Estate Tax

1. Taxation 2 │
DEDUCTIONS FROM GROSS ESTATE
FLABERT VILLASENCIO, CPA
Notre Dame of Dadiangas University

2. ORDINARY
SPECIAL
Expense
sLosses
Indebtedness
Taxes
Transfer for public use
Amount received by heir under RA 4917
Vanishing deductions
Share of surviving spouse
Funeral
Judicial Claims against the estate
Claims against insolvent person
Family home
Medical Expenses
Standard deduction
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3. Amount Received Under RA 4917
oRefers to the amount received by heirs as a
retirement benefit of the decedent
oTo be Deductible:
oHas been in the service for the same employer for
at least 10 years
oNot less than 50 years of age
oAvailed only once

4. Share of the Surviving Spouse
(Communal or Conjugal Properties Net Estate)
x 50%

5. Special Deductions
1. Family Home
oThe dwelling house including the land to
where it is located
oFMV of the Family Home (Gross
Estate)
oFMV of the Family Home vs 1,000,000
(Deductions)
oExcess subject to Estate Tax
oExclusive Property taken up at 100%
oConjugal Property taken up at 50%

6. Special Deductions
1. Family Home
Illustration:
Residential Lot (Conjugal) 2,300,000
Residential House (Exclusive) 800,000
How much is deductible?
Residential Lot 1,150,000
Residential House 800,000
Family Home 1,950,000
Deductible 1,000,000

7. Special Deductions
2. Medical Expense
oNot exceeding 500,000 can be
claimed
oIn excess of 500,000 can no longer
be deducted
oThe expenses must have been
incurred within one year prior to
death

8. Special Deductions
3.Standard Deduction
oAmounts to 1,000,000
oNo need of substantiation
oAny Citizen and Resident

9. Allocations of Deductions
oIf the total amount exceeds the
statutory limit, the basis is TOTAL
AMOUNT
oIf no means to trace the
deduction, the basis will be the
total gross estate

10. Non Resident Alien Decedent
oAllowed Deductions
oELIT
oAllowable Deduction=
World ELIT x (PGE/TGE)
oTransfer for Public Use
oVanishing Deductions

11. SEATWORK: (1/2 CW)
4-35 4-42
4-36 4-43
4-38 4-44
4-39 4-45
4-40 4-46
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