Funeral expenses

Q: What the conditions for the deductibility

of funeral expenses?

1. Whether paid or unpaid

2. Up to the time of interment

3. The actual amount or in an amount equal to

5% of the gross estate, whichever is lower,

but in no case to exceed P200,000

Note: (1) Actual funeral expenses shall mean those which

are actually incurred in connection with the interment or

burial of the deceased. The expenses must be duly

supported by receipts or invoices or other evidence to

show that they were actually incurred.

(2) The amount in excess of the P200,000 threshold shall

not be allowed as a deduction nor will it be allowed to be

claimed as a deduction under “claims against the estate.

Q: A died leaving an estate valued at

P20,000,000. His heirs spent P500,000 for all

the funeral services. How much should be

allowed as a deduction?

The amount deductible is only P200,000. To

determine amount deductible, compare P500,000

and P1,000,000 (5% of P20 million). The lower

amount is P500,000. However, it is beyond the

P200,000 threshold. Thus, only P200,000 will be

allowed as a deduction.

Q: Give some examples of funeral expenses

that are deductible

1. The mourning apparel of the surviving

spouse and unmarried minor children of the

deceased, bought and used on the occasion

of the burial

2. Expenses for the deceased’s wake,

including food and drinks

3. Publication charges for death notices;

4. Telecommunication expenses incurred in

informing relatives of the deceased;