ACC 2012 SOLMAN-TAX2_2019-Edition_-Final

SOLUTIONS MANUAL TRANSFER & BUSINESS TAXATION, 2019 Edition By: TABAG & GARCIA CHAPTER 1 – SUCCESSION & TRANSFER TAXES TRUE OR FALSE 1. TRUE 6. TRUE 11. FALSE 16. TRUE 2. TRUE 7. FALSE 12. TRUE 17. FALSE 3. TRUE 8 ...

SOLUTIONS MANUAL TRANSFER & BUSINESS TAXATION, 2019 Edition By: TABAG & GARCIA CHAPTER 1 – SUCCESSION & TRANSFER TAXES TRUE OR FALSE 1. TRUE 6. TRUE 11. FALSE 16. TRUE 2. TRUE 7. FALSE 12. TRUE 17. FALSE 3. TRUE 8. FALSE 13. TRUE 18. TRUE 4. FALSE 9. TRUE 14. TRUE 19. TRUE 5. FALSE 10. FALSE 15. FALSE 20. TRUE MULTIPLE CHOICE 1. D 12. C 23. D 34. D 45. B 2. A 13. C 24. B 35. B 46. C 3. D 14. B 25. D 36. B 47. D 4. C 15. D 26. D 37. D 48. D 5. C 16. C 27. B 38. B 49. A 6. A 17. B 28. D 39. D 50. B 7. B 18. D 29. A 40. D 51. A 8. A 19. C 30. D 41. B 52. D** 9. B 20. B 31. B 42. D 53. D 10. A 21. B 32. A 43. B 54. D 11. D 22. B 33. D 44. B 55. B **Inheritance and repudiation takes effect upon death of the decedent CHAPTER 2 – GROSS ESTATE PROBLEM SOLVING (P2.1) (1) P19,300,000 (2) P19,300,000 (3) P11,000,000 (4) P14,300,000 Citizen/ Resident (# 1 & 2) NRA with R (# 3) NRA w/o R (# 4) Family home in the Philippines P8,000,000 P8,000,000 P8,000,000 Parcel land of with vacation house in Malaysia 5,000,000 Farm land in the Philippines 3,000,000 3,000,000 3,000,000 Shares of stock of a DC 2,000,000 2,000,000 Shares of stock of a foreign corporation the entire business of which is in the Philippines, deposited in a bank safety deposit box in Malaysia 500,000 500,000 Receivable from a friend who has no property whatsoever 300,000 300,000 Receivables under insurance policies: ▪ Life insurance with his estate as revocable beneficiary 200,000 200,000 ▪ Life insurance with his daughter as revocable beneficiary 300,000 300,000 ▪ Life insurance with his son as irrevocable beneficiary - - - ▪ Life insurance (group) taken by the employer of the decedent - - - TOTAL GROSS ESTATE P19,300,000 P11,000,000 P14,300,000 https://cdn.fbsbx.com/v/t59.2708-21/80047660_2273266482…=18669a49270fd784ac24af5921788750&oe=5E3FD6FE&dl=1 07/02/2020, 10H56 AM Page 1 of 42(P2.2) To Juan P25,000,000 To Pedro 18,000,000 To Maria 15,000,000 To Sisa 20,000,000 Total Gross Estate P78,000,000 (P2.3) Shares of stock (Frozen Co.) [(P8M+3M)/800,000sh x 100,000 shares P1,375,000 Shares of stock (Divergent Co..) 100,000 shares x P15** 1,500,000 Shares of stock (Lenovo Co..) 100,000 shares x P12 1,200,000 Total Gross Estate P4,075,000 ***Mean value shall be used only if the quotation price at the date of death is not determinable (RR 2-2003) (P2.4) (1)P230,0000; (2)P1,100,000; (3)P0; (4)P5,000,000; (5)P1M + [1M x (1M x 10% x 1.5)] = P1,150,000 MODIFIED IDENTIFICATION EXERCISE A 1. Included 6. Excluded 2. Included 7. Excluded * 3. Excluded 8. Included ** 4. Included 9. Excluded 5. Excluded 10. Included*** *Designated by the prior decedent **Exclusions from the gross estate. Nonetheless, the tax code requires these items to be included first in the gross estate before deducting the same from the gross estate. *** Bequests to charitable institutions are considered exclusions from the gross estate only if the problem clearly states that not more than 30% were used for administrative purposes. However, even if not more than 30% of the bequests were used for administrative purposes, since whether or not such is exempt will undergo scrutiny first by the BIR, these items shall be included first in the gross estate before deducting the same for estate tax purposes. EXERCISE B EXERCISE C 1. P0; valid sale 2. P0; valid sale 3. P0; valid sale 4. P4,000,000 5. P6,000,000 1. P10M 2. P20M 3. P5M 4. P10M 5. P0 TRUE OR FALSE 1. TRUE 6. FALSE 11. FALSE 16. TRUE 2. TRUE 7. FALSE 12. TRUE 17. TRUE 3. TRUE 8. FALSE 13. TRUE 18. FALSE 4. FALSE 9. TRUE 14. FALSE 19. TRUE 5. TRUE 10. TRUE 15. FALSE 20. FALSE MULTIPLE CHOICE 1. A 16. D 31. C 46. C 61. A 2. B 17. C 32. C 47. D 62. A 3. D 18. B 33. B 48. C 63. A 4. B 19. D 34. A 49. C 64. C https://cdn.fbsbx.com/v/t59.2708-21/80047660_2273266482…=18669a49270fd784ac24af5921788750&oe=5E3FD6FE&dl=1 07/02/2020, 10H56 AM Page 2 of 42