onerous Transfer Normal Course of Business (Sale or Exchange)
Subject to Business Tax (VAT, Percentage Tax & Excise Taxes)

Casual Transfer Capital Gains Tax

TRANSFER TAXES & BASIC PRINCIPLES OF TAXATION The modes of property transfer may be diagramed as follow: Properties: 3. Real Property 4. 2. Personal Property (Tangible & Intangible Property) Transfer of Property Through Gratuitous Transfer Fact of Death Subject to Estate Tax Donation Subject to Donors Tax Onerous Transfer Normal Course of Business (Sale or Exchange)
Subject to Business Tax (VAT, Percentage Tax & Excise Taxes)

Casual Transfer Capital Gains Tax

GROSS ESTATE Illustrative Problem: J. Santos died leaving the following properties: Lot and House in US Car in US Car in the Philippines Jewelries in the Philippines Jewelries in US Farm in the Philippines Accounts Receivable, debtor residing in the Philippines Accounts Receivable, debtor residing in Hong Kong Bank deposit in the Philippines Bank deposit in US Franchise exercised in US Franchise exercised in the Philippines Patent exercised in the Phils. Copyright exercised in US Investment in a partnership established in US' Investment in a partnership established in the Phils. Domestic shares, certificate of stocks kept in US. Domestic shares, certificate of stocks kept in the Phils. Foreign shares Foreign shares, 86% of the business in the Phils. Foreign shares, 70% of the business in the Phils. Foreign shares, 40% of the business is in the Phils. but shares have business situs in the Phils. Required: A. Determine the SITUS of the decedents properties (within & outside the Philippines). B. If J. Santos is a Filipino, resident of US, determine his gross estate taxable in the Philippines (NRC). C. If J. Santos is an American citizen, resident of the Philippines, determine his gross estate taxable in the Philippines (RA). D. If J. Santos is an American citizen, resident of US, determine his gross estate taxable in the Philippines (NRA). a. There is no reciprocity. b. There is reciprocity. 400,000.00 200,000.00 300,000.00 150,000.00 180,000.00 150,000.00 50,000.00 100,000.00 250,000.00 200,000.00 50,000.00 60,000.00 70,000.00 50,000.00 100,000.00 150,000.00 400,000.00 300,000.00 150,000.00 200,000.00 300,000.00 100,000.00