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    Practice problems - transfer taxes

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    60 views2 pages

    Practice Problems - Transfer Taxes

    Uploaded by

    uchishai

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    PRACTICE PROBLEM

    1. Mr and Mrs. X, made the following donation.


    JAN. 25- Car worth P400,000 to their legitimate son, A, on account of
    marriage dated February 10, 2018. The car was mortgaged for P200,000, only 50%
    of the mortgage was assumed by the donee.
    MAY 31- To Mr. X’ brother, his capital property worth P200,000 on account
    of marriage 3 months ago. They agreed that the donee shall pay the donor’s tax
    thereon.
    JULY 15 - To Charmaine (daughter of Mrs. X by former marriage), Mrs. X
    paraphernal property worth P100,000 on account of marriage celebrated one year
    ago
    AUG. 20 - To Charmaine on account of the same marriage, conjugal car
    worth P400,000 with P200,000 unpaid mortgage. Charmaine assumed 50% of the
    unpaid mortgage.
    December 15 - Parcel of land valued at P500,000 to their two sons on
    account of their graduation. The land was co-owned by the couple and a friend,
    Cliff who agreed to donate the same. The share of Cliff in the property is valued at
    P100,000.

    1. The gift tax payable of Mr. X as of May 31 should be? 6000


    2. The gift tax payable of Mrs. X as of July 15 should be? 0
    3. The gift taxes payable of Mr. X and Mrs. X on August 20 should be? 21K AND 21K
    4. The gift tax payable of Mr. X as of JYP on December 15 is? 0

    2. A donated shares of stock of C Corporation to B on April 20, 2020, with the right to
    revoke it. The donor delivered the property on April 25, 2020. On June 20. 2020, A
    relinquished the right to revoke. Ten days after, the donor died. For purposes of donor’s
    tax, the gross gift should be based on the value of the shares on: JUNE 20, 2020

    3. Mr. X, a citizen of the Philippines, single, died a resident of Hongkong, leaving the
    following properties:
    Real Property in HK, inherited from father 1 1/2 years ago, P2,000,000
    Personal property in the Philippines inherited from the father 1 1/2 years ago,
    P1,600,000
    Family home in HK, P1,400,000
    Claims against the estate, P250,000
    Other obligations contracted within the last two years, P100,000
    The total vanishing deduction allowed is?

    1. The total vanishing deduction allowed is? 1190400


    2. The allowable deduction for family home is? 0
    3. The net taxable estate is? 0
    4.
    4. Mr. D sold properties as follows:
    - Real property, with a cost of P100,000 and fair market value of P1,000,000, sold to
    a brother. The selling price was P600,000.
    - Shares in a wholly-owned corporation, with a cost of P1,000,000, but at the time of
    sale with a book value of P3,000,000 and fair market value of P5,000,000, sold to
    executives of the corporation so that they would have a stake in, and hence,
    loyalty to the corporation. The selling price was at book value.

    Statement 1: The transactions have donor’s tax consequences because they are gifts;
    TRUE
    Statement 2: The transactions have income tax consequences because gains accrue to
    Mr. D if his selling prices are compared with his costs FALSE

    5. Mr. X. a non-resident American, died on May 1, 2019, leaving the following:


    Exclusive Properties – Philippines P5,600,000
    Conjugal Properties – Philippines 4,200,000
    Conjugal Properties – Abroad 18,200,000
    Claims against insolvent person 1,000,000
    Funeral Expenses 200,000
    Judicial Expenses 850,000
    Claims against the estate 1,500,000
    Losses: Occurring 8 months after the death, due to fire 1,700,000
    Donation Mortis causa to Cebu City Hall 1,800,000
    Family home (included above), located abroad 10,000,000
    Standard deduction 10,000,000

    The estate tax due and payable is? 279,900

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