2017 (Taxation) Bar Exam Questions: Question 15

[Answer/discuss the question below, or see 2017 bar exam Taxation Instructions; 2016 Taxation Questions: 1234567891011121314161718, and 19; See also 2017 Bar Exam: Information, Discussions, Tips, Questions and Results]


Casimira died on June 19, 2017 after three weeks of confinement due to an unsuccessful liver transplant. For her confinement, she had incurred substantial medical expenses that she financed through personal loans secured by mortgages on her real properties. Her heirs are still in the process of making an inventory of her assets that can be used to pay the estate taxes, if any, which are due on December 19, 2017.

(a) Are the medical expenses, personal loans and mortgages incurred by Casimira deductible from her gross estate? Explain your answer. (5%)

(b) May the heirs of Casimira file the estate tax return and pay the corresponding estate tax beyond December 19, 2017 without incurring interest and surcharge? Explain your answer. (3%)

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