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Quiz 1 MTP – Succession Which of the following statements is false? Transfer tax is -None of the above The object of estate tax is the: -Right to transmit Justification for the imposition of transfer tax. -All of the above Mortis causa transfer of property is effected: -Upon the death of the deceden...

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Quiz 1 MTP – Succession 1. 2. 3. 4. 5.

Which of the following statements is false? Transfer tax is -None of the above The object of estate tax is the: -Right to transmit Justification for the imposition of transfer tax. -All of the above Mortis causa transfer of property is effected: -Upon the death of the decedent. The tax imposed on the transfer of property without consideration between two or more persons who are living at the time the transfer is made. -Donor's tax

6.

Statement 1: Cancellation of existing debt as payment for services rendered by the debtor to the creditor is a gratuitous transfer. Statement 2: A sale is a form of transfer transaction that requires payment of transfer tax. -Statements 1 & 2 are false

7.

Statement 1: A sale on installment basis is considered as an onerous transfer. Statement 2: A gift out of love to former girlfriend is an onerous transfer. -Statement 1 is true but statement 2 is false It is a mode of acquisition by virtue of which, the property, rights and obligations, to the extent of the value of the inheritance, of a person are transmitted through his death to another either by his will or by operation of law. -Succession The elements of succession are: I. Decedent II. Estate III. Heirs IV. Adminstrators/Executors -I, II and III only Estate -Is the sum of all the property of a deceased individual which are available for disposition to his heirs, successors or beneficiaries, represented by an executor or administrator as the case may be. Statement 1: Inheritance refers to all the property, rights and obligations of a person which are not extinguished by death and all which have accrued thereto since the opening of succession. Statement 2: Rights which are purely personal are not transmissible for they are extinguished by death. -Statements 1 and 2 are true Which is not true about inheritance? -Inheritance includes property, rights, and obligations extinguished by a person's death. Heirs, for estate tax purposes are classified as I. Voluntary heirs II. Compulsory heirs III. Legal or intestate heirs -All of the above Heir who inherits personal property by will is known as: -Legatee

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Which of the following is not a compulsory heir? -Relative by affinity The "compulsory heirs" are classified as: I. Primary - legitimate children and/or descendants II. Secondary - legitimate parents and/or ascendants; illegitimate parents III. Concurring - surviving spouse; illegitimate children descendants -All of the above A person appointed by the testator to carry out the provisions of the will is called: -Executor Which of the following could legally effect transfer of properties through succession? -By both "a" and "b" Which among the following are the kinds of succession? I. Testamentary or testate succession II. Legal or intestate succession III. Mixed succession -All of the above Succession which results from the· designation of an heir, made in a will executed in the form prescribed by law is known as: -Testamentary succession Which is true? Legal or intestate succession does not take place -When the heir instituted is capable of succeeding Which of the following is regarded as an intestate succession? -The will was subsequently rendered void by circumstances. The following statements pertain to relatives by consanguinity, except I. Consanguinity is the relation subsisting among all the different persons descending from the same stock or common ancestor. II. Portion of the blood of the common ancestor flows through the veins of all his descendants, and though mixed with the blood flowing from many other families, yet it constitutes the kindred or alliance by blood between any two of the individuals. III. This relation is also known as relation by blood IV. Relation by consanguinity is of two kinds; lineal and collateral. -None of the above How many degrees (of generation) apart are third cousins -eight In a legal succession -Even half blood brothers and sisters may inherit. Who is not an intestate heir? -Collateral relatives within the 6th degree In case where there are no relatives to receive the inheritance the following has the claim on the estate? -The State·. Statement 1: Compulsory heirs include illegitimate children Statement 2: In the absence of compulsory heirs, relatives to the 3rd degree would inherit the estate. -Statement 1 is true but statement 2 is false Certain parts of the estate of a deceased Filipino citizen cannot be freely disposed of because Philippine law reserves them for the "compulsory heirs". This portion of the decedent's estate is -Legitimes

