estate tax pointers

8/18/2019 Estate Tax Pointers

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“ “ A wise man learns from his A wise man learns from hisown mistakes….own mistakes….

a wiser man learns froma wiser man learns from

the mistakes of others,…the mistakes of others,…

a wisest man learns froma wisest man learns from

the successes of others” the successes of others”


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BASIC CONCEPTSBASIC CONCEPTSOFOF

SUCCESSIONSUCCESSION

Prepared by:Prepared by:

Egay Domanog – RDO 26Egay Domanog – RDO 26

October 2009October 2009


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Basic concepts of Basic succession………..Basic concepts of Basic succession………..

Succession – is a mode of acquisition bySuccession – is a mode of acquisition by

irtue of !"ic" t"e property# rig"ts andirtue of !"ic" t"e property# rig"ts and

ob$igations# to t"e e%tent of t"e a$ueob$igations# to t"e e%tent of t"e a$ueof t"e in"eritance# of a person areof t"e in"eritance# of a person are

transmitted t"roug" "is deat" totransmitted t"roug" "is deat" to

anot"er or ot"ers eit"er by "is !i$$ oranot"er or ot"ers eit"er by "is !i$$ orby operation of $a!&by operation of $a!&


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E$ements of succession:E$ements of succession:

'&'& DecedentDecedent

2&2& (n Estate (n Estate)&)& (n *eir+"eirs& (n *eir+"eirs&


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Decedent,Decedent,

is a person who died and whoseis a person who died and whose

mass of properties is the subject ofmass of properties is the subject ofsuccession.succession.


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(n estate, (n estate,

is the mass of properties left by theis the mass of properties left by the

decedent.decedent. (n *eir, (n *eir,

is a person, natural or artificial, whois a person, natural or artificial, who

succeed to the property of thesucceed to the property of thedecedent.decedent.


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(n "eir+"eirs may be a&& (n "eir+"eirs may be a&&

1.1. Legatee - heir who inherits personalLegatee - heir who inherits personal

property. property.2.2. Deisee - heir who inherits real property.Deisee - heir who inherits real property.


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-ypes of succession:-ypes of succession:

1. !estamentary - is that which results1. !estamentary - is that which results

from designation of an heir, made in afrom designation of an heir, made in awill e"ecuted in the form prescribedwill e"ecuted in the form prescribed

by law.by law.


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-estamentary succession,-estamentary succession,

Legitime # portion of the decedentLegitime # portion of the decedent

estate which the law reseres to hisestate which the law reseres to hiscompulsory heirs.compulsory heirs.


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-estamentary succession,-estamentary succession,

Legitime of legitimate children$Legitime of legitimate children$

% of the hereditary estate% of the hereditary estateLegitime of suriing spouse$Legitime of suriing spouse$

e&ual to share of legitimate child e&ual to share of legitimate child


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e%: estate of 200#000 after s"are of suriing spouse&&

SS ( .

Satisfaction of $egitime /0#000&00 /0#000&00 /0#000&00

ree portion /0#000&00

-ota$ /0#000&00 '00#000&00 /0#000&00


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!estamentary succession..!estamentary succession..

'robate of the last will and testament #'robate of the last will and testament #

will is proen in court to be the willwill is proen in court to be the will

and testament of person who died.and testament of person who died.


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E%ecutor – a person appointed by t"eE%ecutor – a person appointed by t"etestator in "is !i$$ to carry out t"etestator in "is !i$$ to carry out t"e

proisions of a !i$$&proisions of a !i$$&


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(dministrator – is a person appointed by court (dministrator – is a person appointed by court

to carry out t"e proision of t"e !i$$:to carry out t"e proision of t"e !i$$:

a& if t"e person appointed refused toa& if t"e person appointed refused to

accept t"e appointment# or fai$ed or qua$ifyaccept t"e appointment# or fai$ed or qua$ify

under t"e $a!&under t"e $a!&


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(dministrator – is a person appointed by court (dministrator – is a person appointed by court

to carry out t"e proision of t"e !i$$:to carry out t"e proision of t"e !i$$:b& -"e !i$$ did not appoint somebody tob& -"e !i$$ did not appoint somebody to

carry out t"e proisions of t"e !i$$&carry out t"e proisions of t"e !i$$&


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2. Legal or intestate - is that which ta(es2. Legal or intestate - is that which ta(es

place by operation of law because place by operation of law becausethe estate is not disposed of by will.the estate is not disposed of by will.


