MINDANAO STATE UNIVESITY – GENERAL SANTOS CITY

DEPARTMENT OF ACCOUNTANCY
ACT184: DEPARTMENTAL MIDTERM EXAMINATION

Choose the best answer. Shade the letter of your choice on the answer sheet
provided using permanent black/blue pen. STRICTLY NO ERASURES.

Use the data for the next two questions:

Mr. D made the following donations to his relatives:
Philippines ITALY FRANCE GREECE
Gross Gift P750,000 P500,000 P250,000 P500,000
Deductions 250,000 200,000 150,000 150,000
Tax Paid 25,000 12,000 10,000

1. The donor’s tax credit is allowed is?

A. P26,000 B. P30,800 C. P33,520 D. Some other answer

2. The donor’s tax payable after-tax credit is?

A. P26,000 B. P30,800 C. P33,520 D. Some other answer

3. When a property is donated in contemplation of death the basis of the tax shall
be:
A. Fair market value at the time of death
B. Fair market value in the hands of the donor before the time of donation
C. Fair market value at the time of death of the donor
D. Cost when the property was acquired

4. Which of the following is subject to donor’s tax?

A. Sale on promo of Mitsubishi Montero to B by Mitsubishi North Edsa. The regular
price is P1.9M, sold at 1.6M.
B. Sale of residential lot: Market value is P1.5M but sold for 1M only
C. A dying man sold his brand new car worth 1.8M for P800,000 only.
D. Sale of commercial building valued at P20M for P12M only

5. In case of insufficiency of cash for immediate payment of the estate tax due, the
following options are allowed, except
A. Cash installment within one year from the date of decedent’s death
B. Cash installment within two years from the date the date of decedent’s death
C. Cash installment within two years from the date of decedent’s death but subject to
penalties and interest on payments made after one year.
D. Partial disposition of estate and application of its proceeds to the estate tax
due.

6. A single decedent died in 2019 and left the following properties:

Real and personal properties P14,000,000
Family home 9,000,000
Unpaid real property tax 2,000,000
How much is the net taxable estate?
A. P27,000,000 B. P7,000,000 C. P32,000,000 D. P42,000,000

Use the data for the next four questions:

Mr. X, a citizen of the Philippines, single, died a resident of Hongkong, leaving the
following properties:
Real Property in HK, inherited from father 1 1/2
years ago P2,000,000
Personal property in the Philippines inherited from
from the father 1 1/2 years ago 1,600,000
Family home in HK 1,400,000
Expenses incurred
Claims against the estate 250,000
Other obligations contracted within the last
two years 100,000
7. The total gross estate is:
A. P3,400,000 B. P5,000,000 C. P1,600,000 D. P3,000,000

8. The allowable deduction for family home is?

A. P700,000 B. P1,400,000 C. P10,000,000 D. P0

9. The total vanishing deduction allowed is?

A. P1,488,000 B. P2,678,000 C. P1,190,400 D. P1,400,000

10. The net taxable estate is?

A. P2,459,600 B. P0 C. P1,190,300 D. P1,400,000

11. Statement 1. The gross gifts of a donor who is a citizen or resident will include
all properties regardless of location;
Statement 2. The gross gifts of a donor who is a non-resident, citizen of the
Philippines, will include only property located in the Philippines.
A.True, true B. False, false C. True, false D. False, true

12. Statement 1. A donation inter vivos is an act of liberality where a person disposes
of gratuitously property in favor of another who accepts it;
Statement 2. A donation mortis causa is an act of liberality where a person disposes
of gratuitously property in favor of another who accepts it;
A.True, true B. False, false C. True, false D. False, true

13. Mr. D sold properties as follows:

• Real property, with a cost of P100,000 and fair market value of P1,000,000,
sold to a brother. The selling price was P600,000.
• Shares in a wholly owned corporation, with a cost of P1,000,000, but at the
time of sale with a book value of P3,000,000 and fair market value of P5,000,000,
sold to executives of the corporation so that they would have a stake in, and
hence, loyalty to the corporation. The selling price was at book value.
Statement 1: The transactions have donor’s tax consequences because they are gifts;
Statement 2: The transactions have income tax consequences because gains accrue to
Mr. D if his selling prices are compared with his costs;
A.True, true B. False, false C. True, false D. False, true

