CHAPTER 2- DISCUSSION QUESTIONS 1. a. The document is a “will” because it deals with the disposition of the property of Maning upon her death b. The disposition of the house and lot in Dagupan City and the Mitsubishi Adventure car are covered by a will, while the ownership of stocks in Sorsano Corporation is not. Therefore, the succession is a mixed succession. cc. Reynante is to be appropriately called as “devisee” because he will inherit the house and lot near Notre Dame of Dadiangas College , a particular real property in accordance with the provisions of a will, while Quintana will inherit a car (personal property) by virtue of a will, therefore, she is a “legatee.” d. Fila is identified in the will to carry out its provisions. Therefore, she is an “executor. @. The rights shall only be transmitted to Reynante upon the death of Maning. Before death, he has a mere inchoate right on the property 2-2, WORD SEARCH 1. Devise 6. Net estate 2. Testator 7. Codicil 3. Holographic 8. Executor 4. Probate 9. Heir Se 10. Estate 2-3. ANSWERS : 1.7 27 3. F aot 5. F 6 F tol aT 9. F 10.7CHAPTER 3 3- 3-2. DISCUSSION QUESTIONS / PROBLEMS a. Nonresident alien ( with reciprocity) House and lot, Manila P2ooooo0, b. Nonresident alien (no reciprocity) House and lot, Manila 2,000,000 Shares of stock, Philippine corporation 125,000 Shares of stock, Hongkong Corporation with business situs 175,000 Accounts receivable, Philippine debtor 60,000 Proceeds of revocabie life insurance 150,000 Savings deposit, Manila Bank 45.000 Gross estate P2.855.000, a. Nonresident alien (with reciprocity) No gross estate shall be subject to tax because all properties are intangible personal within the Philippines. Only real properties and tangible personal properties within are included in the gross estate of a nonresident alien (with reciprocity) decedent. b. Nonresident alien (no reciprocity) Shares of stock, Po Lu Tan Corporation 225,000 Bonds, Tsi Tsa Company 60,000 Franchise, Philippines 200.000 Gross estate 485.000 DISCUSSION QUESTIONS / PROBLEMS No. Since the account is opened under “and/or signatures” the presumption is that the bank deposits are jointly owned by the spouses. This rule holds whether the conjugal partnership of gains or absolute community of property regime governs the spouses, a. The amount includible in the estate is the salary from September 1 to 15 minus the five- day cash advance. b. Included because the rent income for August had already accrued before the death The interest is already included although it has not yet been withdrawn Not included because the decedent died before the date of record Included, but limited to his interest in the co-ownership. . Included. He had already inherited the property even if he did not take possession 3because his uncle had predeceased him. g. The proceeds are included in the gross estate because the designation of the beneficiary is revocable a. Yes, the salary had already accrued to Cathay, Considerably, this is already part of her gross estate. b. The P5,000 benefit is includible in her gross estate because Cathay complied with the condition set by the employer. a. This is a case of a transfer in contemplation of death because (1) it was the thought of date that induced Mat Sr. to donate the property, and (2) of the stipulation that Mat Takutin shall retain possession or enjoyment to the property until his death. Hence, the transfer is subject to estate tax. b. Even if the transfer of possession and enjoyment had already been made, it is still a case of a transfer in contemplation of death. Therefore, subject to estate tax a. Yes. Ina revocable transfer, itis not necessary that the donor should exercise his reserved right to alter, amend, revoke or terminate the transfer. What is important is that he had made such reservation which can be exercised anytime he wanted to. b. It does not change the nature of the transfer. Whether the decedent has exercised the power of revocation or not, it shall always be a part of his estate. a. Yes, because it is a case of a revocable transfer. In a life insurance, if the designation of the beneficiary is revocable, the proceeds thereof shall be part of the gross estate. The proceeds shall be excluded from the gross estate because the designation of the wife as beneficiary is