Estate & Donor’s Tax Problems Multiple Choice Questions

Transfer Taxes Quizzer

Instruction: Select the best answer to each of the following questions.

1
. A revocable transfer with a consideration received:
Consideration received P200,000
Fair market value of property at the time of transfer 300,000
Fair market value of property at the time of death 250,000

Amount to be included in the gross estate is:

a. P300,000.
b. P250,000.
c. P100,000.
d. P 50,000.
2
. A decedent was married at the time of death and under the system of conjugal partnership of gains
regime. Among the properties in the gross estate were:
Land, inherited before the marriage, fair market value P100,000.
Family home built by the spouses on the inherited land 800,000
The amount of deduction for family home allowance is
a. P900,000.
b. P500,000.
c. P400,000.
d. P450,000.

Questions 3 through 5 are based on the following information:

Mr. Digna, a resident citizen, died with properties consisting of his gross estate, P5,000,000. Actual
funeral expenses amounted to P220,000 and other expenses and claims which are deductions from the gross
estate amounted to P1,200,000.
3
. The allowable deductions for funeral expenses is
a. P220,000.
b. P250,000.
c. P200,000.
d. P-0-
4
. The net taxable estate is:
a. P3,600,000.
b. P3,550,000.
c. P3,700,000.
d. P3,580,000.
5
. The distributable estate was diminished by:
a. P1,420,000.
b. P1,400,000.
c. P1,200,000.
d. P1,450,000.

Questions 6 & 7 are based on the following information:

6
. Properties in the Philippines P500,000.
Properties outside the Philippines 300,000
Actual funeral expenses in the Philippines 20,000
TAX-PQ-0604 1
Estate & Donor’s Tax Problems Multiple Choice Questions
Actual funeral expenses outside the Philippines 10,000
If the decedent was a citizen or resident of the Philippines, the deductible funeral expenses amounts to:
a. P30,000.
b. P40,000.
c. P18,750.
d. P25,000.
7
. If the decedent was a non-resident alien, the deductible funeral expenses amount to:
a. P30,000.
b. P40,000.
c. P18,750.
d. P25,000.
8
. Mr. Arias died with a receivable from Mr. Bernas. Mr. Bernas has properties worth P220,000 and
obligations of P320,000. Included in the obligations are P20,000 owed to the Government of the
Republic of the Philippines for unpaid taxes and P60,000 owed to Mr. A. The deductible claim against
insolvent persons amount to:
a. P60,000.
b. P41,250.
c. P20,000.
d. P40,000.
9
. The decedent, during his lifetime, was under the conjugal partnership of gains. Among his allowable
deductions from the gross estate is vanishing deduction and the following:
Funeral expenses P 80,000.
Judicial expenses 100,000.
Claims against conjugal properties 120,000.
Mortgage on exclusive property 40,000.
Bequest to charitable institution 5,000.
Bequest to the Philippine Government 60,000.
Medical expenses 300,000.
Amount received by heirs under R.A. 4917 60,000.
In the formula for vanishing deduction where:
Initial basis of property
------------------------------ x Deductions,
Gross Estate
The multiplier “deduction” is equal to:
a. P400,000.
b. P405,000.
c. P 40,000.
d. P100,000.
Questions 10 & 11 are based on the following:
A decedent died single, leaving a family home which consists of a piece of a piece of land that he inherited
3-1/2 years ago (with value at that time of P600,000) with a fair market value of P800,000 at the time of his
death, and a house thereon which he built at a cost of P650,000, and a fair market value at the time of his
death of P450,000. Other properties in his gross estate have a fair market value of P550,000. Unpaid
obligations at the time of his death amounted to P300,000.
10
. The vanishing deduction is equal to:
a. P200,000.
b. P500,000.
c. P 40,000.
TAX-PQ-0604 2
Estate & Donor’s Tax Problems Multiple Choice Questions
d. P225,000.
11
. The total deduction for family home is:
a. P 450,000.
b. P 550,000.
c. P1,000,000.
d. P1,250,000.
12
. Mr. Javier, single, a non-resident, not a citizen of the Philippines, died leaving a gross estate in the
Philippines of P1,000,000 and a gross estate outside the Philippines of P3,000,000. His expenses and
transfers were: Funeral expenses outside the Philippines of P100,000, mortgage of property outside
the Philippines of P200,000 and in the Philippines of P50,000 and transfer to the Philippine
Government of property outside the Philippines of P100,000.
The allowable deduction from the Philippine gross estate is:
a. P 87,500.
b. P100,000.
c. P 37,500.
d. P150,000.
13
. Refer to the same information in no. 12, how much is the net taxable estate in the Philippines?
a. P3,500,000.
b. P 912,500.
c. P 300,000.
d. P 850,000.
14
. Mr. Alana inherited property on November 1, 2001, with a fair market value and a mortgage, at that
time, of P200,000 and P100,000, respectively. He married on January 10, 2002. On March 5, 2002, he
borrowed P200,000 from a bank and mortgaged the same property. Mr. Alana died without paying any
of the mortgage indebtedness. Disregarding accrued interest on the mortgage indebtedness, deduction
against exclusive property amounts to:
a. P100,000.
b. P200,000.
c. P300,000.
d. None.
15
. Mr. Benetiz died on June 30, 2003, leaving, among others, the following charges and obligations: Real
property tax for the calendar year 2003 – P20,000; On an interest-bearing promissory note (notarized):
face value of the note – P10,000; accrued interest on the note at the time of death – P600; and interest
to accrue on the note from the date of death to the date of maturity – P400. The deduction from the
gross estate is:
a. P20,600.
b. P30,600.
c. P31,000.
d. P21,000.

