Estate taxation is one of the most difficult, tiring and highly-technical topics in Tax. In Taxation, the student has to immerse himself/herself through the different principles and laws in income taxation, estate and donor's taxation. It is of no question why most students (accountancy or law) hates the subject. Whether you like it or not-- you have no choice but to love the subject. Unless, if you don't want to be a successful CPA.
In the meantime, we will be providing you a bird's eye view yet comprehensive flowchart/outline on the important concepts and principles in estate taxation. The outline will help the student enhance his/her conceptual understanding of the course. Once the principles are fully understood and concretely cemented in his/her mind, he/she is able to attack any problem related to estate tax consciously and in the right way.
Before we proceed on studying the outline, we should look first on what is estate taxation. Accordingly, the National Internal Revenue Code of the Philippines (NIRC) provides a conceptual definition of estate tax:
"Estate tax is imposed on the transfer of the decedent’s estate to his lawful heirs and beneficiaries based on the fair market value of the net estate at the time of the decedent’s death. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the owner. The Estate Tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary."
Basically, the important topics discussed in estate taxation are: 1.) Gross Estate; 2.) Allowable Deductions; and 3.) Computation of Estate Tax. Discussion in Gross Estate is quite easy as compared to the discussion in Allowable Deductions and computation of Estate Tax. There are lots of things to remember and consider in computing allowable deductions.
Provided below is the outline we just mentioned earlier. The outline only discusses the lessons in Gross Estate. We will be providing you another outline for the Allowable Deductions and the Final Computation of Estate Tax.
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