The valuation of Mr. L’s gift to his children is the fair market value (FMV) of the property at the time of donation. It is the higher of the FMV as…

The question

The valuation of Mr. L’s gift to his children is the fair market value (FMV) of the property at the time of donation. It is the higher of the FMV as determined by the Commissioner or the FMV as shown in the schedule of values fixed by the provincial or city assessors. In this case, for the purpose of computing donor’s tax, the proper valuation is the value prepared by the City Assessors amounting to P2,500,00.00 because it is higher than the FMV determined by the CIR. In May 2010, Mr. And Mrs. Melencio Antonio donated a house and lot with a fair market value of P10 Million to their sob, Roberto, who is to be married during the same year to Josefina Angeles. Which statement below is INCORRECT? (2012 Bar Question)

1. A.There are four (4) donations made – two (2) donations are made by Mr. Melencio Antonio to Roberto and Josefina, and two (2) donations are made by Mrs. Antonio;
2. B.The four (4) donations are made by the Spouses Antonio to members of the family, hence, subject to the graduated donor’s tax rates (2%-15%);
3. C.Two (2) donations are made by the spouses to members of the family, while two (2) other donations are made to strangers;
4. D.Two (2) donations made by the spouses to Roberto are entitled to deduction from the gross gift as donation proper nuptias.

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