Practice question
After a taxed estate transfers an income-producing asset to heirs, they earn new income from it in later years. They claim the estate-transfer tax automatically settles every future income tax on those later gains. Which is best?
- Estate tax is prepaid income tax on every future receipt forever.
- Estate-transfer taxation and later income taxation concern distinct events and must be analyzed separately.
- Inherited assets can never yield taxable income.
- Every later gain automatically becomes part of the earlier death-date estate.
- The heirs' citizenship automatically becomes the decedent's.
Legal references
- NIRC Sections84-85,98 and104, read with TRAIN amendments: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
- RA10963, TRAIN, estate and donor tax amendments including Sections99-100: https://lawphil.net/statutes/repacts/ra2017/ra_10963_2017.html
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