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Statement 1: In testamentary and legal succession, the compulsory heirs are assured of their legitimes. Statement 2: In every inheritance, the relative nearest in degree excludes the more distant ones, saving the right of representation when it properly takes place. -Statements 1 and 2 are true If the surviving heirs in an intestate succession are the parents and a legitimate child of the decedent, what is the share of the parents in the legitimes? -None Which of the following statement is true? -The sharing of heirs in testamentary succession must satisfy the rules on legitimes. Statement 1: Under the law on legitimes, if the only survivor is the widow. or widower: she or he shall be entitled to one half of the hereditary estate of the deceased spouse, and the testator may freely dispose of the other half Statement 2: Legitimate and illegitimate child has equal share under intestate distribution of estate. -Statement 1 is true but statement 2 is false Statement 1: A free portion of the estate could be transferred to compulsory heirs by virtue of a will. Statement 2: The surviving spouse is always entitled to his or her legitimes that varies according to the number and classes of the other surviving compulsory heirs. -Statements 1 and 2 are true Statement 1: The presence of children does not disqualify parents to inheritance. Statement 2: The rules on legitimes are substitute for testamentary dispositions. -Statement 1 is true but statement 2 is false Statement 1: A "will" is an act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate upon his death. Statement 2: A "codicil' is a supplement or an addition to a will, made after the execution of a will and annexed to be taken as a part thereof by any disposition made in the original will is explained, added to, or altered. -Statements 1 and 2 are true No Will shall be revoked, except -All of the above Which of the following is a VALID will? -That which increase the share of one heir without impairing the legitimate of the other heirs. Probate of a will involves the following processes, which one is not? -Collecting the heir’s estate Mr. Mhalapit Nha executed a second will three months after he executed the first one. The second will is silent as to the first will. What effect does the second will produce? -The first will is automatically revoked because of the existence of a subsequent will. In which of the following cases ·is a will invalid? -When the will was executed in a language not known to the testator. Which of the following is not a valid will? -That which transfers the portion of legitime to other successors other than compulsory heir(s). Statement 1: The making of a person's will may be left in part to the discretion of a third person. Statement 2: Persons of either sex under eighteen years of age cannot make a will. -Statement 1 is false but statement 2 is true A testator may execute a holographic will instead of an ordinary will. Which among the following statements pertaining to holographic will is false?

I. A person may execute a holographic will which must be entirely written, dated and signed by the hand of the testator himself. II. A holographic will is subject to no other form, and may be made within or outside of the Philippines, and need not be witnessed. III. In case of any insertion, cancellation, erasure or alteration in a holographic will, the testator must authenticate the same by his full signature. -None of the above 45. It deprives an heir to inherit properties by the decedent through the issuance of a will. -Disinheritance 46. The following are causes of disinheriting a child. Which one is not? -When a child has been convicted of adultery or concubinage with the spouse of the testator. 47. The following are causes for disinheriting a spouse, which one is not? -When the spouse justifiably refuses to support the children or the other spouse.

48. Representation is a right created by fiction of law by virtue of which the representative is raised to the place and degree of the person represented and acquires the rights which the latter would have if he were living or if he could have inherited. Statement 2: If a compulsory heir dies ahead of the testator, his legitime goes to the child by representation. Statements 1 and 2 are true 49. Statement 1: The right of representation takes place in the direct descending line, but never in the ascending line. Statement 2: The child of a voluntary heir who predeceases the testator gets nothing, because there is no representation among voluntary heirs nor in the free portion - Statements 1 and 2 are true 50.

Which is not authorized to take charge of the estate during intestate period? -Court

Quiz 2 - Mid Term Period - Gross Estate 1. An excise tax on transfers inter-vivos -Donor's tax 2. An excise on transfers mortis causa -Estate tax

3. Which among the following statements is not correct? I. Estate taxation is governed by the statute in force at the time of death of the decedent. II. Estate tax accrues as of the death of the decedent. III. Succession takes place and the right of the State to tax the privilege to transmit the estate vests instantly upon death. - None of the above 4. Estate tax is a tax on the right of the deceased person to transmit his estate to his lawful heirs and beneficiaries. Hence, it is I. A tax on property. II. An excise tax -II only 5. Estate tax is imposed upon the: -Right to transfer property upon death 6. When will the transfer through succession be effective? -Upon death of the testator 7. Which of the following is not a characteristic of donation mortis causa? -The transfer to the donee is irrevocable while donor is alive.

