Difference: donor's tax, estate tax

Here are some differences between donor's tax and estate tax.

Donation takes place (in other words, transfers property) during the lifetime of the donor. This is why it is called disposition "inter vivos." It may take place between natural and juridical persons.

On the other hand, succession or transfer of estate occurs at the moment of death (sometimes termed "after the death of the decedent or testator"). This is why it is called disposition "mortis causa." It takes place only between natural persons.

In case of donor's taxes, there is, of course, a need to file a return (report). The report shall include [1] each gift made during the taxable year which is to be included in computing the net gifts. Also included in the return are [2] deductions claimed and allowable, [3] any previous net gifts made during the same taxable year, [4] the name of the donee and [5] such further information as may be required by rules and regulations made pursuant to law. A return for donor's tax should be filed within 30 days after the donation was made.

In case of estate taxes, there is also a need to file a return. It shall include the following: [1] value of the gross estate, [2] deductions under Section 86 of the National Internal Revenue Code, [3] other pertinent information related to the estate and [4] if the gross estate exceeds P2,000,000, a certification by a certified public accountant (CPA) as to assets, deductions and taxes due, whether paid or not. The return should be filed within 6 months from the death of the decedent.

Popular Posts