irrevocable, provided that she is neither appointed as executor or administrator. This is a case of a special power of appointment because Bakling, the trustee, cannot choose the person whom he wants to succeed to the property. His power is restricted because the appointment is limited only to his children. Therefore, the property shall not form part of his gross estate Special power of appointment. Baldomero is disqualified to appoint his creditor. General power of appointment. There is no restriction on whomsoever he wants to appoint as his heir. cc. Special power of appointment. He is allowed only to appoint somebody from among the descendants of Alacamo. d. Special power of appointment up to 40% because he is allowed only to appoint his estate up to that extent. General power of appointment on the balance of 60% because there is no restriction on whomsoever he wants to designate as heir. | will advise him that he should provide in his will the limitation on the persons to be appointed by Maatik as his heirs thereby making it a special power of appointment, In which case, the transfer of the property from Maatik to his family will not be subject to estate tax 410. " 12. 13. 14, Caset Case? Gase 3 a) FMV, time of transfer P P950,000 950,000 950,000 b) Consideration received -0- 960,000 800,000 ©) FMY, time of death 1,000,00 1,000,000 1,000,000 0 Amount to be included in the Gross Bion002 one e2onooo Estate a Note: In Case 2, no amount is to be included in the gross estate because the property transferred for a full and adequate consideration. a. The amount to be included in the gross estate of Sigurista is 450,000 (P750,000 = 300,000). If the sale is discovered to be fictitious, the entire amount of P750,000 is to be included in the gross estate of Sigurista because there was actually no payment made to her at the time of sale The action filed by Curiadora against Atacador will prosper. The donation made by Bonador in favor of Atacador is a donation mortis causa due to a reservation of rights over the property in favor of Bonador. Thus, the donation made during lifetime did not prosper. There is also no donation mortis causa because in order to be effective, it must have been provided in the will of Bonador that the property is being donated mortis to Atacador. a. The proceeds of life insurance shall only be excluded from the gross estate if the imevocably designated beneficiary in the policy is not the estate of the deceased, his executor or administrator. These requisites are not satisfied. Therefore, the proceeds shall be part of the gross estate of Bokdoy. b. Even if the designation is irrevocable since the beneficiary named in the policy is his estate, the proceeds shall form part of the gross estate of Bokdoy c. Since the problem does not clearly specify, It is presumed that Oyang is neither the executor nor the administrator. However, if the designation is revocable the proceeds of the life insurance policy shall still be part of the gross estate, subject to estate tax. Itis shall only be exempt if (1) Oyang, the beneficiary, is not the estate, the executor or the administrator and (2) his designation as the beneficiary is irrevocable. Family home 1,450,000 Car 525,000 Jewelries 60,000 Shares of stocks, Malakas Corp. 78,000 Proceeds of life insurance payable to estate 360,000 Land (P450,000 - 150,000) 300,000 Motorbike 40,000 ‘Apartment 3.000.000, Gross estate abiNotes: 1. The condominium unit is under special power of appointment because of the restriction on the privilege of Mando to choose his heirs. 2. The motorbike is presumed to be transferred in contemplation of death because the date of sale and the date of death were relatively close. 3. The resthouse in Tagaytay is revocably transferred to him by his friend Therefore, it should be a donation mortis causa to him. Considering that he was not named in the will, Mando is not the proper heir to the property. 