14. Mr. F donated a piece of land to Mr. G but did not pay the donor’s tax. Mr. G
began employing the income from the land. When the Bureau of Internal Revenue sought
to collect income tax from Mr. G, he alleged that the property is still owned by Mr.
F because with the donor’s tax not having been paid, the property is still the property
of Mr. F.
Statement 1. The transfer of ownership is negated by the payment of the donor’s tax
on the transfer;
Statement 2. The income from the property does not belong to, and is not enjoyed by
Mr. F.
A.True, true B. False, false C. True, false D. False, true

15. Mr. L made a donation during a political campaign period for campaign materials
Statement 1. If the donation is given to a particular candidate, the donation is
exempt from the donor’s tax;
Statement 2. If the donation is given to the political party of the candidate the
donation is subject to the donor’s tax.
A.True,true B. Fale,false C. True,false D. False,true

16. The fruits from exclusive property of each spouse due or received during the
marriage are classified as:
Under ACP Under CPG
A. Communal Conjugal
B. Exclusive Exclusive
C. Community Exclusive
D. Exclusive Conjugal

17. The gross estate of X includes P80,000 receivable which is duly notarized from
debtor Y whose records show:
• Asset: P100,000
 • Indebtedness:
I. Government by ways of taxes P40,000
II. Individual and Corporate Creditors 80,000
III. Other Credits 20,000
The deductible claims against insolvent person is?
A. P80,000 B. P29,285 C. P48,000 D. Some other amount (32,000)

18. Mr. X donated his residential house and lot to his son and duly paid the donor’s
tax. In the deed of donation, Mr. X expressly reserved for himself the usufruct over
the property for as long as he lived. Describe the donated property.
A. The property will form part of Mr. X’ gross estate when he dies
B. The property will not form part of Mr. X’ gross estate when he dies because he
paid the donor’s tax
C. The property will form part of Mr. X’ gross estate because he died soon after the
donation
D. The property will not form part of Mr. X’ gross estate because it is no longer his
property

19. Mr. X left a total cash of P2,000,000 in his BPI savings account. The heirs of
Mr. X plans to withdraw the cash deposit without securing clearance from the BIR. How
much must BPI withhold before releasing the balance to the heirs?
A. P0 B. P120,000 C. P60,000 D. Not allowed

Use the data for the next three questions:

The following donations were made:
January 30, 2018: P2,000,000 cash, P100,000 was on the account of marriage
March 30, 2018: P1,000,000 cash
August 15, 2018: P500,000 cash

20. How much is the donor’s tax due and payable on January 30, 2018?
A. P105,000 B. P120,000 C. 160,000 D. P0

21. How much is the donor’s tax due and payable on March 30, 2018?
A. P165,000 B. P60,000 C. P180,000 D. P0

22. How much is the donor’s tax due on August 15, 2018?
A. P30,000 B. P195,000 C. P210,000 D. P0

Use the data for the next three questions:

Dina Babangon, head of the family, died intestate on June 12, 2019, leaving the
following properties:
Land and House P30,000,000
Agricultural land inherited from her father
who died 2 ½ years before her death 800,000
Other real properties 1,000,000
Other tangible personal properties 200,000
Bank Deposit, BDO Cebu representing amount
received by heirs under RA 4917 500,000
OBLIGATIONS and CHARGES AGAINST THE ESTATE FOLLOW:
Medical expenses of last illness (unpaid) 600,000
Actual funeral expenses (30% paid for from
the estate) 500,000
Judicial expenses incurred within 6 months 100,000
Claims against the estate other than unpaid
mortgage 250,000
Claims against insolvent person 30,000
Unpaid real estate tax for the 4th quarter
of 2018 20,000
Note: The value of the agricultural land at the time of inheritance was P500,000. It
has an unpaid mortgage of P80,000.

23. How much was the vanishing deduction?

A. P348,492 B. 556,788 C. 296,492 D. Some other amount
24. How much was the total deductions excluding special deductions?
A. P300,000 B. P1,100,000 C. P380,000 D. Some other amount

25. How much was the taxable net estate?

A. P31,823,508 B. P26,823,508 C. P26,323,508 D. Some other amount

Use the data to answer the next four questions:

