TITLE III — ESTATE AND DONOR’S TAXES
value of the gross estate, but not including any income tax upon
income received after the death of the decedent, or property taxes
not accrued before his death, or any estate tax. The deduction herein
allowed in the case of claims against the estate, unpaid mortgages or
any indebtedness shall, when founded upon a promise or agreement,
be limited to the extent that they were contracted bona fide and
for an adequate and full consideration in money or money’s worth.
There shall also be deducted losses incurred during the settlement of
the estate arising from fires, storms, shipwreck, or other casualties,
or from robbery, theft or embezzlement, when such losses are not
compensated for by insurance or otherwise, and if at the time of the
filing of the return such losses have not been claimed as a deduction
for the income tax purposes in an income tax return, and provided
that such losses were incurred not later than the last day for the
payment of the estate tax as prescribed in Subsection (A) of Section
91.
(5) Property Previously Taxed. — An amount equal to the value specified
below of any property forming a part of the gross estate situated in
the Philippines of any person who died within five (5) years prior
to the death of the decedent, or transferred to the decedent by gift
within five (5) years prior to his death, where such property can
be identified as having been received by the decedent from the
donor by gift, or from such prior decedent by gift, bequest, devise or
inheritance, or which can be identified as having been acquired in
exchange for property so received:
One hundred percent (100%) of the value, if the prior decedent
died within one (1) year prior to the death of the decedent, or if the
property was transferred to him by gift within the same period prior
to his death;
Eighty percent (80%) of the value, if the prior decedent died more
than one (1) year but not more than two (2) years prior to the death
of the decedent, or if the property was transferred to him by gift
within the same period prior to his death;
Sixty percent (60%) of the value, if the prior decedent died more
than two (2) years but not more than three (3) years prior to the
death of the decedent, or if the property was transferred to him by
gift within the same period prior to his death;
Forty percent (40%) of the value, if the prior decedent died more
than three (3) years but not more than four (4) years prior to the
National Internal Revenue Code of 1997 (as amended by the TRAIN Law, RAs 11256, 11346 and 11467)
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