BIR Ruling No. 011-65

April 12, 1965 BIR RULING NO. 011-65 1st Indorsement Returned to the Regional Director, Regional District No. 5, North Manila, the entire docket relative to the income tax case of RAMON B. CARO (deceased) and his surviving spouse, CARMEN P. VDA. DE CARO, for the year 1958 with the following information: casia The record discloses that Mr. Ramon B. Caro and his wife; Carmen P. Caro, were engaged in the real estate business. Mr. Caro died on March 7, 1958, and on account of such death, a joint income tax return covering the period from January 1 to March 7, 1958 was filed. Thereafter, the surviving spouse, Carmen P. Vda. de Caro, filed her own income tax return covering the period from March 8, 1958 to December 31, 1958. In said return she claimed as personal and additional exemptions the amount of P3,000.00 and P600.00 respectively (P3,000.00 as head of family and P600.00 for a dependent child under 21 years of age). It appears, however, that only the amount of P3,000.00 representing 5/6 of the total personal and additional exemptions of P3,600.00 was allowed. The reason for disallowing full personal and additional exemptions was due to the fact that under section 23(d) of the Tax Code, "if the status of the taxpayer insofar as it affects the personal and additional exemptions for himself or his dependents, changes during the taxable year by reason of his death, the amount of the personal and additional exemptions shall be apportioned, under rules and regulations prescribed by the Secretary of Finance, in accordance with the number of months before and after such change . . .." The question to be resolved in this case is whether or not the surviving spouse who filed a return for the period following the death of her husband up to the end of the taxable year is entitled to the full personal and additional exemptions of P3,600.00. In the case of an individual who dies during the taxable year, the personal exemption and the credit for dependents shall be determined by his status at the time of his death, and the amount of personal and additional exemptions shall be apportioned in accordance with the number of months before and after such change (Section 23(d) of the Tax Code, in relation to Section 13 of Revenue Regulations No. 2). Consequently, when the surviving wife filed a joint income tax return on of her deceased husband covering the period from January 1 to March 7, 1958, the amount of the personal and additional exemptions shall be apportioned as follows: No. of months x Personal & additional ___________ exemptions 12 or 3/12 x P3,600.00 = P900.00 and in such case full credits shall be allowed to the surviving spouse, if any, according to his or her status at the close of the taxable year (B.I.R. Ruling dated May 21, 1956; Mertens, Law of Federal Income Taxation, 32.12). Consequently, the surviving wife, Carmen P. Vda. de Caro, who filed her own income tax return covering the period from March 8, 1958 to December 31, 1958 may claim full personal and additional exemptions of P3,000.00 and P600.00, respectively, or a total of P3,600.00, for she qualifies as head of a family, she having a minor child to whose support she materially contributed when her husband died on March 7, 1958. In other words, she may qualify as head of a family under Section 23(e)of the Tax Code and may be permitted to claim full personal and additional exemptions. cdt (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue