Identify kung citizen or alien.

Kasi kung siya resident citizen, resident alien or non-resident citizen, when we talk of estate tax,
whether inside or outside, we tax. But we do not know muna kung lahat ng property ay kanya
or may asawa siya eh. Ang compostion ng gross estate ng namatay na may property na may
asawa, get first the exclusive property of the decedent. Tapos, yung conjugal property of gains
or absolute community as the case may be, yun ang gross estate, that’s the gross. Kanina yung
tinatanong ko ang family home, puro mali sinasabi niyo. What if the family home is owned by
the decedent? What if it’s own by the spouses? Imagine if the family home is owned by the
spouses -- ½ belongs to the decedent, ½ belongs to the surviving spouse. And therefore if it is
18 million and if it is conjugal or community property, nothing is taxable because 9 million
belongs to the surviving spouse, 9 million belongs to the decedent. And we can’t deduct 10
million. Kaya talaga walang pupuntahan ang recitation kasi the premise immediately is wrong.
You are not identifying. Parang lahat ng gusto mong namamatay single, kawawa naman ang
mga single. Ayaw mo patayin ang may asawa. Wala talagang pupuntahan, mali kasi yung gross
estate eh. Establish first the estate. Kaya ka nalilito, ang estate, halimbawa – ngayon siya
namatay, ang individual ang taxable period calendar year, wala siyang option mag fiscal year,
unlike corporations. Mula January hanggang today, baka may income pa siya na hindi natatax,
although yung iba dun baka final tax, tapos namatay, may estate di ba? Ang taxation ng estate
once lang, pero yung income nun, will depend on the heirs, whether they can immediately
effect distribution the properties comprising the estate. Kasi they cannot immediately
distribute or effect distribution of the properties comprising the estate, the estate will still be
under administration, and it may be income producing property – so the estate will produce
income. Sabi ng isa niyong kaklase, na pag may nagiging income, i-aalis moa ng amount
distributed to the heir. Eh baka naman yung amounts distributed to the heir, came from the
property comprising the estate, bakit mo i-deduct? That is the distribution of the estate. I-
deduct mo if it came from the income realized from the estate. Saan galing ang income na
dinistribute sa estate? Sa beneficiary nang estate. So may income producing property. Baka
may fishpond, may commercial land, may building, may pinapaupahan, edi, that is income
generating property owned by estate, tama? And mula diyan baka nag distribute ng property.
You do not deduct. That is distribution of the inheritance. Mula sa income, nag distribute sa
heirs, you deduct, because that is distribution of the estate, and not of the property comprising
the estate. You’re checking – whether the income comes from the income of the estate or did
that money come from the estate? Saan galing yung binigay?
Oh so na establish muna natin, yung namatay – Sir, single ha, single. Yon. Eh sa Bar exam
walang pupuntahan ang answer mo. Kaya sinasabi nila mahirap ang taxation, kasi andami mo
munang ilalagay. I-set mo muna nag predicate. Aalamin muna ni examiner what you know.
Oh nasabi mo na – eto yung exclusive property noong namatay, eto yung conjugal property
nang namatay, eto yung gross estate. Eh yung tanong ni examiner, paano matatax? Eto muna
tayo – proper identification. Are we talking of deductions? Deductions chargeable against the
exclusive? Chargeable deducted from the community? Deducted from the conjugal? Kasi dati,
yung tinatanggal sa conjugal ELIT, ngayon nawala yung E, kaya nagging CLIT, claims. Dati
expenses, ngayon wala nang expenses eh, mga funeral, wala yung medical, wala nang judicial
expenses. Nawala ang E-LIT. May C na, claims against the estate. Kung ayaw mo nang CLIT,
gawin mong CLUT. Unpaid mortgages gawin mo, hindi indebtedness. Oh di ba? Kasi kung di ka
gagawa ng simpleng pagtatanda mahirapan ka. Lahat ng deductions against – may losses –
imagine mo, the decedent died today, and that property will be included in the estate, kasi FMV
at the time of death, but the filing will be, under the old law, 6 months, the new law – 1 year.
What if January next year namatay siya, malamang di pa na file, ifile mo pa February pa. Pag na
file mo siya, 2 months, 3 months, what if on the 10th month may nawala sa property, so hindi
mo deduct kasi na file mo. Eh pag na-file mo, sa dulo siya, eh pwede pag file mo, pwede yung
property different yung time of loss, sa time of death. Kasi ang property pwedeng nag-
appreciate, pwedeng nag-depreciate. Noong namatay siya, yung value of property 2M,
edi i-add mo sa gross estate – 2M. Tapos noong mawala, yung value of peroperty, 2.4M.
Follow? Tingin mo papaya ang BIR na mag-deduct ka ng 2.4? Hindi. Saan ka mawawalan ng 2.4,
eh ang hawak mo lang 2M? So you cannot deduct the value at the time of loss. How can you
lose something greater than what you have? Ganyan lang kalaki, paano ka mawawala ng
ganyan, maliit lang yan. Pag maliit lang yan, hindi pwede ganyan kalaki bawas mo, pero
pwedeng mas maliit. Kasi nag depreciate in value, kasi nagamit mo.

Matapos mong mabawas, nang lahat ng pwede mong ibawas, matitira yung net, di ba? Tama.
Tapos kukunin mo yung charges against the exclusive, baka yung nakasangla, unpaid mortgage.
And Nakasangla yung exclusive property. At ang nakibang, yung exclusive. Unless inisangla para
mag benefit yung family. Kaya chargeable sa community.