8. Mr. Wais thought that due to old age, death may be imminent. Knowing that the value of estate tax is high, he disposed his properties to his rightful heirs prior to his death (transfer in contemplation of death). To prevent undue avoidance of tax, inter vivos disposition in contemplation of death is subject to: -Estate tax 9. The gross estate of a decedent shall be comprised of the following properties and interest therein at the time of his death, including revocable transfers and transfers for insufficient consideration, etc.: I. Residents and citizens: All properties, real or personal or intangible, wherever situated.

II. Nonresident aliens: Only properties situated in the Philippines, that, with respect to intangible personal property, its inclusion in the gross estate is not subject to the rule of reciprocity -I only 10. Which of the following shall be considered personal property? I. Obligations and actions which have for their object movables or demandable sums. II. Shares of stock of agricultural, commercial and industrial entities, although they may have real estate. -Both I and II 11.The personal property of a non-resident, not citizen of the Philippines, would not be included in the gross estate if: -The intangible property is in the Philippines and the reciprocity clause of the estate tax law applies.

12.

Which of the following is subject to the rule of reciprocity? -Shares owned by a non-resident alien in a partnership established in the Philippines.

13. The rule of reciprocity applies to: Non-resident alien decedent Intangible personal property in the Philippines -Yes Yes 14. Intangible Personal Property of Non-Resident Alien Decedent with Situs in the Philippines shall be Exempt from Taxation if: I. The decedent, at the time of his death was a resident citizen of a foreign country which at the time of his death did not impose an estate tax of any character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country. II. The laws of the foreign country of which the decedent was a resident citizen at the time of his death allow a similar exemption from estate taxes of every character, in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country. - Either I or II 15. One of the following is not an intangible personal property situated in the Philippines: I. Shares, obligations or bonds issued by any corporation or sociedad anonima organized and constituted in the Philippines in accordance with its laws. II. Shares, obligations or bonds issued by any foreign corporation where 85% of its business is located in the Philippines. III. Shares, obligations or bonds issued by a foreign corporation such shares, obligations or bonds have acquired business in the Philippines. IV. Shares or rights in any partnership, business or industry established outside the Philippines. -IV only 16. Which of the following rules on "situs" of property of a decedent correct? I. As a general rule, the situs real property is the place or country where it is situated. II. As a general rule, the situs of tangible personal property is the place or country where such is actually located at the time of the decedent's death. III. The rule that situs of intangible personal property is the domicile or residence of the owner does not apply when the property has a situs elsewhere. IV. The test of situs of property of a non-resident alien decedent is not important at all because only the transmissions of property located in the Philippines are subject to estate tax. - I, Il and III only 17. Which is not a test of situs? -Place of storage in case of certificates of stocks.

18.

One of the following is not an intangible personal property situated the Philippines: -Shares, obligations or bonds issued by a non-resident foreign Corporation. 19.Which of the following statements is correct? -The estate tax accrues as of the death of the decedent and the accrual of the tax is distinct from the obligation to pay the same.

20.Which of the following item is considered situated outside the Philippines? -Foreign currency deposited in bank outside the Philippines

