Which of the following statements is false?

Transferred tax is
a. Impose upon gratuitous transfer of property
b. Of two kinds: estate tax and donors tax
c. Classified as national tax
d. None of the above

Which of the following statements is true?

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

Which is false?
a. The 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 deductions
authorized by law.
c. Both "a" and "b"
d. Neither "a" nor "b"

Which among the following statements is correct?

[I] An obligation that had prescribed already during the lifetime of the decedent, or that
was unenforceable against him when still alive, will not be claim against his estate when
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
b. II only
c. Both I and II
d. Neither I nor II

The following statements regarding "claims against 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

Which is not true about inheritance?

A. Inheritance includes property, right, and obligations of a person that have occurred
since the opening of the succession.
B. Inheritance includes devise and legacy.
C. Inheritance includes property, rights, and obligations extinguished by a persons death
D. Inheritance includes property, right, and obligations of a person existing at the time of
death

Which of the following is not a compulsory heir?

A. Legitimate children and descendants, with respect to their legitimate parents or
ascendants
B. In default of letter a, legitimate parents or ascendants, with respect to their legitimate
children or descendants
C. Widow or widower
D. Relative by affinity

Succession which results from the designation of an heir, made in a will executed in the
form prescribe a law is known as
A. Legal or interstate succession
B. Testamentary succession
C. Mixed succession
D. Ordinary succession

Which is true? Regular intestate succession does not take place

A. If a person dies without a will, or with a void will, or one which has lost its validity
B. When the heir instituted is capable of succeeding
C. When the will does not dispose of all the property belonging to the testator
D. If that's suspensive condition attached to the institution of heir does not happen or is
not fulfilled

Which of the following is regarded as an intestate succession?

A. The will is designating the state as beneficiary of the free portion
B. The will was subsequently rendered void by circumstances
C. That will designate a part of free portion to a stranger
D. The will disposed the legitime to its rightful heir.

Which is not true about relationships?

A. The relation subsisting between son, father and grandfather, in that order is an
example of an ascending lineal consanguinity
B. Consanguinity is The relation of person ascending from the same stock or common
descendants
C. Collateral consanguinity is that which subsists between persons who have the same
ancestors, but we do not descend or ascend one from the other
D. Affinity is connection existing in consequence of a marriage between each of the
married spouse and kindred of the other.

Which of the following statements is correct?

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

Which of the following is wrong? Losses deductible from the gross estate
a. Should only 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.

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.

The following statements regarding "claims against 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

D
Which of the following taxes is deductible from the gross estate?
a. Income tax paid on income received after death
b. Property tax not accrued prior to death
c. Estate tax paid on a foreign country
d. Donor's tax accrued prior or before death

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

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 and testament to the government
c. Includes any kind of transfer to the government for public purpose
d. Will not include legacies to charitable institutions

Pedro died leaving a car he acquired by purchase from Juan 4 years ago. The car was
correctly included in his gross estate. The applicable vanishing rate is
a. 0%
b. 40%
c. 60%
d. 80%

Which of the following 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 from the gross estate, such must have accrued at
the time or before the decedent's death

Which of the following properties of Namayapa Nha who died December 1, 2021 is
subject to vanishing deduction? [Property 1] Rest House in Tagaytay purchased in 2019.
[Property 2] Commercial lot and bullding inherited from her mother in 2018 and where
the estate tax thereon had not been paid. [Property 3] Donation from a friend in 2020.
[Property 4] Property won in a lottery six (6) months before death.

a. [1: NO] [2: NO] [3: YES] [ 4: YES]

b. [1: NO] [2: NO] [3: YES] [4: NO]
c. [1: YES] [2: YES] [3: NO] [4: YES]
d. [1: YES] [2: YES] [3: NO] [4: NO]

Ded Nha, a citizen of the Philippines and a resident of Bacolod Citv. died testate on May
10, 2021. Among his gross estate are properties inherited from his deceased father who
died on April 4, 2018. What 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

Upon effectivity of the TRAIN Law, which is not true about standard deduction?
a. It need not be substantiated
b. It does not apply to nonresident alien decedent
c. It must be reflected in the estate tax return
d. None of the above

One of the following is not subject to the 3% percentage tax.

a. International air carrier doing business in the Phils.
b. Domestic carriers and keepers or garage.
c. Franchise grantee of city gas and water utilities
d. International shipping carrier doing business in the Phils.

