Allowable Deductions in Computing Net Estate of Resident Decedent

January 22, 1999 BIR RULING NO. 009-99 86 (A)-000-00-009-99 Mr. Pepito A. Gonzales Certified Public Accountant 2895 Benita Street Tondo, Manila S i r : This refers to your letter dated November 19, 1998, requesting for a ruling to the effect that all items enumerated in Section 86(A) of the Tax Code of 1997 are allowable as deductions from the value of the gross estate of a resident decedent, in computing the net estate upon which the estate tax shall be due. Section 86(A) of the Tax Code of 1997 enumerates the allowable deductions in computing the net estate of a deceased resident or citizen, to wit: 1. Expenses, Losses, Indebtedness, and Taxes . . .; 2. Property Previously Taxed . . .; 3. Transfers for Public Use . . .; 4. The Home . . .; 5. Standard Deduction . . .; 6. Medical Expenses and . . .; and 7. Amount Received by Heirs under Republic Act No. 4917 . . . In reply, please be informed that when the provisions of a law contain an enumeration of things, the enumeration shall be construed in the sense of "mentioned," "indicated," "referred to," or " authorized ." (Words and Phrases Permanent Edition, Vol. 14A, p. 415). The interpretation that must prevail, therefore is, that the above enumerated items are separate and distinct items, independent of each other. As such, the above enumerated items are properly authorized by law to be deducted as independent, separate and distinct items of deduction, which may properly be deducted from the gross estate of a resident decedent, subject to the limitations or conditions that are provided for under each said item above. Clearly, therefore, it is not a requirement of the law, that the amounts computed, corresponding to the other remaining items in the enumeration (namely #s1-4 and 6-7 of Section 86(A) of the Tax Code of 1997), be included in the standard deduction, in #5 above, which will limit the entire deduction to the amount of the said item, amounting to One Million Pesos (P1,000,000.00). This interpretation is certainly contrary to the intention of the law. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue