CAGAYAN STATE UNIVERSITY

Aparri, Cagayan
PRELIMINARY EXAMINATION – TRANSFER AND BUSINESS TAX

I. A decedent died on February 29, 2020. The following assets were provided for the purpose of determining
the decedent’s gross estate. If the item is an inclusion in the gross estate of the decedent, classify the same
as exclusive by writing “E” or community/conjugal property by writing “C” under the regime of conjugal
partnership of gains (CPG) and absolute community of property (ACP). If the item is an exclusion from the
gross estate, mark the item as “X” . 20 items

ITE PROPERTY CPG ACP

M
1 Commercial building owned before the marriage
2. Income from Item # 1
3. Commercial building inherited during marriage
4. Income from Item # 3
5. Personal property received by the surviving spouse as gift before the marriage
6. Cash from compensation income of the decedent
7. Lot acquired before the marriage by the surviving spouse ( surviving spouse had a
previous marriage and legitimate children in that previous marriage
8. Income from the lot in Item #7
9. Residential house built using the salary of surviving spouse during the marriage.
( House was built on the exclusive lot of the decedent)
10. Lot described in item # 9

II. 30 Items : From the list of properties shown below, determine the following
1. Whether or not the property is included in the decedent’s gross estate. Write YES or NO

COMPOSITION OF GROSS ESTATE

NRA
Item Citizen or With Without
No. Particulars Resident Reciprocity Reciprocity
1 Parcel of LAND – APARRI
2 Rest House – Malaysia
3 PNB Deposit – Philippine Branch
4 PNB Deposit – Singapore
5 Receivables – debtor from Canada
Shares of stocks of foreign corporations which
6 acquired business situs in the Phils
Shares of stocks of foreign corporations. The
7 certificates are stored in the Philippines
Shares of stocks of domestic corporations. The
8 certificates are stored IN Wuhan, China
9 Library
10 Patents exercised in the Philippines

III. Mr. Cardo Dalisay, a resident of Wuhan, China and a Chinese citizen died leaving the following properties:
Condominium unit in Makati P 45,000,000
Family Home in China 70,000,000
Rest House in Australia 27,500,000
Jewelry received as gift dated August 25, 2017 500,000
Car in Makati 1,000,000

The heirs of Mr. Dalisay claimed the following deductions

Funeral expenses P 300,000
Claims against insolvent persons 500,000
Judicial expenses 100,000
Medical Expenses when rushed to the hospital
Due to severe bullet wounds 200,000
 A. Determine the following assuming Mr. Dalisay died on July 4, 2018
1. Gross Estate
2. Allocated Ordinary Deductions
3. Vanishing Deduction Percentage
4. Allowable Special Deductions
5. Taxable Net Estate

IV. 10 points Hyun- Bin died leaving an estate valued at P24,000,000. Distribute the estate by applying the
rules on legitimes on the following independent cases. State the absolute AMOUNT
1. The surviving heirs were his spouse, 2 legitimate children and 1 illegitimate child
2. The decedent is survived only by his 2 illegitimate children – specify share of each illegitimate child
3. Assume data in Case 2 except that the testator provided P16,000,000 to his secretary through
his last will and testament.

V. Capt. Ri suffered an unexpected heart attack causing his death on April 23, 2019. His estate is composed of
Cash P1,000,000 Building P5,000,000 Cars P1,000,000 House & Lot P3,000,000

Yun Se-ri is the only heir of the decedent. Ri’s remains were cremated on april 30, 2019. The executor
of Ri’s estate filed the estate tax return and paid the corresponding estate tax on February 15, 2020.
The properties left by the decedent were finally distributed to Yoon Se-ri on March 14, 2020. Answer
the following

1. When will the transfer of ownership from the decedent to the heir take effect?
2. When should the estate accrue?
3. Assume that Ri’s total outstanding liabilities as of the time of his death amounted to P15,000,000.
How much of the outstanding liabilities of the decedent should be assumed by Yun Se-ri?

VI. Assume Park Saeroyi died in 2018. Determine the allowable deduction for Family Home (FH) from the
following independent cases
1. FH valued at P15,000,000. Decedent was single
2. FH valued at P15,000,000. Decedent was head of the family
3. FH valued at P5,000,000. Decedent was head of the family
4. FH valued at P15,000,000 (exclusive). Decedent was married.
5. FH valued at P P15,000,000 (conjugal). Decedent was married.
6. FH valued at P P15,000,000 of which P10,000,000 is allocated to the land ( exclusive), P5,000,000 to
the house ( conjugal) . Decedent is married
7. The FMV of the FH which is partly exclusive and partly common –
Family lot ( exclusive ) P5,000,000
Family House ( communal) P9,000,000

ESTATE TAX TABLE – PRIOR TO 2018

OVER BUT NOT THE TAX SHALL BE PLUS

OVER
P200,000 Exempt
P200,000 500,000 P0 5% of excess over P200,000
500,000 2,000,000 15,000 8% of excess over P500,000
2,000,000 5,000,000 135,000 11% of excess over P2,000,000
5,000,000 10,000,000 465,000 15% of excess over P5,000,000
10,000,000 - 1,215,000 205 of excess over P10M