BUSINESS AND TRANSFER TAXATION

AE 18 / TAX 2 | JOSE MARIA COLLEGE

EXERCISES
1. The decedent owns an agricultural land with the following values:

Zonal value P 2,000,000

Assessed value 1,500,000
Independent appraised value 3,200,000
Offer price of a willing buyer 4,000,000

The agricultural land shall be included in the gross estate at

a. P1,500,000 b. P2,000,000
c. P3,200,000 d. P4,000,000

2. The decedent owns 200,000 shares of Saint Peter Corporation, a listed company.

Date of Death Date of Interment

Book value per share P 23.50 P 23.55
Closing price P 48.20 P 49.50
Average trading price P 48.00 P 49.60

The 200, shares shall be included in the gross estate at

a. P4,700,000 b. P9,600,000
c. P9,640,000 d. P9,900,000

3. The decedent had $2,000 in his possession at his death on November 2, 2019. He was buried on
November 12, 2019. The following rate were the exchange rates:

November 2, 2019 P 42.50 : $1

November 2 to November 12, 2019 average rate P 43.25 : $1
November 12, 2019 P 42.75 : $1

At what amount shall the $2,000 be included in the gross estate of the decedent?
a. P86,500 b. P85,000
c. P85,500 d. P0

4. Mrs. Carlos died on November 1, 2019. An inventory of her properties was conducted for estate
tax purposes on January 1, 2020. On that date, she had properties with an aggregate fair value of
P7,000,000. This amount includes P300,000 income received by the estate since her death and is
net of P600,000 expenses during her funeral.

What is the amount of the gross estate?

a. P7,900,000 b. P7,000,000
c. P7,300,000 d. P6,700,000
BUSINESS AND TRANSFER TAXATION
AE 18 / TAX 2 | JOSE MARIA COLLEGE

5. Mr. A died leaving the following properties

Purchase Cost Fair Value

Car, registered in his name P800,000 P400,000
House and Lot P2,000,000 P5,000,000
Other properties P400,000 P350,000

What is the amount of the gross estate?

a. P7,900,000 b. P7,000,000
c. P7,300,000 d. P6,700,000

6. Mrs. X had the following properties with their respective fair values in his possession at the date
of his death:

Agricultural land held in trust P 200,000

Car registered in the name of his brother 300,000
Motorcycle 80,000
Residential lot 900,000
Other personal properties 70,000

What is the amount of the gross estate?

a. P950,000 b. P1,250,000
c. P1,050,000 d. P1,550,000

7. The heirs of Mr. X identified a total P12,000,000 in properties existing at the date of his death. A
total of P500,000 was used during his wake up to his interment. His heirs also used P400,000 to
pay off obligations of Mr. X.

An investment in the estate of Mr. X also earned P50,000 in dividends which the heirs reserved
for payment of his estate tax.

What is the amount of the gross estate?

a. P12,900,000 b. P12,500,000
c. P12,850,000 d. P12,000,000

8. A decedent died in October 2018. His properties had an aggregate fair value of 12,000,000 at that
time. His heirs failed to pay his estate tax. In March 2020, his heirs prepared a list of the decedents
properties which now had a value of P13,500,000 and which excluded a car worth P1,500,000
stolen in January 2020.

What is the amount of the gross estate?

a. P 0 b. P13,500,000
c. P12,000,000 d. P15,000,000

9. A resident decedent died leaving the following properties:

BUSINESS AND TRANSFER TAXATION
AE 18 / TAX 2 | JOSE MARIA COLLEGE

An orchard, held as usufructuary P1,200,000

A motorcycle, borrowed from a friend 80,000
Cash, proceeds of his bank loan 500,000
A ranch, acquired for P1,000,000 in 1990 2,500,000
Cattles 600,000
House and lot 800,000

What is the amount of the gross estate?

a. P2,400,000 b. P4,400,000
c. P3,900,000 d. P5,680,000

10. A citizen decedent died leaving the following

Properties inherited from his father P1,200,000
Properties donated by brother 800,000
Cash from his salary savings 400,000
Cash, income of properties before death 200,000
Receivables, income of properties after death 100,000

What is the amount of the gross estate?