4. The donation of the apartment was a revocable transfer. Hence, its value should be included in his gross estate. EXERCISE 3-3. For purposes of the corporation, there being no change in ownership of the questioned shares in its stock and transfer book, the rightful owner of the dividends would be the estate of the deceased Antero. The corporation is bound, in so far as ownership of its shares is concerned, by its stock and transfer book, and as far as the questioned shares are concerned, their owner is still Antero, and it is therefore to his estate that the dividends should be paid. Neither Banayo nor Corona would be entitled to the dividends.CHAPTER 4 3-1, DISCUSSION QUESTIONS / PROBLEMS 4. a. Trees attached to the land + Real property b. Pigeon houses = Real property ©. Usufruct over a parcel of land = Real property d. Fertilizer actually used on a piece of land Real property ©. Wooden scaffoldings ~ Personal property {. Machineries installed by the owner - Real property 4g. Building constructed by the lessee = Personal property h. Machineries installed by lessee = Personal property i. Steamship President Cleveland - Personal property 2. (a), (b) and (c) Residential house 2,500,000 Car 650,000 Farm in Quezon 1,200,000 Shares of stock ‘550,000 Condominium unit in Canada 4,000,000 Time deposit in Canadian Bank —260.000 Gross estate P2460/000, 3. a. Nonresident alien (with reciprocity) House and lot, Manila P2000000 b. Nonresident alien (no reciprocity) House and lot, Manila 2,000,000 Shares of stock, Philippine corporation 125,000 Shares of stock, Hongkong Corporation with business situs 175,000 Accounts receivable, Philippine debtor 60,000 Proceeds of revocable life insurance 150,000 Savings deposit, Manila Bank —45.000 Gross estate 2855.00 4. a. Nonresident alien (with reciprocity) No gross estate shall be subject to tax because all properties are intangible personal within the Philippines. Only real properties and tangible personal properties within are included in the gross estate of a nonresident alien (with reciprocity) decedent Nonresident alien (no reciprocity of stock, Pi Bonds, Tsi Tsa Compan!CHAPTER 4 -DISCUSSION QUESTIONS / PROBLEMS 1. In the absence of a marriage settlement or when the settlement agreed upon is void, the system of property relationship shall depend on the date of the celebration of marriage. If the marriage was celebrated prior to August 3, 1988 the spouses are governed by the conjugal partnership of gains. However, if the marriage has been celebrated after this date, the spouses shall be under the absolute community of property regime. Conjugal Part. Abs. Community. Real property in Naga City Exclusive of ‘Community Remelisa Income of real property in Naga Conjugal Community Real property in Cauayan City Exclusive of Unico Community Income of real property in Cauayan City Conjugal Community Real property in Davao City Conjugal Community Income of real property in Davao City Conjugal Community Real property in Cebu Conjugal Community Income of real property in Cebu Conjugal Community Tangible personal properties in Antipolo Exclusive of Exclusive of city Remelisa Remelisa Income of properties in Antipolo City Conjugal Exclusive of Remolisa Intangible personal, Singapore Exclusive of Unico Exclusive of Unico Income of intangible personal in Singapore Conjugal Exclusive of Unico Tangible personal properties in Dapitan Exclusive of ‘Community city Remelisa Income of property in Dapitan City Conjugal Community Intangible personal properties in Japan Exclusive of Unico Community Income of personal properties in Japan Conjugal Community a. Absolute Community of Property Regime Community Properties: Real property, Davao City P 300,000 Income of real property in Davao 25,000 Real property, Batac 420,000 Income of real property in Batac 52,000 Real property in Iloilo 760,000 Income of real property in Iloilo 23,000 Real property in Bacolod 280,000 Incom e of real property in Bacolod 90,000 Tangible properties in Dagupan 32,000 Income of property in Dagupan 1,800 Intangible personal properties in U.S.A. 50,000 Income of intangible in U.S.A —Zo00 P 2,040,500 Exclusive properties Tangible properties in Santiago 46,000 Income on properties in Santiago 4500 __s0.500 Gross estate 2 2091000 b. Conjugal partnership of gainsConjugal Income of real property in Davao Income of real property in Batac Real property in lloilo Income of real property in lloilo Real property in Bacolod Income of real property in Bacolod Income of properties in Santiago City Income of intangibles in Hongkong Income of property in Dagupan Income of personal properties in U.S.A Exclusive Real property in Davao Tangible personal properties in