Questions 16 & 17 are based on the following information:

Mr. Juanito Mendoza, a citizen and resident of the Philippines, died on June 1, 2003, survived by his wife.
The property relationship in the marriage was the conjugal partnership of gains. He left the following properties
and charges thereon:
Fair
Cost Market Value
Family home:
Residential house, constructed during the marriage P400,000 P900,000
TAX-PQ-0604 3
Estate & Donor’s Tax Problems Multiple Choice Questions
Residential lot, TCT # 318, inherited 10 years ago 200,000 450,000
Furniture and appliances in the residential house 600,000 490,000
Receivable from insolvent friend 10,000
Cash, owned before the marriage 150,000
Other properties owned before the marriage 1,000,000
Actual funeral expenses 100,000
Judicial expenses 120,000
Unpaid mortgage 50,000
Unpaid taxes 20,000
Legacy (per will) of P50,000 cash to DSWD 50,000
Loss of household furniture and appliances on December 9, 2003

12,000

16
. The deduction for family home amounts to:
a. P450,000;
b. P900,000;
c. P1,000,000;
d. P1,350,000.
17
. The net taxable estate is equal to:
a. P1,200,000;
b. P 200,000;
c. P1,700,000;
d. P1,000,000.
Questions 18 through 21 are based on the following information:
Mr. Dencio Cayetano, a citizen of the Philippines, single, died a resident of the United States, leaving the
following properties:
Real property in the United States, inherited from the father one and one-half years
ago

P2,000,000
Personal property in the Philippines inherited from the father
1,600,000
Family home in the United States
1,400,000

and incurred/paid the following expenses:

Actual funeral expenses paid in the United States
100,000
Other obligations contracted within the last two years
250,000
18
. The taxable gross estate is:
a. P3,400,000;
b. P5,000,000;
c. P1,600,000;
d. P3,000,000.
19
. The allowable deduction for family home is equal to:

