TRUE OR FALSE

1. · Deductions from gross est t , i,· h . . - -

deductions must b bl a__e a:e i_g ly _disfavored in law; he who claims
. I d d e a e to Justify his claim or right
2. As a ru e, a e uction is allowed f 0 th ·· -
the estate of the d d . : m _e gross estat~ if it is proven that
. . . ece ent 1s entitled to such deduction as provided by
1aw. .
3. As a rule . ' deductions from
. th e gross estate are presumed to be cdnJugal ·
deductions~ unl_ess specifically identified as exclusive.
4. No deduction ' .
1s allowed on the' property wh"1ch ,s
· not me · · Iuded ,n
· .th e .
deceden t s gross estate.
5. Obligat!ons contracted by a person during his lifetime .are terminated
upon his death.
6. All claims against the insolvent person ·are deductible from the decedent's
gross estate. ·
7. · In a claim against i·n_ solvent person, the insolvency of the debtor must be
proven and not merely alleged. . ·
8. It could be that the amount to be included as part of the gross estate in a
claim against insolvent person is less than the full amount owed.
9. So that unpaid mortgage may be deducted from the gross estate, the fair
market value of the mortgage property niust form ,P~rt of the gross estate
in full. ·
10. For unpaid taxes to be deductible from .gross estate, such must have
accrued at the time or before the decedent's death.
11. Unpaid income taxes incurred before the ,decedent's death is ded,uctible
from the gross estate. .
12. Brokerag·e fees for selling property of the estate are part of the deductible
expenses; . . _ .
13. Casualty loss is deductible -from gross estate. if such loss was incurred
during the settlement of the estate. · . · •
14. Casualty. losses(could be claimed as deduction from the gross income and
from the gross estate. . , I • •

. 15_. vanishing deduction is allowed for property received from donation if part
of the gross estate. . , . . ·
16. In computing for vanishing deduct1or;i, the value to be taken 1s th~ lesser
amount of the va,lue of the property at the date of. the previous transfer
or. the value of the property at the date ~f death of the decedent. .
17. vanishing deduction is being· all?~ed to lessen the i_m~act of successive
taxation of the same property within a very short period due to the death
of the decedent-transferor. .
18. The' benefit of vanishing deduction ·may only be applied once. _
19. The maximum amount of d~ductible family home from the gross estate
after the effectivity of TRAIN Law is Pl0,000,000.

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 c'fter Ec,uCl6u - veMo/~ £ 9ms Estctte
20. Regardless of the classification of the decedent, the ma~imum amount of
deductible · standard deduction from the gross estate after the effectivity
of TRAIN Law is ps,000,000 '

MULTIPLE CHOICE.

1. Which of the following statements ·is true? . . ·

a. Deductions from gross estate are highly disfavored m law; he who .
·claims deductions must be able to justify ·his claim or righ~.
b. Receipts or invoices or other evidence to show that the ~xpense ~as
· really incurred, if applicable, .must duly support deductions against
the gross estate:
c. Both "a" and "b"
d. Neither 'a" nor "b"

2. Which is false? ,
a. Th~ estate tax is computed based on the· net estate or taxable estate. .
b. The net estate is determined by subtracting from the gross estate the
deductiQns authorized by law.
c. Both "a" and "b"
d. Neither "a" nor "b"

ORDINARY DEDUCTIONS
LITe - Indebtedness/Claims against the Estate
3. Which among the following statements is correct? -
I. · An obligation that had prescribed already during the lifetime of
the decedent, · or that was unenfq_rceable against hillJ when still
alive, will not be'claim against his estate whe'n· he shall be dead.
. II. If a ·monetary claim against the decedent did not arise out of a
debt instrument, the requirement on a notarized debt instrument
does not apply.
a. I only C. Both I anp II
b. II only d. Neither I nor II

4. The following statements pertai_ n to indebtedness for estate tax .pu.rposes.

Which is fal~e? · .
I. ~hen a person leaves property encumbered by a mortgage or
indebtedness, his gross estate .must include thefair .market value
of the property, undiminished by the mortgage or indebtedness.
II. Include in the computation for the gross estate only the equity of
the decedent on the property.

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 ctjuer Eercuu - Dd:ct~- £ 9rtJss E.s&d&
III. If the loan is merely an accommodation loan where the proceeds
of the loa~ went to another person the val~e of the unpaid loan
must not be included in the receivable of the estate.
a. I only c. I and II only ·
b. II only d. II and III only

s. Which among the following is false?