Santiago City Tangible personal properties in Dagupan GROSS ESTATE 25,000 52,000 760,000 23,000 280,000 90,000 4,500 55,000 32,000 300,000 46,000 82,000 Pp 1,328,500 278.000 ‘Le So0 The community property of the spouses shall consist of the following: a. House and lot received as wedding gift b. Properties acquired during marriage ©. Cash earned by wife out of her salary Total Conjugal properties Rent income ~apartment house House and lot Winnings in lotto Savings deposit Exclusive property of July. Vacation house Gross estate a. Absolute community of property regime Community property: Cash Accounts receivable Car inherited by Mark before marriage Car purchased during marriage Fishpond Jewelries House and lot Beach resort Cash brought into the marriage Exclusive property Properties for exclusive use of Mark GROSS ESTATE b. Conjugal partnership of gains Conjugal Cash 25,000 2,250,000 6,000,000 250,000 78,000 350,000 600,000 200,000 60,000 1,500,000 "420,000 10.000 250,000 P 2,000,000 750,000 125.000 P 2.875.000 Pp 8,525,000 —tanao 00 10.4250, oo 3,588,000 —120.000 2.208.000,Accounts receivable Car purchased by Mahalia Residential house and lot Jewelry Beach resort Exclusive Car inherited by Mark Fishpond Properties for exclusive use GROSS ESTATE Conjugal - Car Family home Savings account Cash Interest on bank account Cattles [(62-15) x P10,000] Winnings in jueteng Income earned on jeepney Exclusive - Cattles (15 x P10,000) House and lot Passenger jeepney Gross estate a. Absolute community of property regime Community Apartment house Income of apartment house Gold necklace Share in conjugal property of previous marriage Income of the conjugal property Family home Cash Sole proprietorship Income of sole proprietorship Exclusive Shares GROSS ESTATE b. Complete separation of property Shares Apartment house Income of apartment house Gold necklace ‘Share in conjugal property Income of conjugal property Family home. Gross estate 78,000 600,000 1,500,000 60,000 350,000 200,000 450,000 1,200,000 200,000 150,000 2,500 470,000 20,000 150,000 1,650,000 2,500,000 80,000 20,000 1,540,000 95,000 900,000 55,000 825,000 86.000 Pp 2,908,000 2,498,500 Pp 6,081,000 620.000 ggoLo00 520,000 2,500,000 80,000 20,000 1,540,000 95,000 900.000 5.655.000Equal share in_—_co-ownership 845,000 (1,690,000/2) Bank deposit (125,000 x 60%) Riceland Gross estate Computation: Salary (40,000 + 50,000) 90,000 House and lot 1,400,00 0 Lot 20.00 a Total 1,680,00 0 Exclisis Conuigal Ginss estate 2 Properties acquired by Sam & Paz 3,400,00 0 Natural fruits 250,000 House in Quezon City 1,850,00 0 Share of Sam in co-ownership: Condomium unit 1,000,00 0 Appliances (500,000 x 60%) 300,000 int deposit (88,000/2) —44,00 a Gross estate 185000 499400 6.844.000 aCHAPTER 6 - DISCUSSION QUESTIONS a. Yes. The fact that there are two successors to the property does not affect the taxability of the transfer. Since Helena exercised her right to transfer the property, it is subject to tax. b. The merger of the usufruct into the naked title is not subject to estate tax. The presumption here is that there is only one transfer of property, ie. from Helena to Janina and ultimately the transfer of usufruct to Diana. Thus, for purposes of the law, the merger is not considered as another transfer. cc. No, the property subject of merger is limited only to the house being the only subject of succession. All fruits that have accumulated belongs to Janina, she being the usufructuary. 2. Yes. Although there is merger of the usufruct in the ownership of naked title, the transfer in this case is the first transfer from the property owner. It is a different situation if the title had already been the subject of a previous succession to which the merger is counted as the second transfer. 3. No, the value of the reversionary interest of Santo at death is includible in his gross estate. The transfer is taxable as intended to take effect at or after death because the possibility of reversion of Santo makes Santana's interest conditional as long as Santo lives. 