Business Taxation

Chapter 1 – Succession and Transfer Taxes

1. Transfer tax is __________.

A. Imposed upon gratuitous transfer.

B. Of two kinds - estate and donor.
C. Classified as excise tax.
D. All of the above

2. Mortis Causa transfer of property is effected __________.

A. When the property is received by the heir.

B. When the court awarded the ownership to the heir.
C. Upon death of the decedent.
D. Upon payment of estate tax.

3. Inter vivos transfer of property is effected __________.

A. Upon payment of estate tax.

B. During the lifetime of the donor and donee.
C. Upon the death of the decedent.
D. When the property is received by the heir.

4. The subject matter or object of transfer tax is __________.

A. Right to transmit.
B. Decedent.
C. Properties of decedent.
D. Beneficiaries.

5. The tax imposed on the right to transmit property at death is known as __________.

A. Donor's tax
B. Estate tax
C. Business tax
D. Income tax

6. Estate taxation is governed by the statute in force at the time of:

A. Creation of the last will testament or death of decedent in case of intestate succession.
B. Death of the decedent
C. Filing of estate tax return
D. A or B, whichever is higher.

7. Donor's tax is __________.

A. A property tax.
B. A personal tax.
C. A business tax .
D. An excise tax.

8. For the donation to be valid, acceptance of the donee must be made __________.

A. During the lifetime of the donor only.

B. During the lifetime of the donee only.
 C. During the lifetime of the donor and donee.
D. None of the above.

9. According to Art. 712 of the New Civil Code (NCC), Ownership may be acquired through:
1. Occupation 5. Tradition
2. Intellectual Creation 6. Contract
3. Law 7. Prescription
4. Donation 8. Succession

A. 1, 2, 3, 4
B. 1, 2, 3, 4, 5
C. 1, 2, 3, 4, 5, 6, 7
D. 1, 2, 3, 4, 5, 6, 7, 8

10. A Transfer is one that neither imposes burden nor requires consideration from transferee or
recipient known as _________.

A. Onerous
B. Mortis causa
C. Gratuitous
D. Inter vivos

11. Is on where the transferee gives consideration in return for the property or rights received.

A. Onerous
B. Mortis causa
C. Gratuitous
D. Inter vivos

12. The rights to the succession are transmitted from the moment of death of the decedent.

A. Article 775 CC
B. Article 777 CC
C. Article 774 CC
D. Article 776 CC

13. A mode of acquisition by virtue of which, the property, rights, and obligations to the extent of
the value of the inheritance of a person are transmitted through his death to another or
others either by his will or by operations of law.

A. Onerous
B. Gratuitous
C. Transfer taxes
D. Succession

14. Two types of transfer taxes.

A. Estate tax and Property tax

B. Income tax and Property tax
C. Donor's tax and Estate Tax
D. Donor's tax and Income Tax

15. Taxes imposed upon the Gratuitous disposition of private properties or rights.

A. Donor's tax
B. Estate Tax
 C. Transfer Taxes
D. Property Tax

16. The inheritance includes all the property rights and obligation of a person which are not
extinguished by his death.

A. Article 775 CC
B. Article 777 CC
C. Article 774 CC
D. Article 776 CC

17. The amount of obligation acquired/inherited by an heir should not be _________ the
combined value of the properties and rights inherited.

A. Less than
B. Equal
C. More than
D. B and C

18. I. A person is said to have died testate if he left a will.

II. A person is said to have died interstate if he left a will.
III. A person is said to have died testate if he died without leaving a will.
IV. A person is said to have died interstate if he died without leaving a will.

A. Statement I is true.
B. Statements I and IV are true.
C. Statements II and III are true
D. All statements are false

19. If there’s a will, there has to be a __________.

A. probability
B. profit
C. probate
D. promise

20. A type of succession that results from the designation of an heir, made in a will.

A. Testate succession
B. Intestate succession
C. Mixed succession
D. None of the choices

21. Testate succession is also called __________.

A. Testament
B. Legality
C. Testamentary
D. Legal

22. Mitih Neh, the decedent, did not execute a will during his lifetime.

A. Testate succession
B. Intestate succession
C. Mixed succession
D. None of the choices
23. Shomalanget assumes he will die soon and make a will. He then died two years later. What
Nahiwanans, the only heir, must do to the other estate not written on the will?

