ESSAY QUESTION NO. 02 Mr. A, 90 years old and suffering from an Stage IV Terminal Lung Cancer, decided to sell for valuable and sufficient consideration a property to his son. After one year, Mr. A unfortunately died. In the settlement of Mr. A's estate, the BIR argued that the house and lot were transferred in contemplation of death and should therefore form part of the gross estate for estate tax purposes. Is the BIR correct?

ESSAY QUESTION NO. 02 Mr. A, 90 years old and suffering from an Stage IV Terminal Lung Cancer, decided to sell for valuable and sufficient consideration a property to his son. After one year, Mr. A unfortunately died. In the settlement of Mr. A's estate, the BIR argued that the house and lot were transferred in contemplation of death and should therefore form part of the gross estate for estate tax purposes. Is the BIR correct?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information [The following information applies to the questions displayed below.] This year, Leron and Sheena sold their home for $750,000 after all selling costs. Under the following scenarios, how much taxable gain does the home sale generate for Leron and Sheena? Assume that the couple is married filing jointly. Note: Leave no answer blank. Enter zero if applicable. a. Leron and Sheena bought the home one year ago for $600,000 and lived in the home until it sold. Answer is complete but not entirely correct. Taxable gain $ (350,000)
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Mr. A, Filipino, married, died on January 1, 2020 leaving the following: a.) Property inherited from his father who died January 2, 2019: 1. Agricultural land 2. Residential land P 300,000 700,000 b.) Property inherited from his mother who died on November 1, 2014, one day after Mr. A's marriage to Mrs. A. P 400,000 200,000 1. Fish Pond 2. Jewelry c.) Property acquired thru Mr. A's labor 1. Řesidential house and lot used as family home P10,800,000 900,000 2,800,000 2. Motor Vehicles 3. Commercial Land The commercial land has a mortgage of P300,000 of w/c P 200,000 was paid by Mr. A before his death. Also, Mr. A by will bequeathed to the City of Manila for exclusive public purpose the sum of P50,000. The agricultural land and residential land were previously mortgage for P400,000 when inherited whose P150,000 was paid by Mr. A during his lifetime. The estate tax incurred the following expenses a. Funeral Expense b. Judicial Expense c. Claims against the estate P90,000 80,000 250,000…
Assume Darrin transfers ownership of the life insurance policy on his life to an Irrevocable Life Insurance Trust (ILIT) and retains the right to borrow against the policy. Assume Darrin dies five years later. Which of the following is correct regarding the treatment of the proceeds of the life insurance policy? O The proceeds will always be included in Darrin's federal gross estate. The proceeds will be included in Darrin's federal gross estate if he has any outstanding loans against the life insurance policy. O The proceeds will be included in Darrin's federal gross estate if Darrin continued paying the policy premiums after the life insurance policy was transferred to the ILIT. O The proceeds will never be included in Darrin's federal gross estate.
Ma1. Part 3: Spouse purchased Blackacre, worth $200,000.00, as tenants by the entirety. Spouses purchased Blackacre in 1990. Upon the death of one of the spouses. a. Does an interest in property pass from the decedent o surviving spouse? b. What is the amount of the marital deduction? Part 4: Decedent leaves property in trust, the income to be paid to parent for parent’s life, and at parent’s death, the corpus to be distributed to decedent’s spouse or spouse estate. Does the transfer quality for a marital deduction?
Identify the correct answer to the following 1-3 (show solution): 1. What is the total gross estate of the decedent? 2. What is the total vanishing deduction? 3. What is the net share of the surviving spouse?
7. COMPUTE: Gross estate
under what circumstances are property taxes and certain other expenses owed at death deductible on both form 706 and form 1041? a. the decedent's will did not provide instructions b. the amounts owed were paid by the estate, but could have been deducted on the decedent's return if they had been paid prior to death. c. the amounts owed were also simultaneously deducted on the decedent's final return. d. the amounts due were paid by the decedent prior to death but the payments were not received until after the decedent had passed away.
Voytek transfers land worth $200,000 with an adjusted basis of $17,000 to his wife Gosha for her birthday. The land was purchased 3 years ago. Assume no gift tax was paid on the transfer. a) Does Gosha have gross income as a result of the gift? Yes or No. No? b If the answer is no, Explain why. c)What is Gosha basis in the land? d)What is Gosha holding period in the land?
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