INDIVIDUAL TAXATION

EXERCISE 1

1. An whose residence is not within the Philippines and who is not citizen thereof
o Resident citizen
o NRA
o RA
o NRC
2. Who is a resident citizen?
o A citizen who went on tour abroad.
o A citizen of the Phil whose establishes to the satisfaction of the CIR, the fact that of his
physical presence abroad with a definite intention to reside therein.
o A citizen of the Phil who leaves the Phil during the taxable year to reside abroad
o A citizen of the Phil who works and derives income abroad and whose employment
requires him to be physically present abroad most of the time during the year
3. Which of the ff is an individual whose residence is within the Phil but who is not a citizen
thereof?
o Resident citizen
o NRA
o RA
o NRC
4. A non-resident alien is considered engage in trade or business in the Phil if he stayed therein for
o Atleast 183 days
o Atleast 180 days
o More than 183 days
o More than 180 days
5. On which of the following dates shall a citizen who left the Philippines during the year be
classified as a NRC for the year?
o MAY 31
o July 31
o July 15
o November 30
6. An alien shall be classified as a resident in 2019 if he arrived in the Phil on which of the ff dates?
o December 30, 2018
o Jan 1 2019
o July 15,2019
o Dec 31 2019
7. How long does a clitizen have to stay abroad being classified as a non-resident?
o Atleast 183 days
o Atleast 180 days
o More than 183 days
o More than 180 days
8. How long shall an alien have to stay in the phil before being classified as resident alien?
 o Atleast 183 days
o More than 183 days
o Atleast 1 year
o More than 1 year
9. The
10. Length of stay od individuals for purposes of taxpayer classification is reckoned as of
o Dec 31 of the current year
o Dec 31 of the prior year
o The days the alien leaves the Philippines
o The day the individual taxpayer files an income tax return
10. Which of the following is NOT subject to Regular income tax?
o RC
o RA
o NRA-ETB
o NRA-NETB
11. In 2021 , an alien who has been in the country since July 1, 2020 is classifies as a
o RC
o RA
o NRA-ETB
o NRA-NETB
12. In 2021, an American who had been a resident in the phil since aug 14, 2021 is a
o RC
o RA
o NRA-ETB
o NRA-NETB

EXERCISE 2

1. A taxpayer who s both engage in business and employment is not

required to consolidate his quarterly mixed income for quarterly tax reporting
2. Which of the following may be subject to final tax?
o 13 month pay and other benefits
o Supplemental compensation
o Fringe benefits
o Regular compensation income
3. Which of the following cannot claim deduction from gross income?
Resident citizens deriving income solely from employment
4. To which of the following does the submitted filing system apply?
Purely employed taxpayers
5. Which is not a requisite of the substituted filing system?
The taxpayer must have only one source of business income
6. Which of the following employees is not required to file an annual consolidated income tax
return?
 Those earning purely compensation income when the employer correctly withheld the tax
7. Which of the individual income taxpayer can claim tax credit for foreign taxes paid?
o RC
o RA
o NRC
o All off these
8. What is the optional standard deduction claimable by individual income taxpayers who are
engage in business?
40% of gross receipt or sales
9. When should individual income taxpayers submit their annual or consolidated return for the
year 2021?
April 15,2022
10. Which of the following taxes is a resident citizen or alien subject?
o Final tax
o CGT
o Regular tax
o All of these
11. A Non-resident alien, not engage in trade or business is not subject to
Regular tax

