Teacher’s Key Answers: 2016 Business and Transfer Taxation
1
BUSINESS & TRASFER TAX
SOLUTIONS MANUAL
Rex B. Banggawan, CPA, MBA
Dear Teacher,
In lecturing, I strongly advise you to follow the sequencing and chaptering of
the book. Please do
not follow other concept arrangement as this could confuse your students.
The arrangement
adopted here is already the optimal concept arrangement. Please emphasie
the concept structure
in the concept map in the initial page of the book. !s you deal with every
part of the concept
map, generate a summary of the concepts you will discuss in class. "et the
students take care of
the details to optimie time. The book is self#taught, reasonable students are
e$pected to
understand the discussion.
Do not give students copy of this manual. The quiers serve as independent
check of student%s
understanding and mastery of the concepts. There is no short#cut way to
learning. &eing able to
solve the problem does not necessarily mean true understanding.
'ay I share with you a few the various positive and unsolicited
commentaries regarding our ta$
books(
1. )I am thanking you because without your books, siguradong
nahirapan po ako sa
taxation* I know you are +od%s blessing to me, to us. I hope na marami pa
po kayong
matulungan na students especially sa ta$ation. # May Anne Reyes from !T
Mani"a #To$ %
in the &cto'er 201( )*A Board +xam,
-. )!minado pu ako wala akong natutunan sa undergrad sa ta$ kaya binasa
ko po ng mabuti
yung book nyo during review. Ang gaing po ng pagkakaorgani!e ng
topics at yung
presentation madaing maintindihan. salamat po # +dne" Tanhueco
-atu from Ane"es
)ity
/. )+ood day 0ir ust drop by to say thanks "or your wonder"u
masterpiece, Income
#axation. #ruy simpi$ed, principe%based approach.
/ 2 hoen
Ma'auiao from -iine
3or"d )o""ee of 4eas$i
3. )*. 3e are usin your text'oo5s 'oth ncome and Business and Transfer
Taxation. I am
very happy with the way the topics are presented and the books
hep me a ot in
understanding our essons very we*. 2 oshtien Adora'"e7 B!A
student 8+ Ma5ati
4. 9ood eenin !ir.  am an accountancy student from *am$ana. &our
book "or taxation is
ama!ing. I was abe to appreciate tax even more'/ ; Mar5 Ane"o
Ma""ari
5. )ood day. ’m Bert +scudero and ’m wor5in in a $riate com$any in
Ma5ati. I $nd your
Business and #rans"er #axes book very in"ormative and up to
date'./
%. (...)umai ang taxation dahi sa book mo' &ung dating
minememori!e ang namin,
ngayon naisapuso na namin even without memori!ing kasi the way
you iustrate the topic
eh naiintindihan agad. < Kuse"a Mae ani=a from niersity of !t. 4ouis
Tuuearao
6. )*e $nd your book comprehensive, simpe, and direct to the
point.” 2 !lberto 7alubaquib
r., 80" Tuguegarao
Teacher, I would like you say that you are using the right literature for your
students. Thank you
for your patronage. If you have comments on how we could improve this
service better for the
bene9t of more students, please feel free to te$t or e#mail me.
Teacher’s Key Answers: 2016 Business and Transfer Taxation
0hould you need my assistance on the e$ercises and quiers, please feel
free to contact me at
my number, 0>0(2?(>060, facebook Rea" +xce""ence or e#mail(
Rex'anawan@ymai".com. I
would be very glad to be of help to you
'ay +od bless your endeavors and your family always
KEY TO END-OF-CHAPTER PROBLEMS
CHAPTER 1 – I+#R)-C#I+ # C+-MP#I+ #A/
True or Fa!e 1
1. :alse ;business ta$, a form of consumption ta$<
-. True
/. True
3. True
4. True
5. :alse
=. True
6. True
>. :alse ;only domestic consumption<
1?. True ;the ta$ is imposed upon the buyer<
11. :alse ;ta$ applies only on domestic consumption<
1-. :alse ;sale abroad is a foreign consumption<
1/. :alse ;country of destination<
13. :alse ;sub@ect to ta$ to the buyer<
14. True ;particularly business ta$<
True or Fa!e "
1. True
-. True
/. :alse ;the former is a broader concept<
3. True
4. :alse ;it is payable by all who imports<
5. True
=. True
6. True
>. True ;statutory ta$payer A seller, economic ta$payer A buyer<
1?. True
Mu#$%e Co$'e – Teor() Par# 1
1. !
