Valuation of the gross estate

Section. 5. – The properties comprising the gross estate shall be valued according to their fair market value as of the time of decedent’s death.

If the property is a real property, the appraised value thereof as of the time of death shall be, whichever is the higher of –

[1] The fair market value as determined by the Commissioner, or

[2] The fair market value as shown in the schedule of values fixed by the provincial and city assessors, whichever is higher.

For purposes of prescribing real property values, the Commissioner is authorized to divide the Philippines into different zones or areas and shall, upon consultation with competent appraisers, both from the private and public sectors, determine the fair market value of real properties located in each zone or area.

In the case of shares of stocks, the fair market value shall depend on whether the shares are listed or unlisted in the stock exchanges. Unlisted common shares are valued based on their book value while unlisted preferred shares are valued at par value. In determining the book value of common shares, appraisal surplus shall not be considered as well as the value assigned to preferred shares, if there are any. On this note, the valuation of unlisted shares shall be exempt from the provisions of RR No. 06-2013, as amended. For shares which are listed in the stock exchanges, the fair market value shall be the arithmetic mean between the highest and lowest quotation at a date nearest the date of death, if none is available on the date of death itself.

The fair market value of units of participation in any association, recreation or amusement club (such as golf, polo, or similar clubs), shall be the bid price nearest the date of death published in any newspaper or publication of general circulation.

To determine the value of the right to usufruct, use or habitation, as well as that of annuity, there shall be taken into account the probable life of the beneficiary in accordance with the latest basic standard mortality table, to be approved by the Secretary of Finance, upon recommendation of the Insurance Commissioner. (Revenue Regulation No. 12-2018. January 25, 2018)