2013 (Taxation) Bar Exam Questions: Multiple Choice Question 17

[Discuss/answer the question below. Or see Taxation Instructions; Taxation Essay Questions: 12, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12; Taxation Multiple Choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 1618, 19 and 20; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]

XVII.

Mr. Mayuga donated his residential house and lot to his son and duly paid the donor’s tax. In the Deed of Donation) Mr. Mayuga expressly reserved for himself the usufruct over the property for as long as he lived. Describe the donated property from the taxation perspective. (1%)

(A) The property will form part of Mr. Iv1ayuga’s gross estate when he dies.

(B) The property will not form part of Mr. Mayuga’s gross estate when he dies because he paid the donor’s tax.

(C) The property will form part of Mr. Mayuga’s gross estate because he died soon after the donation.

(D) The property will not form part of Mr. Mayuga’s gross estate because it is no longer his.

7 comments

  1. A. it is a Transfer in Contemplation of death – the donor still has control over the donated property by expressly preserving for himself the usufruct thereon for as long as he lived.

    1. Hehe kahit ako hindi rin naman sure sa sagot, D lang sinagot ko kasi the reservation of the usufruct during the lifetime of the donor does not in anyway affect the validity and taking effect of the transfer of the said property and of the donee becoming the absolute owner thereof (although naked ownership in the mean time) hence even if the donor dies the said property will no longer form part of his estate because he is no longer the owner thereof, the fact that the donor reserved the right over the usufruct clearly indicates that he acknowledges that he is no longer the owner of the property, if he is still the owner the reservation would no longer be necessary because diba pag owner ka you can do anything you want.

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