estate tax problems

TRANSFER TAXATION/ESTATE TAX

PROBLEMS:

I. X, a Filipino residing in Pateros, Metro Manila, died a widower on December 20, 2008, leaving the following properties to his children who lived with him.

1) A parcel of land in New York …………………………P2,000,000.00

2) A house and lot in Pateros, Metro Manila …….. 1,800,000.00

3) Claim against an insolvent person ………………… 50,000.00

4) Cash in bank (current account) …………………….. 100,000.00

5) Proceeds of life insurance where he named

his only son, Y, as irrevocable beneficiary……… 200,000.00

6) Shares of stock in a foreign corporation with

Office in New York ……………………………………….. 900,000.00

7) Car in New York …………………………………………… 250,000.00

Total ………………………………………………….. P5,300,000.00

The deductions claimed are as follows:

1) Funeral expenses ……………………………………………. P 250,000.00

2) Medical expenses ……………………………………………P 550,000.00

3) Judicial expenses ……………………………………………. 35,000.00

4) Claims against estate ……………………………………… 72,500.00

5) Claims against an insolvent person ………………… 50,000.00

6) Real Property tax for 2009 …………………………….. 10,000.00

7) Family Home ………………………………………………….P1,000,000.00

Total ……………………………………………….P1,967,500.00

Required:

Compute the net estate and the estate tax due and payable.

II. X, a Filipino residing in Boac, Marinduque, where he worked as branch manager of a bank, married to Y, died intestate (without a will) on January 15, 2009 leaving properties which consist of the following:

1) House and lot (conjugal partnership property) located in Quezon city acquired during marriage ………………………………….P2,000,000.00

2) Household furniture and appliances …………………. 380,000.00

3) Lot located in the province acquired before

Marriage ………………………………………………………….. 900,000.00

4) Improvements on lot described in No. 3 built before

Marriage …………………………………………………………. 1,300,000.00

5) 1,000 shares of stock in a corporation having a

Far market value of P24 per share at the time of

X’s death ………………………………………………………… 240,000.00

6) Retirement benefits received by heirs form X’s

Employer (under R.A. No. 4917) ……………………. 700,000.00

Total …………………………………………………… P5,520,000.00

===========

Claimed as deductions by the heirs who settled he estate extrajudicially are the following:

Funeral expenses …………………………………………. P 90,000.00

Medical expenses incurred on January

2-5, 2008 ………………………………………….. 200,000.00

Judicial expenses ……………………………………….. 100,000.00

Unpaid mortgage n house and lot (family home)

In Quezon City …………………………………. 830,000.00

Losses from fire on June 30, 2009 of improvements

In No. 4 above (not compensated for by

Insurance or otherwise …………………… 500,000.00

Losses from flood on July 30, 2009 of household

Furnitures and appliances ( also not compensated

For by insurance or otherwise) ………… 50,000.00

Family home …………………………………………….. 1,000,000.00

Total ………………………………………………. P2,270,000.00

===============

Required:

Compute the estate tax due and payable.

III. X, a Japanese residing in Tokyo, Japan, died leaving the following properties:

Properties located in the Philippines P 500,000.00

Properties located in Japan 1,000,000.00

Total gross estate within and outside

Of the Philippines P1,500,000.00

============

His administrator in the Philippines claimed the following deductions:

Expenses for cremation P 10,000.00

Cost of urn containing his ashes 5,000.00

Judicial expenses in connection with properties

In the Philippines 20,000.00

Indebtedness incurred in the Philippines 85,000.00

Total P120,000.00

===========

Required:

Compute the net estate subject to Philippine estate tax and the estate tax due and payable.

assignments:

Tax.

Read pages 1 to 6 of reviewer and pages 54 to 61. please prepare for recitation and quiz

sales

Read de leon book up to article 1544. sales agency and bailment. prepare for recitation

insurance claim

again an old letter i discovered from my old files. it illustrates the frustration of an insured against an insurance company who refuses to pay his rightful claim....

TO: UCPB Gen.

Dear Sir:

I would like to reiterate my appeal regarding the uncalled for multiple deductions you are claiming from me.

As stated in my affidavit, my insured vehicle is a victim of unwarranted and senseless vandalism, hooliganism and theft which happened right in front of our residence. I happened to park it unattended because my residence is a mixed residential-commercial establishment situated in front of the public market and I simply do not have a private garage. All I know is that my vehicle was in excellent condition when I left it but it was not so when I saw it again. Those damages and losses resulted from one incident, I repeat, ONE INCIDENT and as far as our insurance policy is concerned, only one deduction is charged for one incident. You also mentioned that it is your policy when it comes to damaged unattended vehicles to make one deduction per panel. But isn’t it a fact that vandals do what they do because they are vandals and therefore do not care about aesthetics nor symmetry or the fact that they inflict damage on only one panel or two or three. I cannot explain what went inside the minds of the vandals and hooligans to do such a thing to my vehicle for who could explain the intricacies of the human mind or at least those of the evil kind. If I could explain what happened I would have been in jail right now for killing those animals. Fortunately I don’t know them and I hope I never will.

I also became a victim twice over because it has been a month since I submitted my requirements and it is only this week that I received your evaluation report ( and an unfavorable one at that) simply because your company lost my submitted requirements, which I only learned after burning the telephone lines and spending so much money on long distance calls following up on my papers which were inexistent as far as your company is concerned. When I have to resubmit my papers, I knew that I was being screwed again.

My past insurance record speaks for itself. This said vehicle has been insured for the last 5 years (4 years with your firm) and I have not made any single claim from the insurer simply because I am a careful and prudent driver.

I have been victimized twice now. Don’t make me a victim thrice over. And please don't make me call you again!!!

Very truly yours

insured

ps. after this incendiary letter. blogger's claim was approved pronto.

adieu

i just accidentally unearthed an old file.. brought back old memories. from pao to private.

Dear Sir:

I would like to tender my resignation effective January 31, 2005. My stint in the Public Attorney’s Office, though on the short side, was filled with learning and self fulfillment. It was here where I learned the practical and living facet of the legal profession, where the law not only served as the sword for the oppressed and violated but also the shield and armor for the innocents.

I would surely miss the office, attendant pressures and all, especially the times I counseled and mediated warring parties and was able to make them realize that conflicts can be turned into common interests, that sometimes the swiftest way to get legal justice is thru the extra-judicial path, that to compromise is to accept less than what is due them but gain more in the long run. I was proud that although I was still growing my wings, you shoved me from my nest of contentment and let me fly on my own with the eagles of our profession.

But it was not all rosy, I was frustrated that I could not give everyone of my client the best defense available to them mainly because I, and I am very sure everyone in PAO feels the same, do not have the luxury of time to dig deeper in each of their cases lest I forsake the others. It was also difficult to juggle time between my business and my profession, and I couldn’t sacrifice neither.

My fault is that I cared too much, that I wasn’t able to acquire the needed degree of callousness as to let go when one is losing, as to forget when one needs to, as to move on when one has to.

Again, thank you very much. I am about to embark on a new journey. Wish me luck. I am confident that I’d be leaving the office a better person than when I came in, with my head unbowed and comforted with the fact that I did not bring dishonor to the office nor my profession but was able to make a difference to the lives of our clients.

Very truly yours,

Public Defender

The modern day Gladiator is now a Mediator

In the olden days when Rome was the center of civilization, the emperors provided an opiate to the masses by organizing mortal combat in the Colosseum. Man against man, man against beast, beast against beast, the protagonists gave it their all and fought for their lives while the spectators drank wine and partake of the feast. The crowd cheer at every thrust and parry of the swords and cringe at the sight of intestines spilling out as the blade make its contact with the human flesh . Nothing excites the mob more and nothing brings them to a frenzy than seeing a wounded man mightily summoning his last ounce of courage to stuff back his spilled guts in his stomach.

Then the lawyers came.

same sex marriage - can it be valid in the philippines

Now that Bebe has finally emerged from the closet, can same sex marriage be far behind.

In our jurisdiction, same sex marriage can never be solemnized. Being in a predominantly Catholic country, our lawmakers made sure that only a male and a female could utter the words to love and to hold, till death do us part, blah blah blah, in front of the altar.

But...

Is there a backdoor (pun unintended) for the brokeback pairs to formalize their union and be recognized as a couple here.

There has been no precedents yet but methinks the following provision of the law provides a glimmer of hope to them.

Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and 38. (17a)

As can be gleaned from the above, a marriage which is celebrated or solemnized in a country which recognizes same sex marriage could be valid here also provided it is not prohibited under:

Art. 35. The following marriages shall be void from the beginning:

(1) Those contracted by any party below eighteen years of age even with the consent of parents or guardians;

(4) Those bigamous or polygamous marriages not failing under Article 41;

(5) Those contracted through mistake of one contracting party as to the identity of the other; and

(6) Those subsequent marriages that are void under Article 53.

Art. 36. A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply with the essential marital obligations of marriage, shall likewise be void even if such incapacity becomes manifest only after its solemnization. (As amended by Executive Order 227)

Art. 37. Marriages between the following are incestuous and void from the beginning, whether relationship between the parties be legitimate or illegitimate:

(1) Between ascendants and descendants of any degree; and

(2) Between brothers and sisters, whether of the full or half blood. (81a)

Art. 38. The following marriages shall be void from the beginning for reasons of public policy:

1. Between collateral blood relatives whether legitimate or illegitimate, up to the fourth civil degree;
2. Between step-parents and step-children;
3. Between parents-in-law and children-in-law;
4. Between the adopting parent and the adopted child;
5. Between the surviving spouse of the adopting parent and the adopted child;
6. Between the surviving spouse of the adopted child and the adopter;
7. Between an adopted child and a legitimate child of the adopter;
8. Between adopted children of the same adopter; and
9. Between collateral relatives
   

Same sex marriage not having been specifically included in those prohibited, then the same can be deemed allowed if it was contracted in a country which recognizes its validity. What the law does not exclude, it includes.