A. Write the additional estate on the will before giving it to the court.
B. Nothing, just possess them too.
C. Let the provisions of the law be in accordance with the distribution of it.
D. You are the only heir, of course, it will be yours automatically.

24. Which of the following is not included?

A. Testate
B. Intestate
C. Mixed
D. None of the choices

25. Mixed succession is effected partly by well and partly by operation of law.

A. True
B. False
C. Both a and b
D. None of the choices

26. If a person dies without a will, or with a void will, or one which has subsequently lost its
validity. The heir shall __________.

A. Inherit by operation of law.

B. Undergo probation.
C. Both a and b
D. None of the choices

27. A person is said to have died _____ if he died without a will and _____ when he left a will.

A. Testamentary and legal

B. Testate and intestate
C. Probate and non-probate
D. Intestate and testate

28. I. The will may be prepared by the heirs of the decedent.

II. A person who prepared a will is referred to as the executor.

A. True, True
B. True, False
C. False, True
D. False, False

29. I. With a last will and testament, the decedent can name any person which he wants as heir.
II. The decedent’s successors in interest are referred to as heirs.

A. True, True
B. True, False
C. False, True
D. False, False
30. Legal succession is effected by probation since the decedent did not execute a will or if there
is, it is void.

A. True
B. False
C. Both a and b
D. None of the choices

31. Gud Bhay upon his death, left a duly executed last will and testament transferring all his
property to Pha- A lam.

A. Testate
B. Intestate
C. Mixed
D. None of the choices

32. I. The heir leaves his estate to the decedent.

II. inheritance is transmitted either through a will or by operations of law.

A. True, True
B. True, False
C. False, True
D. False, False

33. Which of the following is not a pair?

A. Decedent, Heir
B. Testate, Testator
C. Intestate, Intestator
D. Will, Testament

34. Marikit is agitated about the written will she saw that Four-Rain-Ear has left through his
death. It's written there that he's already married and wishes to transmit his estates to his
legal wife. What can Dalagang Bukid do to authenticate the will?

A. Challenge a fight with the legal wife

B. Undergo probate.
C. Hide the will and make a new one.
D. Communicate with the legal wife and make a deal to acquire some of the estates.

35. Is the general term applied to the person whose property is transmitted through succession.

A. Decedent
B. Inheritance
C. Succession
D. Successor

36. A portion of an estate reserved by law, specifically for compulsory heirs.

A. Free portion
B. Inheritance
C. Legitime
D. Succession
37. Juan devised in his will one of his parcels of land to one of his daughters Maria. The language
used in his will was Korean. However, he cannot speak, write, nor read and understand the
language.

A. The will is valid.

B. The will is voidable.
C. The will is void.
D. None of the above.

38. Is a person who is called to the succession, either the provision of a will or by operation of
law.

A. Decedent
B. Inheritance
C. Succession
D. Successor

39. Those who succeed by force of law to some portion of the inheritance, in an amount
predetermined by law or the legitime.

A. Compulsory Heirs
B. Involuntary Heirs
C. Voluntary Heirs
D. Intestate Heirs

40. Those instituted by the testator in his will to succeed to the inheritance of the portion thereof
of which the testator can freely dispose.

A. Compulsory Heirs
B. Involuntary Heirs
C. Voluntary Heirs
D. Intestate Heirs

41. Those who succeed to the estate of the decedent by operation of law.

A. Compulsory Heirs
B. Involuntary Heirs
C. Voluntary Heirs
D. Intestate Heirs

42. Include all the property, rights, and obligations of a person which are not extinguished by
death and all which have accrued thereto since the opening of succession.

A. Descendant
B. Decedent
C. Inheritance
D. Successor

43. The following are examples of compulsory heirs, except one:

A. Legitimate children
B. Illegitimate children
C. Surviving Spouse
D. Brothers and Sisters
44. The elements of succession are:

A. Decedent, Inheritor, Successor

B. Decedent, Legitime, Successor
C. Decedent, Inheritance, Succession
D. Decedent, Successor, Inheritance

45. The following are causes of legal succession, except one:

A. Preterition
B. Refusal of the instituted heir
C. Non-fulfillment of resolutory condition
D. Expiration of term or period of institution

46. The following are kind of compulsory heirs, except one:

A. Primary Compulsory Heirs

B. Concurring Compulsory Heirs
C. Tertiary Compulsory Heirs
D. Secondary Compulsory Heirs

47. These are the first people in the order of intestate succession.

A. Legitimate children
B. Surviving Spouse
C. Legitimate parents
D. Collateral Relatives

48. The last tier in the order of intestate or succession.

A. Illegitimate children
B. Collateral relatives
C. Brothers and Sisters
D. State or the government

49. Juan, when he knew he has only a few months to live, devised in his will one of his parcels of
land to one of his son, Two. However, Two died before him.

