Introduction to Transfer Taxes: Definition and Concepts

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What is the subject matter of a transfer tax?

Privilege of the transferor to gratuitously transfer property or rights (correct)

Privilege of the transferee

Ownership of the property

Value of the property

Who is liable to pay Donor's Tax?

Donee

Donor's creditors

Donor's beneficiaries

Donor (correct)

When does Estate Tax accrue?

At the time of property transfer

Date of death of the decedent (correct)

At the time of donation

Annually

In which type of transfer tax is the timing of valuation of donation based on the date of death?

Estate Tax Signup and view all the answers

Which party is liable to pay Estate Tax?

Executor Signup and view all the answers

Which law governs the imposition of Estate Tax?

The law in force at the time of the decedent's death Signup and view all the answers

What is the difference between lineal consanguinity and collateral consanguinity?

Lineal consanguinity involves persons descended/ascended in a direct line, while collateral consanguinity involves persons with the same ancestors but not descending/ascending from one another. Signup and view all the answers

In the context of consanguinity, what does affinity refer to?

The connection existing due to marriage between each spouse and the kindred of the other. Signup and view all the answers

How is the proximity of relationships determined in terms of degrees?

By the number of generations; each forming a degree. Signup and view all the answers

Under what category do surviving spouses fall in terms of priority in estate distribution?

They fall under the category of state or government beneficiaries. Signup and view all the answers

What is the main distinction between legitimate and illegitimate children in the context of inheritance?

Legitimate children inherit more than illegitimate children. Signup and view all the answers

What relationship does i.Collateral consanguinity describe?

Relations among persons with common ancestors but not descending/ascending from one another Signup and view all the answers

What is the nature of donor's tax?

An act of liberality involving gratuitous disposal of property Signup and view all the answers

When is a donation considered to be perfected?

Upon donor's knowledge of donee's acceptance Signup and view all the answers

What must occur for a completed gift in donation?

Acceptance by the donee and delivery of the gift Signup and view all the answers

Which element is necessary for a donation but refers to the power to transfer ownership without consideration?

Donative intent by the donor Signup and view all the answers

What is the motive or purposes classification of donation based on?

The time when the donation takes effect Signup and view all the answers

What determines if a donor is capacitated to make a donation?

Their ability to contract and dispose of their property Signup and view all the answers

What is the period for settlement of the estate for an incurred indebtedness to be considered deductible?

Within 1 year from the date of death Signup and view all the answers

Which of the following is NOT a criterion for indebtedness or claims against the estate to be deductible?

Must have been condoned by the creditor Signup and view all the answers

What type of obligations may arise out of Contract, Tort, or Operation of Law for claims against the estate?

Contract, Tort, or Operation of Law Signup and view all the answers

What is the substantiation requirement for a simple loan or advance as an incurred indebtedness?

Notarized debt instrument (Promissory Notes, Loan Contract) Signup and view all the answers

Which condition must be met for an indebtedness contracted by the deceased to be deductible?

Indebtedness must represent a personal obligation existing at the time of death Signup and view all the answers

In what situation are deductions allowed when a decedent leaves property encumbered by a mortgage or indebtedness?

When the debts were contracted in good faith and for adequate and full consideration Signup and view all the answers

What is the main mode of acquiring ownership of property through a deceased person?

By tradition Signup and view all the answers

Which type of transfer takes effect during the lifetime of both the donor and the donee?

Donation inter vivos Signup and view all the answers

When does a donation mortis causa take effect?

At the time of death of the donor Signup and view all the answers

What is the main characteristic of a gratuitous transfer?

No consideration involved from transferee Signup and view all the answers

Which of the following is NOT a mode of acquiring ownership as mentioned in the text?

Exchange Signup and view all the answers

When does tradition occur according to the text?

By will or operation of law Signup and view all the answers