EXERCISE 3

1. Who is not required to file quarterly income tax return?

pure compensation income earner
2. Who is not subject to withholding tax on compensation?
Minimum wage earner
3. An individual who wants to pay the regular income tax using optional standard deductions shall
use
Form 1701A
4. Individual opting to be taxed under 8% income tax shall use
Form 1701A
5. Trust and estates shall use which tax form
Form 1701
6. An adjustment return is likely to be required when
The employee receives compensation from multiple employers
7. A minimum wage earner who is subject to withholding tax shall
File an adjustment return and claim tax refund
8. If husband and wife are both employed, which is correct regarding their income tax exemption in
the tax table?
Each spouse shall be entitled to a 250,000-income tax exemption in the tax table.
9. A husband earned 450,000 taxable income. His wife also earned 100,000 taxable income. Which
is true?
The husband pays tax while the wife is exempt
10. If the husband is employed with 700,000 taxable income while his wife is unemployed, he shall
be actually subject to tax on
 450,000 of income
11. Which of the following scenario will still require an adjustment return from the employee even if
the employers correctly withheld the tax on their compensation payments?
o Employee has concurrent employment
o Employee has successive employees during the year
o The employee earned income from other sources
o All of these
12. An employee who earned income from other sources shall use which annual return?
Form 1700
13. Which is a source of tax credit against the tax due under Form 1701?
o Form 2316
o Form 2307
o 1701Q
o All of these
14. Which tax credit against the tax due under Form 1700?
Form 2316
15. The first quarter income tax return is due
May 15 of the same year
16. The third quarter income tax return is due
Nov 15 of the same year
17. Which is incorrect regarding the 8% optional income tax?
May be opted to if the taxpayer claimed optional standard deduction
18. Which will not be included in the tax basis of 8% income tax?
Gross income from operation
19. Which is an item of income subject to regular tax?
Gain on sale of equipment
20. Who is not allowed the option to be taxed at 8%?
Compensation income earner
21. Statement 1. There is no need to file a consolidated return if the withholding tax on
compensation and the expanded withholding tax is correctly withheld
Statement 2. A business man who is deriving income from a sole customer need not file a
consolidated return if the customer correctly withheld any expanded withholding tax
False; False

EXERCISE 4

1. Trixie’s business uses a fiscal year accounting period starting July 1 and ending June 30 for
internal reporting. Her business reported the following quarterly net income on a fiscal year
basis:

Fiscal year 2020-2021 2021-2022

1st quarter (July 1 to September 30) 190,000 210,000
2nd quarter (October 1 to Dec 31) 220,000 250,000
3rd quarter (1/1/2022)- 3/31/2022) 180,000
4th quarter (4/1/2022-6/30/2022) 200,000
 Compute the net taxable income to be reported April 15, 2023? 840,000

2. Jerson married 15 dependents, had the following income within and outside the Philippines:

Philippines Abroad
Compensation income 280,000 -
Rental income 50,000 100,000
Royalties -books 32,000 25,000
Domestic dividends 9,000
Foreign dividends - 40,000

Compute the taxable income assuming she is a resident citizen? 495,000

3. Compute the taxable income assuming she is a resident alien? 330,000

4. Henry Sy, a managerial employee, received the following employee benefits in 2022:

Salaries, net of mandatory and exempt benefits P 4,000,000

Stock bonus 800,000
Director’s fee 200,000
Car designed for the use of Henry 2,500,000
House and lot, transferred in the name Henry 5,000,000

Compute for the taxable income of Henry? 5,000,000

5. Compute for the fringe benefit tax for the year? 2,826,923

6. The following relate to the net income of the firm of Mr. Oda:

Professional fees P 600,000

Long term capital gain 80,000
Short- term capital gain 45,000
Ordinary gain 20,000
Long-term capital loss (90,000)
Short-term capital loss (30,000)
Ordinary loss (40,000)
Other business expenses (200,000)
Net income 385,000

Compute his taxable income: 390,000

7. Shown below is the summarized result of operations of Mr. Chiz Mozo’s business:

Sales 900,000
Cost of sales 300,000
Gross profit 600,000
Other deductible expense 100,000
 Contribution’s expense:
Government priority project 50,000
Non- accredited non-profit institution 55,000
Foreign foundation 25,000
Net income 370,000

Compute his taxable income: 400,000

8. During the year, Celeen received compensation income of P 455,000 after P 15,000 withholding
tax on compensation. Compute her income tax still due: 47,500
9. A Filipino citizen has P 400,000 Philippine income and P 300,000 foreign income. He paid P
55,000 income taxes abroad. Compute the allowable tax credit for the income taxes paid abroad:
45,000
10. A Filipino citizen has P 400,000 Philippine income and P 300,000 foreign income. He paid P
55,000 income taxes abroad. What is the tax credit if the taxpayer was a non-resident citizen or a
resident alien? 0

EXERCISE 5

1. An individual taxpayer recorded sales of P 2,500,000, cost of sales of P 1,000,000 and expenses
of P 700,000. He is also a partner in various partnership and received the following share in their
net income:

General professional Business partnership

partnership
Share in net income P 200,000 P 400,000

Compute the income tax due if opted to itemized deduction: 190,000

2. Compute the income tax due if opted to the 8% optional income tax: 196,000

3. Karen kaled received the following income from her employment in 2021:

Gross sales 400,000

Deductions for:
-SSS 10,000
-Philhealth 8,000
-Pag- ibig 7,000
-Union dues 2,000
-withholding tax 67,400
-Loans payment 50,000
-Tardines and absences 15,000
Net pay P 240,600