-. 7
/. D
3. 7
4. !
5. !
=. 7
6. D
>. 7
1?. !
11. &
1-. !
1/. !
13. 7
14. &
15. &
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/
1=. !
16. D
1>. 7
-?. &
Mu#$%e Co$'e! – Teor() Par# "
1. !
-. !
/. D
3. 7
4. &
5. &
=. 7
6. !
>. !
1?. D
11. 7
1-. &
1/. 7
13. &
14. 7
15. &
1=. !
16. !
1>. 7
-?. &
Mu#$%e Co$'e – Pro*e+ Par# 1
1. !
-. !
/. !
3. D
4. D
5. 7
=. !, ;P==,5?? $ 1-4B? C >=B< A P1??,???
6. !, ;P/?,???  P1?,???< C >=B A P31,-/=
>. &
1?. !
11. 7
1-. 7, ;P-?5,??? $ /B< A P5,16?
1/. D, ;P16?,??? sales 2 P1-?,??? purchase< not ;P16?,??? sales 2 P13?,???
cost of sales<
13. D
14. 7, the E!T on importation is impose upon purchase
15. D, ;P/??,???  P1,-??,???<
Mu#$%e Co$'e – Pro*e+ Par# "
Basic )ase 1
1. D, ;P1>?,??? importation  P14?,??? domestic sales<
Fote( The domestic purchase is ta$able to the seller. G$port sales are not
sub@ect to consumption ta$.
-. D, Hnly the importation is sub@ect to consumption ta$ since consumption
ta$ on sales ;&usiness ta$<
applies only to sellers regularly engaged in business.
Basic )ase 2
/. &, P/??,??? $ 1-B A P/5,???
3. 7, P-??,??? $ 1-B A P-3,???
4. 7, P/5,??? 2 P-3,???
5. &, P /??,??? $ /B A P>,???
Teacher’s Key Answers: 2016 Business and Transfer Taxation
3
Basic )ase 
=. D, P/4?,??? Philippine sales $ 1-B A P3-,???
6. &, P1??,??? purchase from abroad $ 1-B A P1-,???
>. D, P/4?,??? Philippine sales $ /B A P1?,4??
1?. 7, same in Fo. 6
Basic )ase ?
11. P6??,??? $ 1-B E!T A P>5,???
1-. D. ?B E!T on sales A &usiness Ta$ E!T on importation A 1-B $
P3??,??? A P36,???. Jence, P? and
P36,???
CHAPTER "
True or Fa!e 1
1. :alse
-. :alse
/. :alse ;on landed cost<
3. :alse ;1-B of landed cost<
4. :alse ;E!T only<
5. :alse ;from abroad<
=. :alse ;the purchase not the sale. 0ale abroad is e$empt for B ta$payers
and ero#rated for E!T
ta$payers<
6. :alse ;to the &ureau of 7ustoms<
>. True
1?. :alse ;Hnly food products in srcinal state<
11. True
1-. :alse ;e$emption is quali9ed to agricultural or marine food products in
srcinal state<
1/. :alse ;processed foods are vatable including ingredients thereto<
13. :alse ;if intended for personal or professional use only, e$empt<
14. True ;by virtue of legal e$emption<
True or Fa!e "
1. :alse ;only those related to the production of agricultural or marine food
products in srcinal state<
-. True
/. True
3. True
4. True
5. True ;professional services is vatable<
=. True
6. True
>. :alse ;only coop are e$empt<
1?. True
11. :alse ;any importer pays the E!T on importation<
1-. True
1/. True
13. :alse ;it is a ta$ upon the consumption of the resident buyer the E!T on
importation or the
withholding E!T is not a business ta$ but a pure consumption ta$<
14. True
Mu#$%e Co$'e – Teor() Agricutura or marine "ood products0 Part
1
1. D
-. 7
/. D
3. &
4. !
5. 7
=. 7
Teacher’s Key Answers: 2016 Business and Transfer Taxation
4
6. 7
>. D
1?. D
11. &
1-. D
1/. D
13. &
14. D
15. 7
1=. !
16. 7
1>. 7
-?. !
