False — professional tax is collected by the local government. True 4. False — Only sales within are subject to business tax in the Philippines. False — business tax is another Internal Revenue Tax distinct from income tax.

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False — could not be claimed as claim against the estate. True 3. False — indebtedness is not transferrable to the heirs. True 5. False — bank loan is the exception for notarization requirement. True 7. True 8. False — unpaid taxes accrued before death only. False — not deductible because the loss has been claimed by gross income. No double deduction is allowed. False — not deductible. Donation is deductible if given for Philippine Government and exclusively for public purposes.

True False — special deductions are not allowed to nonresident alien decedent. True Problem 4—2 1. False — value of deduction at the time of death. True 4. False — judicial expense incurred after death but before the estate tax settlement date is still deductible from gross estate. False — losses that are deductible must have been sustained after death but before the settlement date of estate tax.

Only those expenses actually taken from the gross estate are deductible. False — this threshold is applicable to funeral expense.

False — Only those expenses actually taken from the gross estate. True Problem 4—3 1. False — special deduction. False — neither special nor ordinary deduction.

True 6. False — deductible only if included in the gross estate. The amount deductible from the gross estate is limited to the amount that cannot be recovered. False — either against the gross estate or against gross income. There is no double deduction. False — Estate tax is not deductible from gross estate. False — not deductible because not yet accrued expense. False — Nondeductible because only those related to gathering, preservation and settlement of the estate is allowed as deductible judicial expense from the gross estate.

False — ordinary deduction. False — no funeral deduction expense is allowed. False — funeral expense is deducted first from common property 6. True 9. False — deductible whether paid or unpaid, the maximum deductible medical expense is P, False — not allowed as deduction is in excess of P, False — this is in addition to other allowable deductions. Standard deduction is not in lieu of ordinary deduction. False — no receipt is necessary for standard deduction.

True Problem 4—5 Problem 4—6 Problem 4—7 Problem 4—8 1. C Problem 4—9 1. If the funeral expenses are not substantiated, such become the lowest among the three choices. No vanishing deduction is allowed when the property subjected to previous transfer taxes is located outside the Philippines. No deduction is allowed if the estate tax return of a nonresident alien does not contain properties located outside the Philippines. Special deductions are not allowed to nonresident alien.

The excess of unpaid funeral expense shall not be deducted as claimed against the estate. Losses could only be claimed within 6 months from the date of death. Problem 4—15 D Funeral expense, lowest amount P, Claims against the estate P - 0 - The entire amount of P90, in excess of P, limit can no longer be deducted as funeral expense not it can be deducted as judicial expense. To be deductible, the loss must be sustained after death but before the filing and payment of the estate tax. No vanishing deduction is allowed for properties located outside the Philippines.

No deduction shall be allowed in the case of a nonresident decedent alien if his properties outside the Philippines are not reported in the Philippine estate tax return. Gross estate P3,, 2. Deductible allowance — standard deduction P1,, 4.


Taxation 5th Edition




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