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Classification

Resident Citizen

Valuation of properties

Real

CMV or FMV of Provincial or City Assessors and/or FMV determined by Commissioner of BIR whichever is higher

Valuation of personal and other properties Gross Estate 1. Real Properties 2. Tangible personal properties 3. Intangible personal properties* 4. Transfer in contemplatio n of death (donation mortis causa), revocable transfer, transfer under general power of appointment 5. Proceeds of life insurance beneficiary is estate, executor, administrator or a 3rd person (revocable);

FMV at the time of decedents death

Not Resident, not Citizen (with foreign reciprocity) CMV or FMV of Provincial or City Assessors and/or FMV determined by Commissioner of BIR whichever is higher FMV at the time of decedents death

Not Resident, not Citizen (w/o foreign reciprocity) CMV or FMV of Provincial or City Assessors and/or FMV determined by Commissioner of BIR whichever is higher FMV at the time of decedents death

Within and without Within and without

Within Within

Within Within

Within and without

W/n and w/o-not included Within

Within included

Within and without Valuation: 1. FMV,t=CR = 0 2. FMV,t>CR=FMV at the time of death CR = Gross Estate; 3. If theres no CR, gross estate the FMV, death

Within

6. Claims against insolvent person *Intangible personal properties: 1. Franchise exercise in the Philippines; 2. Shares, obligations, or bonds issued by any corporation organized in the Phils; 3. SOB issued by foreign corp, 85% is located in the Phils; 4. SOB issued by forein corp it acquired a business situs in the Phils; 5. Shares or rights in any partnership, business or industry in the Phils. Exceptions to the Gross Estate: 1. The merger of the usufruct in the owner of the naked

Added in full in the gross estate but deductible expenses in the portion not covered by asset of the insolvent person

Not included

Included

title 2. The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to fedeicomissa ry 3. The transmission to the first heir, legatee or done in favor of another beneficiary, in accordance with the will of the predecessor; 4. All bequests, devises of legacies or transfers to social welfare, cultural and charitable institutions subject to 30% utilization

Deductions from Gross Estate: 1. Ordinary deductions a. Expenses, losses, indebtedness, taxes, etc. (ELIT) - Funeral expenses i. Actual funeral expenses vs. 5% of the total gross estate whichever is lower but not to exceed 200,000; ii. Wake to interment (except if there is donation in the funeral expenses, exclude that to the computation of actual expenses; iii. If there is a memorial plan included in the gross estate, expenses included in the computation of actual funeral expenses. - Judicial expenses i. Actual expenses for the settlement of the estate to the court; ii. It must not be more than 6 months from the time of death. - Claims against the estate i. The debt instrument must be notarized (except loan for financial institution and if not debt instrument) ii. It must be contracted not more than 3 years prior to decedents death; - Claims against insolvent persons i. Not covered by the asset of the debtor. - Unpaid mortgages or indebtedness i. Included in the deductions to the gross estate - Taxes i. It must be accrue before the decedents death ii. Income and property taxes (before), estate tax (income tax-after) - Losses i. It must be occurred not more than 6 months after decedents death. b. Transfer for public use - Political subdivisions provinces, municipalities, barangays, cities c. Vanishing deduction - Requisites: Present decedent died within 5 years from the receipt of the property from prior decedent or donor; The property claimed as VD is located in the Philippines Form part of the taxable estate of the prior decedent or donor Estate tax and donors tax are fully determined and paid Identifiable as property of the prior decedent or donor No VD on the property was allowable to the estate of the prior decedent.

Computation: o Determination of initial value, FMV,t vs, FMV,d whichever is lower; o Initial value mortgage paid o (Difference (IV-MP) / Gross estate) x (ELIT+TPP) = x o ((Difference (IV-MP) x = xx) x % o 100% - w/n 1 year; 80% - < 2 years; 60% - < 3 years; 40% - < 4 years; 20% - < 5 years 2. Special deductions a. Family home - Deductible to resident citizen only; - Not more than 1M; b. Standard deduction - Deductible to resident citizen only; - 1M; c. Medical expenses - Actual medical expenses vs. P500,000 whichever is lower; - Within 1 year before the decedents death whether paid or unpaid; - Deductible to resident citizen only; d. Amount receivable by heirs under RA 4917 e. Transmission of bequests to Social Welfare, cultural or charitable institutions (30%) Deductions to NRC, Not citizen of the Philippines: GE, Phils / GE, World x World (ELIT) = ELIT (PORTION) + TPP + VD Simplified computation of Estate Tax: (Unmarried / Single) Gross Estate ELIT TPP- VD Special Deductions = Taxable net estate (refer to tax table)

Conjugal Partnership of Gains If no contract before August 3, 1988 Exclusive: 1. Inherited / donated properties during/before the marriage; 2. Acquired using the exclusive money; 3. Properties brought into marriage; Conjugal: 1. Fruits of exclusive properties

Absolute Community of Property If no contract after August 3, 1988 Exclusive property: 1. Inherited / donated properties during the marriage as well as the fruits; 2. Personal or for exclusive use 3. Property acquired before marriage with legitimate descendants. Community: 1. Properties acquired during the marriage; 2. Properties cannot be clearly identified; 3. Jewelries

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