CHAPTER 3

3- 1. DISCUSSION QUESTIONS / PROBLEMS

1. January 5, 2005 or ten years after his disappearance. 2. On January 5, 2005, the same date that he was presumed to be dead. 3.

3.

a. Nonresident alien ( with reciprocity) House and lot, Manila b. Nonresident alien (no reciprocity) House and lot, Manila Shares of stoc , Philippine corporation Shares of stoc , Hon# on# $orporation with business situs &ccounts recei'able, Philippine debtor Proceeds of re'ocable life insurance Sa'in#s deposit, Manila )an +ross estate P2,000,000 !2",000 !%",000 (0,000 !"0,000 *",000 P2,""",000 P2,000,000

*.

a. Nonresident alien (with reciprocity) No #ross estate shall be sub,ect to ta- because all properties are intan#ible personal within the Philippines. .nly real properties and tan#ible personal properties within are included in the #ross estate of a nonresident alien (with reciprocity) decedent. b. Nonresident alien (no reciprocity) Shares of stoc , Po /u 0an $orporation )onds, 0si 0sa $o1pany 2ranchise, Philippines +ross estate P 22",000 (0,000 200,000 *3",000

3- 2. DISCUSSION QUESTIONS / PROBLEMS

!. No. Since the account is opened under 4and5or si#natures4 the presu1ption is that the ban deposits are ,ointly owned by the spouses. 0his rule holds whether the con,u#al partnership of #ains or absolute co11unity of property re#i1e #o'erns the spouses. a. 0he a1ount includible in the estate is the salary fro1 Septe1ber ! to !" 1inus the fi'e6 day cash ad'ance. b. 7ncluded because the rent inco1e for &u#ust had already accrued before the death.

2.

c. 0he interest is already included althou#h it has not yet been withdrawn. d. Not included because the decedent died before the date of record. e. 7ncluded, but li1ited to his interest in the co6ownership. 3 f. 7ncluded. He had already inherited the property e'en if he did not ta e possession

because his uncle had predeceased hi1. #. 0he proceeds are included in the #ross estate because the desi#nation of the beneficiary is re'ocable. 3. a. 8es, the salary had already accrued to $athay. $onsiderably, this is already part of her #ross estate. b. 0he P",000 benefit is includible in her #ross estate because $athay co1plied with the condition set by the e1ployer. *. a. 0his is a case of a transfer in conte1plation of death because (!) it was the thou#ht of date that induced Mat Sr. to donate the property, and (2) of the stipulation that Mat 0a utin shall retain possession or en,oy1ent to the property until his death. Hence, the transfer is sub,ect to estate ta-. b. 9'en if the transfer of possession and en,oy1ent had already been 1ade, it is still a case of a transfer in conte1plation of death. 0herefore, sub,ect to estate ta-. ". a. 8es. 7n a re'ocable transfer, it is not necessary that the donor should e-ercise his reser'ed ri#ht to alter, a1end, re'o e or ter1inate the transfer. :hat is i1portant is that he had 1ade such reser'ation which can be e-ercised anyti1e he wanted to. 7t does not chan#e the nature of the transfer. :hether the decedent has e-ercised the power of re'ocation or not, it shall always be a part of his estate. 8es, because it is a case of a re'ocable transfer. 7n a life insurance, if the desi#nation of the beneficiary is re'ocable, the proceeds thereof shall be part of the #ross estate. 0he proceeds shall be e-cluded fro1 the #ross estate because the desi#nation of the wife as beneficiary is irre'ocable, pro'ided that she is neither appointed as e-ecutor or ad1inistrator.

b. (. a.

b.

%.

0his is a case of a special power of appoint1ent because )a lin#, the trustee, cannot choose the person who1 he wants to succeed to the property. His power is restricted because the appoint1ent is li1ited only to his children. 0herefore, the property shall not for1 part of his #ross estate. a. b. c. d. Special power of appoint1ent. )aldo1ero is dis;ualified to appoint his creditor. +eneral power of appoint1ent. wants to appoint as his heir. 0here is no restriction on who1soe'er he

3.

