61 | P a g e 2010-2015 Taxation Law Bar Examinations Yes. Unpaid mortgages upon, or any indebtedness with respect to property are deductible from…

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61 | P a g e 2010-2015 Taxation Law Bar Examinations Yes. Unpaid mortgages upon, or any indebtedness with respect to property are deductible from the gross estate only if the value of the decedent’s interest in said property, undiminished by such mortgage or indebtedness, is included in the gross estate (Section 86(A)(1)(e)). In the instant case, the interest of the decedent in the property purchased from the loan where the said property was used as the collateral, was not included in the gross estate. Accordingly, the unpaid balance of the loan at the time of Mr. Sakitin’s death is not deductible as “Claims against the Estate.” 12. Exclusions from estate Which among the following reduces the gross estate (not the net estate) of a citizen of the Philippines for purposes of estate taxation? (2011 Bar Question)

1. A.Transfers for public use
2. B.Property previously taxed
3. C.Standard deduction of P1 million
4. D.Capital of the surviving spouse

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