Mr. and Mrs X, made the following donations:
January To Steph, their legitimate son, on account of marriage last January 20,
25 2018, car worth P400,000, with unpaid mortgage of P200,000, ½ was assumed
by the done.
May 31 To MJ, brother of Mr. X, his capital property worth P200,000 on account
of marriage 6 months ago with a condition that the done will pay the
donor’s tax thereon.
July 15 To Candace, daughter of Mrs. X by former marriage, on account of her
marriage 12 months ago, Mrs. X’ paraphernal property worth P100,000
August Conjugal car of the couple worth P400,000, with P200,000 unpaid mortgage,
20 ½ assumed by Candace and P500,000 worth of land to their four sons on
account of their graduation, 20% of which was owned by their closest
friend Shaq, who agreed to donate his share through public document

26. The gift tax payable of Mr. X as of May 31 is?

A. P6,000 B. P8,000 C. P7,200 D. Some other amount

27. The gift tax payable of Mrs. X as of July 15 is?

A. P6,000 B. P8,000 C. P7,200 D. Some other amount

28. The gift taxes payable of Mr. and Mrs. X on August 20 is?
A. P27,000 and P21,000 C. P21,000 and P21,000
B. P21,000 and P27,000 D. Some other amount

29. The gift tax payable of Shaq is?

A. P0 B. P30,000 C. P6,000 D. P45,000

30. Mr. F. a non-resident American, died on May 1, 2019 leaving the following:
Exclusive Properties – Philippines P5,600,000
Conjugal Properties – Philippines 4,200,000
Conjugal Properties – Abroad 18,200,000
Claims against insolvent person 1,000,000
Funeral Expenses 200,000
Judicial Expenses 850,000
Claims against the estate 1,500,000
Losses: Occurring 8 months after death, due to fire 1,700,000
Donation mortis causa to Cebu City Hall 1,800,000
Family home (included above), located abroad 10,000,000
Standard deduction 10,000,000

The estate tax due and payable is?

A. P309,900 B. P279,900 C. P298,875 D. Some other amount

31. When a donation which paid a donor’s tax was actually a donation mortis causa, as
ascertained by the BIR, which of the following is true.
A. The donation shall be required to pay the estate tax on its proper valuation at
the time of the death, and there can be a refund for the wrong payment of the donor’s
tax
B. The donation shall be required to pay the estate tax so that the estate tax computed
shall be reduced by the donor’s tax already paid
C. The donation shall not pay any transfer tax anymore
D. The donation has to pay the estate tax in addition to the donor’s tax already paid.

32. Which of the following statement is false? When an estate tax return had been
filed and the estate tax had been paid but subsequently, because of errors in the
return, a deficiency estate tax has to pay:
A. The Bureau of Internal Revenue can ask payment from the heirs to whom the estate
has been distributed;
B. The Bureau of Internal Revenue cannot ask the executor or administrator to pay
because he would have been discharged from the liability of estate tax of the estate,
the estate and the heirs once the estate tax has been paid on the estate that he
administered
C. The Bureau of Internal Revenue can still ask the executor or administrator to pay,
even if the heirs have dissipated the inheritance, if the executor or administrator
did not ask for a written discharge from the liability from the BIR
D. The BIR shall have a lien on the properties of the estate once a demand for payment
has been made

33. Statement 1: When an estate under administration has income-producing properties,

the annual income of the estate becomes part of the estate subject to the estate tax;
Statement 2: When an estate under administration has income-producing property, the
annual income is not part of the estate subject to estate tax but when distributed in
the year that the income was earned becomes income to the heir subject to income tax.
A. True, true B. False, false C. True, False D. False, True

34. Which of the following statement is not correct?

A. No judge shall order a distribution of any part of the estate to an heir without
a certification from bureau of internal revenue that the tax has been paid.
B. A bank shall not allow the co-depositor of a deceased to withdraw from the joint
bank account without a certification from the bureau of internal revenue that the tax
has been paid.
C. No register of deeds shall transfer to any heir the title of a decedent to real
property without certification from the bureau of internal revenue that the tax has
been paid.
D. None of the above

35. Philippines Foreign

Gross estate 6,000,000 4,000,000
Claims against the estate 1,000,000 1,000,000
How much was the Philippine estate tax due if the decedent was a non-resident, not
citizen of the Philippines, and there was a foreign estate tax payment of P500,000?
A. P 0 C. P270,000
B. Refund of P57, 000 D. Some other amount

36. Donations on one date by K, father, of properly and cash, as follows: To L, a

legitimate daughter, on account of marriage, land with fair market value of P500,00
but subject to a mortgage of P100,000 which is assumed by M. To M, a legitimate son,
on account of marriage, cash of P200,000. The net gifts made are:
A. P600,000 B. P580,000 C. P590,000 D. P700,000

