Gross-gift.docx

GROSS GIFT Transfers subject to donor’s tax: Direct gift; Gift trough creation of a trust; Condonation of debt; Repudiation of inheritance if: 1. Specifically, and categorically done in favor of identified heirs; and 2. To the exclusion or disadvantage of other coheirs. 5) Renunciation by the surviving spouse of his/her share in the conjugal partnership or absolute community after the dissolution of the marriage in favor of their heirs of the deceased spouse or any other person/s; 6) Transfer for insufficient consideration  1) 2) 3) 4)

EXCEPTION: Real property classified as capital asset. FMV at the time of sale PXXX Less: Selling Price (XXX) Taxable Gift PXXX

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 Gift from Common Property- the gift is taxable one-half to each donor spouse.  Donation between husband and wife during the marriage GENERAL RULE: The gift is not taxable, as it is declared void by law. EXCEPTION: Moderate gifts between the spouses are valid. Husband and wife are considered separate and distinct taxpayers for purposes of the donor’s tax. However, if what was donated is a conjugal or community property and only the husband signed the deed of donation, there is only one donor for donor’s tax purposes, without prejudice to the right f the wifeto question the validity of the donation without her consent pursuant to the pertinent provisions of the Civil Cod of the Philippines and the Family Code of the Philippines. EXEMPTIONS OR DEDUCTIONS FROM GROSS GIFT

COMPONENTS OF GROSS GIFT R P

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1) Dowry Exemption

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Repeated under TRAIN Law

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Requisites: 1. Gift made on account of marriage; 2. Given before its celebration or within 1 year thereafter; 3. Given to legitimate, recognized natural or adopted children;

4. Amount of exemption is P10,000 per donor per child.

2) Gifts to the Government-gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any of its political subdivision of the said government. 3) Gifts in favor of an educational and/or charitable, religious, cultural or social welfare, institution accredited nongovernment organization, trust or philanthropic organization or research institution or organization Requisites: 1) Gifts in favor of the following entities: i. Educational ii. Charitable iii. Religious iv. Cultural v. Social Welfare vi. Accredited nongovernment organization; vii. Trust or Philanthropic organization; viii. Research institution or organization; 2) Not more than 30% of the said gift shall be used for administration purposes. 4) Encumbrances on the property donated assumed by the donee 5) Diminution of gift provided by the donor 6) Exemption under Special Laws

1. International Rice Research Institute 2. Ramon Magsaysay Foundation 3. Integrated Bar of the Philippines 4. Development Academy of the Philippines 5. National Museum 6. National Library 7. Archives of the National Historical Institute 8. Museum of the Philippine Costumes 9. Intramuros Administration 10. Political contributions NOTE: For purposes of the donor’s tax, “NET GIFT” shall mean the net economic benefit from the transfer that accrues to the done. Exemption or RC/NRC/RA NRA deduction  Dowry **   Gifts to the Government   Gifts to educational, charitable, religious etc.   Encumbrances on gift assumed by done   Diminution of gift provided by donor **No longer allowed on donations made beginning Jan. 1, 2018.