CHAPTER 8

PROBLEM 1
Exclusive Communal Total

Community Property
Lot w/ apartment, QC 1,800,000
Lot w/apartment, Makati 1,200,000 3,000,000

Exclusive Property
Farm in Nueva Ecija inherited
by Mr.Laurel 600,000 600,000
600,000 3,000,000 3,600,000
Less: Deductions
Communal deductions
Accounts Payable 70,000
Fire Loss on Apartment 30,000 100,000
Net communal estate 2,900,000 3,500,000

Exclusive Deductions
Unpaid mortgage on farm 150,000
Legacy to city of makati 100,000

Other deductions
Net share of surviving spouse
(2900000/2) 1,450,000
Standard Deductions 1,800,000
Net taxable estate 0.00
Estate tax due (0*6%) 0.00

PROBLEM 2
Exclusive Communal Total
Community Property
Investment in a business 2,000,000
Family Home 1,300,000
Fishpond 1,000,000
Personal property 700,000 5,000,000

Exclusive Property
Ranch inherited 200,000 200,000
200,000 5,000,000 5,200,000
Less: Deductions
Communal deductions
Unpaid mortgage, fishpond 300,000
Unpaid real property taxes 20,000 320,000
Net communal estate 4,680,000 4,880,000

Exclusive deductions
Unpaid mortgage on ranch 50,000

Other deductions
Net share of surviving spouse 2,340,000
(4680000/2)
Standard deduction 2,490,000
Net taxable estate 0.00
Estate Tax due (0*6%) 0.00
 PROBLEM 3
Exclusive Communal Total
Communal Property
Inherited from father 1,200,000
Owned by Mrs. Llovido 300,000
Family Home 3,000,000 4,500,000

Exclusive Property
Gift inherited from mother 1,115,000
Income from gift 5,000 1,120,000
Gross estate 1,120,000 4,500,000 5,620,000

Less: Deductions
Communal deductions
Obligations during marriage 150,000 150,000
Net communal estate 4,350,000 5,470,000

Exclusive Dedcutions
indebtedness before marriage 20,000

Other deductions
Net share of surviving spouse
(43500000/2) 2,175,000
Standard deductions 3,275,000
Net taxable estate 0.00
Estate tax due (0*6%) 0.00

PROBLEM 4
Exclusive Communal Total
Communal property
Family Home 4,000,000
Owned by Mr.Castaneda 300,000
Owned by Mrs. Castaneda 200,000 4,500,000

Exclusive Property
Inheritance 2,000,000 2,000,000
Gross estate 2,000,000 4,500,000 6,500,000

Lesss: Deductions
Communal Deductions
Unpaid obligations 35,000 35,000
Net communal estate 4,465,000 6,465,000

Exclusive Deductions
Unpaid mortgage on property 200,000
Vanishing deduction 771,077

Other deductions
Net share of surviving spouse
(4465000/2) 2,232,500
Standard deductions 3,261,423
Net taxable estate 0.00
Estate Tax due 0.00

Vanishing deduction computation

PPT 1,100,000
less: paid 100,000
Initial basis 1,000,000

Less:
1,000,000 *235000 36,154
6,500,000
Final basis 963,846
Multiply rate 80%
Vanishing deduction 771,076.92
CHAPTER 9
PROBLEM 1
Estate tax due (2000000*6%) 120,000

A. net taxable estate Tax paid

Philippines 1,000,000
U.S.A 600,000 250,000
Simgapore 400,000 120,000
TOTAL 2,000,000 370,000

Limitation 1
USA
600,000 *120000 36,000
2,000,000
Actual 250,000
Allowed 36,000

Singapore
400,000 *120000 24,000
2,000,000
Actual 120,000
Allowed 24,000

TOTAL 60,000

Limitation 2
1,000,000 *120000 60,000
2,000,000
Actual (250000+120000) 370,000
Allowed 60,000

TAX CREDIT FOR FOREIGN ESTATE 60,000

B.
Philippine Estate Tax due 120,000
Less: Tax credit 60,000
Estate tax still due 60,000
 PROBLEM 2
A.
Philippine estate tax due (600000*6%) 36,000

Net Taxable Estate Estate tax paid

Philippines 600,000
Indonesia 400,000 10,000
Vietnam 200,000 2,000
TOTAL 1,200,000 12,000

Limitation 1
Indonesia
400,000 *36000 12,000
1,200,000
Actual 10,000
Allowed 10,000

Vietnam
200,000 *36000 6,000
1,200,000
Actual 2,000
Allowed 2,000
TOTAL 12,000

Limitation 2
600,000 *36000 18,000
1,200,000
Actual (10000+2000) 12,000
Allowed 12,000

TAX CREDIT FOR FOREIGN ESTATE 12,000

B.
Philippine Estate Tax due 36,000
Less: Tax credit 12,000
Estate tax still due 24,000

C.
Philippine Estate Tax due 36,000