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extrajudicial settlement with waiver - what taxes do we have to pay?

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ecruz


Arresto Menor
hi. if my mom's property is settled extrajudicially with waiver, what needs to be paid to transfer the title to donee's name. estate tax? donor's tax? both? has the amnesty on estate tax been passed yet?

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thepoetsedge

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Estate taxes should be paid, if the property of your mom is under estate proceedings and her properties are being divided among her children and her spouse.

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ecruz


Arresto Menor
so we pay the estate tax, secure the certificate authorizing registration, submit the extrajudicial settlement with waiver (after securing signatures of heirs and publication) to rd for a title? so there is no need for a donor's tax? my mom passed 8 years ago and i heard the penalty and surcharge are enormous. where can i have the estate tax and the charges computed?

i'm sorry for the numerous questions and thanks in advance for the answers.

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thepoetsedge

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8 years ago? That is a lengthy time that passed without paying the necessary taxes. Indeed, there will be surcharges and penalties for late payment of taxes.

Donor's tax only applies if there was a donation done by your mother to the property in question. If there was none, estate tax should apply. But these are subject to certain conditions, and a tax lawyer should be able to sort things out for you once hired.

You can have the estate tax and charges computed by a lawyer specializing in tax.

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ecruz


Arresto Menor
yes, it was a long time. but real estate payments are updated. no one from the family wanted to take care of it, that is why it took so long. i guess i was misinformed because someone told me that the waiver constituted 'donating' therefore after the estate tax, which would be sizeable, there would be donor's tax to be paid by the other sibling's who waived their right over their share. this would make it more difficult to settle the long-overdue estate tax. thanks for your reply. i appreciate it greatly.

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thepoetsedge

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Did the heirs renounce their share for the benefit of a specific sibling, or did they just generally waive their rights sa lahat ng properties ng mother nyo?

If the general renunciation was done, then it should ONLY be subject to estate tax.

If they renounced their right over the properties for the benefit of a specific heir, that can be considered as a donation and it is subject to donor's tax.

For a more accurate assessment on your current tax liabilities, I humbly implore that you visit a lawyer specializing in taxation immediately. The longer you put off paying your tax liabilities, the higher the amount you have to pay in the future due to penalties and surcharges.

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ecruz


Arresto Menor
this is what appears in the extrajudicial settlement:

"That, FURTHER, WE, (all other siblings), do WAIVE, RENOUNCE AND QUITCLAIM forever, whatever SHARE, RIGHT, OWNERSHIP AND PARTICIPATION we have in the above described real properties in the manner following:

TO (one sibling) – PARCEL 1

TO (another sibling) – PARCEL 2

That we have received our just share and have no claim against each other."

i guess this is a waiver for the benefit of a sibling. how do you do a general renunciation? to whom does the property go to then? and how will the property then be transferred to the name of the heir?

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thepoetsedge

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ecruz wrote:this is what appears in the extrajudicial settlement:

"That, FURTHER, WE, (all other siblings), do WAIVE, RENOUNCE AND QUITCLAIM forever, whatever SHARE, RIGHT, OWNERSHIP AND PARTICIPATION we have in the above described real properties in the manner following:

TO (one sibling) – PARCEL 1

TO (another sibling) – PARCEL 2

That we have received our just share and have no claim against each other."

i guess this is a waiver for the benefit of a sibling. how do you do a general renunciation? to whom does the property go to then? and how will the property then be transferred to the name of the heir?

Yes, it seems to be to the benefit of a specific sibling. Donor's tax will be applied then to the specific sum that the sibling will receive once the land is sold and the amount is transferred to the sibling.

A general renunciation will be without the specific parts in the extrajudicial settlement. They just merely renounce their rights over said property WITHOUT naming specific beneficiaries. That means that the property will be divided among the siblings who did not renounce their rights. The amount, of course, will be bigger -- but that will be covered by the estate tax, NOT donor's tax.

The property will be divided, depending on the partition of the land AFTER estate tax shall be settled. At this point, you need a lawyer who specializes in property law and succession law to have the land divided among the remaining siblings. I am not sure if the land can be divided extrajudicially.

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ecruz


Arresto Menor
thank you very much for your patience. while i am at it, i would like to ask you some questions regarding my sister's property. my sister has a property under her name. in 2009, she made out a deed of sale of her property. half to my son and half to my brother. it was only when she died in 2016 that i saw the deeds of sale. now, my brother, whose house was built in half of the said property wants to transfer the title to his and my son's names. how do we go about it? what taxes do we pay? estate tax as well? then what? transfer tax? CGT? thanks in advance for your reply.

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