I. If a claim against the estate arose out of a debt instrument, the
debt instrument must be notarized regardless of its source.
II. If a monetary claim against the decedent did not arise out of a
debt instrument, the requirement on a notarized debt instrument
does not apply.
III. If the loan was contracted within three years before the death of
the decedent, the administrator or executor must submit a
statement showing the disposition of the proceeds of the loan.
a. I only c. III only
b. II only - d. II and III only

6. Awa Nhen died on January 1, 2018 leaving among others the following
charges and obligations:
Real property tax for the year 2017 Pl00,00Q
Notarized interest bearing .promissory note 100,000
Accrued interest on the promissory note at the time of
death . . 20,000
Interest to accrue on the promissory note from th~ date of 10,000
death to the date of maturity 200 000
Income tax due for 2017 . · t' t ?
the allowable ordinary deductions from the gross es a e.
h
How muc were , PSl0 ooo
a. P420,000 ~- p520' 000
b. P4~0,000 . ·'
. . t t f the decedent who died on February 2018:
7. Claims against the es a e ob owed not notarized PS00,000
· N0 t
es pa
yable for money orr '
r used in business 200 ,000
Accounts payable for supp ies 120 000
Debts from gambling losses ,
. th deductible claims against the estate?
How muc h is e · c. P470,000
a. P200,000 d. P850,000
b. P320,000

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 cC;t« '£era5e, - DM-:,/- £ (jrOcSs Es&tte
LITe-Claims against Insolvent persons _
8. The following statements regarding "claims a~ainst insolvent persons" are
correct, except .
a. It is a deduction even if the debtor had some properties
b. It can be a deduction even if secured by a mortgage
c. It should always be included in the gross estate '
d. Should be omitted in the computation for the net taxable estate if
· entirely uncollectible

9. Which of the following statements is correct?

a. A person is insolvent wh_ en his properties are not sufficient t.o pay
. his obligation. _ ·
b. The claims of the creditors will be satisfied out of the available
properties ofthe insolvent debtor.
c. For estate tax purposes, . there are two kinds pf creditors,
preferred and ordinary creditors.
d. All of the above

LITe-Taxes
10. Which of the following is ript deductible from the gross ·estate of a
decedent? ·
I. Income taxes on income received after death
II. Property taxes not accrued before death
III. Estate,Tax / ,

a. I and II only c. All of the aboye

b. II and III only d. None of the above ·

11. Which of the following taxes is dedlictibl~ from the gross ·estate?
a. Income tax paid on income received after death ·
b. · Property tax not accrued p'rior lo death
c. Estate tax paid on a foreign country
· d. Donor's tax accrued prior or before death

12. On June 30, 2018, Juan Dela Cruz passed away. The following unpaid
taxes relate to his property, income on his property, and estate. Estate
tax was filed and p~id early on December 31, 2018.
20 i 7 Income tax from practice of profession P300 ,ooo
Income tax-practice of profession for Jan. to June 2018 100,000
Income tax of the estate, July to December 2018 200,000
Real property taxes for 2016 and 2017 150,000
Business taxes for 2017 100,000
the total t,axes that may be deductep from the gross estate is
a. PSS0,000 c. P850,000
b. P750,000 d. P650,000

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UTe-Losses
13. Which of the following is wrong? Losses deductible from the gross estate
a. Should onl y be of property included in the Philippine gross estate.
b. Should be incurred during settlement of the estate.
c. May be arising from storm.
d. Should not be compensated by insurance or other form of
indemnity.

14. Which is deductible from the gross estate of resident decedent?

a. Loss of portion of the estate incurred during settlement period ·
such as those arising from theft. ,
b. Loss of portion of the estate incurred 200 days before the death
of the decedent.
c. Loss of portion of the estate· incurred a month. before the death
of the decedent. ·
d. Losses on the .portion of exclusive capital of surviving spouse
incurred during settlement of the estate.

Use the following information for the next four questions:

Among the properties included in the gross estate of the decedent at the time
of death is a three-story commercial building with a fair market: value of
P12,000,000. During the settlement of the estate and before the last day of
paying the estate tax, the said property is destroyed by fire. The fair market
value at the time of the rncident was P13,000,000.

a.
15. The amount that should be included as part of the gross estate is
PO c. P12,500,000
b. P12,000,000 d. P13,000,000

16. The amount of deductible loss will be

a. PO c. P12,500,000
· b. P12,000:,000 d. P13,000,000

17. Assume that the property was insured for Pl0,000,000 and the amount
recovered from the insurance company was P9,000,000. The amount of
deductible loss will be
a. Pl,000,000 c. P9,000,000
b. P3,000,000 . d. P12,ooo,oqo

1a. Assume that 70% 'o f ttie prop~rty is destroyed by fire and the property is

a.
not insured. The deductible loss will be .
PO c. P8,400,000
bl P3,60.0,000 d'. P12,000,000