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). *i"ed - is that effected partly by will). *i"ed - is that effected partly by will

and partly by operation of law.and partly by operation of law.


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1ROSS ES-(-E1ROSS ES-(-E


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+ross estate+ross estate……

omposition of gross estate..omposition of gross estate..

a&a& Resident or iti3en – onsists ofResident or iti3en – onsists ofrea$ estate# tangib$e and intangib$erea$ estate# tangib$e and intangib$e

persona$ property# regard$ess ofpersona$ property# regard$ess of

$ocation&$ocation&


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+ross estate+ross estate……


b& 4on5resident# not a citi3en –b& 4on5resident# not a citi3en –

consist of rea$ estate# tangib$econsist of rea$ estate# tangib$epersona$ properties $ocated in t"epersona$ properties $ocated in t"e

P"i$s and subect to e%ception#P"i$s and subect to e%ception#

intangib$e persona$ propertyintangib$e persona$ property$ocated in t"e P"i$s&$ocated in t"e P"i$s&


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2. 'roperties not physically in the estate$2. 'roperties not physically in the estate$

1.1. !ransfer in contemplation of death!ransfer in contemplation of death

2.2. eocable transfer eocable transfer ).). !ransfer under general power of!ransfer under general power of

appointment appointment


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aluation of properties not physically in thealuation of properties not physically in the

estate$estate$

1. if the transfer was in the nature of1. if the transfer was in the nature of

bona fide sale for an ade&uate and fullbona fide sale for an ade&uate and full

consideration in money or money/sconsideration in money or money/s

worth, no alue shall be included in theworth, no alue shall be included in the

gross estate.gross estate.


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estate$estate$

2. if the consideration is less than2. if the consideration is less thanade&uate and full, the alue toade&uate and full, the alue to

include shall be the e"cess of fm atinclude shall be the e"cess of fm at

the time of death oer thethe time of death oer theconsideration receied.consideration receied.


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estate$estate$

). if there was no consideration). if there was no considerationreceied on the transfer 0donationreceied on the transfer 0donation

mortis causa, the alue to include ismortis causa, the alue to include is

the fm of the property at the time ofthe fm of the property at the time ofdeath.death.


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7$$ustration:7$$ustration:

ase 'ase '

8fu$$8fu$$

ase 2ase 2

8$ess t"an8$ess t"an

ase )ase )

8none8none

'& m at t"e time'& m at t"e time

of transfer of transfer

'00#000'00#000 '00#000'00#000 '00#000'00#000

2& onsideration2& onsideration '00#000'00#000 60#00060#000 00

)& m at t"e time)& m at t"e timeof deat"of deat"

'0#000'0#000 '0#000'0#000 '0#000'0#000

;&


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omposition of gross estate…omposition of gross estate…

)& Proceeds of $ife insurance under)& Proceeds of $ife insurance under

po$icies ta=en out by t"e decent uponpo$icies ta=en out by t"e decent upon

"is $ife if t"e beneficiary is:"is $ife if t"e beneficiary is:

1. estate of the decedent, his e"ecutor1. estate of the decedent, his e"ecutor

or administrator or administrator

2. third person if the designation is2. third person if the designation isreocable.reocable.


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omposition of gross estate…omposition of gross estate…

. Decedent/s claim against an. Decedent/s claim against aninsolent person.insolent person.


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aluation of gross estate…aluation of gross estate…

7n ase of rea$ property:7n ase of rea$ property:

1. !he current and 3*, as shown in the1. !he current and 3*, as shown in theschedule of alues fi"ed by theschedule of alues fi"ed by the

'roincial4ity assessor5 or 'roincial4ity assessor5 or

2. 3* as determined by 6 2. 3* as determined by 6


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7n ase of persona$ property:7n ase of persona$ property:

1. 'urchase price if recently ac&uired by1. 'urchase price if recently ac&uired bythe decedent.the decedent.

2. 7idence of 3*, if not recently2. 7idence of 3*, if not recently

ac&uired.ac&uired.


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7n ase of securities:7n ase of securities:

a.a. 6f traded…6f traded…

fm shall be the mean between thefm shall be the mean between thehighest and lowest &uotation as ofhighest and lowest &uotation as ofthe aluation datethe aluation date

a.a. 8ot traded…8ot traded…

Boo( alue nearest the aluation dateBoo( alue nearest the aluation date


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DED>-7O4SDED>-7O4S

RO? -*ERO? -*E 1ROSS ES-(-E1ROSS ES-(-E


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Deductions from gross estate…Deductions from gross estate…

Deductions from gross estate are:Deductions from gross estate are:

2& -ransfers for pub$ic use2& -ransfers for pub$ic use

)&


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e&uisites of anishing deduction$e&uisites of anishing deduction$

'& -"e present decedent died !it"in'& -"e present decedent died !it"in

fie 8/ years from receipt of t"efie 8/ years from receipt of t"e

property from a prior decedent orproperty from a prior decedent or

donor&donor&


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2& -"e property on !"ic" anis"ing2& -"e property on !"ic" anis"ing

deduction is being c$aimed must bededuction is being c$aimed must be

$ocated in t"e P"i$s&$ocated in t"e P"i$s&


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)& -"e property must "ae formed)& -"e property must "ae formed

part of t"e ta%ab$e estate of t"e priorpart of t"e ta%ab$e estate of t"e prior

decedent# or of t"e ta%ab$e gift of t"edecedent# or of t"e ta%ab$e gift of t"e

donor&donor&


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;& -"e estate ta% on t"e prior;& -"e estate ta% on t"e prior

succession or t"e donorBs ta% on t"esuccession or t"e donorBs ta% on t"e

gift must "ae been fina$$ygift must "ae been fina$$y

determined and paid&determined and paid&


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/& -"e property on !"ic" anis"ing/& -"e property on !"ic" anis"ing

deduction is being ta=en must bededuction is being ta=en must be

identified as t"e one receied fromidentified as t"e one receied from

t"e prior decedent# or from t"et"e prior decedent# or from t"e

donor# or somet"ing acquired indonor# or somet"ing acquired in

e%c"ange t"erefor&e%c"ange t"erefor&


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6& 4o anis"ing deduction on t"e6& 4o anis"ing deduction on t"e

property !as a$$o!ab$e to t"e estateproperty !as a$$o!ab$e to t"e estate

of t"e prior decedent&of t"e prior decedent&


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9teps in computing anishing deduction$9teps in computing anishing deduction$

'& initia$ a$ue to ta=e – is t"e a$ue of'& initia$ a$ue to ta=e – is t"e a$ue of

t"e property in t"e prior estate 8ort"e property in t"e prior estate 8ora$ue used for donorBs ta% purposes#a$ue used for donorBs ta% purposes#

or t"e a$ue of suc" property in t"eor t"e a$ue of suc" property in t"e

present estate# !"ic"eer is $o!er&present estate# !"ic"eer is $o!er&


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'& initia$ a$ue to ta=e,&'& initia$ a$ue to ta=e,&

!"ere t"e property referred to!"ere t"e property referred toconsists of t!o or more items# t"econsists of t!o or more items# t"e

aggregate of suc" item by item $o!eraggregate of suc" item by item $o!er

of t!o a$ues s"a$$ be t"e initia$ basis&of t!o a$ues s"a$$ be t"e initia$ basis&


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2& -"e a$ue in no&' 8initia$ a$ue s"a$$2& -"e a$ue in no&' 8initia$ a$ue s"a$$

be reduced by any payment made bybe reduced by any payment made by

t"e present decedent on any mortgaget"e present decedent on any mortgage

or $ien on t"e property&or $ien on t"e property&


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)& -"e a$ue as reduced in no&2 s"a$$)& -"e a$ue as reduced in no&2 s"a$$

be furt"er reduced by an amount equa$be furt"er reduced by an amount equa$

to:to:

a$ue in no& 2a$ue in no& 2

555555555555555555555555555555555555 % e%penses 85 fms% e%penses 85 fmsgross estategross estate


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;& on t"e computed basis of anis"ing;& on t"e computed basis of anis"ingdeduction# app$y:deduction# app$y:

'00C'00C 55 ' year ' year

0C0C 55 ' yr but 2 yrs& ' yr but 2 yrs&

60C60C

55

2 yrs but ) 2 yrs but )

;0C;0C 55 ) yrs but ; ) yrs but ;

20C20C 55 ; yrs but / ; yrs but /


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6llustration$6llustration$

?r& (# sing$e# in"erited a piece of $and?r& (# sing$e# in"erited a piece of $and

and a car from "is fat"er on ?arc" '#and a car from "is fat"er on ?arc" '#

2006& -"e estate ta% t"ereon !as paid2006& -"e estate ta% t"ereon !as paid

on t"e fm of 00#000 for $and andon t"e fm of 00#000 for $and and

'20#000 for t"e car& (t t"e time "e'20#000 for t"e car& (t t"e time "e

in"erited t"e $and,&&in"erited t"e $and,&&


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,,it !as subect to mortgage of 0#000&it !as subect to mortgage of 0#000&

During "is $ifetime# "e paid F0#000 onDuring "is $ifetime# "e paid F0#000 on

t"e mortgage indebtedness& Ont"e mortgage indebtedness& On

4oember 29# 200# ?r& ( died,&4oember 29# 200# ?r& ( died,&


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,,inc$uded in "is gross estate of )&2minc$uded in "is gross estate of )&2m

!ere t"e $and and car !"ic" "e!ere t"e $and and car !"ic" "e

in"erited from "is fat"er& ?< at t"ein"erited from "is fat"er& ?< at t"e

time of (Bs deat" is /0#000 for t"etime of (Bs deat" is /0#000 for t"e

$and and F0#000 for t"e car& -ota$$and and F0#000 for t"e car& -ota$

deductions from gross estate isdeductions from gross estate is

600#000&600#000&


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omputation of anishing Deduction..omputation of anishing Deduction..

m priorm prior m currentm current 7nitia$


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Thank you…Thank you…


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: : !he opportunities and!he opportunities andthreats that e"ists in anythreats that e"ists in anygien situation alwaysgien situation always

e"ceed the resourcese"ceed the resourcesneeded to e"ploit theneeded to e"ploit theopportunities or aoid theopportunities or aoid thethreats; threats;


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4E- -(G(.@E4E- -(G(.@E

ES-(-EES-(-E


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8et ta"able estate…8et ta"able estate…

1ross Estate1ross Estate

@ess: Deductions@ess: Deductions555555555555555555555555555555555555555555555555

4et -a%ab$e Estate4et -a%ab$e Estate

HHHHHHHHHHHHHHHHHHHHHHHHHHHHHH


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8et !a"able 7state…8et !a"able 7state…

Property re$ations"ip s"a$$ be goerned byProperty re$ations"ip s"a$$ be goerned by

contract e%ecuted before t"e marriage#contract e%ecuted before t"e marriage#

!"ic" may be:!"ic" may be:

1.1.


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7n t"e absence of contract# or if t"e contract7n t"e absence of contract# or if t"e contract

is oid:is oid:

1. Before ??1. Before ??

- 9ystem of conjugal partnership of- 9ystem of conjugal partnership of

gains shall goern.gains shall goern.

2. @n or after ?? 0eff. 32. @n or after ?? 0eff. 3

- 9ystem of absolute community shall- 9ystem of absolute community shall

goern.goern.


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1ross estate of decedent under conuga$1ross estate of decedent under conuga$

partners"ip of gains s"a$$ consist of:partners"ip of gains s"a$$ consist of:

1. 7"clusie properties ….1. 7"clusie properties ….

- !hose ac&uired by right of redemption- !hose ac&uired by right of redemption

or by e"change with property belonging toor by e"change with property belonging to

only one of the spouse.only one of the spouse.

- !hose purchased with the e"clusie- !hose purchased with the e"clusie

money or the wife or husband.money or the wife or husband.