TAX-PQ-0604 4
Estate & Donor’s Tax Problems Multiple Choice Questions
a. P–0-
b. P 700,000;
c. P1,400,000;
d. P1,190,400.
20
. The deduction allowed for property previously taxed is:
a. P1,488,000;
b. P2,678,000;
c. P1,190,400;
d. P1,400,000.
21
. The net taxable estate is:
a. P2,459,600;
b. P1,971,600;
c. P3,162,000;
d. P2,678,000.
The following information should be used to answer questions 22 & 23:
The decedent is a citizen and resident of the Philippines:
Gross estate P10,000,000
Claims against the estate 3,000,000
22
. How much is the net taxable estate if the decedent was single?
a. P7,000,000;
b. P6,000,000;
c. P9,000,000;
d. P5,000,000;
23
. How much is the net taxable estate if the decedent was married and under the conjugal partnership of
gains or absolute community of property and the conjugal/community property was P3,900,000?
a. P5,550,000;
b. P6,550,000;
c. P6,050,000;
d. P5,505,000.
Questions 24 & 25 are based on the following information:

Mr. Alaberde, a citizen of the Philippines and a resident of the United States, under the system of
conjugal partnership of gains, died in the United States, and was shipped to and buried in the Philippines. His
estate had the following details:

Real property in the Philippines, inherited 3-1/2 years ago, when its fair market value
was P500,000 P
600,000
Real property in the U.S., used as family home

2,400,000
Tangible personal properties in the Philippines
200,000
Tangible personal properties in the United States
700,000

Funeral expenses in the United States, paid in cash from the estate
110,000

TAX-PQ-0604 5
Estate & Donor’s Tax Problems Multiple Choice Questions
Funeral expenses in the Philippines, paid in cash from the estate
100,000
Medical expenses, incurred within 1 year prior to death (P550,000 paid, the rest still
payable)
900,000
Unpaid obligations (excluding portion of medical expenses)
600,000
Claim against an insolvent person in the Philippines
100,000
Estate tax paid in the United States
300,000
24
. The gross estate is equal to:
a. P 800,000;
b. P4,000,000;
c. P3,900,000;
d. P 900,000.
25
. The net taxable estate amounts to:
a. P695,000;
b. P445,000;
c. P195,000;
d. P860,000;

Questions 26 & 27 are based on the following information:

Mr. Antonio Mitras, a citizen and resident of the Philippines, died on October 5, 2003. He was married
and the property relationship during the marriage was the absolute community of property. He left the following
properties, with their market values, and obligations and charges thereon:

Agricultural land

P100,000
House and lot acquired by inheritance before the marriage and 4-1/2
years ago, used as family home (with a fair market value of
P420,000 and a mortgage of P120,000 when acquired; P20,000
was paid by Mr. Mitras before he died)
500,000
Jewelry of Mrs. Mitras, acquired during the marriage with the exclusive
money of Mrs. Mitras
50,000
Clothes acquired during the marriage from income earned during
(P60,000 for use of Mr. Mitras, and P70,000 for use of Mrs. Mitras)

130,000
Cash on hand and in banks: income from unidentified sources
300,000
Cash in bank:
From sale at a loss of exclusive property

1,500,000

TAX-PQ-0604 6
Estate & Donor’s Tax Problems Multiple Choice Questions
Received as gift six years ago and before the marriage (current
account)
40,000
Other properties:
Owned before the marriage
90,000
Acquired during the marriage
20,000

Deductions and other information are also presented as shown on the next page:
Total funeral expenses of P300,000. Paid from the estate P 58,000
Judicial expenses 120,000
Unpaid mortgage (already on the property at the time acquired):
On agricultural land 20,000
On house and lot 100,000
Other obligations 20,000
Legacy to the Government of the Philippines from the current account
10,000
26
. The amount of allowable vanishing deduction is:
a. P 70,135.34;
b. P114,758.32;
c. P140,270.68;
d. P 86,068.97.
27
. The net taxable estate is:
a. P660,932.33;
b. P857,310.34;
c. P698,620.70;
d. P767,310.34.

