Pedro and Juana were married in 2016.

On October 2015, Pedro while still single received

through donation from his father Toyota Fortuner valued at Php 1,500,000.00 and with loan
balance of Php500,000.00 which Pedro paid, (at the time of Pedro’s death the car was valued at
Php1,000,00000 ) and a house and lot located in Manila valued at Php 10,000,000.00 with
loan balance of Php I,000,000. ( property was later constituted as Pedro’s family home) and a
lot located in Batangas valued at Php5,000,000.00. Upon marriage of Juana and Pedro, the
spouses acquired two cars valued at Php1,000,000.00 each and three house and lots with
the following value : Php 12,000,000.00 for a condo unit located in Hong Kong ; Php 6,000.000
for Tagaytay used by the parent , brother and sisters of Juana ; Php 2,000,000 in Laguna with
balance on mortgage amounting to Php500,000. They were able to save money in the bank in
the amount of Php10,000,000 pesos. They also bought 100 shares of PLDT at the cost of P
1500 each, valued at P1000 each at the time Pedro died . Pedro also has a life insurance with
Juana as the irrevocable beneficiary in the amount of Php1,000,000 . Pedro died of heart
attack while having nightmare on October 10, 2018. The funeral expense for Pedro was Php
100,000. Pedro left Php200,000 credit card balance which he used to pay the tuition fee of his
nephew and nieces . Pedro made a will donating the Batangas property to the City government
for the construction of a Public School building.

a) Compute the estate tax of Pedro assuming that he is single with all the properties
enumerated
b) Compute the estate that of Pedro as married individual . ( community and conjugal )
As Single

The property Community Exclusive

1 Toyota Fortuner P1,000,000 1,000,000.00
(500k) u.m
2. H&L Manila P10,000,000.00 10,000,000.00
Family Home
(-1m) um
3. Lot Batangas P5,000,000.00 P5,000,000
(donated)
4. 2 Cars ( 1 m each) P2,000,000.00 P2,000,000.00
5 Hong Kong Condo P12,000,000.00 P12,000,000.00
6. Tagaytay property P6,000,000 P6,000,000
7 Laguna Property P2,000,000.00 P2,000,000.00
(500K) um
8 Bank P10,000,000 P10,000,000
9 PLDT share P100,000.00 P100,000.00
Total 48,100,000.0
Deductions

Claim against the estate 200,000.00

Claim against insolvent None
Person
Unpaid Mortgages Php1,500,000.00
1. 1,000,000.00
7. 500,000.00

Taxes None
losses None

Property previously P 258,212.06 P 258,212.06

taxed
Transfer for public use P5,000,000.00 P5,000,000.00
Family Home P10,000,000.00 P10,000,000.00
RA 4917 None none
Standard Deduction P5,000,000.00 P5,000,000.00
Share in the Community/ n/a
Conjugal prop.
Total 21,758,212.06

Vanishing deduction
1m- 500k =500,000
500k/ 41,200,000.0 x 7m= P84,951.45
P500,000 less P84,951.45 = Php 415,048.55

Community

The property Exclusive Community

1 Toyota Fortuner P1,000,000 1,000,000.00
(500k) u.m
2. H&L Manila P10,000,000.00 10,000,000.00
Family Home
(-1m) um
3. Lot Batangas P5,000,000.00 P5,000,000
(donated)
4. 2 Cars ( 1 m each) P2,000,000.00 P2,000,000.00
5 Hong Kong Condo P12,000,000.00 P12,000,000.00
6. Tagaytay property P6,000,000 P6,000,000
7 Laguna Property P2,000,000.00 P2,000,000.00
(500K) um
8 Bank P10,000,000 P10,000,000
9 PLDT share P100,000.00 P100,000.00
Total 48,100,000.0

Deductions

Claim against the estate 200,000.00

Claim against insolvent None
Person
Unpaid Mortgages Php1,500,000.00
1. 1,000,000.00
7. 500,000.00

Taxes None
losses None

Property previously P 273,804.57 P 273,804.57

taxed
Transfer for public use P2,500,000.00 P2,500,000.00
Family Home P5,000,000.00 P5,000,000.00
RA 4917 None none
Standard Deduction P5,000,000.00 P5,000,000.00
Share in the Community/ 46,400,000 / 2 = n/a 23,200,000
Conjugal prop. 23,200,000
Total 21,758,212.06
Gross Estate - Total deductions = ___ x .6

Conjugal

The property Community Exclusive

1 Toyota Fortuner P1,000,000 1,000,000.00
(500k) u.m
2. H&L Manila P10,000,000.00 10,000,000.00
Family Home
(-1m) um
3. Lot Batangas P5,000,000.00 P5,000,000
(donated)
4. 2 Cars ( 1 m each) P2,000,000.00 P2,000,000.00
5 Hong Kong Condo P12,000,000.00 P12,000,000.00
6. Tagaytay property P6,000,000 P6,000,000
7 Laguna Property P2,000,000.00 (500K) P2,000,000.00
um
8 Bank P10,000,000 P10,000,000
9 PLDT share P100,000.00 P100,000.00
Total 35,100,000 48,100,000.0

Deductions

Claim against the estate 200,000 200,000

Claim against insolvent None
Person
Unpaid Mortgages 2. 1,000,000.00 Php1,500,000.00
7. 500,000.00

Taxes None
losses none

Property previously tax P 258,212.06 P 258,212.06

Transfer for public use P5,000,000.00 P5,000,000.00
Family Home P10,000,000.00 P10,000,000.00
RA 4917 none none
Standard Deduction P5,000,000.00 P5,000,000.00
Share in the Community/ 16,700,000.00 16,700,000.00
Conjugal prop.
Total Php 38,608,212.06

(G.E.) 48,100,000 - (Deductions) 38,608,212.06 = 9,441,787.94 X .06 = 566,507.28 ESTATE

TAX 

Vanishing deduction
1m- 500k =500,000
500k/ 41,200,000.0 x 7m= P84,951.45
P500,000 less P84,951.45 = Php 415,048.55

Php 35,100,000.00 less Php2,000,000.00/2 = 16,550.00

Casimira died on June 19, 2017 after three weeks of confinement due to an unsuccessful liver
transplant. For her confinement, she had incurred substantial medical expenses that she financed
through personal loans secured by mortgages on her real properties. Her heirs are still in the
process of making an inventory of her assets that can be used to pay the estate taxes, if any, which
are due on December 19, 2017.

(a) Are the medical expenses, personal loans and mortgages incurred by Casimira
deductible from her gross estate? Explain your answer.(5%)

(b) May the heirs of Casimira file the estate tax return and pay the corresponding estate tax
beyond December 19, 2017 without incurring interest and surcharge? Explain your
answer.(3%)

CMI School, Inc., a non-stock, non-profit corporation, donated its three parcels of idle land situated in
the Municipality of Cuyapo, Nueva Ecija to SLC University, another non-stock, non-profit corporation,
in recognition of the latter's contribution to and participation in the spiritual and educational
development of the former.

(a) Is CMI School, Inc. liable for the payment of donor's tax? Explain your answer. (2.5%)

(b) If SLC University later sells the three parcels of idle land to Puregold Supermarket, Inc., a
stock corporation, will SLC University be liable for capital gains tax? Explain your answer.
(3%)

(c) If SLC University donates the three parcels of idle land in favor of the Municipality of
Cuyapo, Nueva Ecija, will SLC University be liable for donor's tax? Explain your answer.
(2.5%)