37. In 2019, Jose made the following gifts:

• One June 1, 2019, P150,000 to Anton, his son, on account of his marriage
celebrated on May 1, 2017.
• On July 10, 2019, a parcel of land worth P180,000 to his father, subjects to
the condition that the father would assume the mortgage indebtedness of Jose in
the amount of P40,000.
• On September 30, 2019, P150,000 dowry to his daughter Dana, on account of her
scheduled marriage on October 25, 2019, and another wedding gifts worth P20,000
on November 23, 2019.
How much is the gross gifts?
A. P460,000 B. P440,000 C. P500,000 D. Some other amount

38. Statement 1: in showing gross gifts in the donor’s tax return, real property shall
be valued at the current and fair market value, as shown in the assessment rolls, or
fair market value, as determined by the Commissioner of Internal Revenue, whichever
is lower.
Statement 2: in showing gross profits in the donor’s tax return, personal property
shall be valued at current market value or at cost, whichever is lower.
A. True, True B. False, False C. True, False D. False, True

39. Statement 1: A donation on which the donor’s tax was not paid is not a valid
donation.
Statement 2: Title to the donated real property can be transferred to the donee in
the Registry of Deeds even if the donor’s tax on the donation had been paid.
A. True, True B. False, False C. True, False D. False, True

40. Which of the following is not a deduction from the gross estate under the National
Internal Revenue Code?
A. Taxes C. Legacy to the Government
B. Losses D. Legacy to a charitable institution

41. Statement I: The gift is perfected from the moment the donor effects the delivery
either constructively or actually of the property donated.
Statement II: Donor’s tax is a property tax imposed on the property transferred by
way of gift inter-vivos
A. True, True B. True, False C. False, False D. False, True

42. This is not part of the gross estate of the decedent

A. Conjugal Property C. Share of Surviving Spouse
B. Community Property D. Exclusive property of the surviving spouse

43. Statement I: Property brought to the marriage by either spouse shall belong to
both spouses.
Statement II: The share of the surviving spouse in the conjugal property is part of
the gross estate of the decedent.
A. True, True B. True, False C. False, False D. False, True

Use the data for the next four questions:

The estate of Mr. Dido, resident citizen decedent, married, who died on April 1, 2019
are as follows:

House and lot (Family Home) P14,000,000

Note: The lot was acquired at a cost of P3,000,000 before marriage
while the house was constructed on March 1, 2019, during marriage,
at a cost of P10,000,000 from partnership funds. The lot had a FMV
of P4,000,000 after construction of the house.

Other properties acquired during marriage 6,000,000

Jewelry inherited of Feb. 14, 2018, during marriage, then with a
FMV of P1,300,000 2,500,000
Property in US, received as gift during marriage from a friend on
January 12, 2018. (the applicable donor’s tax was not paid by the
donor.) 2,300,000
Rental Income on the above property up to time of death 1,200,000
Expenses/Claims:
Funeral expenses 420,000
Judicial expenses 800,000
Casualty loss incurred on December 10, 2019 600,000
Claims against the estate 1,600,000
Medical expenses 4,000,000

44. How much is the taxable net estate under Conjugal Partnership of Gains?
A. P3,926,000 B. P6,426,000 C. P3,426,000 D. Some other amount

45. The estate tax due under CPG is?

A. P80,880 B. P235,560 C. P83,880 D. Some other amount

46. How much is the taxable net estate under Absolute Community of Property?
A. P2,174,000 B. P1,174,000 C. P4,836,000 D. Some other amount

47. The estate tax due under ACP is?

A. P83,880 B. P70,440 C. P236,160 D. Some other amount

48. Cal Anne Say died on November 20, 2019. Some of the properties he left are the
following:
ASSET Mode of Date Fair Market Value
Acquisition Acquired Acquisition Death
Land Purchase 7-3-15 P500,000 P350,000
Car Donation 10-2-18 P800,000 P980,000

Other information:
• The gross estate of the decedent amounts to P3,000,000
• The car was mortgage for P50,000 when it was acquired and Cal paid the same
before he died
• The allowable deductions totaled P325,000, which includes judicial expenses of
P30,000 and funeral expenses of P150,000
The vanishing deduction is?
A. P581,000 B. P571,000 C. P648,783 D. Some other amount

Use the data to answer the next three questions:

Joy, a Filipina made the following donations
A. To Nath, a land worth P450,000 in Manila
B. To Rose, jewelry worth P100,000 in Japan
C. To Amber, PLDT shares amounting to P150,000
D. To Rick, a building in Italy P1,600,000 mortgage fire P50,000 assumed by the donee.
E. To Dan, land in Davao worth P300,000
F. P300,000 cash, PNB New York to Heart
G. P200,000 receivable, 50% condoned by Joy.