Questions 28 through 32 are based on the following information:

Mr. Benjamin Contina, a citizen and resident of the Philippines, died on October 10, 2003, leaving the
following properties, rights, obligations and charges:
Conjugal properties (including a family home of P3,000,000 and amount
receivable under R.A. 4917 of P200,000)

P6,000,000
Exclusive properties (including cash of P500,000 inherited 4-1/2 years ago)

4,000,000
Medical expenses unpaid, January 2003
600,000
Funeral expenses
350,000
Judicial expenses
500,000
Other obligations
100,000
28
. The deductible medical expenses amount to:
a. P600,000;
b. P300,000;

TAX-PQ-0604 7
Estate & Donor’s Tax Problems Multiple Choice Questions
c. P500,000;
d. P250,000.
29
. The amount of deductible funeral expenses is:
a. P350,000;
b. P100,000;
c. P500,000;
d. P200,000.
30
. The family home allowed should be:
a. P3,000,000;
b. P1,500,000;
c. P1,000,000;
d. P 500,000;
31
. The amount of allowable vanishing deduction is:
a. P460,000;
b. P184,000;
c. P 92,000;
d. P138,000.
32
. The net taxable estate is:
a. P3,808,000;
b. P5,058,000;
c. P1,150,000;
d. P2,250,000.
33
. Miss Laura Praningna, a citizen and resident of Sydney, Australia, died leaving properties and obligations
in Australia and in the Philippines; Data on her properties and obligations follow:
Properties in Australia P3,000,000
Properties in the Philippines 1,000,000
Funeral expenses in Australia 250,000
Unpaid obligations in Australia 700,000
The net taxable estate in the Philippines is:
a. P1,000,000;
b. P 800,000;
c. P 775,000;
d. P-0-
34
. You are given the following information about the estate of a resident citizen decedent:
Columbia: Net estate of P100,000 and estate tax paid of P1,500;
Indonesia: Net estate of P200,000 and estate tax paid of P1,800;
Philippines: Net estate of P1,200,000.
The allowable amount of tax credit for estate tax paid in foreign countries amount to:
a. P2,800;
b. P3,000;
c. P3,300;
d. P5,500;
35
. Assume the same information given in no. 35, compute the estate tax still due after credit for foreign
estate taxes paid:
a. P 6,000;

TAX-PQ-0604 8
Estate & Donor’s Tax Problems Multiple Choice Questions
b. P12,200;
c. P 7,500;
d. P-0-
36
. A resident citizen died leaving the following:
Net estate in the Philippines, P1,100,000; Net estate in Japan, P50,000; Net estate in Korea, P150,000.
His estate paid estate taxes in Japan, P200 and in Korea, P500.
The allowable estate tax credit against the Philippine estate tax is:
a. P700;
b. P692.31;
c. P769.23;
d. P776.92.
37
. Given the following information, compute the amount of Philippine estate tax payable after tax credit if the
decedent was a nonresident alien, and there was foreign estate tax payment of P500,000:
Philippines Foreign
Gross estate P6,000,000 P4,000,000
Claims against the estate 1,000,000 1,000,000
a. P-0-
b. Refund of P57,000;
c. P443,000;
d. P265,800.
38
. The estate tax return should be accompanied by a certificate of an independent CPA if the gross estate
is:
a. P2,000,000;
b. More than P2,000,000;
c. At least P2,000,000;
d. At least P50,000.
39
. In 2003, Joseph made the following gifts:

(a) On June 1, 2003, P150,000 to Antonio, his son, on account of his marriage celebrated on May 1,
2002;
(b) On July 10, 2003, a parcel of land worth P180,000 to his father, subject to the condition that the
father would assume the mortgage indebtedness of Joseph in the amount of P40,000;
(c) On September 30, 2003, P150,000 dowry to his daughter Dana, on account of her scheduled
marriage on October 25, 2003, and another wedding gift worth P20,000 on November 23, 2003.

How much is the total net gifts?

a. P500,000;
b. P450,000;
c. P430,000;
d. P460,000.
40
. Donation on one date by Kiko, father, of property and cash, as follows: To Lilia, a legitimate daughter, on
account of marriage, land with a fair market value of P500,000 but subject to a mortgage of P100,000
which is assumed by Lilia. To Michael, a legitimate son, on account of marriage, cash of P200,000.