Compute karen kaled’s taxable compensation income: 358,000

4. Magdalene made the following computation of her annual financial savings from employment,
her sole source of income:

Salaries, net of 59,000 witholding tax and P P 321,000

12,000 mandatory payroll deductions
Expenses:
Load expense 10,000
Medical expense 8,000
Transportation expenses 25,000
Food, rent and utilities 100,000
Bank loan repayments 20,000
Miscellaneous expenses 15,000
Net savings for 2021 143,000

What is Magdalene’s taxable compensation income in 2021? 380,000

5. Roger presented the following schedule of income in 2021:

Service fees, net of 5% withholding tax P 617,500

Dividends from a domestic corporation 20,000
Interest income from bank 10,000
Expenses:
Office utilities expense 30,000
Staff salaries 120,000
Rent & miscellaneous expenses
80,000
Tuition fees of 5 dependent children 100,000
Personal medical expenses 15,000
Net business income P 297,500

Total deductible expense against gross income is: 230,000

6. Compute Roger’s taxable net income: 420,000
7. Compute the tax still due: 2,500 payables
8. Compute the tax still due if Mr. Roger opted to the 8% optional tax: 500 refundable

9. Clyde Jerik, a self-employed employee with ten dependent children, had the following items of
income and expenses in 2021:

Sales P 900,000
Less: cost of sales 400,000
Gross profit 500,000
Interest income, net of 20% final tax 16,000
Interest income from clients notes 12,000
 Expenses:
Salaries expense 100,000
Dep. Expense 15,000
Rent and other expenses 50,000
Interest expense 30,000
Net income P 333,000
Compute for the deductible business expense: 191,000
10. Clyde Jerik shall report a taxable income of: 324,000
11. Compute the taxable income if Clyde Jerik opted to use the optional standard deduction:
307,200
12. Compute the income tax due if Clyde Jerik opted to use the 8% optional income tax: 52,960

13. An individual income tax payer had the following income:

Compensation income P 820,000

Mandatory payroll deductions 20,000
Gross receipts 1,800,000
Direct cost of services 500,000
Expenses 300,000
Other income subject to RIT 100,000
Other income subject to FT 200,000
Withholding tax on compensation 130,000
Expanded withholding tax on receipts 14,000
Estimated tax payments made 94,000

Compute the income tax still due if the taxpayer opted to the itemized deduction: 222,000
14. Compute the income tax still due if the taxpayer opted to optional standard deduction: 246,000
15. Compute the income tax still due if the taxpayer opted to 8% optional income tax:
282,000

ESTATE TAXATION

1. A legatee, heir or advisee is also known as?

Successor
2. A decedent who died without a will or with an invalid one is called
Intestate
3. The following transfers are taxable except:
Transfer passing under special power appointment
4. Gross estate includes all his property, real or personal, tangible or intangible wherever situated,
except.
NRA
5. The following transfers are exempt and hence excluded from gross estate, except?
 All bequest, devise, legacies and transfer to social welfare, cultural and charitable institution no
part of the income of which inures to the benefit any person and not more than 30% of such
bequest, devise or legacies or transfer are used for administration purposes
6. I. In the taxable transfers, the value to include and gross estate is the fair value of the property at
the time of death, any consideration given by the counterparty is treated as an obligation
deductible to gross estate.
II. in taxable transfers, if the fair value at the time of death is lesser than the consideration given,
no value is included in gross estate.
III. in taxable transfers, if at the date of transfer the fair value is higher than the consideration
received, the FV at the time of death is included in gross estate regardless of whether at the time
of death the value of property is lower than consideration given.

What is correct?
II only

7. The reciprocity on exemption of intangible properties located in the Philippines of non-resident

aliens may apply in the following conditions, except when the foreign country where the non-
resident alien is a citizen?
Has no income tax imposed on income earned by the estate but imposes transfer taxes
8. Even if physically existing at the time of death, the following are not included in gross estate,
except?
Benefits claimed by surviving spouse as arising from GSIS policy but no adequate documents
could be presented in support thereof.
9. A made the following transfers inter-vivos to the following:

B C D E
Cost 100,000 100,000 100,000 100,000
FMV,time of 140,000 140,000 80,000 80,000
transfer
Consi received 100,000 100,000 100,000 0
FMV, time of 120,000 70,000 120,000 90,000
death of A