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1ross estate of decedent under conuga$1ross estate of decedent under conuga$

partners"ip of gains s"a$$ consist of:partners"ip of gains s"a$$ consist of:

2. conjugal properties2. conjugal properties

-


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Deduction from gross estate under t"eDeduction from gross estate under t"e

system of conuga$ partners"ip of gains&&system of conuga$ partners"ip of gains&&

1. 7lit, etc.1. 7lit, etc.

2. !3*92. !3*9

). 8et share of suriing spouse). 8et share of suriing spouse


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Sample problemSample problem

E%c$usieE%c$usie onuga$onuga$ -ota$-ota$


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g g

@and 7n"erited@and 7n"erited '#200#000'#200#000

ar 7n"eritedar 7n"erited '00#000'00#000

*ouse and $ot*ouse and $otacquiredacquired

'#;'0#000'#;'0#000

*ouse"o$d*ouse"o$dfurniturefurniture

'/0#000'/0#000

Ot"er persona$Ot"er persona$propertiesproperties

2#';0#0002#';0#000

-ota$-ota$ '#)00#000'#)00#000 )#F00#000)#F00#000 /#000#000/#000#000



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un& E%p&un& E%p&

(ctua$ )00#000 (ctua$ )00#000

/C of /m/C of /m

2/0#0002/0#000

?a%imum?a%imum 200#000200#000 200#000200#000

Audicia$ e%p&Audicia$ e%p& '/#000'/#000

$aims against$aims againstconuga$ propconuga$ prop '/#000'/#000


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9ched of anishing D.9ched of anishing D.

m prior m prior m currentm current


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E%c$usie onuga$ g -ota$

1ross Estate1ross Estate '#)00#000'#)00#000 )#F00#000)#F00#000 /#000#000/#000#000

DeductionsDeductions )6#000)6#000 ;00#000;00#000 F6#000F6#000

4et estate4et estate 9)2#0009)2#000 )#)00#000)#)00#000 ;#2)2#000;#2)2#000

S"are of SSS"are of SS

5'#6/0#0005'#6/0#000

5 '#6/0#0005 '#6/0#000

ami$y "omeami$y "ome

8'+2 0f '&;m8'+2 0f '&;m 5F0/#0005F0/#000 5 F0/#0005 F0/#000

Standard decStandard dec 5'#000#0005'#000#000 5'#000#0005'#000#0004et ta%ab$e4et ta%ab$eestateestate

FF#000FF#000


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SAMPLESAMPLEPROBLEMPROBLEM


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PropertiesPropertieso!ned byo!ned by?r& 4?r& 4

)00#000)00#000

PropertiesPropertieso!ned byo!ned by?rs& 4?rs& 4

200#000200#000

7n"erited7n"erited 2#000#0002#000#000

(cquired (cquired '#/00#000'#/00#000

-ota$-ota$ 2#000#0002#000#000 2#000#0002#000#000 ;#000#000;#000#000

E $ iE%c$usie $onuga$ - t $-ota$


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unera$Iunera$I

(ctua$ )00t (ctua$ )00t/C H 200t/C H 200t

?a% H 200t?a% H 200t 200#000200#000

Audicia$ e%pAudicia$ e%p 0#0000#000

>npaid debt>npaid debt )/#000)/#000

>npaid>npaid

mortgage onmortgage onin"eritedin"eritedpropertyproperty

200#000200#000


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omputation of anishing D.omputation of anishing D.

m prior m prior mm

currentcurrent


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1ross Estate1ross Estate 2#000#0002#000#000 2#000#0002#000#000 ;#000#000;#000#000

DeductionDeduction 59F#00059F#000 5)'/#0005)'/#000 '#2'2#000'#2'2#000

-ota$-ota$ '#'0)#000'#'0)#000 '#6/#000'#6/#000 2#F#0002#F#000

@ess: J@ess: J

s"are of SSs"are of SS 5;2#/005;2#/00 5;2#/005;2#/00

* '+2* '+2 5F/0#0005F/0#000 5F/0#0005F/0#000

.a$ance.a$ance '#'0)#000'#'0)#000 92#/0092#/00 '#'9/#/00'#'9/#/00

Standard D&Standard D& 5'#000#0005'#000#000

4et ta%ab$e4et ta%ab$e '9/#/00'9/#/00

E- dueE- due e%empte%empt


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Esae Ta!Esae Ta!

