QUIZ 1 Taxation Reviewer PDF

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QUIZ 1 TAXATION REVIEWERTRUE or FALSE 1. TRUE Estate tax is an excise tax. 2. TRUE Adopted children, for all intents and purposes are considered as legitimate children. 3. FALSE If zonal value is available at date of death, and this is higher than the fair market value per assessor’s listings of val...

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QUIZ 1 TAXATION REVIEWER TRUE or FALSE 1. TRUE Estate tax is an excise tax. 2. TRUE Adopted children, for all intents and purposes are considered as legitimate children. 3. FALSE If zonal value is available at date of death, and this is higher than the fair market value per assessor’s listings of values, then the amount to be reported in the gross estate is the zonal value. 4. FALSE A person has unlimited right to make donations in his last will and testament. 5. FALSE A special power of appointment authorizes the donee of the power to appoint only from among a designated class or group of persons other than himself. 6. TRUE Devisees and legatees are persons to whom gifts of real or personal property are respectively given by virtue of a will. 7. FALSE An heir who inherits a specific personal property by will is known as devisee.

 a) b) c) d)

A surviving spouse is a compulsory heir classified under Primary heir Secondary heir Concurring heir Voluntary heir

 a) b) c) d)

One of the following donations is not included in the computation of the gross estate Revocable transfers Transfers with reservation of certain rights Transfers under special power of appointment Transfers in contemplation of death

 a) b) c) d)

Which of the following values is not used when valuing gross estate? Fair market value at time of death Fair market value at the time the estate return is filed Zonal value when higher than the assessed value in case of real property Book value in case of shares not traded in the stock exchange

 Which of the following is not included in the gross estate? a) Revocable transfer where the consideration is not sufficient b) Proceeds of life insurance where the beneficiary designated is the estate and the designation is irrevocable c) Revocable transfer where the power of revocation was not exercised d) Proceeds of life insurance where the beneficiary designated is the mother and the designation is irrevocable

 a) b) c) d)

Which is not authorized to take charge of the estate during the intestate period? Administrator Executor Court Heirs



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 legitime? 1/3 1/2 1/4 None

a) b) c) d)



The following are properties in the gross estate with their fair market values:  House & lot, family home in Quezon City, P 1,800,000  Bank deposit in the foreign branch of a domestic bank, P 600,000.  Bank deposit in Manila branch of a foreign bank, P 400,000  Shares of stock issued by San Miguel Corp, a domestic corporation certificate kept in the USA, P1,200,000  Franchise exercised in Makati, Philippines, P700,000  Receivable, debtor from the Visayas, P250,000



How much is the value of the gross estate if the decedent is a nonresident alien and there is no reciprocity? P4, 350,000 P3, 400,000 P2, 550,000 P2, 300,000

a) b) c) d)

600k excluded  a) b) c) d)

Justification for the imposition of transfer tax is Redistribution of wealth theory Benefit received theory State partnership theory All of the above

 a) b) c) d)

A person appointed by the testator to carry out the provisions of the will is called Administrator Executor Enforcer Beneficiary



CHONG SY, Filipina, died in the Middle East leaving the following properties:  House and lot in the Middle East - 1,000,000  Vacant lot in Manila - 2,000,000  Shares of stock, Domestic Corp., 60% of the business is located in the Philippines - 200,000  Shares of stock in a Foreign Corp., 70% of the Business is located in the Philippines - 300,000  Car in Manila - 500,000 How much is Ms. SY's gross estate? a) P 4,000,000 b) P 3,500,000 c) P 3,200,000 d) P3, 000,000

 a) b) c) d)

Which of the following could legally effect transfer of properties through succession? By virtue of a will By operations of law By onerous transfer By both “a” and “b”

 a) b) c) d)

Which of the following is not to be included in the gross estate of citizen decedent? Dividend income declared, but not yet actually received at date of death. Share in partnership’s profit earned immediately after the date of death. Rent income accrued before death but collected after death. None of the above

 The following are causes for disinheriting a spouse, which is not ? a) When the spouse justifiably refuses to support the children or the other spouse. b) When the spouse has accused the testator of a crime for which the law prescribes imprisonment for six years or more, and the accusation has been found to be false. c) When the spouse by fraud, violence, intimidation or undue influence causes the testator to make a will or to change one already made. d) When the spouse has given cause for legal separation.  a) b) c) d)

Which of the following transfers is included in the gross estate ? Transfer inter vivos Transfer under general power of appointment Transfer under special power of appointment Transfer for an adequate and full consideration

 a) b) c) d)

It deprives an heir to inherit properties by the decedent through the issuance of a will Disinheritance Distributable share Legitimate Disqualification

● a) b) c) d)

When will the transfer through succession be effective ? Upon the signing of a written will Upon payment of estate tax Upon death of the testator Upon registration in the register of deeds

● a) b) c) d)

Which of the following is regarded as an intestate succession ? The will is designating the State as beneficiary of the free portion. The will was subsequently rendered void by circumstances. The will designate a part of the free portion to a stranger. The will disposed of the legitime to its rightful heir.

●

DINA NATUTO, Filipina, died in the USA with the following properties:  Condo unit in New York City - 2,500,000  Shares of stock in a foreign corporation - 800,000  Interest in a partnership business, domestic - 400,000  Bank deposit in a New York City bank - 100,000  Car in Cebu, donated inter vivos 5 years ago to her son - 350,000 Assume the decedent is a nonresident alien (with reciprocity), how much is her gross estate? a) P3, 800,000 b) P3, 700,000 c) P3, 300,000 d) P None  The elements of succession are: I. Decedent II. Estate III. Heirs IV. Administrators/Executors a) b) c) d)

I and II only I, II and III only All of the above None of the above

 Decedent, Jose Aguinaldo has the following information: Value of property at the time of sale P 1,200,000 Value of consideration when sold 1,000,000 Value of the property at the time of death 1,500,000 What is the amount to be included in the gross estate of Jose Aguinaldo? a) P 100,000 b) P 200,000 c) P 300,000 d) P 500,000 1.5M – 1M  a) b) c) d)

Succession which results from the designation of an heir, made in a will executed in the form prescribed by law is known as Legal or intestate succession Testamentary succession Mixed succession Ordinary succession



The following are properties in the gross estate with their fair market values:  House & lot, family home in Quezon City, P 1,800,000  Bank deposit in the foreign branch of a domestic bank, P 600,000  Bank deposit in Manila branch of a foreign bank, P 400,000  Shares of stock issued by San Miguel Corp, a domestic corporation certificate kept in the USA, P1,200,000  Franchise exercised in Makati, Philippines, P700,000  Receivable, debtor from the Visayas, P250,000 How much is the value of the property to be excluded from the gross estate if decedent is a nonresident alien and there is reciprocity ? a) b) c) d)

P4,300,000 P3,150,000 P2,900,000 P2,500,000

600k+ 400k + 1.2M + 700k + 250k  a) b) c) d)

The object of estate tax is the Properties of the decedent. Beneficiaries Right to transmit Decedent...