Reference no: EM132644103
Question - Use the following data for the next four (4) questions: A decedent left 1,000 XYZ Corporation common shares. The shares were not traded in the stock exchange. The following data were made available
Capital stock, XYZ Corporation P10,000,000
Retained earnings 2,000,000
Outstanding shares 100,000
Q1. What was the value included the decedent's gross estate?
a. P150,000
b. P120,000
c. P100,000
d. P0
Q2. Assume that the shares were classified as preference shares, what was the value included the decedent's gross estate?
a. P100,000
b. P120,000
c. P150,000
d. P0
Q3. Assume that the shares were traded in the stock exchange. Assume further that the average value at the time of death was P100 per share. What was the value included the decedent's gross estate?
a. P100,000
b. P110,000
C. P120,000
d. P150,000
Q4. Assume that the shares were traded in the stock exchange. However, the quoted price at the time of death was not determinable. Nonetheless, the highest and lowest quotations of the shares in the market were P140 and P80, respectively, what was the value included the decedent's gross estate?
a. P100,000
b. P110,000
c. P120,000
d. P150,000
Q5. Decedent died in 2018 leaving a will which directed all real estate owned by him not to be disposed or sold for a period of 2 years after his death, and ordered that the property be given to Juan Dela Cruz after 2 years. In 2018, the estate left by the decedent had a fair market value of P500,000. In 2020, the fair market value of the said estate increased by P4,500,000, and the BIR Commissioner assessed thereon estate tax based on assessed value of P4,000,000 in 2018.
What would be the correct amount of the gross estate?
a. P5,000,000
b. P4,000,000
C. P4,500,000
d. P500,000
Q6. Which of the following is not to be included in the gross estate of citizen decedent?
a. Dividend income declared, but not yet actually received at date of death
b. Share in partnership's profit earned immediately after date of death
C. Rent income accrued before death but collected after death
d. None of the above
Q7. Transfers in contemplation of death:
Consideration received FMV upon transfer FMV upon death
Land 1,500,000 1,500,000 2,000,000
Shares of stock 100,000 50,000 150,000
Vintage car 50,000 80,000 100,000
Painting 250,000 400,000 500,000
The correct gross estate should be
a. P120,000
b. P300,000
C. P300,000
d. P350,000
Q8. Which of the following transfer is not included in the gross estate?
a. Transfer with reservation of certain rights
b. Transfer for insufficient consideration
C. Transfer for an adequate full consideration in money or money's worth
d. Transfer in contemplation of death
Q9. In determining whether the value of a property transferred onerously by a decedent during his lifetime should be included in his estate, ask yourself, "was the consideration insufficient?"
I. If yes, then add the excess of the FMV at the time of death over the consideration received.
II. If no, then it was a bona fide sale. Exclude the property in determining the decedent's gross estate.
a. 1 only
b. Il only
c. Both I and II
d. Neither I nor II
Q10. Proceeds of life insurance includible in the taxable gross estate
a. Insurance proceeds from SSS or GSIs
b. Amount receivable by any beneficiary other than the estate, administrator, or executor, irrevocably designated in the policy by the insured
c. Amount receivable by any beneficiary designated in the insurance policy
d. Proceeds of group insurance taken out by a company for its employees.
Q11. Amounts receivable by the estate of the deceased, his execto administrator as an insurance under policy taken by the decedent upon his own life is
a. Excluded from the gross estate.
b. Part of the gross estate whether the beneficiary is revocable or irrevocable.
c. Part of the gross estate if the beneficiary is revocable.
d. Part of the gross estate if the beneficiary is irrevocable.
Q12. Ms. Balo, spouse of the decedent who died in a bus accident (Harurot Transport), received P2,500,000 broken down as follows:
P900,0000 From Habambuhay Life Insurance Company. A life insurance taken out by the decedent designating his wife as revocable beneficiary.
P1,200,000 From Walang Hangganan Life Insurance Company taken out by the decedent designating beneficiary.
400,000 From Harurot Transport Company (owner of the bus involved in the accident) where settlement was his wife as irrevocable made outside court proceedings.
The gross estate of the decedent shall include
a. P900,000
b. P1,200,000
c. P2,100,000
d. P2,500,000
Q13. Which of the following is a transfer in contemplation of death?
a. Mhalapit Nha has been fighting for his life since he was diagnosed to have a terminal illness. Accepting his fate, he sought the assistance of Atty. Lho Yer, and made his will.
b. Mr. Matibay celebrated his 1013 birthday. Feeling that death is not far, he transferred all his properties to Pedro and Juan.
c. Both "a" and "b"
d. Neither "a" nor "b"
Q14. One of the items in the gross estate of a decedent is a claim against an insolvent person amounting to P500,000. The insolvent debtor can still pay P100,000 out of the P500,000. How much will be included in and deducted from the gross estate?
Q15. Which of the following is a transfer under special power of appointment?
I. Earl transfers his property in trust for his son, Gabry and then in trust for anybody whom Gabry may, by will, appoint or designate.
II. Mr. Byahero frequently travels due to the nature of his profession. He thinks that he is not spared from meeting accidents considering the rampant occurrence of accidents these days. He decided to execute his last will and testament appointing his properties to his children.
III. Georgia designated his special friend, E. Garcia as beneficiary of an insurance which he took upon his own life.
a. I only
b. II only
c. All of the above
d. None of the above