Cre"#Cre"#


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7state ta" credit…7state ta" credit…

Purpose:Purpose:

!o proide relief from too onerous!o proide relief from too onerous

ta"ation of the ta"able estate outsideta"ation of the ta"able estate outside

the 'hilippines, ta" credit against thethe 'hilippines, ta" credit against the

'hil. 7state ta" is allowed for foreign'hil. 7state ta" is allowed for foreign

estate ta" paid.estate ta" paid.


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3ormula$3ormula$

0one 1 foreign country only # if0one 1 foreign country only # if

there/s only one foreign country tothere/s only one foreign country towhich a foreign estate ta" was paid,which a foreign estate ta" was paid,

the ta" credit is whicheer is lower ofthe ta" credit is whicheer is lower of

the following amount$the following amount$


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3ormula$3ormula$

0one 1 foreign country only ….0one 1 foreign country only ….

a. estate ta" actually paid to thea. estate ta" actually paid to theforeign country.foreign country.

b. net estate, foreignb. net estate, foreign

------------------------ " 'hil. 7! ------------------------ " 'hil. 7!

net estate, world net estate, world


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7state ta" credit…illustration7state ta" credit…illustration

4et estate# P"i$&4et estate# P"i$& 900#000900#000

4et estate# foreign %4et estate# foreign % 600#000600#000

4et estate# !or$d4et estate# !or$d '#/00#000'#/00#000

P"i$& E- ta% on '&/00P"i$& E- ta% on '&/00 '/#000'/#000

@ess:E- credit@ess:E- credit

E- paid on foreign country F#000E- paid on foreign country F#000

600+'&/ %'/#000 6#000600+'&/ %'/#000 6#000

a$$o!ab$ea$$o!ab$e 6#0006#000

P"i$& E- ta% sti$$ dueP"i$& E- ta% sti$$ due 9#0009#000


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?ore t"an one foreign country,t"e estate?ore t"an one foreign country,t"e estate

ta% credit is computed as fo$$o!s:ta% credit is computed as fo$$o!s:

9tep 1.


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1. By foreign country…1. By foreign country…

7! paid to foreign country 7! paid to foreign country """ """

b.b. 8et 7state, foreign8et 7state, foreign

------------------------ " 'hil. 7! ------------------------ " 'hil. 7! """ """

8et estate, world 8et estate, world


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2. !otal of foreign country…2. !otal of foreign country…

7! paid to7! paid to allall foreign country foreign country """ """

b.b. 8et 7state, foreign8et 7state, foreign

------------------------ " 'hil. 7! ------------------------ " 'hil. 7! """ """

8et estate, world 8et estate, world


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). !he allowable ta" credit shall be the). !he allowable ta" credit shall be the

amount arried at in step 1 or theamount arried at in step 1 or the

amount arried at in step 2,amount arried at in step 2,

whicheer is lower.whicheer is lower.


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6llustration…6llustration…

?r& . died residing in t"e P"i$s# $eaing a net?r& . died residing in t"e P"i$s# $eaing a net

estate of '#0/0#000 in t"e P"i$s )00#000estate of '#0/0#000 in t"e P"i$s )00#000

in foreign country % and '/0#000 in foreignin foreign country % and '/0#000 in foreign

country y& 4et estate ta% paid on foreigncountry y& 4et estate ta% paid on foreigncountry % and y !as /#000 and '#;00#country % and y !as /#000 and '#;00#

respectie$y& ompute net E- due in t"erespectie$y& ompute net E- due in t"e

P"i$s&P"i$s&


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6llustration…6llustration…

4et estate P"i$s&4et estate P"i$s& '#0/0#000'#0/0#000

4et estate foreign %4et estate foreign % )00#000)00#000

4et estate foreign y4et estate foreign y '/0#000'/0#000

4et estate !or$d4et estate !or$d '#/00#000'#/00#000

@ess: deductions@ess: deductions '#000#000'#000#0004et -a%ab$e estate4et -a%ab$e estate /00#000/00#000

P"i$& E- on /00#000P"i$& E- on /00#000 '/#000'/#000

@ess: E- credit@ess: E- credit

$imitation ( ;#;00$imitation ( ;#;00

$imitation . ;#/00$imitation . ;#/00

($$o!ab$e ($$o!ab$e ;#;00;#;00


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omputation of ta" credit…omputation of ta" credit…

Limitation < 0 by country..Limitation < 0 by country..

ountry $ountry $7! paid to ountry 7! paid to ountry C,=== C,===

)==41.Cm " 'hil. 7! 1C,=== )==41.Cm " 'hil. 7! 1C,=== ),=== ),===


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omputation of ta" credit…omputation of ta" credit…

Limitation B 0 by total..Limitation B 0 by total..