A. There is preterition so there is a legal succession.

B. The heir is not capable of succeeding so there is a legal succession.
C. The heir repudiated so there is a legal succession.
D. The term or period of the institution expired so there is a legal succession.

50. A portion of an estate that can be distributed to voluntary heirs, as long as it is provided in
the will and testament.

A. Free Portion
B. Legitime
C. Succession
D. Inheritance

51. Pedro executed his last will devising a parcel of land to one of his children. However, he failed
to indicate an heir in his will.

A. The will is valid, and there is no legal succession.

B. The will is voidable, and there is legal succession.
 C. The will is not valid, and there is legal succession.
D. The will is void, and there is no legal succession.

52. The relation of persons ascending from the same stock or common ancestor.

A. Lineal Consanguinity
B. Collateral Consanguinity
C. Consanguinity
D. Affinity

53. The connection existing in consequences of a marriage between each other of the married
spouse and the kindred of the other.

A. Lineal Consanguinity
B. Collateral Consanguinity
C. Consanguinity
D. Affinity

54. May be descending or ascending, who are direct line to each other.

A. Lineal Consanguinity
B. Collateral Consanguinity
C. Consanguinity
D. Affinity

55. Subsist between persons who have the same ancestors, but who are not descend or ascend
from one another.

A. Lineal Consanguinity
B. Collateral Consanguinity
C. Consanguinity
D. Affinity

56. A legally enforceable declaration of how a person wishes his or her property to be distributed
after death.

A. Will
B. Notarial Will
C. Attested Will
D. Holographic Will

57. The following are requisites for a valid Notarial Will EXCEPT:

A. It must be in writing and executed in a language or dialect known to the testator.

B. Any person not domiciled in the Philippines.
C. It must be attested and subscribed by three or more credible witnesses in the presence of the
testator and one another.
D. It must be subscribed at the end thereof by the testator himself or by the testator’s name written by
some other person in his presence and by his express direction.

58. In what article states the disqualification from being witness to a will?

A. Article 804 CC
B. Article 821 CC
C. Article 822 CC
D. Article 808 CC
59. What Article states that ‘The validity of a will as to its from depends upon the observance of
the law in force at the time it is made.’

A. Article 795 CC
B. Article 796 CC
C. Article 797 CC
D. Article 798 CC

60. The following are disqualified from being witnesses to a will, EXCEPT:

A. Any person not domiciled in the Philippines.

B. Any person domiciled in the Philippines.
C. Those who have been convicted of falsification of a document, perjury, or false testimony.
D. None of the above.

61. This will is executed in accordance with the formalities prescribed by Article 804 to 808 of the
New Civil Code.

A. Foreign Will
B. Codicil
C. Notarial Will
D. Holographic Will

62. Assume the amount of estate is P16,000,000 and the decedent only survived only by his 1
legitimate children. How much is the shares of Legitimate Children?

A. P4,000,000
B. P6,000,000
C. P16,000,000
D. P8,000,000

63. In question 62, how much is the free portion?

A. P4,000,000
B. P6,000,000
C. P16,000,000
D. P8,000,000

64. Assume the amount of estate is P200,000,000 and the decedent surviving heirs are his
surviving wife, 2 legitimate children and 1 illegitimate Child. How much is the shares of 1
Legitimate Children?

A. P50,000,000
B. P100,000,000
C. P150,000,000
D. P25,000,000

65. In question 64, how much is the share of 1 Illegitimate Child?

A. P50,000,000
B. P100,000,000
C. P150,000,000
D. P25,000,000
66. In question 64, how much is the share of the surviving Spouse?

