Donation can be deducted from gross estate of decedent
"m My aunt passed away in February 2018 and left properties under her name. Before she died, she donated a parcel of land to the local government of her home province, which shall be used as part of a public road. We are now preparing for the filing of my aunt’s estate tax return. Can we deduct the said donation in computing for her taxable net estate?
Please be informed that Section 86 (A) (6) of the National Internal Revenue Code, as amended by Republic Act 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN)” provides:“(A) Deductions Allowed to the Estate of Citizen or a Resident. - In the case of a citizen or resident of the Philippines, by deducting from the value of the gross estate -
xxx(6) Transfers for Public Use. - The amount of all the bequests, legacies, devises or transfers to or for the use of the Government of the Republic of the Philippines, or any political subdivision thereof, for exclusively public purposes.”
xxx.”In your situation, your aunt donated a parcel of land to and for the use of the local government of her home province, which shall be used as a public road. Conversely, the said donation amounts to a transfer for public use considering that the property shall be used for a public purpose. Hence, the value of the property donated can be deducted from your aunt’s gross estate in order to arrive at the proper taxable net estate.This opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated. We hope that we were able to enlighten you on the matter.Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to "
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"Donation can be deducted from gross estate of decedent"
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and updated on 15 September 2021