The net gifts made are:

a. P680,000;

TAX-PQ-0604 9
Estate & Donor’s Tax Problems Multiple Choice Questions
b. P580,000;
c. P590,000;
d. P700,000.
41
. Mr. Rex Cortes made donations to Jun Cortes and Ana Dinio, son and daughter in law, on account of
marriage, of real property with a fair market value of P1,500,000, but subject to a mortgage of P300,000
which was assumed by the donees.

The donor’s tax is:

a. P 77,750;
b. P 84,950;
c. P185,950;
d. P199,400;
42
. Rico Peralejo, a citizen of the Philippines, made the following donations in 2003:

January 10: To Magaslaw, a legitimate daughter, on account of marriage, cash of P200,000;

May 10: To Maginoo, a legitimate son, on account of marriage, property with a fair market value of
P200,000 and a mortgage of P40,000, which was assumed by Maginoo;
October 10: Masunurin, a friend, an ordinary donation amounting to P10,000;
To Malambing, a niece, a donation on account of marriage of P15,000.

The donor’s tax on the donation of January 10, 2003:

a. P150;
b. P600;
c. P900;
d. P1,800.
43
. Refer to the same information in the previous question, how much was the donor’s tax on the donation of
May 10, 2003?
a. P 5,750;
b. P24,000;
c. P 4,500;
d. P 5,800.
44
. Refer to the same information in no. 42, compute the donor’s tax on the donation of October 10, 2003
a. P1,000;
b. P3,000;
c. P6,250;
d. P6,150.
45
. Refer to the same information in no. 42, How much was the donor’s tax on the donation of December 10,
2003?
a. P1,350;
b. P2,450;
c. P6,500;
d. P 600.

Questions 46 through 48 are based on the following information:

Mr. & Mrs. Carlo Suarez, citizens and residents of the Philippines, made the following donations:
June 6, 2003 To Jericho, a legitimate son, on account of marriage

TAX-PQ-0604 1
0
Estate & Donor’s Tax Problems Multiple Choice Questions

P460,000
To Betina, a legitimate daughter, property with mortgage of
P4,000 which was assumed by Betina (fair market value)

20,000
October 8, 2003 To Renato, a legitimate son of Mrs. Suarez, by a prior
marriage, on account of marriage
60,000
April 4, 2004 To the Paco Catholic Church
10,000
To Cynthia, a family friend
40,000
46
. On the donation of June 6, 2003, the donor’s tax of Mr. Suarez is equal to:
a. P7,800;
b. P 420;
c. P1,170;
d. P3,120;
47
. On the donation of October 8, 2003, the donor’s tax of Mr. Suarez is equal to:
a. P9,000;
b. P2,850;
c. P 800;
d. Exempt.
48
. On the donation of April 4, 2004, the donor’s tax of Mr. Suarez amounts to:
a. P1,050;
b. P 600;
c. P 200;
d. P 315.
49
. Mr. Gary Nievera, a citizen and resident of the Philippines, made donations on January 10, 2004, as
follows:

Donation to Alan, a legitimate son, on account of marriage, to be celebrated

on February 14, 2004, property in the United States (on which a U.S. donor’s
tax of P1,200 was paid) with a fair market value of P110,000
Donation to Alan, cash in the Philippines of 100,000

The donors’ tax credit allowed for donor’s tax paid to the U.S. amounts to:
a. P1,200;
b. P1,000;
c. P 600;
d. P1,600;
50
. Donations to a legitimate child of properties:
Property in the Philippines P110,000
Property outside the Philippines, on account of marriage 200,000
Donor’s tax paid in a foreign country 4,500

The donor’s tax due after tax credit for foreign donor’s tax paid:
a. P2,200;
TAX-PQ-0604 1
1
Estate & Donor’s Tax Problems Multiple Choice Questions
b. P2,750;
c. P4,625.50;
d. P3,208.33.
51
. Mr. Bean, a citizen and resident of the Philippines, made the following donations on February 14, 2004:
To Mr. Carlos, a legitimate child, on account of marriage on the same day,
property in Malaysia, which paid the Malaysian donor’s tax of P52,000
and with a fair market value of P610,000

To Mr. Dimalabanan, a friend, ordinary donation of property in the Philippines,

subject to a mortgage of P60,000, which was assumed by the donee, and
fair market value equals 160,000

The tax credit for foreign donor’s tax paid:

a. P34,628.06;
b. P52,000;
c. P42,857.14;
d. P31,520.43.