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 ctjter EerWu -vdd~= £ 9r,Hs Esttu,"""
Transfer for Public Use
19. It pertains to the amount of all the bequests, legacies, devises or
transfers _to or for the use of the Government of the Rep~blic of the
Philippines, or any political subdivision thereof, for exclusively public
purposes.
a. Transfer .for public use c. Property previously taxed
b. Vanishing deduction , d. Inheritance

20. By "transfer for public use" as deduction from the gross estate is meant
dispositions in:
I. A last will and testament in favor of the Government of the
Philippines or any political subdivision thereof, for exclusively
public purposes.
. II. Transfer to take effect after death in favor of the Government of
the Philippine~, or any political subdivision thereof, for exclusively
public purposes.
a. I only c. Both I and II
b. II only d. Neither I nor II

21. Which of the following is .not a remedy against double taxation

a. Estate, tax credit
b. Vanishing deduction
c. Delivery of property from fiduciary heir to fedeicommissary in a
fideicommissary substitution
d. Transfer for public _use

22. Which is wrong? Deduction for·transfer for public use:

a. Means legacy in a last will and testament to the government
b. Means device in a last will ?Jnd testament to the government
c. Includes any kind of transfer to the government for public
purpose
d. Will not include legacies to charitable institutions

23. Yumao ·Na Rhin transferred a 3,000 square meter lot purposely to be
converted as a zoo to be administered by the city government of Tawi·
tawi. The lot was acquired by the decedent 10 years ago for PS0,000.
Its fair market value at the time of Yumao Na Rhin's death was
PS,000,000. The deduction from ,the gross estate relative to this transfer
is
a. PS0,000 c. PS,000,000
b. P2,500,000 d. PO

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vanishing Deductions
24. Pedro died leaving a car he at •
The car was correctly . dquired by purchase from Juan 4 years ago.
vanishing rate is me1u ed in his gross estate. The applicable
a. 0%
b. 40% C. 60%
d. 80%
25. Vanishing deducti?n is availed by taxpayer to
I. Reduce his output vat
II. Reduce his gross income
III. Reduce his gross estate
a. I only
c. III only
b. II ony d. II and III only

26. Which of th: f~llowing statements regarding gross estate is incorrect?

a. Vanishing deduction is being allowed to lessen the impact of
successive taxation of the same property within a very short
period due to the death of the decedent-transferor.
b. Even property previously taxed situated outside the Philippines of
a, non-resident alien decedent, for estate tax purposes, can be
allowed vanishing deduction ,
c. So that unpaid mortgage may be 'deducted from the gross estate,
the fair market value of the mortgaged property must form part
of the gross estate in full.
d. For. unpaid taxes to be deductible fro111 t~e gross estate, such
must have accrued at the time or before the decedent's death.

27. Which of the: following properties of, Namayapa Nha who ~ied December
1, 2018 is subject to vanishing -deduction? .
Property 1: Rest Hquse in Ta~aytay ~urc~ase~ m 2016 _ .
Property 2: commercial lot and building mhented fr9m her mother m
2015 where the estate tax thereon had npt been paid.
Ptope,ty 3: Donation from a friend in ~017.
Property-,4: Property won in a lottery six (6) months before death.

Pro12.ertv 2 · Propertv3 Property 4

Pro12.ertv 1
a. · No No .Yes
Yes
Yes
No. No
b. No
No Yes
c. Yes Yes .
Yes No No
d. Yes

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28. Ded Nha, a citizen of the Philippines a'nd a resident of Bacolod City, di
testate on May 10, 2018. Among his gross estate are properties inhent:~
from his deceased father who died on April_ 4, 2015. "Yh~t percentage of
deduction will be used in computing the amount of vanishing deduction?
a. 80% of the value taken as basis for vanishing deduction; .
b. 100-% of the value taken as basis for vanishing deduction;
c. 60% of the value taken as the basis for vanishing deduction
d. 40% of the value taken as the basis.for vanishing deduction

29. On September 4, 2018, Yumao N. Rin .di~d lea~ing ~n ap~~m~~t building

which has a fair value of Pl,000,000 which he inherited from hrs mother.
The property was valued at P900,000 at the time of inheritance dated
July 28, 2015. The building has a previous mortgage of PlS0,000. of
which PS0,000 was paid by Yumao .N. Rin prior to his death. In ·
computing for the vanishing deduction, what percentage will be used and
how much will b~ the vanishing deduction?
a. 40%; P306,000 c. 40%; P323,000 ·
. b. 60°io; P300,000 d. 20% P305,000