4, a. Yes, because this is counted as the first and a valid transfer. b. The succession is a case of a fideicommissary substitution. The transfer from Angelica, the testator, to Barbara, the fiduciary heir, then to Criselda, the fideicommissary, is considered as a single transfer only. Since the first transfer has been subjected to tax, then the second transfer should be exempt. ©. Although there is no more fideicommissary substitution in this case, the transfer of the ownership of property from Barbara to Diana is a transfer in accordance with the desire of the predecessor. Hence, the transfer is still exempt from estate tax. d. This is not covered anymore by the exemption because the law allows tax exemption on the second transfer only 5. This is exempt from estate taxation because the second transfer is in accordance with the desire of the predecessor. The first and the second transfers are counted only as one. Ifthe property shall go to Concha, the transfer shall be subject to tax because it has disregarded the desire of the predecessor, as contained in the deed of donation. 6. The transfer is made to a charitable institution. It shall be exempt from estate tax if only a maximum of 30% of said devise shall be used for administration purposes. Otherwise, it shall be subject to estate tax. House, Cauayan City P 1,300,000 Cash 25,000 Time deposit 150,000, Jewelries 83,500 Trimobile 70,000 Bookstore 750,000 ‘Stocks, Bayani Corporation 150,000 Lot, Keronadal City —so0.000 10Gross estate 3.028.500 Notes: 1 The pineapple plantation is a case of a merger of usufruct in the owner of a naked title. Itis exempt from estate tax. The antique collections are the subject of a fideicommissary substitution Therefore the transfer is exempt from estate tax. Moreover, it is a case of special power of appointment; hence, not includible in the gross estate The time deposit with Chinabank is a donation to charitable institution to be used exclusively for public purposes. Hence, exempt from estate tax. The dividends declared by Bayani Corporation shall not be subject to estate tax because the decedent died before the date of record. "CHAPTER 7 ~ DISCUSSION QUESTIONS / PROBLEMS 1. The BIR is correct. It is not the obligation of the BIR to prove that the deductions are not allowed, but the executor of the estate of Licupo has the burden of proof to establish the validity of claimed deductions (Comm. vs. Algue, 158 SCRA 91). He must point to some specific provisions of the statute in which that deduction is authorized, and must be able to prove that he is entitled to the deduction which the law allows. 2. Deductions are classified as conjugal or community when they are normal charges against conjugal or community properties. Thus, funeral expenses, judicial expenses, and other expenses such as losses, indebtedness and taxes incurred which have been beneficial to, are classified as conjugal/community property deductions. Charges against the exclusive properties of the decedent are classified as exclusive deductions, such as bequests, legacies or devises to the government or to social welfare institutions. 3. a. Deductible b. Deductible c. Deductible d. Deductible e. Deductible f, Deductible g. Deductible h. Not deductible. To be allowed as deduction, the expenses must not be borne by any person whether a friend or relative, i. Not deductible. Expenses incurred after the burial are not allowed as deduction i. Not deductible. 4 Gass, Actual S%OtGE Maximum Deductible 1 P 130,000 P 200,000 P_ 80,000 80,000 2 158,000, 200,000 158,000 189,000 3 211,000 200,000 173,750 173,750 4 213,500 200,000 200,000 208,615 5. Collection expenses 75,000 Attorney's fees (25,000 x 60%) 15,000 Accountant's fees 5.000 Executor’s commissions 10,000 Appraiser’s fees 4,000 Court costs 18,000 Total judicial expenses (127.000 6. No. Since the decedent exercises substantial control over the creditor corporation and due to apparent defects in the creditor's policy and security on the loans, it would 1210, 1" 12, 13, be very easy to manipulate the records of the creditor corporation. Thus, based on the facts presented, the claims were not incurred in good faith by the decedent, ‘The unpaid balance or 85% of the GSIS loan is deductible. Not deductible because there is no more legal liability to pay the debt. Not deductible. The taxes must have accrued prior to the death of the decedent, Deductible. These are valid claims against the estate. Not deductible, There is no valid claim against the estate because the property was inherited thereby imposing no obligation on