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21. Pedro died on April 13, 2018, leaving the following properties: · Common stocks of Sunchamp Corporation (2,000 shares) listed in the Philippine Stock Exchange (highest - P40; lowest P39). · Common stocks of AgriNurture Corporation (1,500 shares) not listed in the stock exchange. Cost - P50 per share; book value P45 per share · Preferred stocks of Greenergy Inc. (3,000 shares) - not listed in the stock exchange. Cost P70 per share; book value P60 per share; par value P50 per share · Car (cost - P600,000; book value - P350,000; market value P400,000) Real properties (zonal value - P120,000; assessed value - P72,000) The gross estate of Pedro is -P816,500 22. A Filipino decedent residing in Hawaii during his lifetime, left the following properties: House & lot, USA P10,000,000 Mansion, Philippines 50,000,000 Cars, Philippines 2,000,000 Shares of stock, Singapore 5,000,000 Accounts receivable, USA 3,000,000 The gross estate of the decedent is -P70,000,000 23. The gross estate of a decedent included the following: Cost Fair value Land& building, Philippines P1,600,000 P2,000,000 House and lot, UK 1,800,000 1,500,000 Personal properties, UK 1,000,000 600,000 House and lot, Philippines 4,000,000 3,500,000 Shares of stocks, UK corp. 200,000 Shares of stocks, domestic corp. (certificate kept in UK) 250,000 Shares of stocks, domestic corp. (certificate kept in Phils) 100,000 Franchise exercised in the Phils. 200,000 Franchise exercised in UK 150,000 Receivables, debtor is from UK 50,000 Receivables, debtor is from Phils. 50,000 If the decedent was a nonresident alien and his country exempts a Filipino citizen from estate tax, how much of his assets would be subject to reciprocity? -P600,000 24. Which of the following value is not used when valuing gross estate? -Fair market value at the time the estate return is filed;

25. The following statements pertain to rules on valuing the estate left by a decedent. Select the incorrect statement. I. Values in the gross estate are based on values at the time of the decedent's death because it is at this time that the heir legally succeeds to the inheritance II. Receivable are appraised on the basis of the amount of the principal and interests due and unpaid at the time of death. -Neither I nor II

26. A decedent left a piece of land. The following data were available in connection with the property. Assessed valued, one (1) month before death P2,500,000 Zonal value, time of death 2,000,000 FMV at the time of filing estate tax return 3,000,000 What would be the value of the piece of land in the gross estate? - P2,000,000 27. A decedent left 1,000 XYZ Corporation common shares. The shares were not traded in the stock exchange. The following data were made available Capital stock, XYZ Corporation P10,000,000 Retained earnings 2,000,000 Outstanding shares 100,000 What was the value included the decedent's gross estate? -P150,000 28. A decedent left 1,000 XYZ Corporation common shares. The shares were not traded in the stock exchange. The following data were made available Capital stock, XYZ Corporation Retained earnings Outstanding shares

P10,000,000 2,000,000 100,000

Assume that the shares were classified as preference shares, what was the value included the decedent's gross estate? -P150,000 29. A decedent left 1,000 XYZ Corporation common shares. The shares were not traded in the stock exchange. The following data were made available Capital stock, XYZ Corporation P10,000,000 Retained earnings 2,000,000 Outstanding shares 100,000 Assume that the shares were traded in the stock exchange. Assume further that the average value at the time of death was P100 per share. What was the value included the decedent's gross estate? -P100,000 30. A decedent left 1,000 XYZ Corporation common shares. The shares were not traded in the stock exchange. The following data were made available Capital stock, XYZ Corporation P10,000,000 Retained earnings 2,000,000 Outstanding shares 100,000 Assume that the shares were traded in the stock exchange. However, the quoted price at the time of death was not determinable. Nonetheless, the highest and lowest quotations of the shares in the market were P140 and P80, respectively, what was the value included the decedent's gross

estate?? -P110,000 31. Decedent died in 2018 leaving a will which directed all real estate owned by him not to be disposed or sold for a period of 2 years after his death, and ordered that the property be given to Juan Dela Cruz after 2 years. In 2018, the estate left by the decedent had a fair market value of P500,000. In 2020, the fair market value of the said estate increased by P4,500,000,and the BIR Commissioner assessed thereon estate tax based on assessed value of P4,000,000 in 2018. What would be the correct amount of the gross estate? -P500,000 32. Decedent's Interest I. Refers to the extent of equity or ownership participation of the decedent on any property physically existing and present in the gross estate, whether or not in his possession, control or dominion. II. Refers to the value of any interest, having value or capable of being valued or transferred, in pr...