The executor of an unmarried decedent, who died on November 28, 2022, presented us the following inventory of property in the estate: a. Residential house and lot in the U.S.A., acquired at P 5,600,000, with current fair market value at the time of death of P 8,450,000. b. Residential house and lot in Manila (registered as family home) with a book value of P 3,500,000 but currently valued at P 5,675,000, the zonal value of which is P 7,250,000. c. Car in Japan, costing P 1,200,000 but the depreciated valued is P 900,000. Per independent appraisal, it is currently valued at P 680,000 d. Furniture and fixtures in Canada, worth P 1,600,000 when purchased 3 years ago. Today, they are valued at P 2,000,000. e. Jewelries in the Philippines. Acquired for P 758,000, currently valued at P 1,510,000. f. Apartment and lot in the Philippines used in business. Costing P 1,500,000, with book value of P 1,100,000 but presently appraised at P 2,800,000. 9. Life insurance proceeds in the Philippines on an insurance policy on his life, with the executor of his estate as the irrevocably designated beneficiary, P 3,000,000. Cash in Bank in the Philippines, P 2,125,000. Fair value of a house and lot in Marikina, jointly owned with a friend who has 40% equity, P 1,700,000. h. 1. GROSS ESTATE j. 10,000 ordinary shares of stocks of a domestic corporation in the Philippines acquired for P 110.00 each share when the par value was P 100.00. The corporation's shares are not listed in the stock exchange, but the following pertinent information were made available: k. 1. Total Assets Total Liabilities Outstanding Ordinary Shares at P 100.00 par value Outstanding Preferred Shares, 7% cumulative, with P 150.00 par value Excerpt from 2021 Audited Financial Statements P 500,000,000 320,000,000 150,000 100,000 Excerpt 2022 Audited Financial Statements P 650,000,000 435,000,000 170,000 100,000 The preferred shares are cumulative and participating, and may be redeemed at a price of P 210.00 per share. The corporation did not declare dividends in 2019 and 2020, despite that it earned a net income of P 25,000,000 and P 32,000,000 in those years, respectively. Certificate of bonds of foreign corporations in the USA worth P 820,000. Cash time deposit held at PNB-Makati amounting to P 1,350,000 representing P 1,200,000 benefits received from GSIS and P 150,000 interest earned on the account since it was deposited. m. Cash time deposit at RCBC amounting to P 250,000 representing savings from his lifetime earnings from employment. n. Other assets in the Philippines with aggregate fair market value amounting to P 500,000. o. Assets transferred by the decedent during his lifetime as follows: (1) Second hand Toyota car then worth P 350,000, transferred to his brother subject to revocation. Said asset had a current fair market value equivalent to 60% of said property when transferred. (2) Various appliances and furniture with aggregate book value equal to P 50,000 on the date of death but given as donation inter-vivos to a brother before the decedent died. Required: 1. Compute the gross estate assuming the decedent is a: a. Resident or Citizen of the Philippines. b. Nonresident alien and the reciprocity clause does not apply. c. Nonresident alien and the reciprocity clause applies. (3) A Honda motorcycle worth P 100,000 given as donation mortis causa to a friend, who later sold it to another friend for P 35,000. The said property was fairly valued at P 70,000 when acquired by the decedent before the date of death. (4) A necklace sold to Maria, the decedent's long-time girlfriend, which is fairly valued at P 120,000 at the time of sale for a price of P 80,000. At the time of his death, the jewelry was valued at P 145,000.
The executor of an unmarried decedent, who died on November 28, 2022, presented us the following inventory of property in the estate: a. Residential house and lot in the U.S.A., acquired at P 5,600,000, with current fair market value at the time of death of P 8,450,000. b. Residential house and lot in Manila (registered as family home) with a book value of P 3,500,000 but currently valued at P 5,675,000, the zonal value of which is P 7,250,000. c. Car in Japan, costing P 1,200,000 but the depreciated valued is P 900,000. Per independent appraisal, it is currently valued at P 680,000 d. Furniture and fixtures in Canada, worth P 1,600,000 when purchased 3 years ago. Today, they are valued at P 2,000,000. e. Jewelries in the Philippines. Acquired for P 758,000, currently valued at P 1,510,000. f. Apartment and lot in the Philippines used in business. Costing P 1,500,000, with book value of P 1,100,000 but presently appraised at P 2,800,000. 9. Life insurance proceeds in the Philippines on an insurance policy on his life, with the executor of his estate as the irrevocably designated beneficiary, P 3,000,000. Cash in Bank in the Philippines, P 2,125,000. Fair value of a house and lot in Marikina, jointly owned with a friend who has 40% equity, P 1,700,000. h. 1. GROSS ESTATE j. 10,000 ordinary shares of stocks of a domestic corporation in the Philippines acquired for P 110.00 each share when the par value was P 100.00. The corporation's shares are not listed in the stock exchange, but the following pertinent information were made available: k. 1. Total Assets Total Liabilities Outstanding Ordinary Shares at P 100.00 par value Outstanding Preferred Shares, 7% cumulative, with P 150.00 par value Excerpt from 2021 Audited Financial Statements P 500,000,000 320,000,000 150,000 100,000 Excerpt 2022 Audited Financial Statements P 650,000,000 435,000,000 170,000 100,000 The preferred shares are cumulative and participating, and may be redeemed at