the decedent. No, the estate of Pamugat cannot claim the P300,000 as deduction representing claim against insolvent person because Pamaan was not actually insolvent. He was only encountering a liquidity problem. Liquidity should be distinguished from insolvency. While in the former, there is a problem on insufficiency of cash; in insolvency, the total liability is more than its total assets, Itis a valid deduction because it diminishes the estate of the decedent. However, itis still counted as part of his properties. For which reason, it should be included as part of his gross estate. Moreover, most deductions are allowed because they diminish the value of the distributable estate, If the amount of claims against insolvent person Is not to be included in the gross estate, it will understate the net estate by an amount equivalent to the value of the “claims. The insolvency of the debtor should be proven in court through an insolvency proceeding, and not merely alleged. Thus, the information relayed by Mayo is not a valid basis in allowing the estate of Mac to claim the P100,000 as a deduction from gross estate under “claims against insolvent persons.” The amount of unpaid mortgage indebtedness is deductible, provided (1) the value of the land in the amount of P950,000 is included in the gross estate of Dalahera and (2) was contracted bona fide and for an adequate and full consideration in money or money's worth The entire real estate taxes of P320,000 is deductible provided that they are still unpaid as of June 30, 2008. The income tax on income eared from January to June, 2008 of P15,500 is also deductible. The tax on the income which have accrued after his death are not deductible. a. Yes, because the shipwreck occurred after the death but before the deadiine for filing the estate tax return. As a tule, losses are deductible from gross estate if it occurred within a period of six(6) months from the death of the decedent. However, since the insurance company indemnified the 50% of the value of the car, only a loss P600,000 can be claimed as deduction from gross estate. b. Ifthe loss occurred before Carperter’s death, it is not deductible because the lost property should not also be inclided in the gross estate 1314, 16. 16 17, 18, c. The law uses the phrase “losses incurred during the settlement of the estate.” Therefore, to be considered as a valid deduction, the loss should occur after death irrespective of the time it was discovered. 4. Ifthe value of the car lost was indemnified by the insurer, then the estate of Carpenter (the owner), did not suffer any loss. Consequently, it cannot claim that amount as deduction from gross estate, In the case of White vs. Comm'r., 48 TC 439 (1967), the tax court held that an accidental and irrevocable loss of property can be the basis of a casually loss deduction. The court has accepted the principle that an accidental loss of property qualifies as a casually provided the loss is (1) identifiable; (2) damaging to property; and (3) sudden, unexpected, and unusual in nature. Considering that the loss of the property complies with the essentials of a casualty loss, the value of the jewel could have been deductible had it occurred after the death of Carlos’ wife. Section 125 of the New Family Code provides that neither spouse may donate any conjugal partnership property without the consent of the other. However, either spouse may, without the consent of the other, make moderate donations from the conjugal partnership property for charity or on occasions of family rejoicing or distress. A donation of a 200-square meter lot in the poblacion of Infanta, Quezon is not a moderate donation. Therefore, the donation is not binding. In this case, the value of the property is not deductible from gross estate for estate tax purposes. Property — Exclusive A = Community Exclusive Exclusive — Exclusive = Exclusive moom F Although the second transfer of the property took place within five(5) years from the first transfer, the estate of the present decedent cannot claim vanishing deduction because the full amount of the property donated to the barangay is already deductible from gross estate as “transfer for public purpose.” Otherwise, it would result to double deduction Lower value of property P 250,000 Less: Mortgage paid —s0.000 