Chapter 13 Business Taxation

CHAPTER 13:SELF-TEST EXERCISES
Discussion Questions
1. What is succession?
2. What is inheritance?
3. Enumerate and discuss each of the types of succession. What is a will? Discuss briefly.
4. Enumerate and explain each of the elements of succession.
5. Briefly discuss the types of compulsory heirs and their order of succession.
6. Briefly discuss the sharing of the inheritance under intestate succession.
7. What is a legitime?
8. What is estate taxation?
9.Enumerate and explain the nature of estate tax.
10.What are the two classifications of decedents? Discuss their estate taxation. 12.Illustrate the estate
tax model.
True or False 1
1. Succession is a mode of acquisition of property similar to donation.
12. Inheritance refers to the property which will be transmitted to the heirs.
3. The right to succession is transmitted from the moment of death of the decedent.
+4. A decedent with a last will and testament is said to be intestate.
5. The succession over properties of a decedent who prepared a will but covers only a portion of his
estate is called mixed succession.
6.A person who prepared a will is referred to as the executor.
7.A person who died with a will is said to be testate.
8.The succession by operation of law is called intestate succession.
9. The will may be prepared by the heirs of the decedent.
10.The will may be prepared after the death of the decedent.
11.A testator can designate any heirs even if in violation of his legitime.
12.In intestate succession,the surviving spouse is treated as a legitimate child qualified for a share while
illegitimate children are allowed half-share each.
13.The computation of the estate requires understanding of the legitime.
True or False 2
1.A debt can be inherited by heirs.
2. Only testamentary dispositions are subject to estate tax.
3. Successlons whether testamentary,intestate,or mixed are subject to estate tax.
4. The decedent's successors in interest are referred to as the heirs.
5. With last will and testament,the decedent can name any person which he wants as heir.
6. In testamentary disposition,the helrs must always be relatives of the decedent
7. The secondary compulsory heirs shall inherit only in default of concurring heirs.
8.The concurring heirs shall inherit together with the primary heirs, or in their default, the secondary
heirs.
9. In default of concurring heirs, relatives in the collateral line up to the 5u degree shall inherit.
10. In default of compulsory heirs, the government shall inherit the estate of the decedent.
Multiple Choice-Theory 1
1. IT is a mode of gratuitous acquisition of property out of the generosity of a person
a.Succession c.Loan
b. Donation d.None of these
2. It is a mode of gratuitous acquisition of property by the death of a decedent
a. Donation c.Inheritance
b. Succession d.Testate
3. The donor in a donation mortis causa is
a. dead. c. either living or dead.
b. living. d.in a coma.
4. Which is not a form of succession?

a. Testamentary c.Intestate
b. Compulsory d.Mixed
5. It is succession in the absence of a will.

a. Testamentary c.Mixed
b. Intestate d.None of these
6. It is succession by will and operation of law.

a. Testamentary c.Mixed
b. Intestate
d.None of these
7.Itiswriten document which sets forth how the decedent's property wilble distributed after death. a.
Will
b. Testamentary disposition
C. Intestate disposition
d. Mixed
8.Which is not an element of succession?

a.Decedent
b. Estate tax
c.Estate
d.Heirs
9. It is the property,rights and obligations of the decedent not extinguished by Estate

a. estate
b. estate tax
c.Codicil
d.Legitime
10.They are the successors in interest ofthe decedent. c.Devisees

a. heirs
b.Estate
c. devisees
d.Legatees
11. It is a donee of a real property in a last will and testament.

a.Heir
b. Devisee
c. legatee
d.Successor
12.It is a donee of personal property in a last willand testament. c.Legatee

a. Heir
b. Devisee
c. legatee
d.Successor
13. Who is not a compulsory heir?

a. An adopted child
b. Children of a deceased child
c. The surviving spouse
d. A brother
14.Who will inherit among the following?

a. Alegitimate child
b. Parents
c.Grandchildren
d.First cousin
15.Which of the following heirs will not inherit?

a. Illegitimate child
b. Surviving spouse
c.Nephew
d.Legitimate child
Multiple Choice-Theory 2
1. Which will not inherit from the following group?