She has also transferred the following properties:

Selling Price FMV
Jewelry, GenSan P200,000 P300,000
Jewelry, Vietnam 300,000 200,000
Building, Cebu 1,000,000 2,000,000
Building, Vietnam 1,500,000 2,500,000

49. How much is the donor’s tax due and payable?

A. P294,000 B. P234,000 C. P228,000 D. Some other amount

50. How much is the donor’s tax due and payable if she is a non-resident alien?
A. P177,000 B. P57,000 C. P51,000 D. Some other amount

51. P177,000 B. P42,000 C. P48,000 D. Some other amount

Use the data for the next two questions:

• Properties in the estate:
• Car in Philippines, owned before marriage P800,000
• Condo unit in Philippines, inherited during marriage 2,400,000
• Shares of stock issued by a foreign corporation, 60%
of operation in Philippines 600,000
• Bonds issued by a domestic corporation inherited during marriage 1,000,000
• Philippine government treasury bills acquired by purchase with
money inherited before marriage 1,200,000
• Accrued interest on the government treasury bills 80,000

52. Decedent was a citizen and married. Property relation is the absolute community.
Community property has a total of
A. P2,680,000 B. P2,880,000 C. P3,400,000 D. Some other amount

53. Decedent was a non-resident alien. Property excluded from the gross estate by
reciprocity shows a total of
A. P1,000,000 B. P2,200,00 C. P2,280,000 D. Some other amount

54. Matteo donates the following items prior to his death:

• House and lot to his son (mortis causa) P1,000,000
• Diamond ring to his wife 500,000
• Portion of land to the National Government 300,000
 • Car to his son on account of current birthday 800,000
How much is the gross amount of donations subject to donor’s tax?
A. 1,300,000 B. P1,600,000 C. 800,000 D. 1,100,000

55. A citizen of Malaysia, residing in Kuala Lumpur, with properties in Malaysia and
Philippines, had the following data on properties and rights at the time of his death
and their values:
o Real estate, Malaysia P1,000,000
o Real estate, Philippines 2,000,000
o Shares of stock of a domestic corporation 200,000
o Shares of stock of a Malaysian corporation 300,000
o Shares of stock of an Indonesian corporation, doing
business in the Philippines only 100,000
o Philippine peso deposit in BDO bank 500,000
o Receivable with a life insurance with insurance
company doing business in Malaysia 250,000
The gross estate that should be reported in the Philippines is:
A. P4,350,000 B. P3,700,000 C. P4,000,000 D. P2,800,000

56. In filing the estate tax return, a CPA certificate is required when:
A. Gross estate exceeds P2,000,000 C. Gross estate exceeds P10,000,000
B. Gross estate exceeds P5,000,000 D. Gross estate exceeds P2,500,000

57. In case of a resident decedent, the administrator or the executor shall register
the estate of the decedent and secure new TIN from the:
A. Office of the Commissioner
B. RDO where the administrator/executor is registered
C. RDO where the decedent domiciled at the time of death
D. Duly authorized treasurer of the city/municipality where the decedent is domiciled
at the time of his death.

58. Killua sold his car to Gon for P200,000. Killua’s car costs P500,000, and had a
fair market value of P400,000 at the time of sale. What is the tax consequence of the
sale?
A. Taxable gift of P300,000
B. Taxable gift of P200,000
C. Transfer for insufficient consideration, hence, not subject to donor’s tax
D. Transfer involved a personal property, hence, not subject to donor’s tax

59. in the absence of marriage settlement, or when the regime agreed upon is void,
the property relations of the spouses who got married on September 5, 1987 shall be
governed by?
A. Absolute Community of Property C. Absolute Separation of Properties
B. Conjugal Partnership of Gains D. No party relations

60. On the belief that Ansai is about to die, he sold to his daughter a parcel of
land valued at P3,000,000 for the same amount. One year later, Ansai died of a car
accident. At that time, the property already valued at P3,500,000. For Philippine
estate tax purposes, the amount includible in the gross estate is?
A. P0 B. P500,000 C. P3,000,000 D. P3,500,000

END OF EXAMINATION