a price of P 210.00 per share. The corporation did not declare dividends in 2019 and 2020, despite that it earned a net income of P 25,000,000 and P 32,000,000 in those years, respectively. Certificate of bonds of foreign corporations in the USA worth P 820,000. Cash time deposit held at PNB-Makati amounting to P 1,350,000 representing P 1,200,000 benefits received from GSIS and P 150,000 interest earned on the account since it was deposited. m. Cash time deposit at RCBC amounting to P 250,000 representing savings from his lifetime earnings from employment. n. Other assets in the Philippines with aggregate fair market value amounting to P 500,000. o. Assets transferred by the decedent during his lifetime as follows: (1) Second hand Toyota car then worth P 350,000, transferred to his brother subject to revocation. Said asset had a current fair market value equivalent to 60% of said property when transferred. (2) Various appliances and furniture with aggregate book value equal to P 50,000 on the date of death but given as donation inter-vivos to a brother before the decedent died. Required: 1. Compute the gross estate assuming the decedent is a: a. Resident or Citizen of the Philippines. b. Nonresident alien and the reciprocity clause does not apply. c. Nonresident alien and the reciprocity clause applies. (3) A Honda motorcycle worth P 100,000 given as donation mortis causa to a friend, who later sold it to another friend for P 35,000. The said property was fairly valued at P 70,000 when acquired by the decedent before the date of death. (4) A necklace sold to Maria, the decedent's long-time girlfriend, which is fairly valued at P 120,000 at the time of sale for a price of P 80,000. At the time of his death, the jewelry was valued at P 145,000.
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 58P
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Question
Transcribed Image Text:GROSS ESTATE
The executor of an unmarried decedent, who died on November 28, 2022, presented us the following
inventory of property in the estate:
a. Residential house and lot in the U.S.A., acquired at P 5,600,000, with current fair market value at
the time of death of P 8,450,000.
b. Residential house and lot in Manila (registered as family home) with a book value of P 3,500,000
but currently valued at P 5,675,000, the zonal value of which is P 7,250,000.
c.
Car in Japan, costing P 1,200,000 but the depreciated valued is P 900,000. Per independent
appraisal, it is currently valued at P 680,000
d.
Furniture and fixtures in Canada, worth P 1,600,000 when purchased 3 years ago. Today, they are
valued at P 2,000,000.
e. Jewelries in the Philippines. Acquired for P 758,000, currently valued at P 1,510,000.
f. Apartment and lot in the Philippines used in business. Costing P 1,500,000, with book value of P
1,100,000 but presently appraised at P 2,800,000.
9. Life insurance proceeds in the Philippines on an insurance policy on his life, with the executor of
his estate as the irrevocably designated beneficiary, P 3,000,000.
Cash in Bank in the Philippines, P 2,125,000.
h.
1. Fair value of a house and lot in Marikina, jointly owned with a friend who has 40% equity, P
1,700,000.
j.
10,000 ordinary shares of stocks of a domestic corporation in the Philippines acquired for P 110.00
each share when the par value was P 100.00. The corporation's shares are not listed in the stock
exchange, but the following pertinent information were made available:
Total Assets
Total Liabilities
Outstanding Ordinary Shares
at P 100.00 par value
Outstanding
Preferred
Shares, 7% cumulative, with
P 150.00 par value
Excerpt from 2021 Audited
Financial Statements
P 500,000,000
320,000,000
150,000
100,000
Excerpt 2022 Audited
Financial Statements
P 650,000,000
435,000,000
170,000
100,000
The preferred shares are cumulative and participating, and may be redeemed at a price of P 210.00
per share. The corporation did not declare dividends in 2019 and 2020, despite that it earned a
net income of P 25,000,000 and P 32,000,000 in those years, respectively.
k.
Certificate of bonds of foreign corporations in the USA worth P 820,000.
1. Cash time deposit held at PNB-Makati amounting to P 1,350,000 representing P 1,200,000 benefits
received from GSIS and P 150,000 interest earned on the account since it was deposited.
m. Cash time deposit at RCBC amounting to P 250,000 representing savings from his lifetime earnings.
from employment.
n. Other assets in the Philippines with aggregate fair market value amounting to P 500,000.
o. Assets transferred by the decedent during his lifetime as follows:
(1) Second hand Toyota car then worth P 350,000, transferred to his brother subject to revocation.
Said asset had a current fair market value equivalent to 60% of said property when transferred.
(2) Various appliances and furniture with aggregate book value equal to P 50,000 on the date of
death but given as donation inter-vivos to a brother before the decedent died.
Required:
1. Compute the gross estate assuming the decedent is a:
a. Resident or Citizen of the Philippines.
b. Nonresident alien and the reciprocity clause does not apply.
c. Nonresident alien and the reciprocity clause applies.
(3) A Honda motorcycle worth P 100,000 given as donation mortis causa to a friend, who later
sold it to another friend for P 35,000. The said property was fairly valued at P 70,000 when
acquired by the decedent before the date of death.
(4) A necklace sold to Maria, the decedent's long-time girlfriend, which is fairly valued at P 120,000
at the time of sale for a price of P 80,000. At the time of his death, the jewelry was valued at
P 145,000.
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