Determination of Net Estate

October 21, 1996 BIR RULING NO. 108-96 78 000-00 108-96 Ms. Sylvia C. Acosta Lot 6, Road 19, Phase 3 Cogeo Village Antipolo, Rizal M a d a m : This refers to your letter dated August 22, 1996 stating that Miguela de Leon-Dionisio, grandmother of your client, Renato Dionisio died on November 10, 1957; that Tereso Dionisio, son of Miguela de Leon-Dionisio and father of Renato Dionisio pre-deceased his mother because he died in 1945; that Isabel Dionisio-Lacsina, daughter of Miguela de Leon-Dionisio died on August 12, 1992 with two (2) surviving children; that when Miguela de Leon-Dionisio died, she left five (5) parcels of real estate properties and a residential house; that the only surviving heirs were her daughter, Isabel Dionisio-Lacsina and her grandson, Renato Dionisio; that Isabel Dionisio-Lacsina, instead of giving the share of her nephew, Renato Dionisio, fraudulently transferred all the properties in her name by executing affidavits that she was the sole heir of her mother; that when Isabel Dionisio-Lacsina died on August 2, 1992 Renato Dionisio filed a complaint in court against the children of Isabel Dionisio-Lacsina demanding for his share of the inheritance from the estate of his grandmother, Miguela de Leon-Dionisio, which was finally decided by way of an extra-judicial settlement; that Renato Dionisio gets the following share: cdll 1. 1/3 of TCT No. 638; 2. 1/3 of TCT No. 614; 3. 1/3 of TCT No. 615; 4. 1/2 plus 197 sq. m. of Tax Dec. C-011-01218; and 5. No share on the residential house and lot. that sometime in 1995, Renato Dionisios cousin filed the estate tax return for the estate of his mother, the late Isabel D. Lacsina, erroneously including the share of Renato Dionisio as part of the said estate; that Renato Dionisio, filed his protest asking for the exclusion of his share from the gross estate of his aunt, Isabel D. Lacsina which is subject to estate tax and that he should only pay the inheritance tax on his share based on its market valuation of the year his grandmother died. Based on the foregoing representation, you now request for a ruling on the following queries: "1. Is my client right on his protest that his share be excluded from the estate of Isabel Dionisio-Lacsina and should only pay the inheritance tax due him? "2. Can he be given clearance on his share from the properties of his grandmother which were already fraudulent transferred in the name of Isabel D. Lacsina? "3. Can he ask(ed) for a resurvey of the properties to segregate his share? In reply, please be informed as follows: 1. Pursuant to Article 981 of the Civil Code of the Philippines, should children of the deceased and descendants of other children who are dead, survive, the former shall inherit in their own right, and the latter by right of representation. In the instant case, your client Renato C. Dionisio inherited by right of representation the 1/2 portion of the aforementioned properties from his late grandmother Miguela de Leon Dionisio, he being the legitimate son of the late Tereso Dionisio, one of the two (2) children of the former. Having succeeded his late father his right to inherit had concurred with the late Isabel Dionisio-Lacsina upon the death of his grandmother Miguela de Leon Dionisio. The inheritance therefore should have been distributed between him and the late Isabel Dionisio-Lacsina. While the distribution did not happen since the aforementioned properties were fraudulently titled in the name of Isabel Dionisio-Lacsina, still accretion in favor of the former did not take place. Accordingly, upon Isabels death, the properties rightfully belonging to your client, Renato G. Dionisio, should have been excluded from the estate of Isabel Dionisio-Lacsina. On the other hand, Renato G. Dionisio will only pay the inheritance tax of the following shares: LLjur 1. 1/3 of TCT No. 638; 2. 1/3 of TCT No. 614; 3. 1/3 of TCT No. 615; 4. 1/2 plus 197 sq. m. of Tax Dec, C-011-01218 which was awarded to him by the court by virtue of its approval of the aforesaid extrajudicial settlement submitted in the complaint filed by your client against the children of Isabel Dionisio-Lacsina. 2. Your client can be given tax clearance on his share in the properties of his deceased grandmother which as represented were already fraudulently transferred in the name of Isabel Dionisio-Lacsina provided the corresponding estate and inheritance taxes due thereon in proportion to Renatos share have been paid applying the law enforced at the time of the death of the latter. 3. While the answer to query no. 3 is not within the ambit of taxation, the right to request for a re-survey of one's property in order to determine/segregate ownership is a personal right of an owner. cdta This ruling is being issued on the basis of the foregoing facts as represented, However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue