tax midterm 3 year

Estate or inheritance

– refers to all the properties, rights and obligations of a person which are not extinguished by his death and also those which have accrued thereto since the opening of the succession.

estate

is an income taxpayer if under juridical settlement or administration.

trust

- is an agreement created by will or an agreement under which title to property is passed to another for conservation or investment with the income there from and ultimately the corpus or principal to be distributed in accordance with the directive of the creator as expressed in the governing instrument.

trustor or grantor

– is the person who establishes a trust.

beneficiary

– is the person for whose benefit the trust has been created. A beneficiary has equitable title to the property transferred to the trust, including generally the possession and use of the property.

fiduciary

– is the general term which applies to all persons or corporations that occupy positions of peculiar confidence toward others, such as trustees, executors, guardians or administrators, receivers or conservators.

taxable income

of an estate or trust shall be computed in the same manner and on the same basis as in the case of an individual.

april 15

taxable year of estate and trust shall be calendar year and must be filed on or before ________________ of the following year.

trust

__is a unique form of legal entity, being neither PURE TAXPAYER nor PURE CONDUIT .

Pre-taxed income

_______earned by a trust may be either retained by the trust or distributed to the trust’s beneficiary.

revocable trusts

In a ______________the title to income may be re-vested/transfer to the grantor, the trusts itself is not subject to income tax.

YES

is the grantor who is taxable. YES OR NO

irrevocable trust

is one that cannot be changed by recall or cancellation, both as to corpus or principal and income.

gross income of estate and trusts

are the same items of gross income of individuals as provided in the Tax Code. They include;

gross income

Income accumulated in trust for the benefit of unborn or unascertained person or persons with contingent interest and income accumulated or held for future distribution under the terms of the will or trust.

optional standard deduction

In general, there shall be allowed at the option of the taxpayer, itemized deductions or an Optional Standard Deduction (OSD) at the rate of forty percent (40%). In case of individual taxpayers, OSD shall be computed at the rate of forty percent (40%) of gross sales/receipts, as the case may be.

Trust Exempted from Tax

The tax imposed by this Title shall not apply to employee's trust which forms part of a pension, stock bonus or profit-sharing plan of an employer for the benefit of some or all of his employees:

fiduciary return

Guardians, trustees, executors, administrators, receivers, conservators and all persons or corporations, acting in any fiduciary capacity, shall render, in duplicate, a return of the income of the person, trust or estate for whom or which they act, and be subject to all the provisions of this Title, which apply to individuals in case such person, estate or trust has a gross income of Twenty thousand pesos (P20,000) or over during the taxable year.

Consolidation of 2 or more trusts

Where, in the case of two or more trusts, the creator of the trust in each instance is the same person, and the beneficiary in each instance is the same, the taxable income of all the trusts shall be consolidated and the tax provided in this Section computed on such consolidated income, and such proportion of said tax shall be assessed and collected from each trustee which the taxable income of the trust administered by him bears to the consolidated income of the several trusts.