A. P50,000,000
B. P100,000,000
C. P150,000,000
D. P25,000,000

67. In question 64, how much is the Free portion?

A. P50,000,000
B. P100,000,000
C. P150,000,000
D. P25,000,000

68. How many percent can get an illegitimate child if the decedent has 2 legitimate children and
the surviving spouse?

A. 100%
B. 75%
C. 50% of 1 Legitimate child
D. None of the above.

69. What are the modes of revoking a will under the Philippine law?

A. by operation of law, by a will, by physical destruction without intent of destruction of the testator
B. by operation of law, by a codicil, by physical destruction
C. by operation of law, by a will or codicil, by physical destruction with the intent of the testator
D. by operation of law, by a will or codicil, by physical destruction coupled with intent

70. What are the ways of physical destruction of a will as provided under Art. 830?

A. Burning, Tearing, Bombing, Obliterating

B. Burning, Destroying, Tearing, Cancelling
C. Obliterating, Tearing, Burning, Shredding
D. Burning, Tearing, Cancelling, Obliterating

71. How is physical destruction of a will be done?

A. It may be done by the testator or by another person acting in his presence and by his express
direction.
B. It may be done only by the testator.
C. It may only be done by another person acting in his presence and by his express direction.
D. It may be done by the testator or by another person not acting in his presence and not by his
express direction.

72. A will that is not witnessed but written entirely in the handwriting of the testator.

A. Notarial Will
B. Nuncupative will
C. Holographic Will
D. Holographic Codicil

73. What is a codicil?

A. Is a supplement or addition to a will, made before the execution of a will and annexed to be taken
as a part thereof, and it shall not be executed as in the case of a will.
 B. Is a supplement or addition to a will, made after the execution of a will and annexed to be taken as
a part thereof, and it shall be executed as in the case of a will.
C. Is a supplement or addition to a will, made after the execution of a will , and need not be
executed as in the case of a will.
D. Is a supplement or addition to a will, made before the execution of a will and will not be taken
as a part thereof, and it shall be executed as in the case of a will.

74. In a probate of a holographic will, it shall be necessary that at least _____ witness/witnesses
knows the handwriting and signature of the testator.

A. One
B. Two
C. Three
D. Four

75. Statement I: When a Filipino is in a foreign country, he is not authorized to make a will in any of the
forms established by the law of the country in which he may be.
Statement II: Probate of a will is a court procedure by which a will is proved to be valid or invalid.

A. Statement I: TRUE, Statement II: TRUE

B. Statement I: TRUE, Statement II: FALSE
C. Statement I: FALSE, Statement II: FALSE
D. Statement I: FALSE, Statement II: TRUE

76. Statement I: A will may be revoked by the heir at any time before the testator’s death.
Statement II: The will of the testator will not be disallowed if the signature was procured by fraud.

A. Statement I: TRUE, Statement II: TRUE

B. Statement I: TRUE, Statement II: FALSE
C. Statement I: FALSE, Statement II: FALSE
D. Statement I: FALSE, Statement II: TRUE

77. Statement I: In the case of any insertion, cancellation, erasure or alteration in a holographic will, the
testator must authenticate the same by his full signature.
Statement II: “No will shall pass either real or personal property unless it is proved and allowed in
accordance with the Rules of Court…”

A. Statement I: TRUE, Statement II: TRUE

B. Statement I: TRUE, Statement II: FALSE
C. Statement I: FALSE, Statement II: FALSE
D. Statement I: FALSE, Statement II: TRUE

78. Which of the following is not true about holographic will?

A. It needs to be handwritten by the testator himself.

B. It needs to have the signature of the testator.
C. It need not be witnessed.
D. There must be at least three witnesses.

79. Which of the following is not true about probate of a holographic will?

A. It may be done extrajudicially.

B. It is a court process that authenticates the will.
C. The witness needs to explicitly declare that the will and signature are in the testator’s handwriting.
D. Probate is required.
80. Statement I: If the formalities required by law have not been complied with, the will shall be disallowed.
Statement II: The proceedings in the absence of a will is called “intestate proceedings”.

A. Statement I: TRUE, Statement II: TRUE

B. Statement I: TRUE, Statement II: FALSE
C. Statement I: FALSE, Statement II: FALSE
D. Statement I: FALSE, Statement II: TRUE

81. Which of the following statements is incorrect?

A. A codicil is a supplement or addition to a will.

B. The will shall be disallowed if the testator was insane, or otherwise mentally incapable of making a
will, at the time of its execution.
C. Probate of a will is a court procedure by which a will is proved to be valid or invalid.
D. None of the above.

82. Probate of a will involves the following processes, which one is not?

A. Collecting the decedent’s estate.

B. Paying any remaining liabilities.
C. Distributing property to the heirs.
D. Collecting the heir’s estate.

83. Mr. Cee executed a second will three months after he executed the first one. The second will
is silent as to the first will. What effect does the second will produce?

