TAX3703 TAXATION OF ESTATES TEST BANK
COMPREHENSIVE EXAM PREP WITH 100%
VERIFIED SOLUTIONS 2026
◉NATURE OF ESTATE TAX . Answer: 1. Excise Tax
2. Revenue or General Tax
3. Ad Valorem Tax
4. National Tax
5. Progressive Tax
◉What is Excise Tax . Answer: Tax on the privilege to transfer
properties
◉What is Revenue or General Tax . Answer: Intended as a revenue or
fiscal measure
◉What is Ad Valorem Tax . Answer: Dependent on the value of the
estate
◉What is National Tax . Answer: Imposed by the National government
, ◉What is Progressive Tax . Answer: Determined based on a tax table of
progressive rates
◉PURPOSE AND JUSTIFICATION OF ESTATE TAX . Answer: 1.
Benefit-Received Theory
2. Privilege Theory or State Partnership Theory
3. Ability to Pay Theory
4. Redistribution of Wealth Theory
◉What is Benefit-Received Theory . Answer: It considers the services
the government renders in the distribution of the estate of the decedent,
either by law or in accordance with his wishes. For the performance of
these services and other benefits that accrue to the estate and the heirs,
the State collects the tax.
◉What is Privilege Theory or State Partnership Theory . Answer:
Accordingly, inheritance is not a right, but a privilege granted by the
State, and large estates have been acquired only with the protection of
the State. Consequently, the State, as a "passive and silent partner" in the
accumulation of property, has the right to collect the share which is
properly due to it
◉What is Ability to Pay Theory . Answer: This asserts that the receipt of
an inheritance, which is in the nature of unearned wealth or a windfall,
places assets in the hands of the heirs and beneficiaries thereby creating
an ability to pay the tax and thus to contribute to governmental income.
COMPREHENSIVE EXAM PREP WITH 100%
VERIFIED SOLUTIONS 2026
◉NATURE OF ESTATE TAX . Answer: 1. Excise Tax
2. Revenue or General Tax
3. Ad Valorem Tax
4. National Tax
5. Progressive Tax
◉What is Excise Tax . Answer: Tax on the privilege to transfer
properties
◉What is Revenue or General Tax . Answer: Intended as a revenue or
fiscal measure
◉What is Ad Valorem Tax . Answer: Dependent on the value of the
estate
◉What is National Tax . Answer: Imposed by the National government
, ◉What is Progressive Tax . Answer: Determined based on a tax table of
progressive rates
◉PURPOSE AND JUSTIFICATION OF ESTATE TAX . Answer: 1.
Benefit-Received Theory
2. Privilege Theory or State Partnership Theory
3. Ability to Pay Theory
4. Redistribution of Wealth Theory
◉What is Benefit-Received Theory . Answer: It considers the services
the government renders in the distribution of the estate of the decedent,
either by law or in accordance with his wishes. For the performance of
these services and other benefits that accrue to the estate and the heirs,
the State collects the tax.
◉What is Privilege Theory or State Partnership Theory . Answer:
Accordingly, inheritance is not a right, but a privilege granted by the
State, and large estates have been acquired only with the protection of
the State. Consequently, the State, as a "passive and silent partner" in the
accumulation of property, has the right to collect the share which is
properly due to it
◉What is Ability to Pay Theory . Answer: This asserts that the receipt of
an inheritance, which is in the nature of unearned wealth or a windfall,
places assets in the hands of the heirs and beneficiaries thereby creating
an ability to pay the tax and thus to contribute to governmental income.