Special power of appoint1ent. He is allowed only to appoint so1ebody fro1 a1on# the descendants of &laca1o. Special power of appoint1ent up to *0< because he is allowed only to appoint his estate up to that e-tent. +eneral power of appoint1ent on the balance of (0< because there is no restriction on who1soe'er he wants to desi#nate as heir.

=.

7 will ad'ise hi1 that he should pro'ide in his will the li1itation on the persons to be appointed by Maati as his heirs thereby 1a in# it a special power of appoint1ent. 7n which case, the transfer of the property fro1 Maati to his fa1ily will not be sub,ect to estate ta-. *

!0.
a) 2M>, ti1e of transfer

$ase ! P ="0,000 b) $onsideration recei'ed 606 c) 2M>, ti1e of death !,000,00 0 &1ount to be included in the +ross P!,000,00 9state 0

$ase 2 P ="0,000 ="0,000 !,000,000 None

$ase 3 P ="0,000 300,000 !,000,000 P 200,000

Note? 7n $ase 2, no a1ount is to be included in the #ross estate because the property transferred for a full and ade;uate consideration. !!. a. b. 0he a1ount to be included in the #ross estate of Si#urista is P*"0,000 (P%"0,000 6 300,000). 7f the sale is disco'ered to be fictitious, the entire a1ount of P%"0,000 is to be included in the #ross estate of Si#urista because there was actually no pay1ent 1ade to her at the ti1e of sale.

!2.

0he action filed by $uriadora a#ainst &tacador will prosper. 0he donation 1ade by )onador in fa'or of &tacador is a donation 1ortis causa due to a reser'ation of ri#hts o'er the property in fa'or of )onador. 0hus, the donation 1ade durin# lifeti1e did not prosper. 0here is also no donation 1ortis causa because in order to be effecti'e, it 1ust ha'e been pro'ided in the will of )onador that the property is bein# donated 1ortis to &tacador. a. 0he proceeds of life insurance shall only be e-cluded fro1 the #ross estate if the irre'ocably desi#nated beneficiary in the policy is not the estate of the deceased, his e-ecutor or ad1inistrator. 0hese re;uisites are not satisfied. 0herefore, the proceeds shall be part of the #ross estate of )o doy. b. 9'en if the desi#nation is irre'ocable since the beneficiary na1ed in the policy is his estate, the proceeds shall for1 part of the #ross estate of )o doy. c. Since the proble1 does not clearly specify, it is presu1ed that .yan# is neither the e-ecutor nor the ad1inistrator. Howe'er, if the desi#nation is re'ocable the proceeds of the life insurance policy shall still be part of the #ross estate, sub,ect to estate ta-. 7t is shall only be e-e1pt if (!) .yan#, the beneficiary, is not the estate, the e-ecutor or the ad1inistrator and (2) his desi#nation as the beneficiary is irre'ocable.

!3.

!*.

2a1ily ho1e $ar @ewelries Shares of stoc s, Mala as $orp. Proceeds of life insurance payable to estate /and (P*"0,000 A !"0,000) Motorbi e &part1ent +ross estate "

!,*"0,000 "2",000 (0,000 %3,000 3"0,000 300,000 *0,000 3,000,000 ",303,000

Notes? !. 0he condo1iniu 1 unit is under special power of appoint1ent because of the restriction on the pri'ile#e of Mando to choose his heirs. 2. 0he 1otorbi e is presu1ed to be transferred in conte1plation of death because the date of sale and the date of death were relati'ely close. 3. 0he resthouse in 0a#aytay is re'ocably transferred to hi1 by his friend. 0herefore, it should be a donation 1ortis causa to hi1. $onsiderin# that he was not na1ed in the will, Mando is not the proper heir to the property. *. 0he donation of the apart1ent was a re'ocable transfer. Hence, its 'alue should be included in his #ross estate.

EXERCISE 3- 3.
2or purposes of the corporation, there being no change in ownership of the questioned shares in its stock and transfer book, the rightfu owner of the di!idends wou d be the estate of the deceased "ntero. #he corporation is bound, in so far as ownership of its shares is concerned, by its stock and transfer book, and as far as the questioned shares are concerned, their owner is sti "ntero, and it is therefore to his estate that the di!idends shou d be paid. $either %anayo nor &orona wou d be entit ed to the di!idends.