Deductions And Taxation In Estate And Donor's Tax:
Questions With Solutions
Deductions from Gross Estate Correct Answer - Allowable subtractions for
estate tax calculation.
Net Estate Correct Answer - Amount subject to estate tax after deductions.
Unpaid Debts Correct Answer - Liabilities owed by the decedent at death.
Funeral Expenses Correct Answer - Costs incurred for the decedent's
funeral.
Administrative Expenses Correct Answer - Costs related to managing the
estate.
Family Allowances Correct Answer - Financial support for the decedent's
family.
Surviving Spouse's Property Correct Answer - Not included in decedent's
gross estate.
Exclusive Properties Correct Answer - Assets solely owned by the
decedent.
Conjugal Properties Correct Answer - Assets owned jointly by spouses.
Absolute Community of Property Correct Answer - Property regime where
all assets are shared.
Conjugal Partnership of Gains Correct Answer - Property regime sharing
gains from marriage.
Vanishing Deduction Correct Answer - Deduction for property previously
taxed.
Transfer for Public Use Correct Answer - Deduction for property given to
public entities.
,Standard Deduction Correct Answer - Fixed deduction without
documentation requirement.
Claims Against the Estate Correct Answer - Debts owed by the estate to
creditors.
Claims Against Insolvent Persons Correct Answer - Debts owed to the
decedent by bankrupt individuals.
Unpaid Mortgages Correct Answer - Mortgages not settled before the
decedent's death.
Estate Tax Rate Correct Answer - Percentage applied to net taxable estate.
Estate Tax Due Correct Answer - Total tax owed based on estate value.
Substantiation Rule Correct Answer - Documentation required for all
deductions, except standard.
Matching Principle Correct Answer - Deductions must relate to items in
gross estate.
Net Taxable Estate Correct Answer - Estate value after all deductions
applied.
Share of Surviving Spouse Correct Answer - Half of net conjugal estate
deducted from taxable estate.
Non-Deductible Losses Correct Answer - Losses before taxpayer's death
are non-deductible.
No Double Classification Rule Correct Answer - Single deduction
classification is allowed per item.
Casualty Loss Example Correct Answer - Family home loss can't be
deducted as both.
,Estate Tax Return Limitations Correct Answer - Losses on income tax can't
be claimed again.
Deductible Loss Requirements Correct Answer - Loss must not be
compensated by insurance.
Common Deductions Rule Correct Answer - Ordinary deductions
presumed against common properties.
Ordinary Deductions Correct Answer - Deductions reducing inheritance
value, excluding taxed property.
Special Deductions Correct Answer - Deductions with specific criteria
beyond ordinary deductions.
Share of Surviving Spouse Correct Answer - Deductions allocated to
surviving spouse's share.
Claims Against Insolvent Persons Correct Answer - Claims treated as
separate deductions in tax return.
Deductible Claim Amount Correct Answer - Unrecoverable amount of
claim is deductible.
Illustration of Claims Correct Answer - Example calculation for claims
against insolvent persons.
Gross Estate Inclusion Correct Answer - Claims must be included in gross
estate value.
Claims Against the Estate Correct Answer - Debts enforceable against
deceased's estate.
Requisites for Claims Deductibility Correct Answer - Claims must meet
specific legal and factual criteria.
Good Faith Liability Correct Answer - Liabilities must be contracted in
good faith.
, Valid and Enforceable Claims Correct Answer - Claims must be legally
valid and enforceable.
Creditor's Non-Condonation Correct Answer - Creditor must not have
forgiven the debt.
Substantiation Requirements Correct Answer - Documents required for
deducting unpaid obligations.
Notarized Debt Instrument Correct Answer - Debt must be notarized when
incurred.
Loan Disposition Statement Correct Answer - Statement required for loans
within three years.
Creditor Certification Correct Answer - Certification of unpaid balance
required from creditor.
Internal Revenue Compliance Correct Answer - Deductions must comply
with revenue issuance requirements.
Personal loan Correct Answer - Debt forgiven by creditor, valued at
P400,000.
Car purchase balance Correct Answer - Amount heirs paid, P200,000, post-
death.
Promissory note Correct Answer - Debt obligation, value of P100,000.
Bank loan Correct Answer - Outstanding debt of P300,000.
Accrued interest Correct Answer - Interest on bank loan, P50,000, as of
death.
Deductible claims Correct Answer - Total claims against estate, P500,000.
Exclusive claims Correct Answer - Claims solely against exclusive
properties, P600,000.
