MIDTERM EXAM – TRANSFER AND BUSINESS TAX

Instruction: Answer legibly and refrain from making any erasures. (165 points)
1. In general, state the properties comprised in the gross estate of the decedent for
purposes of the estate tax. (6 points)
2. When are the proceeds of a life insurance policy “taken out by the decedent upon his
own life” includible in the gross estate? (5 points)
3. Are the proceeds of a group insurance policy taken out by a company for its employees
part of the gross estate? (3 points)
4. Are accident insurance proceeds includible in the gross estate? (5 points)
5. For purposes of the estate tax, give the legal effect of transfers of property made by the
decedent during his lifetime, where such transfers partake the nature of testamentary
dispositions. (10 points)
6. What inter vivus transfers are excluded from the gross estate and are thus not taxable?
(10 points)
7. Where the future spouses agree in the marriage settlements that the regime of conjugal
partnership of gains shall govern their property relations during the marriage, what are
considered conjugal partnership property? (15 points)
8. What are the acquisitions transmissions which, under the Tax Code, are not subject to
estate tax? State the reasons for the exemption. (15 points)
9. Give the two (2) instances wherein the Tax Code provides for a reciprocity exemption
from the estate tax (donor’s tax) as to intangible personal property left (donated) by a
non-resident decedent (or donor). (20 points)
10. State the requisites that must be present in order that vanishing deduction may be
allowed. (10 points)
11. State the rules regarding tax credit for estate taxes paid to a foreign country. (10 points)
12. What must an estate return contain? (5 points)
13. State the general rule on the imposition of the donor’s tax. (5 points)
14. State the properties which are 1 included in 2 excluded from the term “gift.” (5 points)
15. Is donative intent always essential to constitute a gift? (10 points)
16. Give the gifts which, under the Tax Code, are declared exempt (or deductible) from
donor’s tax. (10 points)
17. State the rule on the valuation of gifts made in property. (6 points)
18. State the provision on the time and place of the filing of the donor’s return and payment
of tax. (10 points)
19. State the contents of the donor’s return. (5 points)
20. Is notice of assessment or demand necessary before the donor’s tax must be paid? (10
points)
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