BIR Ruling [DA-210-96]

June 10, 1996 BIR RULING [DA-210-96] MEMORANDUM TO : Mr. Eduardo T. Obero OIC Assistant Revenue District Officer Revenue Region No. 19 Revenue District Office No. 112 Tagum, Davao This refers to your letter dated December 2, 1995 requesting for a ruling as to whether or not the income of the estate of a decedent is subject to income tax before the settlement of the estate and issuance of estate tax clearance. cdtech In reply, please be informed that pursuant to Section 53(a) (3) of the Tax Code, as amended reading: "SEC. 53. Imposition of Tax . "(a) Application of tax . The tax imposed by this Title upon individuals shall apply to the income of estates or of any kind of property held in trust, including; xxx xxx xxx "(3) Income received by estates of deceased persons during the period of administration or settlement of the estate; and xxx xxx xxx" the decedent's estate is subject to income tax on income earned or received by it before its final settlement, judicially or extrajudicially and issuance of estate tax clearance. Estates are subject to income tax in the same manner and on the same basis as in the case of individuals. (Sec. 54, supra). In fact, in the case of a decedent's estate, the settlement of which is the object of testamentary or intestate proceedings, the fiduciary, executor or administrator is required to file an annual return for the estate up to the final settlement thereof. (Sec. 209, Revenue Regulations No. 2). LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue