The document defines gross estate as all property owned by a decedent at the time of death, excluding property of the surviving spouse. It identifies the key components of gross estate as real property like land and buildings, and personal property like shares and bonds. Additions to the gross estate include revocable transfers, transfers in contemplation of death, property subject to a power of appointment, life insurance proceeds with a revocable beneficiary, transfers for insufficient consideration, and claims against an insolvent estate. The document provides examples to illustrate how to determine if specific property and transfers are included in the gross estate.

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

2. Learning Objectives
▪Define gross estate
▪Identify components of gross estate
▪Determine the value of gross estate
▪Identify some additions to the gross
estate

3. Gross Estate
▪Consists of all property owned
by a decedent at the time of his
death excluding the exclusive
properties of the surviving
spouse

4. Components of Gross Estate
▪Real Properties
–Immovable properties such as land,
building, resort, etc.
▪Personal Properties
–Franchises, shares, obligations or bonds
issued by foreign corporation provided
that…
▪ 85% is in the Philippines
▪ It acquired business situs in the Philippines
▪ It is established in the Philippines

5. Resident/
Citizen
Non-resident
(no reciprocity)
Non-resident
(with reciprocity)
Real Properties
Within
Without
Personal Properties
Tangible- within
Tangible-without
Intangible- within
Intangible- without
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Summary Components of Gross Estate

6. Vacation house in HK
Land in Zamboanga
House in Camarines
Apartment in NY
Car in HK
Car in Phils
Jewelries in NY
Franchise, NY
Franchise, HK
Franchise, Phils
A/R from Phils
A/R from NY
A/R from HK
Investment, NY
Investment, Phils
Investment, HK
Domestic Shares, Phils
Domestic Shares, New York
Foreign Shares, 90% in Phils
Foreign Shares, 30% in Phils
Foreign shares, 60% in Phils
Compute for the gross estate: Resident or citizen, Non Resident (no reciprocity and with
reciprocity)
………………………………………………………………………………….1,200,000
……………………………………………………………………………………. 80,000
………………………………………………………………………………. 3,000,000
………………………………………………………………………………. 4,500,000
……………………………………………………………………………………. 700,000
……………………………………………………………………………………. 650,000
……………………………………………………………………………………. 125,000
……………………………………………………………………………………. 300,000
……………………………………………………………………………………. 260,000
……………………………………………………………………………………. 380,000
……………………………………………………………………………………. 275,000
……………………………………………………………………………………. 240,000
……………………………………………………………………………………. 385,000
……………………………………………………………………………………. 730,000
……………………………………………………………………………………. 300,000
……………………………………………………………………………………. 245,000
……………………………………………………………………………………. 140,000
……………………………………………………………………………………. 250,000
……………………………………………………………………………………. 100,000
……………………………………………………………………………………. 270,000
……………………………………………………………………………………. 425,000

7. Answers
Resident/Citizen-
P14,555,000
Non-resident (no reciprocity)
4,925,000
Non-resident (with reciprocity)
3,730,000

8. Valuation of Gross Estate
▪ Real & Personal Property-
o FMV at the time of death whichever is higher.
FMV of land P1,200,000
Cost of land 1, 000,000
FMV of BIR 1,400,000
What will be the valuation of the land?
Answer: FMV of BIR, P1,400,000
▪ Stocks, bonds & other securities
o If Listed In PSE, get the average of highest and lowest of the
SP x shares.
o If not listed in PSE, for common stock-BV, for preferred
stock, par value

9. Additions to Gross Estate
1. Revocable Transfer
 transfers of property with the retention or
reservation of rights over the property while he
still lives.
Subject to a right of
Revoke.
Land, P500,000
QUESTION: Upon death, is the transfer part of his GROSS ESTATE?

10. 2. Transfers in contemplation of death
properties that are not physically available in
the estate at the time of death in anticipation
of his death.
Property
QUESTION: Is the transfer part of his gross estate?
Additions to Gross Estate

11. 3. Property passing under GPA-
power of appointment is the right to
designate by will or deed the person who will
received the property.
Property with a clause that
She is free to transfer it to anybody.
QUESTION: is the appointment part of his gross estate?
Additions to Gross Estate

12. 4. Decedent’s Interest-
dividends, profits, proceeds in any
insurance, right of usufruct.
Additions to Gross Estate

13. 5. Proceeds Of Life Insurance with
revocable beneficiary,
administrator or his executor.
P 1,500,000
QUESTION: is the proceeds part of his gross estate?
Additions to Gross Estate

14. 6. Transfers for insufficient
consideration
Land of P1,500,000
For P200,000
QUESTION: is the transfer part of his gross estate? How much?
Additions to Gross Estate

15. 7. Claims against insolvent
person
8. Amount received by heirs
under RA 4917
Additions to Gross Estate