Initial basis 200,000 Less: Deductions (pro-rated) 2000 (675,000 - 75,000) 50.000 2,000.0 oo “419, 20. Base 150,00 0 Rate (more than 1 year but not more than 2 80% years) Vanishing deduction 20.00 a 1. No 6 Yes 11. No 2. No 7. Yes 12. Yes 3. No 8. No 13. No 4. No 9. No 14. No 5. No 10. No 15. No a. Decedent is an unmarried head of family. Deductible Case 1 P1.000,000 Case 2 820.000 b. Decedent is married. Family home is an exclusive property case 1 Pioooooo Case 2 —a20.000 ©. Decedent is married. The family home is a conjugal property. Case 1 P1.g00.000, Case 2 410.000 4. Decedent is married. The family home is composed of the house and the lot. Thirty five percent (35%) of its value is community property. Case 1 (2,000,000 x 35%) x 1/2 P 350,000 (2,000,000 x 65%) = _g50.000 1,300,000 Deductible, maximum, 1ooo000 Case 2 (P820,000 x 35%) x 1/2 (820,000 x 65%) Deductible ©. Decedent is married. The house, which is 70% of the total value of the family home, is a community property, while the land which is 30% of the value of the family home is an exclusive property. Case 1 (P 2,000,000 x 70%) x 1/2 P._700,000 1621 22. ( 2,000,000 x 30%) 300.000 =600,000 Deductible -Loovooo Case 2 House (820,000 x 70%) x P 287,000 12 Lot (820,000 x 30%) 248.000 Deductible 833.000 Real properties, Philippines 3,000,000. 00 Personal properties, Philippines 700.0000 o Gross estate 3,700,000.0 0 Less: Deductions Funeral expenses abroad, actual 20.000 Limit 200,000 Deductible P 200,000 Judicial expenses. 80,000 Bad debts 45.000 Total 335,000 (3,700,000/7,700,000) x P335,000 180.9749 2 Net estate asae.075.9 8 House, Sapporo Pp 2,600,000 Properties, Japan 4,600,00 0 Real properties, Philippines 3,000,00 ° Personal properties, Philippines —z00.00 a Total gross estate 2700.00 a The decedent-spouse does not solely own a conjugal or community property because it is equally owned by the husband and the wife. The share of the spouse in the property should not be subject to succession considering that heishe is still alive. However, since the community or the conjugal property in the gross estate includes the share of the surviving spouse, it should be deducted. Otherwise, estate taxes 16being imposed will include properties which are not subjects of succession. Community property 2,500,000 Charges against community —s35.000 properties Net community property Lass.000 Deductible share (1,865.000/2) 282.500 ATM deposit 126,540 Time deposit 200,000 Interest (200,000 x 18% x 6.5/12) 19,500 Less: Final tax (19,500 x 20%) 2.900 1,600 Car 441,246 13" month pay 45,000 Cellular phone 25,000 Condominium unit 1,542,895, Post-dated check 15,000 Laptop computer 40,000 Accrued wages 15,000 Cows (15,000 x 5) 75,000 Calf —2.000 Total exclusive 2,546,281 Add: Share in co-ownership Appliances & home decors 50,000 Other personal properties (60.000 Total 730,000 Share (130,000/2) 95.000 Gross estate 2,611,281 Less: Deductions Ordinary - Claims against the estate Credit card 15,273 Car loan 237.181 Utility bills 7.654 Funeral expenses 4a5.000 (405,108) Special - Medical expenses 28,000 Standard deduction 1,000,000 (4.028.000) Net taxable estate 13 Notes. 1. The land donated to the government is no longer part of decedent's interest considering that it had been donated already. There is no tax payable because a donation to the government is tax exempt 2. The remaining balance of the loan with Pag-Ibig has been condoned because the debtor died with an updated payment. This is a loan policy of Pag-lbig, 3. The cost of appliances and other personal properties are owned by Antonio and Vittorio in equal shares because the problem does not give the share of 7the respective couple in the actual contribution of each Under the law on sales, a buyer of an illegally acquired property does not acquire a title better to the property that that the seller had. Antonio is not legally bound to reimburse Luca Brasi the 25,000 because the latter does not acquire better title to the laptop than Vittorio had. Luca Brasi did not even bought the computer in a trade, or fair or market, Under the law on sales, the buyer is entitled to the fruits of a thing from the time of the perfection of the contract even before its delivery. Thus, Antonio is entitled to the calf even the cows have not yet been delivered by Tattaglia, 18