What You Need To Know About Estate Taxes
Atty. Tricia Villar sheds light on this matter
If you inherited a property from your deceased parents, you might have encountered the term "estate taxes." Here are some questions you might have in mind and an explanation for each:
1. What is included in a person’s estate?
"Everything a person owns forms part of his estate—land, buildings, houses, cars, shares of stock, bonds, promissory notes, etc. Note that upon a married person’s death, the conjugal share (1/2) of the widow/widower should be deducted in computing the total worth of the deceased’s estate."
2. What is the basis for the estate tax?
"Estate or inheritance tax (paid by the heir) will be based on the net worth of the estate of the deceased. This means that you are allowed certain deductions (with corresponding restrictions) under the law such as: a) funeral expenses; b) judicial expenses for testamentary/inestate proceedings; c) monetary claims against the estate; d) monetary claims against insolvent or bankrupt persons; e) losses on property not compensated by insurance; f) family home; and g) medical expenses."
Estate tax will be based on the worth of the estate after all allowable deductions have been made. The rates are as follows:
Source: Bureau of Internal Revenue
More on Realliving.com.ph