So. wanna test this theory? Contract your marriage in California and file a test case for it's recognition here. Dare....

What do you think? Let's play as the devil's advocate.

five ways to leave your lover - the final installment -annulment of marriage

while we are at the last installment of the various ways with which couples could unshackle the marital yoke that enslaves them, it is nice to know how these folks got to be enslaved in the first place.

the dissolution of a defective marriage starts with the understanding of the foundation of a perfectly valid marriage. and the law says:

Art. 2. No marriage shall be valid, unless these essential requisites are present:

(1) Legal capacity of the contracting parties who must be a male and a female; and
(2) Consent freely given in the presence of the solemnizing officer.

Art. 3. The formal requisites of marriage are:

(1) Authority of the solemnizing officer;
(2) A valid marriage license except in the cases provided for in Chapter 2 of this Title; and
(3) A marriage ceremony which takes place with the appearance of the contracting parties before the solemnizing officer and their personal declaration that they take each other as husband and wife in the presence of not less than two witnesses of legal age.

The absence of any of the essential or formal requisites as mentioned above shall render the marriage void ab initio except the absence of marriage license which is excused under extraordinary circumstances like:

Art. 27. In case either or both of the contracting parties are at the point of death, the marriage may be solemnized without necessity of a marriage license and shall remain valid even if the ailing party subsequently survives.

Art. 28. If the residence of either party is so located that there is no means of transportation to enable such party to appear personally before the local civil registrar, the marriage may be solemnized without necessity of a marriage license.

Art. 33. Marriages among Muslims or among members of the ethnic cultural communities may be performed validly without the necessity of marriage license, provided they are solemnized in accordance with their customs, rites or practices. (78a)

Art. 34. No license shall be necessary for the marriage of a man and a woman who have lived together as husband and wife for at least five years and without any legal impediment to marry each other. The contracting parties shall state the foregoing facts in an affidavit before any person authorized by law to administer oaths. The solemnizing officer shall also state under oath that he ascertained the qualifications of the contracting parties are found no legal impediment to the marriage.

A defect in any of the essential requisites (legal capacity and consent) shall render the marriage voidable or annullable. the following grounds could be invoked in the annulment of marriage:

(1) too old to vote but too young to marry. That the party in whose behalf it is sought to have the marriage annulled was eighteen years of age or over but below twenty-one, and the marriage was solemnized without the consent of the parents, guardian or person having substitute parental authority over the party, in that order, unless after attaining the age of twenty-one, such party freely cohabited with the other and both lived together as husband and wife;

(2) insane or demented. That either party was of unsound mind, unless such party after coming to reason, freely cohabited with the other as husband and wife;

(3) deceived and defrauded. That the consent of either party was obtained by fraud, unless such party afterwards, with full knowledge of the facts constituting the fraud, freely cohabited with the other as husband and wife; fraud involves concealment of previous conviction of a crime involving moral turpitude, pregnancy of the wife at the time of marriage by a man other than her groom, sexually transmissible disease, homosexuality, lesbianism, drug addiction and alcoholism.

(4) forced, intimidated and influenced. That the consent of either party was obtained by force, intimidation or undue influence, unless the same having disappeared or ceased, such party thereafter freely cohabited with the other as husband and wife;

(5) impotent and frigid. That either party was physically incapable of consummating the marriage with the other, and such incapacity continues and appears to be incurable; or

(6) the crabs and the clap. That either party was afflicted with a sexually-transmissible disease found to be serious and appears to be incurable.

The action for the annulment of a voidable marriage is however prescriptible. meaning that it should be filed within the proper time or else the voidable marriage becomes valid by the passage of time or the happening of the event.

Art. 47. The action for annulment of marriage must be filed by the following persons and within the periods indicated herein:

(1) For causes mentioned in number 1 of Article 45 by the party whose parent or guardian did not give his or her consent, within five years after attaining the age of twenty-one, or by the parent or guardian or person having legal charge of the minor, at any time before such party has reached the age of twenty-one;
(2) For causes mentioned in number 2 of Article 45, by the same spouse, who had no knowledge of the other’s insanity; or by any relative or guardian or person having legal charge of the insane, at any time before the death of either party, or by the insane spouse during a lucid interval or after regaining sanity;
(3) For causes mentioned in number 3 of Article 45, by the injured party, within five years after the discovery of the fraud;
(4) For causes mentioned in number 4 of Article 45, by the injured party, within five years from the time the force, intimidation or undue influence disappeared or ceased;
(5) For causes mentioned in number 5 and 6 of Article 45, by the injured party, within five years after the marriage. (87a)

now. are you happy in your married state?

do you look forward to waking up everyday to gaze at your spouse's face in its unwashed glory?

if given a chance, would you marry the same boy or girl?

only you could provide the answers. i'm just here to give you options.