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Transfers for insufficient consideration are not a bona fide sale for an adequate and full consideration in money or money's worth.
Transfers for insufficient consideration are not a bona fide sale for an adequate and full consideration in money or money's worth.
True
Proceeds from life insurance are included in the gross estate if the beneficiary is designated as revocable or irrevocable and the beneficiary includes his executor, administrator, or the estate.
Proceeds from life insurance are included in the gross estate if the beneficiary is designated as revocable or irrevocable and the beneficiary includes his executor, administrator, or the estate.
True
What are the three types of marital arrangements in the Philippines?
What are the three types of marital arrangements in the Philippines?
Absolute Community of Property (ACOP), Conjugal Partnership of Gains (CPG), and Complete Separation
When does the rule of reciprocity apply for the taxation of intangible properties held by a non-resident alien decedent?
When does the rule of reciprocity apply for the taxation of intangible properties held by a non-resident alien decedent?
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Which of the following is NOT a test of situs?
Which of the following is NOT a test of situs?
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In the event of death, a deduction is allowed for real property where the fair market value was higher than the zoned value.
In the event of death, a deduction is allowed for real property where the fair market value was higher than the zoned value.
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If the decedent died before January 1, 2018, the estate tax would be paid within six months from the time the decedent died.
If the decedent died before January 1, 2018, the estate tax would be paid within six months from the time the decedent died.
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The amount of unpaid mortgage is deductible from the gross estate only when the fair market value is worth more than the mortgage indebtedness and a contracted mortgage.
The amount of unpaid mortgage is deductible from the gross estate only when the fair market value is worth more than the mortgage indebtedness and a contracted mortgage.
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The decedent's estate is personally liable for the estate tax, but their executor or administrator can be released from the liability as long as a written application is submitted to the BIR.
The decedent's estate is personally liable for the estate tax, but their executor or administrator can be released from the liability as long as a written application is submitted to the BIR.
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A judge may authorize the executor or the judicial administrator to transfer the distributive share to any party interested in the estate without a certification that the estate tax was paid.
A judge may authorize the executor or the judicial administrator to transfer the distributive share to any party interested in the estate without a certification that the estate tax was paid.
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A foreign corporation with 85% business in the Philippines is considered to have business situs in the Philippines and is taxed like a domestic corporation.
A foreign corporation with 85% business in the Philippines is considered to have business situs in the Philippines and is taxed like a domestic corporation.
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A donation mortis causa is considered to be similar to a transfer of property in the regular course of business.
A donation mortis causa is considered to be similar to a transfer of property in the regular course of business.
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The right of the surviving spouse to inherit properties that were acquired during the marriage is always considered to be an exclusive property.
The right of the surviving spouse to inherit properties that were acquired during the marriage is always considered to be an exclusive property.
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A general power of appointment is when the donee-decedent has the power to appoint anyone to inherit the property if he so chooses.
A general power of appointment is when the donee-decedent has the power to appoint anyone to inherit the property if he so chooses.
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The beneficiary designation of life insurance is always revocable unless it is specifically stated in the policy documents that the designation is irrevocable.
The beneficiary designation of life insurance is always revocable unless it is specifically stated in the policy documents that the designation is irrevocable.
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The vanishing deduction is allowed on properties that were acquired through inheritance or donation within five years of the prior decedent's death.
The vanishing deduction is allowed on properties that were acquired through inheritance or donation within five years of the prior decedent's death.
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If the transfer of property is considered to be a donation, then the property is not subject to the estate tax, instead it is only subject to the donor's tax.
If the transfer of property is considered to be a donation, then the property is not subject to the estate tax, instead it is only subject to the donor's tax.
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Study Notes
Estate Tax
- Transfers for insufficient consideration (not a bona fide sale for adequate consideration): Fair market value (FMV) at the time of death is included in the gross estate. Selling price (SP) is subtracted from the FMV. The difference (FMV-SP) is included in the gross estate.
Proceeds from Life Insurance
- Proceeds from life insurance policies taken out by the decedent are included in the gross estate if the policies are revocable, and the beneficiary is the estate of the deceased, executor, or administrator.
- Policies are also included if the beneficiary is a third party and the designation is revocable.
Exemptions and Exclusions from Gross Estate
- Capital or exclusive property of the surviving spouse, properties outside the Philippines of a non-resident alien decedent, and intangible personal property in the Philippines of a non-resident alien (when the rule of reciprocity applies) are exempt.
- Merger of usufruct (right to use) in the owner of the naked title, transmission from the first heir/legatee/donee to another beneficiary (Special Power of Appointment), and transmission to the fideicommissary heir are considered exclusions from the gross estate.
- Transfers to social welfare, cultural, or charitable institutions are also exclusions if no part of the institutions' net income benefits individuals, and if no more than 30% of the transfer is used for administration.
- Proceeds of life insurance and benefits from the GSIS and SSS are also exempt from estate taxes under specific laws.
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Description
This quiz explores key concepts related to estate tax, including the treatment of transfers for insufficient consideration and the inclusion of life insurance proceeds in the gross estate. It also delves into exemptions and exclusions applicable to the gross estate. Test your knowledge on these critical components of estate tax law.
