EXERCISE 8-1.
TRUE OR FALSE QUESTIONS
1. If the net taxable estate of a decedent is P200,000 it shall be exempt from estate tax,
while if the net gift of a donor is P100 000 it shall be exempt from donor’s tax.
2. Estate tax is a progressive tax
3. The tax rates on estate tax arc relatively higher than the tax rates on donor's tax.
4. The estate tax paid in foreign country may either be claimed as deduction from gross
estate, or as tax credit from estate tax due.
5. The estate tax credit on foreign estate taxes paid is allowed on resident or citizen but not
on non-resident not a citizen of the Philippines.
6. The estate tax credit on estate taxes paid in foreign country is allowed on non-resident
alien, provided that the rule on reciprocity is not applicable on his intangible personal
property.
7. The estate tax credit, is to be interpreted as a deduction from the estate tax due and not
from gross estate.
8. The purpose of tax credit is to minimize the harshness of indirect duplicate taxation on
the same subject and the same purpose.
9. If the actual estate tax paid in foreign country is higher than the proportion of the
Philippine estate tax multiplied by the net estate in foreign country over the total net
estate the estate tax paid in foreign country shall be the allowable tax credit.
10. If the decedent who died in 2018 was a Filipino residing in the United States and the
estate incurred losses in the Philippines of P300,000 and in the United States of
P100,000, the deductible losses in the Philippines is P 150,000 and losses without of
P50,000.
11. if a decedent American citizen residing in the Philippines was hospitalized in April 2018
in the United States and in the Philippines which cost him P400,000 and P600,000,
respectively, the estate can claim deductible medical expenses of F500,000 allocated as
follows: Philippines, P300,000; United States P200,000.
12. If the decedent was a resident citizen with properties in the Philippines, Canada and
Australia, the standard deduction shall be apportioned based on the gross estate in each
country with the total gross estate.
13. If the decedent was a resident citizen with conjugal properties within and without the
Philippines, the deductible share of surviving spouse in the conjugal property in each
country shall be based on their respective conjugal properties and deductions without
necessary apportioning them with the aggregate conjugal properties.
14. The concept and formula in computing the tax credit on estate taxes paid in foreign
country is similar to that of the concept and formula in computing the tax credit on
donor's tax and income tax.
15. The net distributable state is different in concept and computation with the net taxable
estate.
16. Standard deduction is deductible from gross estate in computing the net taxable estate
but not the net distributable estate.
17. The net distributable estate is computed by including in the gross estate ail properties of
the estate even if exempt from tax and deducting therefrom all the allowable deductions
from gross estate as enumerated in the tax code.
18. The casualty loss sustained which is deductible from gross estate to arrive at net taxable
estate is also deductible in computing the net distributable estate.
19. Deductions for net taxable estate which are never allowed for net distributable estate are
vanishing deduction, standard deduction, family home and amount receivable tinder RA
4917.
20. The Philippine estate tax is in itself a deduction from gross estate in computing the net
distributable estate.