Questions With Solutions
Deductions from Gross Estate Correct Answer - Allowable subtractions for
estate tax calculation.
Net Estate Correct Answer - Amount subject to estate tax after deductions.
Unpaid Debts Correct Answer - Liabilities owed by the decedent at death.
Funeral Expenses Correct Answer - Costs incurred for the decedent's
funeral.
Administrative Expenses Correct Answer - Costs related to managing the
estate.
Family Allowances Correct Answer - Financial support for the decedent's
family.
Surviving Spouse's Property Correct Answer - Not included in decedent's
gross estate.
Exclusive Properties Correct Answer - Assets solely owned by the
decedent.
Conjugal Properties Correct Answer - Assets owned jointly by spouses.
Absolute Community of Property Correct Answer - Property regime where
all assets are shared.
Conjugal Partnership of Gains Correct Answer - Property regime sharing
gains from marriage.
Vanishing Deduction Correct Answer - Deduction for property previously
taxed.
Transfer for Public Use Correct Answer - Deduction for property given to
public entities.
,Standard Deduction Correct Answer - Fixed deduction without
documentation requirement.
Claims Against the Estate Correct Answer - Debts owed by the estate to
creditors.
Claims Against Insolvent Persons Correct Answer - Debts owed to the
decedent by bankrupt individuals.
Unpaid Mortgages Correct Answer - Mortgages not settled before the
decedent's death.
Estate Tax Rate Correct Answer - Percentage applied to net taxable estate.
Estate Tax Due Correct Answer - Total tax owed based on estate value.
Substantiation Rule Correct Answer - Documentation required for all
deductions, except standard.
Matching Principle Correct Answer - Deductions must relate to items in
gross estate.
Net Taxable Estate Correct Answer - Estate value after all deductions
applied.
Share of Surviving Spouse Correct Answer - Half of net conjugal estate
deducted from taxable estate.
Non-Deductible Losses Correct Answer - Losses before taxpayer's death
are non-deductible.
No Double Classification Rule Correct Answer - Single deduction
classification is allowed per item.
Casualty Loss Example Correct Answer - Family home loss can't be
deducted as both.
,Estate Tax Return Limitations Correct Answer - Losses on income tax can't
be claimed again.
Deductible Loss Requirements Correct Answer - Loss must not be
compensated by insurance.
Common Deductions Rule Correct Answer - Ordinary deductions
presumed against common properties.
Ordinary Deductions Correct Answer - Deductions reducing inheritance
value, excluding taxed property.
Special Deductions Correct Answer - Deductions with specific criteria
beyond ordinary deductions.
Share of Surviving Spouse Correct Answer - Deductions allocated to
surviving spouse's share.
Claims Against Insolvent Persons Correct Answer - Claims treated as
separate deductions in tax return.
Deductible Claim Amount Correct Answer - Unrecoverable amount of
claim is deductible.
Illustration of Claims Correct Answer - Example calculation for claims
against insolvent persons.
Gross Estate Inclusion Correct Answer - Claims must be included in gross
estate value.
Claims Against the Estate Correct Answer - Debts enforceable against
deceased's estate.
Requisites for Claims Deductibility Correct Answer - Claims must meet
specific legal and factual criteria.
Good Faith Liability Correct Answer - Liabilities must be contracted in
good faith.
, Valid and Enforceable Claims Correct Answer - Claims must be legally
valid and enforceable.
Creditor's Non-Condonation Correct Answer - Creditor must not have
forgiven the debt.
Substantiation Requirements Correct Answer - Documents required for
deducting unpaid obligations.
Notarized Debt Instrument Correct Answer - Debt must be notarized when
incurred.
Loan Disposition Statement Correct Answer - Statement required for loans
within three years.
Creditor Certification Correct Answer - Certification of unpaid balance
required from creditor.
Internal Revenue Compliance Correct Answer - Deductions must comply
with revenue issuance requirements.
Personal loan Correct Answer - Debt forgiven by creditor, valued at
P400,000.
Car purchase balance Correct Answer - Amount heirs paid, P200,000, post-
death.
Promissory note Correct Answer - Debt obligation, value of P100,000.
Bank loan Correct Answer - Outstanding debt of P300,000.
Accrued interest Correct Answer - Interest on bank loan, P50,000, as of
death.
Deductible claims Correct Answer - Total claims against estate, P500,000.
Exclusive claims Correct Answer - Claims solely against exclusive
properties, P600,000.
