MANAGEMENT

Detailed explanation-1: -The family home deductible from gross estate is P10, 000, 000 only because it is the maximum amount allowed.

Detailed explanation-2: -An amount equivalent to the current fair market value of the decedent’s family home: Provided, however, that if the said current fair market value exceeds Ten million pesos (P10, 000, 000), the excess shall be subject to estate tax.

Detailed explanation-3: -A deduction from the gross estate is allowed for funeral expenses, administration expenses, claims against the estate, certain taxes, and unpaid mortgages or other indebtedness allowable under the local law governing the administration of the decedent’s estate ( Code Sec.

Detailed explanation-4: -The correct answer is d. Payments made to satisfy specific bequests to individuals other than a surviving spouse or a charity are not deductions from the gross estate to arrive at the taxable estate. All of the others are deductible expenses or transfers.

Detailed explanation-5: -Municipal taxes are to be deducted from the Gross Annual value to derive the Net annual value of the house property. Deduction of municipal tax is allowed only if it has been borne by the owner and paid during that financial year. Standard Deduction – Standard Deduction is 30% of the Net Annual Value calculated above.