7! paid to ountry 7! paid to ountry C,=== C,===

7! paid to ountry 7! paid to ountry 1,== 1,==

----------------

!otal !otal E,== E,==

C=41.Cm " 'hil. 7! 1C,=== C=41.Cm " 'hil. 7! 1C,=== ,C== ,C==


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ES-(-E -(GES-(-E -(G

(D?747S-R(-7


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7state !a"


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7state !a"


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7state !a"


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7state !a"


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7 t t !


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7state !a"


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7state !a"


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7state !a"


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7state !a"


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7state !a"


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7state !a"


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7state !a"


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7state !a"


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7state !a"


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Thank you…Thank you…


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Bas#$ Con$epsBas#$ Con$eps

#n#n%ona#on%ona#on

oncepts of donationoncepts of donation


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oncepts of donation..oncepts of donation..

Donation defined:Donation defined:

- is an act of liberality whereby a- is an act of liberality whereby a

person disposes gratuitously a thing person disposes gratuitously a thing

or right in faor of another, whoor right in faor of another, who

accepts it.accepts it.



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Parties of donation:Parties of donation:

a. Donor # a person who disposesa. Donor # a person who disposes

property or right. property or right.

b. Donee # person who receies theb. Donee # person who receies the

property or right. property or right.



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Requisites of donation:Requisites of donation:

a. Disposition of the property by the donora. Disposition of the property by the donor

to the donee must be gratuitous.to the donee must be gratuitous.

b.


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K"at may be donated:K"at may be donated:

a& ( -"inga& ( -"ingb& Or a rig"tb& Or a rig"t



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Donation may be$Donation may be$

1. @ral # which is effected through1. @ral # which is effected through

simultaneous deliery.simultaneous deliery.

2. Gritten # if the alue of property2. Gritten # if the alue of property

donated e"ceeds C,=== donated e"ceeds C,===

oncepts of donationoncepts of donation..


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Donation may be$Donation may be$

1. @ral # which is effected through1. @ral # which is effected through

simultaneous deliery.simultaneous deliery.

2. Gritten # if the alue of property2. Gritten # if the alue of property

donated e"ceeds C,=== donated e"ceeds C,===

0donation of immoable property shall be0donation of immoable property shall bemade in public documentmade in public document



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!ypes of donation$!ypes of donation$

a. *ortis causa # ta(es effect upon thea. *ortis causa # ta(es effect upon the

death of the donor.death of the donor.

b. 6nter ios # intended by the donorb. 6nter ios # intended by the donor

to ta(e effect during his lifetime.to ta(e effect during his lifetime.



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omposition of gross gift$omposition of gross gift$

1. 6n case of resident or citiFen donor 1. 6n case of resident or citiFen donor eal, tangible, intangible propertieseal, tangible, intangible properties

whereer located.whereer located.



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oncepts of donation..p

omposition of gross gift$omposition of gross gift$

2. 6n case of non-resident, not a2. 6n case of non-resident, not acitiFen.citiFen.

eal, tangible, intangible propertieseal, tangible, intangible properties

located in the 'hilippines.located in the 'hilippines.



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pp

ule$ule$

6f a person transferred property for less6f a person transferred property for lessthan ade&uate and full considerationthan ade&uate and full consideration

money or money/s worth, and suchmoney or money/s worth, and suchtransfer was effectie during histransfer was effectie during hislifetime, the amount by which the aluelifetime, the amount by which the alue

of property e"ceeded the considerationof property e"ceeded the considerationreceied shall be considered areceied shall be considered adonationdonation

estate tax pointers

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