Amounts received for overseas dispatch, message, or conversation originating from the
Philippines are subject to:
a. 2% franchise tax
b. 10% overseas communication tax.
c. 3% franchise tax.
d. None of these.

Admission fees received by cockpits and race tracks are subject to

a. tax on paid admission
b. tax on gross receipts
c. tax on amusement
d. tax on winning

Which of the following business is not subject to percentage tax?

a. Life insurance companies
b. Carriers of passengers
c. Carriers of cargoes
d. Sale of shares of stock in PSE

Which of the following gross receipts may be subject to business tax?

a. Transport of passengers by land using animal-drawn, two-wheeled vehicles
b. Transport of passengers by water using bancas.
c. Compensation paid to professionals for services rendered
d. Compensation income of an individual taxpayer.

In case where there are no relatives to receive the inheretance, who of the following is
the claim on the estate?
A. The nearest relative beyond fifth degree
B. The closest associate or friend
C. Any charitable institution located in the place where the bulk of estate is located
D. The State

In default of the testamentary heirs, The law determines who are to succeed to the
inheritance of the deceased. Which one of the following ranks first in the order of
succession?
A. Legitimated children
B. Surviving spouse
C. Legitimate parents
D. Illegitimate parents

Who is not an interstate heir?

A. Legitimate children/descendants
B State
C. Legitimate parent/ascendants
D. Collateral relatives within the 6th degree

Certain parts of the estate of a deceased Filipino citizen cannot be freely disposed of
because Philippine law reserves them for the "compulsory heirs". This portion of the
decedent's estate is known as
A. Legitimes
B. Free portion
C. Legacy
D. Bequest

If the surviving heirs in an intestate succession are the parents and a legitimate child of
the decedent, what is the share of the parents in the legitimes?
A. 1/3
B. 1/2
C. 1/4
D. None

Which of the following is a valid will?

A. That which produces the legitime of compulsory heirs
B. That which increase the share of one heir without impairing the legitimate of the other
heirs
C. Which transferred the legitime of one heir to the other heir
D. That which impair the legitimate of compulsory heirs

Probate of a will involves the following processes, which one is not?

A. Collecting the decedent's estate
B. Liquidating liabilities and paying necessary taxes
C. Distributing property to the heirs
D. Collecting the heir's estate
D

In which of the following cases is a will invalid?

A. When no heir has been instituted
B. When the will was executed in a language not known to the testator
C. When the institution does not cover the entire estate
D. When the instituted heir is incapacitated to succeed

Which of the following is not a valid will?

A. That which increases the legitime of compulsory heir
B. That which transfers the portion of legitime to other successors other than compulsory
heir(s)
C. That which reduces the free portion of the estate tax
D. That which transfers a part of free portion to a compulsory heir

A testator may execute a holographic will instead of an ordinary will. Which among the
following statements pertaining to holographic will is false?
I. A person may execute a holographic will which must be entirely written, dated and
signed by the hand of the testator himself
II. A holographic will is subject to no other form, and may be made within or outside of
the Philippines, and need not be witnessed
III. In case of an insertion, cancellation, erasure or alteration in a holographic will, the
testator must authenticate the same by his full signature

A. II
B. III
C. All of the above
D. None of the above

It deprives an heir to inherit properties by the decedent through the issuance of a will
A. Disinheritance
B. Distributable share
C. Legitimate
D. Disqualification

The following are causes of disinheriting a child. Which one is not?

A. When a child has been found guilty of an attempt against the life of the testator
B. When A child has been convicted of adultery or concubinage with the spouse of the
testator
C. When a child marries a person other than the testator's choice
D. When a child leads a dishonorable and disgraceful life

The following are causes of disinheriting a spouse. Which one is not?

A. When the spouse justifiably refuses to support the children or the other spouse
B. When the spouse has accused the testator of a crime for which the law prescribes
imprisonment for six years or more, and the position has been found to be false
C. When the spouse by fraud, violence, intimidation, or undue influence causes testator
to make a will or to change one already made
D. When the spouse has given cause for legal separation

Which is not true about an inheritance?

