Business Taxation Notes
CHAPTER 3: GROSS ESTATE
DETERMINATION & EVALUATION OF GROSS ESTATE
-starting point in computing Philippine estate tax liability
GROSS ESTATE
-consists of all property owned by a decedent at the time of his death, including stocks, bonds, real estate, mortgages & any other property that technically belonged to him
-it shall not include the exclusive properties of the surviving spouse
-property is called gross estate because it is to be reduced by decedent’s debts (including taxes), funeral expenses, share of the surviving spouse & other permissible deductions to arrive at a net taxable estate.
DECEDENT CITIZENS & RESIDENT ALIENS
-real & personal properties, wherever located, shall be included as part of the gross estate.
NONRESIDENT ALIENS
-only properties located in the Philippines that are to be transferred upon death are subject to estate tax.
-share of stocks acquired from a domestic corporation are taxable in the Philippines.
REAL PROPERTY
-land, building or any structure or even equipment permanently attached to the land.
TANGIBLE PERSONAL PROPERTY
-property with physical form that could be seen or touched, such as car, jewelry and clothing.
INTANGIBLE PERSONAL PROPERTY
-property that has no physical form, such as receivables, bonds and other securities.
-located within the Philippines of a non-resident alien is subject to the rule of reciprocity. If there is reciprocity, it is not subject to estate tax in the Philippines.
SITUS OF A PROPERTY
-is the domicile or residence of the owner.
DATE OF VALUATION
-is the time of death because the transfer of properties from the dead to the living takes effect at the moment of death.
RULES IN VALUING THE GROSS ESTATE 1. In general, the GROSS ESTATE shall be valued at its FAIR MARKET VALUE at the time of the decedent’s death. 2. REAL PROPERTIES should be valued at the CURRENT FAIR MARKET VALUE as shown in the schedule of values fixed by the Provincial/City Assessors, or the fair market
DETERMINATION & EVALUATION OF GROSS ESTATE
-starting point in computing Philippine estate tax liability
GROSS ESTATE
-consists of all property owned by a decedent at the time of his death, including stocks, bonds, real estate, mortgages & any other property that technically belonged to him
-it shall not include the exclusive properties of the surviving spouse
-property is called gross estate because it is to be reduced by decedent’s debts (including taxes), funeral expenses, share of the surviving spouse & other permissible deductions to arrive at a net taxable estate.
DECEDENT CITIZENS & RESIDENT ALIENS
-real & personal properties, wherever located, shall be included as part of the gross estate.
NONRESIDENT ALIENS
-only properties located in the Philippines that are to be transferred upon death are subject to estate tax.
-share of stocks acquired from a domestic corporation are taxable in the Philippines.
REAL PROPERTY
-land, building or any structure or even equipment permanently attached to the land.
TANGIBLE PERSONAL PROPERTY
-property with physical form that could be seen or touched, such as car, jewelry and clothing.
INTANGIBLE PERSONAL PROPERTY
-property that has no physical form, such as receivables, bonds and other securities.
-located within the Philippines of a non-resident alien is subject to the rule of reciprocity. If there is reciprocity, it is not subject to estate tax in the Philippines.
SITUS OF A PROPERTY
-is the domicile or residence of the owner.
DATE OF VALUATION
-is the time of death because the transfer of properties from the dead to the living takes effect at the moment of death.
RULES IN VALUING THE GROSS ESTATE 1. In general, the GROSS ESTATE shall be valued at its FAIR MARKET VALUE at the time of the decedent’s death. 2. REAL PROPERTIES should be valued at the CURRENT FAIR MARKET VALUE as shown in the schedule of values fixed by the Provincial/City Assessors, or the fair market