Matapos mong mabawas ang dapat, may mga special deducation – ayon family home. We
check. Ang family home ba, exclusive ng namatay? Yung family home ba community? Eh yung
family home consisting of house of lot, yung house be exclusive? Yung lot ba exclusive? Para ma
identify, para malaman mo yung idededuct mo.

Paano kung gumawa siya ng will? So siya lang ang may gusto non, ba’t mo ibabawas sa
community? Siya lang may gusto eh, nasa will niya eh. Eh paano kung pera yun, edi kukunin sa
community? Okay lang kukunin sa community, but do not deduct sa community kasi babayaran
ng estate niya sa surviving spouse. Halimbawa nag donate siya ng 2million, edi i-deduct mo sa
esate niya ang 2Million. Pero sabihin mo, sir kukunin sa money owned by the spouses, may
utang siya sa surviving spouse, kasi magkakaroon tayo ng net distributable estate. Ganito yan –
iba ang taxable, iba ang distributable. Yung net taxable, dun natin iba-base ang tax liability,
ngayon hindi na mahirap kasi fixed rate na. Pag inalis mo yun, magkakaroon ka, magkakaroon
ka ng net distributable, yung ipaghahatian. Iba kasi yung itatax sa paghahatian. Sa net
distributable ka magcocompute ng legitime. Hindi ka magcocompute ng legitime sa net taxable,
kasi may dindeduct na hindi naman nagrereduce sa estate. Family home will reduce the taxable
estate, but it did not reduce distributable estate. Hindi bumababa ang mana. Bumababa ang
taxable. Imagine nag-deduct ka ng 10Million, oh di lumiit yung taxable. Pero yung available to
the heirs will still be 10Million. Nagdeduct ka pa ng standard deduction, another 5M. So paliit
paliit yung taxable, na hindi lumiliit ang distributable. Kaya pwede niyong paghati-an, ganito
kalaki, pero yung itina-tax lang ganito kaliit, because of deductions effected which did not
actually reduce the estate. The estate remains intact, but the taxable keeps on reducing
because of the allowable deductions. Naintindihan?
Kaya hirap unawain, ayaw alamin eh. Ang estate tax mararanasan yan twice. Hindi pwede taon
taon may estate tax, pero pwedeng pwede taon taon may income tax imposed on the estate.
Kasi ang mga heirs mahirap pagsunduin on how to distribute amongst them the properties
comprising the estate, kaya dapat pinagpapayuhan sila ng lawyers. Oh limang anak, ang kulit
niyo eh. Ayaw niyong paghati-hatian niyan. Dahil hindi niyo pinaghatian, natatax as one taxable
entity, oh ang laki ng tax niyan, graduated yan. If you come to senses, hatiin na natin sa lima,
lima na yung taxpayers, oh, edi lahat kayo nagumpisa sa mababang rate. Ang laki ng tinipid,
nagkasundo-sundo pa kayo, kesa sa ayaw magkasundo. Pag nagkasundo-sundo na kayo, you’ve
distributed the estate, wala nang itatax na estate kasi hindi na siya under administration. Tapos
na, kayo naman ngayon ang mamamatay.

Yan ang estate. Kaya hindi mahirap, kasi once lang ini-impose ng State. Buti nga ang laki na ng
ma deductions – 10M. Kaya pa gang family home 20M, at conjugal, walang matatax. Bakit?
Remove the share of the surviving spouse which is ½ -10, edi share ni decedent, 10. We deduct
10. Nothing is taxable. Oh? Ayaw mo kasing mag analyze. Kaya unang unang bigkas mo ng
answer, mali na ang tinatahak mong kalsada. Kaya kahit anong dagdag mo sa sagot mo, may
grade ka na kaagad. Kung baga sa bar exam, si examiner, na entertain na niya na yung taong to
hindi alam ang sagot jan. May sumagot 18M – wala na kaagad, 8 mali na kaagad. Yung casualty
loss kaya namamali, hindi naiisip ang depreciation ng value of the property. Pwede kasing siya
ay alahas, yung alahas tumataas ang halaga. Ang kotse bumababa ang halaga.

Pag katapos ng break, tuloy tayo sa donor’s tax (‘siiiirrr’). Bakit tayo tatagal sa estate, kadali-
dali. Tapos nung tinanong kayo ng property previously taxed, di niyo nasagot. May namatay –
parang kailangan dalawa ang namatay. Paano kung niregalo?Ansabi ng law na acquire mo by
gratuitious transfer. Hindi naman sinabi ng law na na-acquire mo kasi na inherit eh. Gusto mo
inheritance lang ang vanishing deduction. Gratuitous title - pwedeng niregalo sayo. So
nagbayad ng donor’s tax, yung niregaluhan, namatay, magbabayad ng estate, the previous tax
was gratuitous, the 2nd was also gratuitious, doon mo titingnan ang 5 year period, yung interval.

Reciprocity ka nang reciprocity, tingan mo muna if yung shares of stock issued by a resident
foreign, or non-resident foreign. Walang problema if domestic yan, lahat ng within domestic eh.
Tapos tingnan mo yung 85%, kasi hindi amended ang law, ang tagal na. Nong hindi amended
ang tax code, si Pres. Cory – inamend, naupo si Ramos – inamend. Ang inamend nong umupo si
Pres Cory yung business taxes. Yung sales tax ginawang VAT. Ginawang uniform na 10% - VAT.
Noong naupo si Ramos, binago yung income tax, hindi yung estate. Kaya dati, nong bago upo si
Pres Ramos, ang income tax ng resident citizen, non-resident citizen, resident alien --- 6 o’clock
prayer.