Monday, October 6, 2014

Allowable Deduction for Non-Resident Alien Decedent (Estate Tax)

1.       Expenses, the deductible amount is pro-rata using the following formula:

With regard to a non-resident, not a citizen decedent, the ELITE allowable to him would only be a pro-rata share of his GE in the Philippines over his worldwide GE:

                                                   GE Philippines   x   ELITE world
                                                   GE World
       
2.       Vanishing deduction
3.       Transfer for public use

        Not allowed as deductions are:
-  medical expenses
-  family home
-  standard deduction, and
-  amount received under R.A. 4917.             

No deduction shall be allowed to non-resident alien decedent unless the executor, administrator, or any of the heirs would include in the return required to be filed all the property from within and outside the Philippines.

SUMMARY OF DEDUCTIONS


Citizen or Resident Decedent
Non-resident Alien Decedent
1.  ELITE
Deductible
Deductible (pro-rated)
2. Transfers for public use
Deductible
Deductible
3.  Vanishing deduction
Deductible
Deductible
4.  Family home
Deductible
Nondeductible
5.  Standard deduction
Deductible
Nondeductible
6.  Medical expenses
Deductible
Nondeductible
7.  Amount received by heirs under RA 4917
Deductible
Nondeductible

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