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Death real estate and estate taxes

The month of November we remember our dead. All Saints’ day and All Souls’ day. On any other time and day, the topic of death is usually avoided. It is a reality though, that a time will come when we will all die and it’s just a question of when.

Immediately after the death of a love one a person can be in a state of despair, overwhelmed with feelings of grief, emotional pain and inability to function. This we may know from experience. But, we need to face the fact that there are arrangements needed to be made and that someone has to do it. Arrangements such as the embalming, wake, casket, place of burial and the gravestone. Then the matter of the estate tax that will need to be taken care of.

At the transfer of the net estate,  an Estate tax will be imposed which is the difference between the gross estate (as defined under Section 85 of the Tax Code) and allowable deductions (under Section 86) of the decedent. A tax estate return is needed to be filed and paid to be able to transfer to the heirs the real estate of the decedent. Estate tax rates are graduated and will be based on the net estate amount.  Many problems arise when there is non payment of estate tax making it difficult to transfer to the buyers/heirs.

Gross estate is described as the value of all property, real or personal, tangible or intangible, wherever situated at the time of death. When decedent is a non resident or not a citizen of the Philippines at the time of his death, the only thing that will be included in the gross estate will be that part of the entire gross estate which is situated in the Philippines. Any proceeds of life insurance  are included in the gross estate and shall remain so unless the beneficiary is designated irrevocable.

 

 

 

DeathEstate1 Reaching For A Home

images from: www.foreclosurephilippines.com and lovewilliamsburglife.com