Integrative Course 2 (INTEGR2)Academic Year 2014-2015Practice Set

CASES. Straight Problems. Write the answer of the correct answer on the problem. Round-off only on your final answers up to 2 decimal places (45 minutes). Avoid opening your notes or lectures.

CASE A

Mrs. Andres, a Filipino and a resident of the Canada, married under the property regime of conjugal partnership of gains at the time of death, left the following properties and rights, with fair market values indicated, and obligations and charges, in the amounts stated:

Conjugal properties:

Family homeP 2,200,000

Franchise exercisable in Canada1,500,000

Exclusive properties:

Inherited land1,200,000

Receivable from Mr. Albay200,000

Shares of stock of Apol Corporation (foreign corporation with more than 85% of operations in Jamaica)700,000

Obligations and charges:

Medical expenses2,000,000

Funeral expenses3,000,000

Judicial expenses140,000

Unpaid mortgage on inherited property100,000

Unpaid mortgage on family home150,000

Unpaid tax on exclusive property20,000

Loss of conjugal property during the deceaseds wake10,000

Other claims against exclusive properties60,000

Other claims against conjugal properties300,000

Legacy of exclusive property disposed in favor of PNP-SAF administration500,000

The land was inherited three years and eleven months before Mrs. Andress death, with a fair market value at the time of inheritance at P880,000 and a mortgage thereon of P180,000. Mrs. Andress paid P80,000 on the mortgage.

Mr. Albay, Mrs. Andress special friend had P2,000,000 in total liabilities with P100,000 in total assets at the time of declaration of insolvency. The court decide to proportionately distribute his total assets to settle his liabilities without seniority rights for other creditors.

Jamaica currently has reciprocity on tax laws with the Philippines. Canada currently has reciprocity on tax laws with the Philippines.

1. Total exclusive properties2. Total conjugal properties3. Total deductions on exclusive properties4. Total deductions on conjugal properties5. Total share of surviving spouse6. Amount of vanishing deductions7. Net taxable estate8. Estate tax due9. If Mrs. Andres died on February 6, 2015, when should the Notice of Death be submitted to the BIR?10. The estate of Mrs. Andres is being administered by his 3rd child (of a total of 5 children). Assuming settlement is executed outside of court, when is the deadline of payment of the estate tax due?

CASE B

Mr. Bernas, a resident citizen of the Philippines, married under the system of absolute community of property, died leaving the following properties and obligations:

Real properties inherited from his mother four years ago and before the marriageP 400,000

Real properties received as gift from his father three years ago and during the marriage2,230,000

Cash income from the property received as gift10,000

Real property owned by Mrs. Bernas before the marriage600,000

Real property (family home) acquired during the marriage1,000,000

His estate also had the following expenses:

Medical expensesP 140,000

Funeral expenses100,000

Judicial expenses for the settlement of the estate200,000

Obligations incurred during the marriage300,000

Indebtedness incurred before the marriage for a pleasure trip of Mr. Hotelz240,000

Notes by lawyers on specific properties held: Real properties inherited from his mother had fair market value at the time of inheritance of P200,000 Real properties received as gift from his father had fair market value of the time of donation of P2,550,000

11. Total exclusive properties12. Total conjugal properties13. Total deductions on exclusive properties14. Total deductions on conjugal properties15. Total share of surviving spouse16. Amount of vanishing deductions17. Net taxable estate18. Estate tax due

CASE C

Mr. and Mrs. Carlos, citizens and residents of the Philippines made the following donations (all from conjugal properties) in 2015:

January 15:> To Carina, a legitimate child, on account of marriage, of P300,000 cash> To Conrado, a legitimate child, cash of P100,000> To Carissa, a family friend, cash of P20,000

February 1:> To Carina, cash of P100,000> To Cess, legitimate child of Mr. Carlos by his previous marriage, and Cent, husband of Cess, on account of their marriage, P570,000 (donees agree to assume P95,000 of existing mortgage liability) (executed in Australia)> To Carlo, father of Mrs. Carlos, cash of P20,000 (executed in United Kingdom)

Mr. and Mrs. Carlos paid a total of P75,000 in Australia and P12,000 in United Kingdom for the February 1 donation (equally shared by Mr. and Mrs. Carlos).

19. Donors tax payable by Mr. Carlos on the January 15 donation20. Donors tax payable by Mrs. Carlos on the January 15 donation21. Donors tax payable by Mr. Carlos on the February 1 donation22. Donors tax payable by Mrs. Carlos on the February 1 donation23. Deadline for filing and payment of the February 1 donation

CASE D

Domingo, resident and a citizen of Philippines, died with data on conjugal properties (of which P850,000 is family home) in the Philippines, exclusive properties in Ecuador and Finland, charges thereon and foreign estate taxes paid, as follows:

PhilippinesEcuadorFinland

Gross estateP 3,000,000P 1,500,000P 1,500,000

Funeral expenses250,000250,000

Medical expenses200,000600,000

Other charges400,000225,0001,000,000

Foreign estate taxes paid15,0005,000

24. Net taxable estate25. Total allowable foreign tax credit26. Estate tax still due

CASE E

Determine the deadline of the following submissions (assume the submission is necessary as per requisites provided):

EventDateDocumentary SubmissionDeadline

Death of Mr. EliDate of death January 15, 2015Estate tax return

Death of Mr. EliDate of death January 15, 2015Notice of death

Donation of Mr. Ezekiel to ErnalynDate of donation March 22, 2015Donors tax return

Death of Mr. Ekko settled through courtsDate of death June 23, 2015Payment of estate tax payable

Death of Ms. EloisaDate of death September 2, 2015Submission of CPA statement