A. The acceptance of an inheritance may be express or tacit
B. Express acceptance of an inheritance may be made in a public or private document
C. An heir may accept or repudiate an inheritance
D. The inheritance or repudiation of an inheritance takes effect upon inheritance or
repudiation

Which is not authorized to take charge of the estate during intestate period?
A. Executor
B. Court
C. Administrator
D. Heirs

Mr. J. Cruz is the owner of a small variety store. His gross sales la any one year do not
exceed of P3M. He is not VAT-registered the following data are taken from the books of
the variety store for the quarter ending March 31, 2026
Merchandise inventory, December 31, 2025 P 100,000
Gross sales 450,000
Purchase from VAT-registered suppliers 350,000
The percentage tax due is:
a. None of these.
b. P 16,500
c. P 10,000
d. P 13,500

Problem 1: (Real Properties) Mr. A died leaving a house and lot as part of his estate. The
property which was encumbered by a P1,000,000 mortgage had the following fair values:
LOT HOUSE
ZONAL VALUE 3,000,000 0
FAIR VALUE, PER ASSESOR 2,000,000 4,000,000
APPRAISAL VALUE 4,000,000 4,500,000

Required: Compute the gross estate ]

ANSWER: The house and the lot shall be included in gross estate at P4,000,000
and P3,000,000, respectively. The independent appraisal is not used. Also, the
mortgage shall not be offset against the value of the property.

Problem 2: (Loan Receivables) On June 30, 20x20, Mr. D died with the following
outstanding receivables: P50,000 non-interest bearing loan to Mr. A, given April 1,
20x20 and is due in 3 months. P300,000 loan, bearing 10% interest to Mrs. B, given
January 1, 20x20 and is due in one year. P200,000 non-interest bearing loan to Mr. C,
due March 30, 20x20 but still unpaid.

Required: Compute the gross estate.

Loan to Mr. A P50,000
Loan to Mrs. B 300,000
Accrued interest on loan to Mrs. B at the date of death 15,000
Overdue loan to Mr. C 200,000
Amount to include in gross estate P565,000

Problem 2: (Shares of stock) Mr. A died leaving 1,000 preferred shares and 300,000
common stocks of AAA in his estate. The equity section of AAA in the its latest quarterly
financial statements is a follows:
Preferred stocks, 10,000 shares @P500 par
P5,000,000
Common shares, 10,000,000 shares @P2 par 20,000,000
Share premium – common shares 4,000,000
Retained earnings 12,000,000 Revaluation surplus 2,000,000
Treasury shares, 100,000 shares (360,000)
Total shareholder’s equity P42,640,000
Required: Case 1: Assuming AAA is non-listed company. Compute the gross estate

Case 1:(20,000,000 + 4,000,000 +12,000,000 -360,000) = P35,640,000 / 9,900,000* =

P3.60 book value per share *(10,000,000 – 100,000)

Preferred stocks (1,000 shares x P500) P500,000

Ordinary shares (300,000 x P3.60) 1,080,000
Gross estate P1,580,000

Case 2: Assuming AAA is listed and traded as follows in the stock market at the nearest
trading day to the date of death:

Case 2: ( 8 + 2) / 2 = P5
Preferred stocks (1,000 shares x P500) P500,000
Ordinary shares (300,000 x P5) 1,500,000
Gross estate P2,000,000

TRUE OR FALSE

TRUE 1.Deductions from gross estate are highly disfavored in law; he who claims
deductions must be able to justify his claim or right.

TRUE 2. Deductions from the gross estate are generally presumed to be conjugal
deductions, unless specifically provided otherwise.

TRUE 3. In a claim against insolvent person, the insolvency of the debtor must be proven
and not merely alleged.

TRUE 4. So that unpaid mortgage may be deducted from the gross estate, the fair
market value of the mortgage property must form part of the gross estate in full.

TRUE 5. For unpaid taxes to be deductible from gross estate, such must have accrued at
the time or before the decedent's death.

TRUE 6. Unpaid income taxes incurred before the decedent's death is deductible from
the gross estate.

TRUE 7. Casualty loss is deductible from gross estate if such loss was incurred during the
settlement of the estate.

TRUE 8. In computing for vanishing deduction, the value to be taken is the lesser amount
of the value of the property at the date of the previous transfer or the value of the
property at the date of death of the decedent.

