UNDER TRAIN LAW (RA 10963)

Use this to answer the four following questions:

Among the properties included in the gross estate of the decedent at the time of death is a three- story commercial building with a fair market value of Php 12,000,000. During the settlement of the estate and before the last day of paying the estate tax, the said property is destroyed by the fire. The fair market value at the time of the incident was Php 13,000,000

1.What is the amount that should be included to be a part of gross estate?

a.P 0

b.P 12,000,000

c.P 12,500,000

d.P 13,000,000

2.What amount should the deductible loss should be?

a.P 0

b.P 12,000,000

c.P 12,500,000

d.P 13,000,000

3.Assume that the property was insured for P 10,000,000 and the amount recovered from the insurance company was P 9,000,000. The amount of deductible loss is:

a.P 1,000,000

b.P 3,000,000

c.P 9,000,000

d.P 12,000,000

4.Assume that 70% of the property is destroyed by fire and the property is not insured. The deductible loss will be:

a.P 0

b.P 3,600,000

c.P 8,400,000

d.P 12,000,000

Querl Dox died on January 1, 2018 leaving among others the following charges and obligations:

Real property tax for the year 2017 P 100,000

Notarized interest-bearing promissory note 100,000

Accrued interest in the promissory note at the time of death 20,000

Interest to accrue on the promissory note from the date of death to the date of maturity 10,000

Income tax due for 2017 200,000

How much were the allowable ordinary deductions from the gross estate?

a.P 420,000

b.P 430,000

c.P 510,000

d.P 520,000