(10%)
Antonia Santos, 30 years old, gainfully employed, is the sister of Edgardo Santos. She died in an airplane crash.
Edgardo is a lawyer and he negotiated with the airline company and insurance company and they were able to agree to a total settlement of P10 Million. This is what Antonia would have earned as somebody who was gainfully employed. Edgardo was her only heir.
a) Is the P10 Million subject to estate tax? Reason briefly.
b) Should Edgardo report the P10 Million as his income being Antonia’s only heir? Reason briefly.
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1 comment:
VII.
a.
The P10 million is subject to estate tax because the money forms part of the estate of decedent Antonia Santos.
b.
No, because inheritance is excluded from the computation of the income tax.
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