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Estate tax too much to pay off by heirs

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1 Estate tax too much to pay off by heirs on Thu Sep 28, 2017 1:19 pm

silvrewolf


Arresto Menor
Father owned a lot of real estate properties and had passed away 4 years ago. He didn't have a will and the wife and children are are trying to settle his estate. The amount of the estate tax is way too much for the family combined to pay off at one time. The question is, does the estate tax need to filed and paid all at once? Or is there a way to settle it one property at a time? Is there a reference in law about this?

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2 Re: Estate tax too much to pay off by heirs on Fri Sep 29, 2017 11:00 am

karl704


Reclusion Temporal
You may settle the properties one at a time, or another option is to sell one property then use the proceeds in settling the tax liabilities for the other properties

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3 Re: Estate tax too much to pay off by heirs on Sun Oct 01, 2017 6:12 pm

silvrewolf


Arresto Menor
karl704 wrote:You may settle the properties one at a time, or another option is to sell one property then use the proceeds in settling the tax liabilities for the other properties

Thanks for the advice Karl. How do you apply the deductions (e.g. hospital expenses) to total taxable amount if you will pay off the estate tax for the properties one by one? And would you know if there are published guidelines around the process of paying them off one by one? I find a lot of examples online but they all describe how to pay estate tax all at once. Our plan is really to sell the properties, we were just assuming they all need to paid off at once.

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4 Re: Estate tax too much to pay off by heirs on Mon Oct 23, 2017 10:37 pm

Ladie


Prision Mayor
Hi I am not a lawyer but want to share my little knowledge. The Family Code of the Phil states that within one year upon dissolution of marriage, i.e. by death, the surviving spouse must inventory all properties and liquidate all liabilities. Estate tax, documentary stamp tax, transfer tax to heirs must be settled. Estate tax is based on the Fair Market Value, BIR Zonal Value or Assessed Value, whichever is higher. There are many deductible items from the gross cost which will be the basis how much to pay. Interest, surcharges, penalty and absence of death notification are things to consider in computing the tax. Read the BIR Tax Reform Act for more information. Besides, only your father's portion of your parents' conjugal property you will liquidate. In this case, all heirs of your father need to execute an extrajudicial settlement agreement. Read Rules 73 & 74 of the Rules of Court. We experienced the situation you are in now--no funds to pay. We sold one property without the CAR from BIR with understanding and agreement with the buyer. We used that sale proceeds to pay all we are supposed to pay. That helped us to settle our inheritance. ..Ladie


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