The following intangible personal properties deemed located in the Philippines (statutory enumeration): 1.

Franchise which must be exercised in the Philippines; 2. Shares, obligations or bonds issued by any corporation or sociedad anonima organized or constituted in the Philippines in accordance with its laws: 3. Shares, obligations or bonds issued by any foreign corporation eighty-five percent (85%) of the business of which is located in the Philippines; 4. Shares, obligations or bonds issued by any foreign corporation, if such shares, obligations or bonds have acquired a business situs in the Philippines (e.g. bonds that have been subjected to numerous transactions in the Philippines); and 5. Shares of rights in any partnership, business, or industry in the Philippines Reciprocity Clause As a general rule, intangible personal property located in the Philippines is included in the gross estate, under the exception known as reciprocity clause in the estate tax law, which applies only to the estate of a nonresident, not citizen of the Philippines, intangible personal property of the decedent located in the Philippines will not be included in the gross estate: a. If the decedent at the time of his death was a citizen and resident of a foreign country which at the time of death did not impose a transfer or death tax of any character in respect of intangible personal property of citizens of the Philippines no residing in that foreign country; b. If the laws of the foreign country of which the decedent was a citizen and resident at the time of death allow a similar exemption from transfer taxes or deaths taxes of every character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country. Properties not in the estate All properties below must be included in the gross estate computation if transferred under circumstances qualifying as: a. Transfer in contemplation of death; or A transfer motivated by the thought of death, although death may not be imminent. A donation mortis causa is a donation made during the lifetime of the transferor but intended to take effect at death. Donation mortis causa is a transfer in contemplation of death. The circumstances surrounding the transfer of property may indicate that the transfer was in contemplation of death. b. Revocable transfer This is a transfer where the terms of enjoyment of the property may be altered, amended, revoked or terminated by the decedent. It is sufficient that the decedent had the power to revoke, though he did not exercise the power to revoke.

M Transferred property to N to be held in trust for O. Without taking back the property, M can change N; or without taking back the property, M can change O; or M can take back the property. c. Transfer under general power of appointment A power of appointment is the right to designate the person or persons who will succeed to the property of a prior decedent. A power of appointment may be a general power of appointment or a limited power of appointment. A general power of appointment is one which may be exercised in favor of anybody. A limited power of appointment is one which may be exercised only in favor of a certain person or persons designated by the prior decedent. IN order that property passing under a power of appointment may be included in the gross estate of the transferor, the power of appointment must be a general power of appointment. In a transfer in contemplation of death, revocable transfer, or transfer under a general power of appointment, the value to include in the gross estate will be as determined under the following rules (See Figure 1-6): a. IF the transfer was in the nature of a bona fide sale for an adequate and full consideration in money or moneys worth, no value will be included in the gross estate; b. IF the consideration received on the transfer was less than adequate and full, the value to include in the gross estate will be the excess of the fair market value at the time of the decedents death over the consideration received; c. If there was no consideration received on the transfer (as in donation mortis cause), the value to include in the gross estate will be the fair market value of the property at the time of the decedents death. Proceeds of life insurance Proceeds of life insurance are paid by the insurance company directly to the beneficiary. In order for the proceeds of insurance under policies to be included in the gross estate, the following are the requisites: 1. The estate of the decedent, his executor or administrator (whether revocable or irrevocable); 2. A third person (i.e. a person other than the estate executor or administrator,) and the designation of the beneficiary is revocable. Others to be included in the Gross Estate 1. Decedents interest accrued at the date of death; 2. Proceeds of life insurance with revocable beneficiary or whose beneficiary is the estate, administrator or executor. Not to be Included in the Gross Estate Anymore

1. The merger of usufruct in the owner of the naked title; 2. The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicomissary; 3. The transmission from the first heir, legatee or done e in favor of another beneficiary, in accordance with the will of the predecessor. 4. Amounts received for war damages; 5. Exemptions under reciprocity clause of estate tax law; 6. Amounts received from the United States Veterans Administration; 7. Benefits received from the Government Service Insurance System; 8. Benefits received from the Social Security System. To be included but to be deducted 1. Claims against insolvent person. Deduction limited to uncollectible amount. 2. All bequests, devises, legacies or transfers to social welfare, cultural, and charitable institutions no part of the net income of which inures to the benefit of any individual: Provided, that not more than thirty percent (30%) of the said bequests, legacies or transfers shall be used by such institutions for administrative purposes. 3. Bequests to be used actually, directly and exclusively for educational purposes. 4. Amounts received by heirs under RA 4917. Valuation of Gross Estate General Rule: The gross estate shall be valued at its fair market value at the time of the decedents death. Real Property: In case of real property, the value shall be the current and fair market value, as shown in the schedule of values fixed by the Provincial and City Assessors, or the fair market value as determined by the Commissioner of Internal Revenue (zonal value), whichever is higher. Personal Property: In case of personal property recently acquired by the decedent, the purchase price may indicate the fair market value. In case of personal property not recently acquired, there should be some evidence of fair market value. Shares of Stock: Listed in the local stock exchange: Arithmetic mean between the highest and the lowest quotation of the shares of stock on the date of death or on the date nearest the valuation date. Not listed in the local stock exchange: The fair market value shall be the book value, if common, and the par value, if preferred. In determining book value, appraisal surplus shall not be considered, as well as value assigned to preferred shares, if any.