The amount to be included in the gross estate of A is: 110,000

10. The gross estate of this decedent shall be comprised of properties situated in the Philippines
only: American residing in the US
11. One of the following is not included in the gross estate of a citizen decedent
Benefits received from group insurance
12. For estate tax purpose, the rule of reciprocity applies:
I. When the decedent is a non-resident alien
II. With respect to intangible personal properties situated in the Philippines;

Both I and II are correct

13. One of the following is not an intangible personal property situated in the Philippines:
 Shares, obligations or bonds issued by a non- resident foreign corporation
14. For estate tax purposes, one of the following is not an intangible personal property
Livestock
15. John Johnson, an American domiciled in South Africa, died in 2005. He left the following
property:
a) Rest house in Hawaii
b) A villa in Switzerland;
c) Shares of stock in LA Corporation, USA;
d) Shares of stock in San Miguel corp, phil.
e) Shares of stocks in Union corp, a foreign corp where 85% of its business in the Philippines;
f) Time deposit, Philippine national bank, Manila:
g) Lease contract over his Manhattan, New York, USA apartment leased to the Philippine
consulate

John Johnson’s Philippine gross estate shall consist of:

Only property d, e, and f

16. Assuming there is reciprocity, John Johnson’s Philippine gross estate shall consist of:
None of the properties
17. Mr. Juan Cruz, Filipino citizen, died in the United States of America in 2005. He left the following
properties:
a) House and lot, California USA
b) Shares of stock in PLDT domestic corporation
c) Bank deposit, first bank of California, USA
d) Bank deposit, BPI Manila
e) Tax-free long-term Phil govt bonds
f) Car, registered in the name of his 21 years old son

The Philippine gross estate shall consist of:

All properties enumerated above

18. One of the following transfers is not included in gross estate:

Transfer for adequate and full consideration
19. Case I- X transfer shares of stock of Y on the condition that X shall receive or enjoy the dividends
during X’s lifetime, thereafter to Y or his estate.
Case II- B makes a transfer of property in trust, income payable to himself for 6 years, thereafter
to C or his estate. B dies before the 6 years imposed.
Both transfers are with retention and reservation of certain rights, hence taxable.
20. Under the following is not included in gross estate of a decedent
Land held in trust but in the decedent possession before death
21. X, decedent, owns a property valued at 1,500,000 at the time of his death. The said property was
sold by X during his lifetime to Y for 700,000 when it was valued at 1,200,000. IT was agreed by X
and Y that the transfer of ownership will take after X’s death. For the phil estate tax purpose,
which of the following statement is correct?
 The transaction is a transfer for inadequate consideration, hence the amount of 800,000 shall be
included in the gross estate
22. One of the following is not a motive which precludes a transfer from category of one made
contemplation of death
To save donor’s and estate tax
23. Which of the following proceeds shall be included in the taxable gross estate?
Amount receivable by any beneficiary designated in the insurance policy
24. The widow and children of a passenger who dies in a airplane crash were paid 3,500,000 by the
air line. This figure was released after negotiation between the heirs of the deceased and the
insurer of the airline, the latter having received indubitable evidence that the deceased had a
net income of 350,000 at the time of his death and that 10 productive years would have insured
financial stability for his family, should the heirs declare this amount in the estate tax return?
No, the heirs should not declare the 3,500,000 in the estate tax return because the amount is
not part of the decedent’s properties at the time of death
25. The following are transactions and acquisitions exempt from transfer taxes, exempt
All bequests, devises, legacies or transfer to social welfare, cultural and charitable institutions.
26. Which of the following exempt transactions will still require the inclusion of property in the gross
estate?
- Bequests, devises, legacies or transfers to social welfare, cultural and charitable institutions the
administration expenses of which do not exceed 30% of such bequest, devises, legacies or
transfers.
27.
Case I- Y devised in his will a piece of land; naked title to B and usufruct to C for as long as C
lives, thereafter to B. The transmission from Y to B and C is subject to estate tax but the merger
of the usufruct and the naked title in B upon the death of C is exempt
Case II- Z devised in his will real property to his brother D who is entrusted with the obligations
to preserve and to transmit the property to E a son of D, when he becomes of age. The
transmission of D to his son E is subject to tax
- Only the first statement as to the taxability and non-taxability of the transmissions is correct.
28. X died in 1990 leaving a will which directed all real estate owned by him not to be sold or
disposed for a period of 10 years after his death and ordered that the property be given to Y
upon the expiry of the 10-year period. In 1990, the estate left by X had a fair market value of
P1,000,000. In 2002, the fair market value increased to P3,000,000 and the Commissioner of
Internal Revenue assessed thereon the estate tax vase dib P3,000,000. Is the commissioner’s
assessment based on P3,000,000 correct?
- No. The assessment of the commissioner is incorrect because the assessment should have
been based on the fair market value at the time of death which is P1,000,000.
29. Which of the following value is not generally used for estate valuation purposes?
- Fair market value at the time the return is filed.
30. Real properties owned by the decedent at the time of death shall be valued at:
Zonal value or value per tax whichever is higher
31. Mr. X died. He was survived by his wife and children. The couple had exclusive and common
properties. The gross estate of Mr. X would include:
- Common and capital properties
 32. In the absence of a marriage settlement, or when the regime agreed upon is void, the property
relations of the spouses who married on or after August 3, 1988 shall be governed by:
- Absolute community of properties
33. Properties owned before marriage and brought into the marriage are generally classified as:
I. Conjugal properties under conjugal partnership of gains;
II. Exclusive properties under absolute community of properties
- Both I and II are incorrect
34. The net fruits as well as the income received during the marriage from the exclusive properties
of the spouses are classified as:
I. Conjugal properties under conjugal partnership of gains;
II. Exclusive properties under absolute community of properties.
- Both I and II are correct
35. The community properties shall include all properties owned by the spouses at the time of the
celebration of the marriage or acquired thereafter. One of the following, however, is not a
community property.
-Properties acquired before marriage by either spouse who had legitimate descendants by a
former marriage.

