1.

Estate tax is imposed on:

a. The death of the decedent
b. The making of the will of a decedent
c. The transfer of properties by the decedent to the heirs, legatees, or devisees.
d. The duration of the life of the decedent
2. Ee Cao died single on January 1, 20218. At this point, due to the amounting of his relatives, no inventory of
the estate was made. Two months after, an inventory of the estate was made, and it was found out that at
this point, the value of the estate amounted to P2,430,000. From January 1 up to the date of inventory, the
estate earned income of P367,000, and spent P442,000 for funeral expenses and P 180,000 for family
support. How much should be declared as gross estate?
a. 2,175,000
b. 2,430,000
c. 2,505,000
d. 2,685,000
3. When does estate tax accrue?
a. Upon the death of the taxpayer
b. Upon the settlement of the estate
c. Upon order of the court declaring the final distribution of the estate of the decedent
d. After one year from the date of the death of the taxpayer
4. A CPA certification containing the itemized assets and liabilities of the estate is required if:
a. The gross estate exceeds P 500,000.
b. The gross estate exceeds P 5,000,000.
c. The gross estate exceeds P 200,000.
d. The gross estate exceeds P 2,000,000.
5. A legatee:
a. Is a person named by the decedent to carry out the provisions of his will.
b. Is a person to whom gifts of personal property were given by the deceased owner.
c. Is a person to whom gifts of real property were given by the deceased owner.
d. Is a person appointed by the court to manage the property in the estate.
6. Revocable transfers inter vivos are:
a. Subject to donor’s tax if not revoked and the transferor dies.
b. Subject to donor’s tax if the transferor revoked the transfer before, he dies.
c. Subject to estate tax if not revoked and the transferor dies.
d. Subject to estate tax if the transferor waives his right of revocation before he dies.
7. Which of the following is/are transmitted by way of succession?
I. Transmissible rights
II. Transmissible properties
III. Obligations of the decedent in their full amount
a. II only.
b. I and II only.
c. II and III only.
d. I, II, and III.
8. Statement 1: If the estate is being judicially settled, the Commissioner may grant an extension of payment
of estate tax not exceeding two years.
Statement 2: In no case will an estate exempt to estate tax be required to file an estate tax return.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both Statements are true.
d. Both statements are not true.
9. Andeng died, leaving listed shares of stock as part of his estate. How should these properties be valued?
a. Book value on the date of death
b. Quotation on the date of death.
c. Par value on the date of death.
d. Based on computation in accordance with the Adjuested Net Asset Method
10. Reciprocity primarily affects the taxability of
a. Tangible personal property located without the Philippines.
b. Tangible personal property located within the Philippines.
c. Intangible personal property
d. Intangible personal property located within the Philippines.
11. The estate tax return must be filled, and the estate tax must be paid:
a. Within 30 days after the death of the decedent.
b. Within 6 months after the death of the decedent.
c. Within 1 year after the death of the decedent.
d. On or before April 15 of the year following the death of the decedent.
12. If a donation is intended to take effect upon the death of a person, such donation is subject to:
a. Donor’s tax
b. Estate tax
c. Donor’s tax or estate tax, at the point of the taxpayer
d. Both donor’s tax and estate tax.
13. Statement 1: Death extinguishes the obligations and debts of a deceased person.
Statement 2: All rights which a person has upon his death will be transmitted to his heirs upon his death.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.
14. Statement 1: The gross estate of a non-resident alien who has the benefit of reciprocity shall not include
personal properties located in the Philippines.
Statement 2: The gross estate of a resident alien shall not include personal properties located outside the
Philippines.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.
15. Which of the following statements is true with respect to foreclosed property?
a. Foreclosed properties do not form part of the gross estate of a deceased borrower.
b. Foreclosed properties still form part of the gross estate of a deceased borrower until the redemption
period has expired.
c. Foreclosed properties still form part of the gross estate of a deceased borrower until the foreclosure
sale has been confirmed by the court.
d. Foreclosed properties form part of the gross estate of a deceased borrower under any and all
circumstances.
16. All of the following are inclusions in the gross estate of a decedent, except:
a. Transfers under a special power of appointment
b. Revocable transfers, in general
c. Transfers in contemplation of death
d. Donations mortis causa.
17. What is the rule in relation to claims against insolvent persons?
 a. The amount that is collectible must be included in the gross estate of the decent, and the amount that is
uncollectible may be claimed as a deduction from gross estate.
b. The amount that is collectible need not be included in the gross estate of the decedent, and the amount
that is uncollectible may be claimed as a deduction from gross estate.
c. The full amount of the receivable must be included in the gross estate of the decedent, and the amount
that is uncollectible may be claimed as a deduction from gross estate.
d. The full amount of the receivable need not be included in the gross estate of the decedent, and the
amount that is uncollectible may be claimed as a deduction from gross estate.
18. Which of the following should be included in the gross estate?
I. Conjugal or community property, in its full amount
II. Exclusive property of the decedent, in its full amount
III. Exclusive property of the surviving sp[ouse, in its full amount
a. II only.
b. I and II only.
c. II and III only.
d. I, II, and III.
19. Bobby died on April 1, 2021. In his will, he gave the right to the use and fruits of the property to Cassie, but
the title should be registered under the name of Dennis. Which of the following is exempt from estate tax?
a. Transfer of Bobby to both Cassie and Dennis
b. Transfer of Cassie of the right to the use and fruits to Dennis
c. Transfer of Dennis of the registered title to Cassie
d. Transfer of Dennis of the registered title to his own heirs
20. Which of the following bequest and devises are exempt?
I. Bequests and devises to social welfare institutions
II. Bequests and devises to religious institutions
III. Bequests and devises to cultural institutions
a. I and II only,
b. I and III only.
c. II and III only.
d. I, II and III.
21. A decedent died with an unpaid liability of P2,000,000. A week after his death, the debt fell due. The
creditor called the decedent’s son picked up, and informed the creditor that the decedent has died. The
creditor lashed out, saying that is not a valid excuse to not pay the debt. The decedent’s son settled one-
fourth of the debt, an amount of P 500,000, within two hours. The remainder is unpaid. What is the effect of
the payment of P 500,000 to the claimable deduction of the estate for estate tax purposes?
a. No effect
b. The P 500,000 payment reduces the amount of claimable deduction.
c. The entire P 2,000,000 will no longer be considered as claimable.
d. The P 500,000 payment shall be removed from the gross estate of the decedent.
22. Bill died on September 24, 2020. The following were losses incurred:

Date
Incurred Particulars Amount

22-Sep 2020 Payments of hospitalization expense P 24,000

23-Sep 2020 Loss on fire of property in Laguna 55,000
28-Sep 2020 Loss of cash from theft 102,000
10-Nov 2020 Insured loss from flood 245,000
Loss from inventory spoilage to be
claimed as deduction on the income
 5-Jan 2021 tax return of the estate 52,000
22-Oct 2021 Uninsured loss from bomb explosion 38,200
P 516,200
How much may be claimed as deduction against the gross estate?
a. 102,000
b. 126,000
c. 140,200
d. 157,000
23. Under which of the following instances can vanishing deduction be claimed?
I. A succession which was preceded by a donation when both events happened within five years.
II. A donation which was preceded by a succession when both events happened within five years.
III. A succession which was preceded by another succession when both events happened within five
years.
a. III only
b. I and III only
c. II and III only.
d. I, II, and III.

Situational Problem No. 1: For items 24-26, refer to the following information:

The following items were in the estate of Aling Lucing, who died on May 30, 2020.

Land, Zimbabwe P 7,020,000

Land, Antipolo 8,687,000
Ordinary shares, Filipino corporation, 40%
of business in the Philippines 3,709,000
Ordinary shares, Filipino corporation, 60%
of business in the Philippines 4,175,000
Ordinary shares, Italian corporation, 30%
of business in the Philippines 5,302,000
Ordinary shares, Nigerian corporation, 55%
of business in the Philippines 5,226,000
Ordinary shares, Guatemalan corporation, 90%
of business in the Philippines 6,257,000
Trademark, registered in the Philippines. 5,992,000
Franchise, exercisable in Argentina. 7,979,000
Franchise, exercisable in the Philippines. 8,393,000
Car, British Virgin Islands 5,052,000
Car, Philippines 5,059,000
P 72,851,000
24. How much is Aling Lucing’s gross estate if Aling Lucing is a resident citizen of the Philippines?
a. 30,579,000
b. 42,272,000
c. 43,789,000
d. 72,851,000
25. How much is Aling Lucing’s gross estate if Aling Lucing is resident of Morocco and a citizen of Cambodia,
and reciprocity does not apply?
a. 38,563,000
b. 42,272,000
c. 43,789,000
d. 47,498,000

