Request for Determination of the Tax Base for the Computation of the Estate Tax Due on Real Properties

October 30, 1991 BIR RULING NO. 220-91 103 000-00 220-91 S i r : This refers to your letter dated August 20, 1991 requesting in effect a ruling as to what law, Revenue Regulations or RAMO is applicable in the determination of the tax base for the computation of the estate tax due on the real properties left by your mother-in-law, Maria L. Abiera, who died intestate on April 14, 1985. cdt It is represented that the decedent left the following real properties situated at Aklan with their corresponding market value based on the tax declaration of such properties effective 1985 issued in the name of the decedent: Market Value April 14, 1985 Residential lots without improvements P39,530.18 Agricultural land (permanent plants damaged/destroyed by typhoon Undang) 23,524.99 Commercial land (55 sq. m. without improvement) 3,594.74 Total Market Value per Tax declaration P120,649.91 =========== that you are making your aforesaid request because there is no zonal valuation of real properties in Aklan in 1985; and that the estate tax return of the decedent will be filed presently. In reply, please be informed that under then Section 103 (now Section 81) of the Tax Code, the estate shall be appraised at its fair market value as of the time of death, or as of six months thereafter, at the election of the executor or administrator. However, the appraised value of real property as of time of death, or at the election of the executor or administrator, as of 6 months after death, shall be either (a) the current and fair market value as shown in the schedule of values fixed by the Provincial and City Assessor or (b) the fair market value as determined by the Commissioner of Internal Revenue, whichever is higher, and shall be binding upon all concerned for purposes of computing any internal revenue tax based on the value of the property. Accordingly, and since at the time of death of the decedent, April 14, 1985, there is as yet no fair market value of real properties as determined by the Commissioner, the tax base in computing the estate tax due upon the death of your mother-in-law, Maria L. Abiera, concerning her real properties above enumerated is determined by applying the current and fair market value as shown in the schedule of values fixed by the Provincial and City Assessors as of April 14, 1985 or six months thereafter, at the election of the executor or administrator of the estate of the decedent. Moreover, the said estate is likewise subject to the civil penalty imposed under then Sections 113(a) (1) and 114 [now Section 248 (a) (1) and (3)] of the Tax Code for non-filing and non-payment for the estate tax due within the period prescribed under then Sections 105 (b) and 107(a) [now Sections 83 (b) and 84 (a)] of the Tax Code. cdti Very truly yours, (SGD.) JOSE U. ONG Commissioner