CO OWNERSHIP ESTATES AND TRUST
BY: MAMARIL SESE AND FRIENDS
CO OWNERSHIP: SLIDE 1
What is co-owners? articles 484 of the civil code of the Philippines provides that
there is co-ownership whenever the ownership of an undivided thing or right belongs
to different persons.
SLIDE 2
For taxation purposes inheritance is subjected to "estate tax" while donation is
subjected to "donors tax" they are both qualified as "transfer tax"
SLIDE 3
Co-owners are taxed individually on their distributive share in the income of the
co-ownership. Meaning that the co-ownership is not itself taxable for the reason
that activities of co-ownership is generally for the preservation of common
property and the collection of income.
SLIDE 4
When inherited and the property is still undivided for more than ten (10) years
with no attempt was ever made to divide among to the co-heirs, nor was the property
was not held on trust, the property should be considered as owned by unregistered
partnership, consequently, taxable as corporation.
SLIDE 5
Income tax of an estate refers to the income of the estate during the period of
administration.
SLIDE 6
What is an estate? Estate is the possessions or property of a person especially a
persons property in land. The assets and liabilities left by a persons at death.
SLIDE 7
Real estate is defined as the land and any permanent structures, like a home, or
improvements attached to the land, whether natural or man-made. Real estate is a
form of real property.
SLIDE 8
Applying the 6% tax rate with the net estate calculated by subtracting allowable
deductions from the gross estate, the estate tax is then computed by applying the
flat rate of 6%
SLIDE 9
The TRAIN law introduced a standardized deduction of 5melyon pisos for the estate
of every decedent. This means that irrespective of the size of the estate, 5melyun
pisos can be deducted from its gross value before the estate tax is calculated.
SLIDE 10
Deductions from the gross income of an estate and trust are the same items of
deductions allowed for individual tax payers under section 34 of tax code
SLIDE 11
section 34 of the tax code example
SLIDE 12
In addition to the usual allowable business expense, the amount of the income of
the estate for the taxable year which is properly paid and credited to the heir,
beneficiary, etc... should be deducted this is also known as special deduction.
However, such amount of income distributed shall be included
in the determination of the taxable income of the heir/legatee/beneficiary.
SLIDE 13
What is trust? A Trust is a legal entity with separate and distinct rights, similar
to a person or corporation. In a trust a party known as a trustor gives another
party the trustee the right to hold title and manage property or assets for benefit
of a third party, the beneficiary.
SLIDE 14
Parties to the trust
1. Trustor- person who establishes a trust.
2. Trustee- one in whom confidence is reposed as regards property for the benefit
of another person.
3. Fiduciary- any person or corporation that holds in trust an estate of another
person or persons.
4. Beneficiary- person for whose benefit trust is created.
SLIDE 15
Income of trust taxed to the beneficiaries. The income of a trust for the taxable
year which is to be distributed to the beneficiaries must be returned. Income
distributed to the beneficiaries of a trust is subject to creditable withholding
taxes. of 15% to be withheld by the trust.