26. How much is Aling Lucing’s gross estate if Aling Lucing is a resident of Sri Lanka and a citizen of
Albania, and reciprocity applies?
a. 13,746,000
b. 14,141,000
 c. 19,367,000
d. 28,526,000

Situational Problem No. 2; For items 27 to 29 refer to the following information:

Che-che, a resident citizen, died on August 15, 2020. Details regarding her gross estate, are presented below:

Value at the
Death of Che-che
Conjugal property 4,500,000
House, exclusive property of Che-che 1,500,000
Other exclusive property of Che-che 1,200,000

Amount
Actual funeral expenses incurred 250,000
Judicial expenses, incurred evenly for 12 months 480,000
Deductible claims against the estate 420,000
Loss from claims against insolvent persons 140,000
Insured loss from earthquake 200,000

The house, when it was inherited on september 16, 2015, had a fair market value of p1,150,000. The house was
mortgaged to secure a debt of P 600,000, which was assumed by Che-che. Up to this date, the debt has not been
fully paid, and it is now being claimed as a deductible claim against the estate. Assume that all ordinary deductions
are hargeable to the community property.

27. Computer for the gross estate.

a. 2,700,000
b. 4,950,000
c. 7,200,000
d. 7,620,000

28. Compute for the vanishing deduction.

a. 178,911
b. 183,202
c. 232,404
d. 271,000

29. in filing the estate tax return of Che-che, is a certification from a certified Public Accountant required to be
attached?
a. Yes, because the gross estate exceeded P2,000,000.
b. Yes because the gross estate exceeded P5,000,000.
c. No, because the gross estate did not exceed p5,000,000.
d. No, because the gross estate did not exceed P10,000,000.

Situational Problem No. 3: For items 30 to 31, refer to the following situation:

A married decedent had the following properties;

I. A car that was owned by the decedent before marriage and earned through industry
II. Rentals from a building that was inherited by the decedent during marriage
30. Under the conjugal partnership of gains, which of the following would be considered as exclusive property?
a. I only
b. II only.
c. Both I and II
d. neither I nor II.
31. Under the absolute community of property, which of the following would be considered as exclusive property?
a. I only.
b. II only.
c. Both I and II.
d. Neither i nor II.

Situational Problem no. 4; For items 32 to 33, refer to the following information:

Gemma obtained si life insurance policies, each having different terms. When Gemma died on October 19, 2017, the
foloowing were paid out:

Life insurance with Lea, her sister, as a

revocable beneficiary. P 5,210,000
Life insurance with her estate as an
irrevocable beneficiary 6,340,000
Life insurance with Gemmina, her daughetr,
as an irrevocable beneficiary 5,700,000
Life insurance with a friend Georgia as a revocable
beneficiary 3,570,000
Life insurance with executor Ghemwhelyn as a revocable
beneficiary 6,770,000
P 27,590,000

32. How much of the proceeds shall be part of the gross estate?
a. 15,550,000
b. 18,320,000
c. 21,890,000
d. 27,590,000

33. Which of the following statements is correct with respect to the liability for the payment of estate tax?
a. Gemmina and Ghemwelyn are solidarily liable for the payment of estate tax
b. Gemmina and Ghemwelyn are jointly liable for the payment of estate tax.
c. Gemmina is primarily liable for the payment of estate tax, while Ghemwelyn is solidarily liable.
d. Ghemwelyn is primarily liable for the payment of estate tax, while Gemmina is subsidarily liable.

34.With no more money, left the heirs of Vina Bangko were left with no recourse but to withdraw from the bank
account of Vina who died one month ago. Vina’s bank deposits amount to P 2,400,000. Vina’s net taxable estate
after deducting special deductions and the share of the surviving spouse is P 12,500,000, excluding the amount
withdrawn. Pending the payment of estate taxes to the BIR, what is the maximum amount that the heirs of Vina can
receive from the bank in relation to Vina’s bank account?
a. 2,112,000
b. 2,256,000
c. 2,332,000
d. 2,400,000

35. Which of the following is deductible from gross estate?

a. Legacy or device to a nonstock nonprofit charitable institution
b. Statutory benefits from SSS, GSIS or PAGIBIG

c. Transfer for public use

d. Exclusive property of surviving spouse