36. During their last anniversary, the wife bought an expensive coat for his husband using her salary
earned during the marriage. Shortly thereafter, the husband died. For Philippines estate tax purposes,
the expensive coat shall be classified as:

- Exclusive property of the husband-decedent

37. During the engagement ceremony before their marriage, the man gifted his woman an expensive
diamond necklace. The necklace was for the exclusive use of the woman. How would this necklace be
classified for Philippine estate tax purpose, assuming the man died and was survived by the woman and
they were under absolute community of properties?

- Communal property

38. Which of the following is an exclusive property?

- Properties acquired during the marriage by gratuitous title.

39. Are properties owned by the spouses at the time of marriage presumed common unless proven to
be exclusive?

I. Yes, under conjugal partnership of gains;

II. Yes, under absolute community of properties.

- Both answers are correct.

40. A decedent left the following properties in 2020:

Land in Italy (with 1M unpaid mortgage) P 2,000,000

Land in Laguna Philippines 500,000
Franchise in USA 100,000
Receivable from debtor in the Philippines 70,000
Receivable from debtor in the USA 100,000
Bank deposit in USA 80,000
Shares of stocks of PLDT, Philippines 75,000
Shares of stocks of ABC, foreign corporation 75% 125,000
of the business in the Philippines
Other personal properties 300,000
Zonal value of the land in Laguna 750,000

If the decedent is a non-resident citizen, his gross estate is:

- P3,600,000

42. A decedent left the following properties in 2020:

Land in Italy (with 1M unpaid mortgage) P 2,000,000

Land in Laguna Philippines 500,000
Franchise in USA 100,000
Receivable from debtor in the Philippines 70,000
Receivable from debtor in the USA 100,000
Bank deposit in USA 80,000
Shares of stocks of PLDT, Philippines 75,000
Shares of stocks of ABC, foreign corporation 75% 125,000
of the business in the Philippines
Other personal properties 300,000
Zonal value of the land in Laguna 750,000
If the preceding number reciprocity law can be applied, the gross estate is:

- P1,050,000

43. A decedent left the following properties in 2020:

Land in Italy (with 1M unpaid mortgage) P 2,000,000

Land in Laguna Philippines 500,000
Franchise in USA 100,000
Receivable from debtor in the Philippines 70,000
Receivable from debtor in the USA 100,000
Bank deposit in USA 80,000
Shares of stocks of PLDT, Philippines 75,000
Shares of stocks of ABC, foreign corporation 75% 125,000
of the business in the Philippines
Other personal properties 300,000
Zonal value of the land in Laguna 750,000

Based on the above problem but assuming that the PLDT shares of stock is not listed n the local stock
exchange, and there are 1,000 shares at the time of death, the company’s outstanding shares were
10,000 shares. Its retained earnings were P2,000,000, par value per share was P50. The gross estate
should show the said share at
-P250,000

44. The estate should be valued at the time

- of the death of the decedent.

45. The proceeds of life insurance of the decedent shall be included in the gross estate if the beneficiary
designated is:

-Any other party, if designation is revocable.