Questions 52 through 54 are based on the following information:

A donation was made by Mr. Angeles, a citizen and resident of the Philippines, to Brisney Co., of property
in a foreign country with a fair market value of P300,000. Foreign donor’s tax of P70,000 was paid. There was
a donation earlier in the year of P150,000 cash to Mr. Charlie, a legitimate child.
52
. How much was the donor’s tax on the donation to Brisney Co. before foreign donor’s tax credit?
a. P91,000;
b. P90,000;
c. P60,000;
d. P 6,000.
53
. How much is the tax credit for foreign donor’s tax paid?
a. P60,666.67;
b. P70,000;
c. P54,666.66;
d. P50,000.
54
. How much is the donor’s tax due after credit for foreign donor’s tax paid?
a. P20,000;
b. P29,333.33;
c. P35,333.33;
d. P40,000

 END 

TAX-PQ-0604 1
2
Estate & Donor’s Tax Problems Multiple Choice Questions
ANSWER KEY TO MULTIPLE CHOICE PROBLEM QUESTIONS

TAX-PQ-0604 1
3
1
. Letter “D” is the correct answer.
2
. Letter “B” is the correct answer.
3
. Letter “C” is the correct answer.
4
. Letter “A” is the correct answer.
5
. Letter “A” is the correct answer.
6
. Letter “A” is the correct answer.
7
. Letter “C” is the correct answer.
8
. Letter “C” is the correct answer.
9
. Letter “A” is the correct answer.
10
. Letter “A” is the correct answer.
11
. Letter “C” is the correct answer.
12
. Letter “A” is the correct answer.
13
. Letter “B” is the correct answer.
14
. Letter “A” is the correct answer.
15
. Letter “C” is the correct answer.
16
. Letter “B” is the correct answer.
17
. Letter “B” is the correct answer.
18
. Letter “B” is the correct answer.
19
. Letter “A” is the correct answer.
20
. Letter “C” is the correct answer.
21
. Letter “A” is the correct answer.
22
. Letter “B” is the correct answer.
23
. Letter “A” is the correct answer.
24
. Letter “B” is the correct answer.
25
. Letter “C” is the correct answer.
26
. Letter “A” is the correct answer.
27
. Letter “A” is the correct answer.
28
. Letter “C” is the correct answer.
29
. Letter “D” is the correct answer.
30
. Letter “C” is the correct answer.
31
. Letter “C” is the correct answer.
32
. Letter “A” is the correct answer.
33
. Letter “C” is the correct answer.
34
. Letter “A” is the correct answer.
35
. Letter “B” is the correct answer.
36
. Letter “B” is the correct answer.
37
. Letter “A” is the correct answer.
38
. Letter “C” is the correct answer.
39
. Letter “B” is the correct answer.
40
. Letter “B” is the correct answer.
41
. Letter “D” is the correct answer.
42
. Letter “D” is the correct answer.
43
. Letter “D” is the correct answer.
44
. Letter “B” is the correct answer.
45
. Letter “D” is the correct answer.
46
. Letter “D” is the correct answer.
47
. Letter “A” is the correct answer.
48
. Letter “B” is the correct answer.
49
. Letter “B” is the correct answer.
50
. Letter “A” is the correct answer.
51
. Letter “C” is the correct answer.
52
. Letter “B” is the correct answer.
53
. Letter “A” is the correct answer.
54
. Letter “B” is the correct answer.