a. P600,000 b. P2,600,000
c. P700,000 d. P2,700,000

11. A Resident Japanese decedent died with the following properties:

House and lot in Japan P2,000,000
Bank deposit in the Philippines 800,000
A car in the Philippines 1,000,000
A residential lot in the USA 1,500,000

What is the amount of the gross estate?

a. P0 b. P2,000,000
c. P1,800,000 d. P5,300,000

12. A non-resident alien dissident died leaving the following properties:

A building in Korea P8,000,000
A car in Hong Kong 2,000,000
Shares of stocks in Malaysia 4,000,000
Cash in Philippine banks 800,000
Investment in bonds of domestic corporations 400,000

What is the amount of the gross estate?

a. P0 b. P1,200,000
c. P800,000 d. P11,200,000
BUSINESS AND TRANSFER TAXATION
AE 18 / TAX 2 | JOSE MARIA COLLEGE

13. A Filipino citizen died while residing in the USA. he had the following properties at the date of
his death:
Shares of domestic corporations P2,000,000
Cash in US banks 5,000,000
Car in the US 3,000,000
House and lot in the Philippines 4,500,000

What is the amount of the gross estate?

a. P0 b. P1,200,000
c. P800,000 d. P11,200,000

14. A Mexican citizen died in Tokyo Japan. he had the following properties:
P12,000,000
House and lot in Japan 18,000,000
Car in Japan 2,000,000
Shares of stock in a domestic corporation 4,000,000
Interest in a Philippine-based business 2,000,000

What is the amount of the gross estate?

a. P0 b. P26,000,000
c. P6,000,000 d. P38,000,000

15. In the immediately preceding problem, what is the amount to include in grass estate assuming that
the reciprocity condition applies?
a. P0 b. P26,000,000
c. P6,000,000 d. P38,000,000

16. Mr. X died leaving a commercial land as part of his estate. The land was purchased in 2018 at an
acquisition price of P11,000,000. An interested buyer tendered a P15,000,000-offer to buy the
property. The land had an independent appraisal of P16,000,000, assessed value of P12,000,000
and a zonal value of P14,000,000.

What is the amount to be included in the gross estate?

a. P11,000,000 b. P14,000,000
c. P12,000,000 d. P15,000,000

17. Mr. Lin Was hospitalized on April 8, 2020 and died on April 12, 2020. he was buried on April 21,
2020. Mr. Lin had $124,000 prior to hospitalization. $24,000 was bad for his hospitalization
while $10,000 was used for his funeral.

The following were the exchange rates between the peso and the dollar

April 8, 2020 April 12, 2020 April 21, 2020

Peso-dollar exchange rate P42.30 P42.50 P42.45
BUSINESS AND TRANSFER TAXATION
AE 18 / TAX 2 | JOSE MARIA COLLEGE

What is the amount to be included in the gross estate?

a. P4,245,000 b. P5,270,000
c. P4,250,000 d. P5,695,000

18. A decedent owns 25,000 stocks in a closely-held corporation which had the following equity
structure at the date of death of the decedent.
Common stocks (1,000,000 outstanding shares) P 5,000,000
Additional paid in capital 2,000,000
Retained earnings 1,000,000
Total shareholder’s equity P 8,000,000

What is the value of the stocks to be included in the gross estate?

a. P0 b. P175,000
c. P125,000 d. P200,000

19. A Korean citizen residing in the Philippines died in the Philippines:

An agricultural land in Korea P12,000,000

A house and lot in Korea 4,000,000
A condominium unit in the Philippines 2,000,000
A business interest in the Philippines 3,000,000
Car in the Philippines 1,200,000
Cash in Japanese banks 1,800,000

What is the total amount to be included in the gross estate?

a. P 0 b. P175,000
c. P125,000 d. P200,000

20. A decedent died with the following properties:

Newly purchased jeepney P12,000,000
An old model Ford expedition so 4,000,000
Land, mortgage a bank for P1,000,000 2,000,000
500 grams pure gold 3,000,000

The Ford expedition was refurbished by the decedent making it really saleable at P1,800,000 in
the second-hand market. the land had a zonal value of P4,000,000 and assessed value of
P2,500,000. The Bangko Sentral ng Pilipinas (BSP) was buying gold at P1,800 per gram at the
date of death of the decedent.

What is the total amount to be included in the gross estate?

a. P 6,550,000 b. P7,150,000
c. P 6,900,000 d. P7,900,000