46. This is not part of the gross estate of the decedent

- Exclusive property of the surviving spouse.

47. The following do not form part of the communal properties of the spouses, except?

- Jewelries

48.The following are included in the community properties of the spouses, except?

- Properties acquired by the surviving spouse under right of redemption using only his separate
properties.

49. Which of the following do not form part of the conjugal properties of the spouses?

- Properties acquired before the marriage whether there are dependents in future marriage or not

50. Which is correct concerning the property settlement of spouses?

- The spouses can stipulate the conjugal partnership of gains even after august 3, 1988

51. This is not part of the conjugal property

- Those acquired during the marriage gratuitous title.

52. Under the absolute community of property, jewelry for personal and exclusive use of the wife shall
belong to the

- husband and wife

53. A. Taxation of the estate shall be governed by the statute or law in force at the time of distribution of
the estate to their heirs.

B. Succession takes place upon the determination of the respective share of the heirs in the estate of the
decedent

- False, false

54. A. Property brought to the marriage by either spouse shall belong to both spouses.

B. The share of the surviving spouse in the conjugal property is part of the gross estate of the decedent.

- True, true
55. A. Fruits and income of exclusive property shall belong to the spouses.

B. Donations made by the decedent during lifetime but to take effect upon his death shall be exempt
from estate tax.

-False, false

56. A. When exclusive property is sold during the marriage, the proceeds becomes property of the
spouses.

B. The legal heirs of the decedent must be determined first before the correct estate tax can be
ascertained.

- False, True

57. A. If the property is inherited before marriage it will belong to both spouses while if it is inherited
during marriage, it is exclusive.

B. Unless stipulated, the property relations shall be governed by conjugal partnership of gains for
marriages celebrated on or before August 3, 1988.

-True, False

58. A. Unless stipulated, the property relations shall be governed by absolute community of property for
marriages celebrated on or after august 3, 1988

B. Under the regime of absolute community of property, property for personal and exclusive use of
either spouses, except jewelry shall belong to both spouses.

- True, false

59. The estate may claim a standard deduction of ‘

-P5,000,000

60.

Statement 1 - A died giving B power to appoint a person who will inherit A’s house and lot. B however,
can only choose C,D, E and F. B decided to transfer the property to C, in B’s will when he was old already.
The transfer from B to C is subject to estate tax.

Statement 2- During A’s lifetime, he decided to give B as gift his car subject to the condition that if B does
not become a CPA within 3 years, A shall revoke the transfer. In the second year however, A died. The car
no longer form part of A’s gross estate.

-False, false

61. A died leaving a farm land. In his will he transferred the ownership thereof to B but subject to the
condition that C will have the right to use the land for the period of 10 years (usufruct). In the seventh
year however, C died and in C’s will he surrendered his right over the land to B.

- The above is a tax exempt transfer.

62. One of the following is not an exemption or exclusion from the gross estate

-Shares of stock of San Miguel Corporation of a non-resident Mexican

63.

Statement 1- Unpaid mortgage indebtedness is deductible from the gross estate provided the said
property subject to the indebtedness is included in the gross estate, net of the mortgage indebtedness.

Statement 2- A donations inter-vivos by the decedent to the Philippine government few months before
his death is a deduction from the gross estate

-False, false

64. From the decedent’s death, the estate tax return shall be filed within

-1 year

65. The CIR, in meritorious cases may grant a reasonable extension to file the return, not exceeding

-60 days

66. On October 31, 2016, the decedent borrowed P2,000,000 from a lender which charges 10% interest
due annually every October 31. The decedent died on January 31, 2018. Compute the total deductible
indebtedness against gross estate.

P2,050,000

67. The following obligations remained unpaid before estate tax returns were about to be filed:

Unpaid funeral expenses P250,000

Unpaid judicial expenses 400,000
Unpaid medical expense 200,000
Real property tax (3/4 unpaid before death) 80,000
Unpaid bank loan
- Balance at date of death 150,000
- Balance before filing return 120,000

Compute the deductible indebtedness

P210,000

68. Decedent X received a P2,000,000 donations from his father on July 1, 2016. He used the money to
purchase 100,00 shares of listed company, Sam Miguel Company. The shares of Sam Miguel Company
traded as follows: Open -P20, High P24, Low -P18 and Close -P23 at the time of X’s death on July 4, 2018.
X have other assets of P12,900,000, X had P3,600,000 total obligations upon his death.

Compute the vanishing deduction?

P912,000