SPECIAL DEDUCTIONS
- Standard Deduction
30. Upon effectivity of the TRAIN Law, which is not true -about standard
deduction? ·
a. It need not be s,ubstantiated
b.. It does not apply to nonresident alien decedent
c. It n,ust be reflected in the estate tax return
d: None of the above

31. Statement 1: The PS,000,000' standard deduction .for estate tax purposes
is a short-cut, legal' mechanism-,to further exempt the less privileged
estate and heirs from the·-tax burden. · ·

.Statement 2: The BIR may examine .the bank deposit of a decedent for
the purp'ose of determining, his gross estate without violatlng the Bank
Secrecy ~aw.
a. Statements 1, & 2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true

120
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Family Home .
32. Statement 1 The maxi~um amount of deductible family home from the ·
gross estate Is Pl0,000,000 ,
2 th
Statement : "If e family h_ome is exclusive property of the surviving
spouse _and has a current market value of Pl0 000 000 such amount is
not subJect to est~te tax. - ' ' '
a. Statements 1 and 2 are corre'ct
b. . Only statement 2 is correct
c. Only statement 2 is correct
d. Statements 1 and 2 are incorrect

33. Only one statement is correct? A deduction for family home

_ a. Shall be _aUdwed if the family home is in the Philippines.
b. Shall be at a_maximum of Pl0,000,000, based on cost.
c. May be allowed for two family homes (one in the city and another
in the province), both in the Philippines and with certifications of
the barangay captains.
d. Shall be deducted at lesser 'than Pl0,000,000 if, with vanishing
deduction and unpaid mortgage or indebtedness, the value of the
~amily home is already_reduGed to zero.

34. A resident citizen had family home in the Philippines. He worked abroad
and was temporarily absent from his family home when he died. Which
of the·following statements is correct? · ·
-a. The decedent would not be allowed family home deduction
because he was abroad when he died.
b. The decedent would not be allowed family home deduction
because he was a nonresident citizen when he died.
c. The decedent would be allowed family home deduction because
actual occupancy of the family home ·was not interrupted or
abandoned because of his temporary absence.
d. The decedent would be allowed family home because all
decedents wer~ allowed family-' home deduction.

- Amount received un,der RA 4917

35. Which of the· following statements regarding amount(s) received · or

· receivable under RA4917 is riot correct?- ·
a. ,Any amount received by the heirs from the decedent's employ~r
as a consequence of the death of the d~cedent-~mployee m
accordance with Republic Act 4917 shall be included m the gross
estate of the decedent.

121
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b. Any amount received by the heirs from th ed decd~dent's employer
as a consequence of the death of the ece ent-employee •
accordance with Republic Act 4917 shall be deductible from
. t~ne
gross estate of the decedent.
c. Both "a" and "b"
d. Neither "a" nor "b"

36. A decedent has orie year left to complete 30 Y~~rs of. continuous servic~
with his employer when he died. His only heir received _Pl,500,000 as
benefit under RA 4917. What should be the amount to be included in the
g·ross estate?
a. Pl,500,000 c. , Pl,000,000 ,
b. PS00,000 . d. PO

37. Based on the preceding proble~, what amount sliould be inclu~ed as part
of deductions from gros~ estate? ·
a. Pl,500,000 c. Pl,000,000
b. PS00,000 d. , PO

Deductions for Nonresident Alien Decedents

38. Orie of the following is allowed as a deduction from the gross estate of a
. non-resident alien under the Tax Code as amended by ·RA 10963 (TRAIN
Law), but is prorated between Philippine gross ,estate and the total or
world gross estate _
a._ Losses, indebtedness, claims against the estate and taxes
b. Share of the surviving spouse .
c. Vanishing deduction
d. Standard deduction

39._ A nonresiden~ alien decedent l~ft the f~llowing assets:

· Domestic shares Pl 000 000
Forei~n shares . 3:poo:000
Tang,bl~ personal property, Philippines 6,000,000
Losses,_unpaid indebtedness and taxes 1,200,000

!he country where the decedent is a citizen and resident does not
1m~o~e trans~er tax on transmi·ssion of intangibies of Filipinos not
residing therein. The taxable net estate in the Philippines ·is
a. P.3,800,000 - c. P4,780 000
b. P4,280,000 d. PS, 2SO,OOO

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40 A nonresident alien . died on March 10, 20lB leaving the following
· roperties and deductions .
p shares, domestic corporation
PS00,000
Shares, foreign corporation
500,000 -
Tangible personal p~operty
1,500,000
Deductible losses, indebtedness and taxes 500,000
Assuming there is no reciprocityi the estate tax due is
a. P96,000 _c. Pl,500,000
b. P66,000 d. Pl,600,000

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