A. The second will is void because he waived his right to revoke the first will.
B. The first will is automatically revoked because of the existence of a subsequent will.
C. The second will annul provisions of the first will that are inconsistent with the second will.
D. The first will shall subsist over the second will because it is the original will.

84. Can an alien who lives abroad make a will that produces effects in the Philippines?

A. No, any will that an alien makes takes no effect in the Philippines.
B. Yes, if it is made in the Philippines.
C. Yes, if made with the formalities prescribed by the law of the place in which the alien resides.
D. Yes, if made with the formalities prescribed by the law of the place in which he resides, or in
conformity with those which the Philippine civil code prescribes.

85. It deprives an heir to inherit properties by the decedent through the issuance of a will.

A. Disinheritance
B. Distributable share
C. Legitimate
D. Disqualification

86. The following are causes of disinheriting a child. Which one is not?

A. When a child has been found guilty of an attempt against the life of the testator.
B. When a child has been convicted of adultery or concubinage with the spouse of the testator.
C. When a child marries a person other than the testator's choice.
D. When a child leads a dishonorable or disgraceful life.
87. The following are causes for disinheriting a spouse, which one is not?

A. When the spouse justifiably refuses to support the children or the other spouse.
B. When the spouse has accused the testator of a crime for which the law prescribes imprisonment for
six years or more, and the accusation has been found to be false.
C. When the spouse by fraud, violence, intimidation, or undue influence causes the testator to make a
will or to change one already made.
D. When the spouse has given cause for legal separation.

88. Which is not true about an inheritance?

A. The acceptance of an inheritance may be express or tacit.

B. The express acceptance of an inheritance may be made public or private document.
C. An heir may accept or repudiate an inheritance.
D. The inheritance or repudiation of an inheritance takes effect upon inheritance or repudiation.

89. Statement I: Representation is a right created by fiction of law by virtue of which the representative is
raised to the place and degree of the person represented and acquires the rights which the
latter would have if he were living or if he could have inherited.
Statement II: If a compulsory heir dies ahead of the testator, his legitime goes to the child by
representation.

A. Statements I and II are false.

B. Statement I is true, but statement II is false.
C. Statement I is false, but statement II is true.
D. Statements I and II are true.

90. Statement I: The right of representation takes place in the direct descending line, but never in the
ascending line.
Statement II: The child of a voluntary heir who predeceases the testator gets nothing, because there is
no representation among voluntary heirs nor in the free portion.

A. Statements I and II are false.

B. Statement I is true, but statement II is false.
C. Statement I is false, but statement II is true.
D. Statements I and II are true.

91. Which is not authorized to take charge of the estate during intestate period?

A. Executor
B. Court
C. Administrator
D. Heirs

92. Which is not the Requisites for Disinheritance ?

A. For a cause expressly stated by law.

B. Cause must be stated verbally by the testator itself.
C. Effected only through a valid will.
D. Unconditional

93. The grounds or causes of Disinheritance shall be limited to those expressly stated by law.

A. True
B. False
 C. Neither A nor B.
D. Both A and B.

94. Disinheritance can be effected only through a will even though the legal cause is not
expressly specified.

A. True
B. False
C. Neither A nor B.
D. Both A and B.

95. When one of the parents attempts against the life of the other, is this enough reason for
Disinheritance?

A. Yes, it is one of the peculiar causes for Disinheritance and it is absolute.

B. Yes, unless there has been a reconciliation between them.
C. No, because they can reconcile with each other.
D. None of the above.

96. . The following are the reason Representation may arise, EXCEPT:

A. Invalid Will
B. Incapacity
C. Disinheritance
D. Death

97. The elements of succession are:

I. Decedent
II. Estate
III. Heirs
IV. Administrators/executors

A. I and II only
B. I, II, and III only
C. All of the above.
D. None of the above.

98. Statement I: The presence of children does not disqualify parents to inheritance.
Statement II: The rules on legitimes are substitute for testamentary dispositions.

A. Statements I and II are false.

B. Statement I is true, but statement II is false.
C. Statement I is false, but statement II is true.
D. Statements I and II are true.

99. A compulsory heir may, despite the consequence of Disinheritance, still have the rights of his
legitime, for causes expressly stated by law.

A. True
B. False
C. Not sure if true or false.
D. At least I tried.
100. Disinheritance is applicable to compulsory and voluntary heirs.

A. True
B. False
C. Not sure if true or false.
D. At least I tried.