a. Grandchild from a deceased son of the decedent
b. A daughter of the decedent
C. Grandson from a living daughter of the decedent
d. An illegitimate child of the decedent
2. Who may not inherit under an intestate succession?
a. Grandparents
b. Grandchildren
c.First cousin
d.Best friends
3.Who will be disinherited from the following?

a.Widow
b. Legitimate children
c.Illegitimate children
d.Parents
4. Who shall inherit from the following group?

a. Legitimate child c.Grandparents
b. Parents d. Brothers and sisters
5. Who shall inherit from the following potential heirs?
a. 1st cousins c.Niece sand nephews
b. Brothers and sisters d.Second cousins
6. This is a person appointed by the court to manage the distribution of the estate.
a. Administrator c.Guardian
b. Executor d.Trustee
7. This is a person handpicked by the decedent to implement his will.

a. Administrator c.Guardian
b.Executor d.Trustee
8. There are several estate tax laws in the history of estate taxation in the Philippines. Which applies to a
particular decedent?
a. The estate tax law in effect when the properties of the decedent are being accumulated
b. The estate tax law in effect at the date of the decedent's death
c. The estate tax law in effect at the date the last will and testament was prepared
d. The estate tax law in effect upon determination of the legal heirs
9. Which is correct regarding estate tax?

a. A privilege tax c.A final tax
b. A national tax d.A fiscal tax
10. Statement 1: Succession will not effect until and unless the estate tax is paid. Statement 2: Estate tax
is payable even in the absence of relatives who may inherit the estate.
Which is correct?
a. Statement 1 c.Both statements
b. Statement 2 d.Neither statement
11.Statement 1:No estate tax is due if the net taxable estate is negative. Statement 2:Once there is
death,the estate tax is always payable. Which is incorrect?
a. Statement 1 c.Both statements
b. Statement 2 d.Neither statement
12.Statement 1: A resident ditizon is taxable on hisestate whereversituoued the Philippines.

Which is correct?
a. Statement 1
b. Statement 2
c.Both statements
d.Neither statement
13.Statement A:A resident alien Iis taxable only on his estate situated o the Philement 2:A non-resident
alien is taxable only on his estate stuated in the Philippines.
Which is correct?
a. Statement 1
b. Statement 2
c.Both statements
d.Neither statement
14. The reciprocity exemption on intangible personal properties situated in the Philippines is applicable
only to a
a. Non-resident citizen
b. Non-resident alien
C. Resident alien
d. All of these
15.Which is correct?
a. Estate tax is determined per piece of property transferred to the heir.
b. Estate tax is collected by the local government.
c. Estate tax is a property tax.
d. Estate tax is an excise tax.
16.A decedent died intestate with P1,000,000 net estate. If he has four legitimate children and two
illegitimate children, how much shall each legitimate and each illegitimate child respectively receive?
a. PO;P0
b.P100,P50,000
c.P 200,000;P100,000
d.P 166,667;P166,667
17.A married decedent died intestate leaving behind P1,500,000 of his separate property and
P6,000,000 common properties with his surviving spouse.If he has three children and one illegitimate
child.How much shall each legitimate child receive?
a.P1,666,667
b.P1,000,000
c.P 666,667
d.P 333,333
18.In the immediately preceding problem,compute the total propertiesofthe surviving spouse after
partition of the properties.
a. P3,000,000
b.P4,000,000
c.P 4,666,667
d.P 3,666,667

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CHAPTER 13:SELF-TEST EXERCISES

4. Which is not a form of succession?

5. It is succession in the absence of a will.

6. It is succession by will and operation of law.

8.Which is not an element of succession?

9. It is the property,rights and obligations of the decedent not extinguished by Estate

10.They are the successors in interest ofthe decedent. c.Devisees

11. It is a donee of a real property in a last will and testament.

12.It is a donee of personal property in a last willand testament. c.Legatee

13. Who is not a compulsory heir?

14.Who will inherit among the following?

15.Which of the following heirs will not inherit?

1. Which will not inherit from the following group?

3.Who will be disinherited from the following?

4. Who shall inherit from the following group?

7. This is a person handpicked by the decedent to implement his will.

9. Which is correct regarding estate tax?

12.Statement 1: A resident ditizon is taxable on hisestate whereversituoued the Philippines.

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