I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
The estate of a deceased person is subject to the following deductions:
1.) Expenses, losses, debts and taxes:
a.) Funeral expenses -must not be more than 5% of the gross estate and not more than Php200,000 (doesn't include expenses after the burial.)
b.) Court expenses for testate (with a will) or intestate (without a will) proceedings (including extra-judicial settlement.)
c.) Debts of the deceased where the papers of said debts are notarized when they were contracted. If the loan was made 3 years before the death of the person in question, there must be a statement showing the disposition of the loan proceeds.
d.) Collectible claims against insolvents (bad debts.)
e.) Unpaid mortgages.
f.) Casualty losses - uninsured, not claimed as a deduction from income tax, and mus be incurred before the last day of the filing of the estate tax return (6 months from the person's death, but may be extended for 30 days.) This includes theft.
g.) Unpaid income and real estate taxes.
2.) Vanishing deductions
To be exempt, the deduction must show all of the following:
a.) The deceased either inherited the property or received it as a donation.
b.) The property must have been acquired within 5 years before his death
c.) It forms part of the gross estate of the prior decedent (the one who died before the dead person in question) if it was inherited, or it must be a taxable gift of the donor (if donated.)
d.) The transfer tax was paid during the previous transfer.
e.) The property was identified as having come from the previous decedent or donor
f.) The estate of the prior decedent didn't avail of vanishing deduction of the property in question.
3.) Bequests, legacies, devises or transfers to the government for public purposes -they are deductible in full, but they must be mentioned in the tax return.
4.) Bequests, devises or transfers to social welfare or cultural organizations and charities.
5.) Standard deductions of Php1,000,000 -based on a BIR ruling, this doesn't need to be proven. It's automatic.
6.) Medical expenses up to Php500,000 incurred within 1 year before the person's death and supported by receipts.
7.) The Family Home -must determine if it's common or not.
Requires all of the following:
a.) The fair market value or zonal value (which ever is higher!) forms part of the gross estate.
b.) Certification by the Barangay captain as the actual residence at the time the person died.
c.) The deductible amount is only up to P1,000,000.
8.) Amount received by the heirs from the deceased's employer as a result of the death.
9.) The share of the surviving spouse (1/2 of the common estate.)
1 comments:
Wow... Thanks Mr. Pozon. :)
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