TRUE 9. Vanishing deduction is being allowed to lessen the impact of successive taxation
of the same property within a very short period.

TRUE 10. The benefit of vanishing deduction may only be applied once.
TRUE 11. The maximum amount of deductible family home from the gross estate upon
the effectivity of the TRAIN Law is P10,000,000.

TRUE 12. persons of either sex under 18 years of age cannot make a will.

TRUE 13. the right of representation takes place in the direct descending line, but never
in the ascending line.

TRUE 14. the child of a voluntary heir who predeceases the testator gets nothing,
because there is no representation among the voluntary heirs nor in the free portion.

TRUE 15.if a compulsory heir dies ahead of the testator, his legitime goes to the child by
representation

TRUE 16.representation is a right created by fiction of law by virtue of which the

representative is raised to the place and degree of the person represented and acquires
the rights which the latter would have if he were living or if he could have inherited

TRUE 17. inheritance refers to all the property, rights and obligations of a person which
are not extinguished by death and all which have accrued thereto since the opening of
succession

TRUE 18. Rights which are purely personal or not transmissible for they are extinguished
by death death.

TRUE 19. The OPT in shares of stocks in closely held corporations is imposed on the
issuing corporation only

TRUE 20.A closely held corporation is any corporation wherein more than 50% of the OCS
is owned directly or indirectly by not more than 20 persons

TRUE 21. Cooperatives shall be exempt from the 3% gross receipts tax

TRUE 22. A sale of 33% of outstanding shares of stock in an initial public offering of
shares of stock is subject to a 2% other percentage tax.

TRUE 23. In case of financial leasing the taxable gross receipts exclude recovery of
principal.

TRUE 24.Overseas dispatch, message or conversations subject to a percentage tax of

10%

TRUE 25. In testamentary and legal succession, the compulsory heirs are assured of
their legitimes

FALSE 26. Obligations contracted by a person during his lifetime are terminated upon his
death.

FALSE 27.All claims against the insolvent person are deductible from the decedent's
gross estate.

FALSE 28. 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.

FALSE 29.Casualty losses could be claimed as deduction from the gross income and from
the gross estate.

FALSE 30. A person whose annual gross sales or receipts does not exceed P100,000 is
not subject to VAT but subject to OPT.

FALSE 31. Generally OPT Taxes are paid within 20 days after the end of each quarter

FALSE 32. In bank tax, the basis of the OPT is the bank's receipts less interest expenses

FALSE 33. Amusement tax on winnings is based on the winnings before deducting the
cost of the ticket.
FALSE 34. The OPT on the winnings is deducted from the dividends or prize and remitted
to BIR within 25 days from the date it was withheld.

FALSE 35. A person may be subject to VAT and OPT on the same transaction

FALSE 36. Percentage tax may be imposed together with VAT.

FALSE 37. Every person liable to the percentage tax shall always file a separate return
for each branch or place of business.

FALSE 38. A VAT-exempt taxpayer who issues VAT invoice shall not be liable to VAT.

FALSE 39. The 60% of 1% stock transaction tax is a final withholding income tax.

FALSE 40. A VAT-registered radio and TV broadcasting company is subject to a

percentage tax of 3% if its total gross receipts during the year is P1,500,000 and below

FALSE 41.The "Gross Philippine Billing" includes total amount of gross revenue including
noncontinuous and interrupted flight.

FALSE 42.Cancellation of existing debt as payment for services rendered by the debtor to
the creditor is a gratuitous transfer.

FALSE 43. A sale is a form of transfer transaction that requires payment of transfer tax

FALSE 44. A gift out of love to former girlfriend is an onerous transfer

FALSE 45. in the absence of compulsory heirs, relatives to the 3rd degree would inherit
the estate

FALSE 46. The sharing of heirs in intestate succession does not satisfy the rule on
legitimes

FALSE 47. A compulsory heir cannot receive more than his legitimes

FALSE 48. legitimate and illegitimate child has equal share under intestate distribution of
estate

FALSE 49. the rules on legitimes are substitute for testamentary dispositions

FALSE 50. Compulsory heirs have rights to insists that the legitime be given in the form
of a property

FALSE 51. The property left by the decendent without a will shall be trasferred in favor of
the government