Tax credit for estate tax paid to a foreign country
- Who can claim? Only citizen or resident alien decedent.
- Limitations on tax credit:
Net estate (per Foreign Country) / Total Net Estate x Philippine Estate Tax
Net estate (All Foreign Countries) / Total Net Estate x Philippine Estate Tax
Items 1 and 2 are based on the following information:
Country A: Net estate of P100,000 and estate tax paid of P3,500; Country B: Net estate of P200,000 and estate tax paid of P5,000; Philippines: Net estate of P200,000. The decedent was a citizen and resident of the Philippines.
- The estate tax credit for foreign estate taxes paid is:
a. 9000 b. 8500 c. 8000 d. 7000
- The estate tax still due after credit for foreign estate taxes paid is:
a. 6000 b. 6500 c. 7000 d. 15000
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JONATHAN RUIZ CPA, MIB