Mu#$%e Co$'e – Teor() Agricutura or marine "ood products0 Part
2
1. &
-. &
/. D
3. &
4. !
5. D
=. D
6. D
>. &
1?. 7
11. D
1-. D
1/. !
13.
14.
15.
1=.
16.
1>.
-?.
D
7
!
!
D
D
!
Mu#$%e Co$'e! – Teor() ther exempt importations
1. &
-. 7
/. 7
3. D
4. D
5. &
=. D
6. !
>. !
1?. D
11. 7
1-. !
1/. 7
13. &
14. !
15. !
1=. D
16. &
1>. 7
-?. D
-1. D
Teacher’s Key Answers: 2016 Business and Transfer Taxation
5
Mu#$%e Co$'e – Pro*e+ Par# 1
1. D, Tuna and salmon are food products in srcinal state
-. 7, ;P/-?,??? $ 1?6B $ 1-B< A P31,3=Fote( The 1?B customs duties forms part of the E!T base.
/. &, ;P-??,??? prof. instruments  P/4?,??? school supplies< $ 1-B A P
55,???
3. &, all are e$empt agricultural food products, e$cept the marinated milk9sh
which is considered
processed. Jence, P1??,??? $ 1-B A P1-,???.
4. D, P1,3??,??? $ 1-B A P156,???
5. D, ;P34?,???  P-4?,???< $ 1-B A P63,???
=. D, ;P5??,???  P-4?,???  P34?,???< $ 1-B A P145,???
6. !, rice is e$empt from consumption ta$
>. &, ;P/??,??? $ 1-B< A P/5,???
1?. D, ;P1,???,???  P/??,???  P-??,???  P/??,???< $ 1-B A P-15,???

Mu#$%e Co$'e – Pro*e+ Par# "
1. &, ;P1,1??,??? $ 11?B< $ 1-B A P134,-??
-. D, e$empt if imported by agri#coop
/. &
3. 7, Hnly the personal car is sub@ect to E!T.
4. &, ;P-??,??? $ 1-B< A P-3,???
Fote( The P6??,??? is a technical importation.
5. 7, ;P/,???,??? $ 5?B< $ 1-B A P-15,???
=. D, K;PL3?,??? $ P3/ML1< $ 11?B  P1??,???< $ 1-B A P-/>,?3?
6. D,
Dutiable value ;P-3,??? M 14B< P 15?,???
7ustoms duties -3,???
&H7 charges 1/3,???
Total P /16,???
'ultiply by( 1-B
E!T on importation P /6,15?
>. D
Purchase cost ;L1-,??? $ P3-.6?< P 41/,5??
Hther costs 134,???
Total P 546,5??
7ustom%s duties ;P546,5?? $ 1?B< 54,65?
&H7 charges 1??,???
Total landed cost P 6-3,35?
'ultiply by( 1-B
E!T on importation P >6,>/4.-?
1?. 7
Purchase cost ;L4,??? $ P3-.4?< P -1-,4??
Insurance 3,???
:reight 14,???
Nharfage fee 3,???
!rrastre charges =,???
&rokerage fee 6,???
7ustoms% duties -3,???
G$cise ta$ 16,???
Total landed cost P ->-,4??
'ultiply by( 1-B
E!T on importation P /4,1??
Teacher’s Key Answers: 2016 Business and Transfer Taxation
=
CHAPTER ,
True or Fa!e) Par# 1
1. :alse
-. :alse ;it depends upon the type of properties or services sold<
/. True
3. True
4. :alse ;employment is a distinct type of undertaking separate from
business<
5. True
=. True ;generally speaking, although, an employee can be self#employed<
6. :alse ;not all, the sale of ordinary assets is considered made in the
ordinary course of business for
E!T ta$payers<
>. True ;as a rule<
1?. :alse
11. :alse ;non#registration is not an e$cuse to business ta$ liability<
1-. True
1/. :alse ;it is the type of activity that determines ta$ability to the E!T not
the purpose of the
undertaking. If the business activity is commercial in nature, it is ta$able
even if it is intended for
non#pro9t purposes<
13. :alse
14. :alse
True or Fa!e) Par# "
1. :alse ;e$empt from business ta$ but not to income ta$<
-. :alse ;still an employee<
/. True
3. :alse
4. True
5. :alse ;they are for pro9t but were given e$emption due to their nature<
=. True
6. True
>. :alse ;professionals cannot qualify as marginal income earners<
1?. True ;by revenue regulations<
11. :alse ;Ta$able only on unrelated activities<
1-. :alse
1/. :alse ;regardless of the disposition made of such income<
13. True
14. True
15. True
1=. :alse ;spouses are separate business ta$payers<
16. True
1>. :alse ;P4?? not P1,???<
-?. :alse ;only those with sales operation pays the registration fee<
True or Fa!e) Par# ,
1. True
-. True
/. True
3. :alse
4. :alse
5. :alse ;brokers are sellers of services<
=. :alse
6. True
>. :alse
1?. :alse ;sales of service<
11. True
1-. True
Teacher’s Key Answers: 2016 Business and Transfer Taxation
6
1/. True
13. True
14. True
15. True
1=. True
16. True
1>. True
-?. :alse ;as a rule, e$cept only to life insurers<
True or Fa!e) Par# 
1. True
-. :alse
/. True
3. True
4. True
5. True
=. True
6. :alse ;ta$able quarter<
>. True
1?. True
11. True
1-. :alse ;all E!T ta$payers whether individuals or corporations 9les monthly
and quarterly E!T returns<
1/. :alse ;it is the other way around<
13. True
14. True
True or Fa!e .
1. :alse ;always percentage ta$<
-. True
/. :alse
3. :alse ;rates vary from O of 1B to /?B<
4. :alse ;not all, e$cept those who derives only e$empt sales or receipts from
services speci9cally
sub@ect to percentage ta$<
5. :alse ;egistrable person pertains to those who e$ceed the E!T threshold<
=. :alse ;Hutput E!T less Input E!T<
6. :alse
>. :alse ;P1?,???,???<
1?. :alse ;not within, )!:TG the /#year lock#in period<
11. True ;they are locked#in forever<
1-. :alse ;)without the bene9t<
Mu#$%e Co$'e – Teor() Par# 1
1. 7
-. 7
/. D
3. !
4. 7
5. !
=. &
6. &
>. D
1?. !
11. 7
1-. &
1/. D
13. D
14. &
15. &
Teacher’s Key Answers: 2016 Business and Transfer Taxation
>
1=. D
16. !
1>. D
-?. &
Mu#$%e Co$'e – Teor() Par# "
1. !
-. D
/. !
3. 7
4. D
5. D
=. 7
6. !
>. !
1?. D
11. &
1-. !
1/. 7
13. D
14. !
15. &
1=. D
16. !
1>. 7
-?. &
-1. &
--. D
-/. D
-3. &
-4. 7
Mu#$%e Co$'e – Pro*e+ Par# 1
1. 7, ;P-4?,???  P1??,???<
-. &
/. !
3. &
Fote( The sales do not pertain to the broker because the securities sold are
not his inventories.
4. !. !n investor is not sub@ect to a business ta$. Hnly dealer of securities
;those engaged in buy#andsell
of securities< are sub@ect to business ta$.
5. !. 'r. 'asipag is a marginal income earner who is e$empt from business
ta$.
=. 7, ;P3??,???  P/5,???<
Fote( The sale of lot held as investment ;a capital asset< is not a business
sale.
6. &. The sale of souvenir is commercial in nature, hence, sub@ect to business
ta$.
>. &. ;P-??,???  P4?,???< The sale of investment ;a capital asset< is not
sub@ect to business ta$.
1?. &.
11. D. The creditable income ta$ is not deductible against gross receipts.
1-. !. 'ang Pandoy is not engaged in the realty business.
1/. !. ;:ees received under an employer#employee relationship is
compensation income, not business
income. Jence, e$empt from business ta$<
13. D. The 9rst quarter now ends every Fovember /?, -?13 hence, the
deadline of the quarterly E!T
return is December -4, -?13.
14. D. The third quarter ends 'ay /1, -?14 hence, the deadline of the
quarterly E!T return shall be
une -4, -?14.
Mu#$%e Co$'e – Pro*e+ Par# "
1. 7, ;P-??,???  P/??,??? 2 P3?,???  P-?,???< A P36?,???
-. 7. -?th day from the end of the month.
Teacher’s Key Answers: 2016 Business and Transfer Taxation
1?
/. D. The calendar quarter ends 0eptember /?, -?13 hence, the deadline of
the quarterly E!T return is
Hctober -4, -?13.
3. D, ;P6?,???  P-?,??? advances  P3?,??? HP7< A P13?,???
4. 7, Hther sales e$ceeds P1,>1>,4??.
5. !
=. 7. 0ervice providers are sub@ect to ta$ on receipts. Fon#E!T ta$payers are
not sub@ect to quarterly
9ling.
6. D. 0ellers of goods are sub@ect to ta$ on sales.
>. !. E!T ta$payers are sub@ect to quarterly 9ling.
1?. & ;&ased on sales and sub@ect to quarterly 9ling<
11. 7. The sale of cakes is a sale of goods hence, sub@ect to ta$ on sales.
1-. !
1/. 7
13. &
14. D. P /5,??? 2 P? input E!T A P/5,???
Fote( registration should have been made in Hctober. ;P/??,??? $ 1-B A
P/5,??? output E!T<. Fo
deduction is allowable for input E!T. Fo credit shall be made for the
percentage ta$ paid since
automatic set#oQ is not allowed in ta$ation.
15. 7. P/5,??? 2 P? input E!T 2 P>,??? percentage ta$ A P-=,???
1=. D. ;If 7hemre$ applied for cash refund, it will receive cash rather than ta$
credit.< Fo credit for the
percentage ta$ paid shall be taken.
16. & ;P3??,??? $ 1-B A P36,??? output E!T less P-6,??? input E!T< A
P-?,???<
1>. D ;P1?3,???  P5,???< $ /B A P/,/??
-?. D ;P4-,???  P3,???< $ 1-M11- A P5,???
CHAPTER 
E/er'$!e Dr$!
True or Fa!e 1
1. Eegetables 3xempt
-. 7ooked rice 4atabe
/. 0undried banana 3xempt
3. 7anned 9sh 4atabe
4. :ruit shake 3xempt
5. &oiled eggs 3xempt
=. :resh fruits 3xempt
6. :resh sea foods 3xempt
>. "umber 4atabe
1?. Hrchids and bonsai 4atabe
11. 7hicken manure 3xempt 5"ertii!er6
1-. &amboo 4atabe
1/. &amboo shoots 3xempt
13. 7otton seeds 4atabe
14. 7otton 4atabe
15. Nheat 3xempt
1=. 7acao 3xempt
16. 7ocoa 4atabe 5processed6
1>. 7heese 4atabe 5processed6
-?. 7harcoal 4atabe 5non%"ood6
-1. :urniture 4atabe
--. Roo animals 4atabe
-/. Tobacco 4atabe 5non%"ood6
-3. Tea 3xempt
-4. !quarium 9sh 4atabe
-5. 0moked or dried 9sh 3xempt
-=. 7anned 9sh 4atabe
Teacher’s Key Answers: 2016 Business and Transfer Taxation
11
1. True
-. True
/. :alse ;e$cept pesticide<
3. True
4. :alse
5. :alse ;e$empt<
=. :alse
6. :alse
>. True
1?. True
11. :alse ;processed<
1-. :alse
1/. :alse
13. True
14. :alse
True or Fa!e "
1. True ;but is sub@ect to percentage ta$<
-. True
/. True
3. True
4. :alse ;generally vatable, e$cept only on their sale of books held as
inventory<
5. :alse
=. :alse
6. :alse ;sub@ect to ?B E!T<
>. :alse ;e$empt from business ta$<
1?. :alse
11. :alse. 'onthly rental not annual rental.
1-. :alse
1/. :alse. Fon#dealers are not sub@ect to business ta$ including E!T.
13. True
14. :alse
Mu#$%e Co$'e – Teor() Par# 1
1. &
-. 7
/.
3.
4.
5.
=.
6.
>.
!
D
7
D
7
!
!
1?. !
11. 7
1-. D
1/. D
13. !
14. D
15. 7
1=. !
16. 7
1>. &
-?. &
Mu#$%e Co$'e - Teor() Par# "
1. D
-. !
Teacher’s Key Answers: 2016 Business and Transfer Taxation
1/. D
3. !
4. D
5. D
=. !
6. 7
>. D
1?. D
11. D
1-. 7
1/. &
13. D
14. 7
15. &
1=. D
16. 7
1>. D
-?. 7
Mu#$%e Co$'e) Par# ,
1. 7
-. !
/. D
3. D
4. &
5. !
=. &
6. !
>. &
1?. D
11. D
1-. 7
1/. &
13. &
14. !
Mu#$%e-Co$'e – Pro*e+!) Par# 1
1. &
-. !
/. D. Pesticides and water pump are ta$able.
3. D. &oth are sellers of agricultural food products in srcinal state.
4. !. !ll are agricultural food products ;e$empt<.
5. !.
=. D. G$cess fresh sardines and dried 9sh are marine food products in srcinal
state.
6. &. The sales of vegetables are e$empt from business ta$.
>. !. This is a business for mere subsistence.
1?. &. ;P14,???  P6?,???< A P>4,???
11. 7. ;P--?,???  P-4?,???< A P3=?,???
1-. !. The importation of vegetables, an agricultural food product in srcinal
state, are E!T#e$empt.
1/. !. The sale of vegetables is also e$empt from the E!T.
13. !. The sale of personal asset is e$empt.
14. &. ! printing press is selling service, hence, sub@ect to ta$ on receipts ;i.e.
collections<. Jence,
P14?,???  P3??,???  P6?,??? A P 5/?,???.
15. &. 7ompensation income is not business income. Director%s fees is part of
compensation income.
1=. &
16. &. The sale of residential lot that do not e$ceed P1,>1>,4?? and
residential dwelling that do not
e$ceed P/,1>>,-?? is e$empt. The sale of commercial lot is vatable.
1>. !
-?. &
Teacher’s Key Answers: 2016 Business and Transfer Taxation
1/
Mu#$%e-Co$'e – Pro*e+!) Par# "
1. &. The sale of hospital services is e$empt, e$cept the sale of medicine.
-. 7
/. &
3. !
4. !
5. 7
=. D
6. !. Fo e$emption e$ists for leases of commercial spaces.
>. &. The lease of residential unit at an amount not e$ceeding P1-,6??Munit
per month is e$empt.
Jence, ;4? units $ P1?,???< A P4??,???.
1?. &. E!T because the annual value of the P4??,??? monthly rental e$ceeds
the E!T threshold.
11. &. Fote the residential lot e$ceeds the P1,>1>,4?? price ceiling.
1-. &
1/. !
13. !. The aggregation rule does not apply because there are two separate
buyers. !ll of the residential
units are sold below the P/,1>>,-?? price ceilings.
14. &
Mu#$%e-Co$'e – Pro*e+!) Par# ,
1. D
-. &. The unrelated receipt is sub@ect to business ta$.
/. D
3. D
4. &. Fote that fares from passengers on international voyage or air transport
is e$empt.
5. D. E!T ta$payers are sub@ect to E!T on their e$port sales but at ero rate.
=. &. Fon#E!T ta$payers are e$empt on e$port sales.
6. & ;P1??,??? $ /B for non#E!T ta$payers<
>. D. ;The e$port sales is also TAXABLE but at a RGH#!TG. The total
ta$able sales shall be P1??S 
P1-?S A P--?S<
1?. &. P 1??S $ 1-B  P1-?S $ ?B A P1-,???
11. 7. ;P-,??? $ 6?B<, note that the P-,??? is e$clusive of E!T
1-. !. ;P1,1-?M11-B< $ 6?B
1/. !. Rero because hospital services are E!T e$empt.
13. !. Rero because rentals of residence not e$ceeding P1-,6??Mmonth per
unit is e$empt.
14. 7. ;P/,/5? 2 P/,/5? $ 1M/ $ 1-BM11-B E!T on senior citien 2 P/,/5? $
1M/M11-B $ -?B discount<
CHAPTER .
E/er'$!e Dr$!
1. 7ommon carrier by land 2 transport of passenger 78 percentage tax
-. 7ommon carrier by land 2 transport of cargoes 4A# or 7 percentage tax
/. 7ommon carrier by sea 4A#
3. 7ommon carrier by air 4A#
4. International carrier 2 passenger 3xempt
5. International carrier 2 cargoes, baggage or mails 78 percentage tax
=. Fon#life insurance 4A#
6. "ife insurance 28 percentage tax
>. &ank 2 short#term loans 98 percentage tax
1?. &ank 2 long#term loans 18 percentage tax
11. :ranchise grantees of electricity4A#
1-. :ranchise grantees of water 28 percentage tax
1/. :ranchise grantees of gas 28 percentage tax
13. :ranchise grantees of telephone 2 inbound calls 3xempt
14. :ranchisee grantees of telephone 2 outbound calls 1:8 percentage tax
15. Hperators of cinemas 4A#
1=. Hperators of cockpits 1;8 percentage tax
Teacher’s Key Answers: 2016 Business and Transfer Taxation
13
16. Hperators of @ai#alai 7:8 percentage tax
1>. Places of e$hibitions of professional basketballs 198 percentage tax
-?. Places of e$hibitions of professional bo$ing 1:8 percentage tax
-1. &owling alleys 4A# or percentage tax
--. Fight or day clubs and cabarets 1;8 percentage tax
Those indicated as 94A#/ here are "are 'usinesses which are ata'"e in
conce$t 'ut are usua""y reistered as
CAT in $ractice 'ecause of their o"ume of sa"es
True or Fa!e 1
1. :alse
-. :alse
/. :alse
3. True
4. :alse
5. :alse
=. True
6. True
>. :alse ;speci9cally sub@ect to /B percentage ta$<
1?. True
True or Fa!e "
1. True ;/B percentage ta$<
-. :alse
/. :alse ;it depends upon the type of utilities Fote electricity and
telecommunication franchisees are
sub@ect to E!T<
3. :alse ;the term )premiums ta$ pertains to insurance companies<
4. :alse ;only on outgoing calls<
5. :alse
=. True
6. True
>. :alse
1?. True
Mu#$%e Co$'e – Teor() Par# 1
1. &
-.
/.
3.
4.
5.
=.
6.
!
!
!
!
D
&
!
>. &
1?. !
11. D
1-. &
1/. D
13. D
14. D
Mu#$%e Co$'e – Teor() Par# "
1. &
-. D
/. !
3. !
4. !
5. &
=. D
6. 7
Teacher’s Key Answers: 2016 Business and Transfer Taxation
14
>. D
1?. &
11. 7
1-. 7
1/. !
13. D
14. D
Mu#$%e Co$'e – Teor() Par# ,
1. &
-. !
/. !
3. D
4. !
5. 7
=. 7
6. D
>. !
1?. D
11. 7
1-. D
1/. 7
13. 7
14. !
Mu#$%e Co$'e – Teor() Par# 
1. 7
-. &
/. &
3. &
4. D
5. &
=. 7
6. D
>. &
1?. !
11. 7
1-. 7
1/. !
13. 7
14. !
Mu#$%e-Co$'e – Pro*e+!) Par# 1
1. !
-. !
/. 7
3. &
4. &
5. 7
=. 7
6. 7
>. &
1?. !
11. 7
1-. &
1/. D
13. D
14. !
Teacher’s Key Answers: 2016 Business and Transfer Taxation
15
15. &
1=. 7
Mu#$%e-Co$'e – Pro*e+!) Par# "
1. &
-. !
/. &
3. !
4. &
5. &
=. &
6. &
>. 7
1?. 7
11. D
1-. D
1/. !
13. 7
14. 7 ;Fote( The outstanding shares is 1,???,???M3?B A -,4??,???. The IPH
B is =??,???M-,4??,??? A
-6B # equivalent to -B ta$. Jence, the ta$ is =??,??? $ P1?? $ -B
P1,3??,???<
15. ! ;/??,??? $ P>? $ O $ 1B<
1=. 7
16. D K;P13-,4??M>4B< $ /B A P 3,4??
1>. D ;P-??,??? $ /B A P 5,???<
CHAPTER 0
Dr$ E/er'$!e!
1. 0eller of agricultural food products G$empt
-. :urniture shop Eatable
/. Eegetable trader G$empt
3. ! private college G$empt
4. ! private hospital G$empt
5. ! dentist Eatable
=. Jospital drugstore Eatable
6. ! non#pro9t elementary school G$empt
>. ! government college G$empt
1?. estaurant Eatable
11. &us operator B ta$
1-. Jotel Eatable
1/. Hperator of domestic sea vessel Eatable
13. "ife insurance company B ta$
14. 'all Eatable
15. Domestic airliner Eatable
1=. "essor of vessels or aircraft U Eatable
16. &anks B ta$
1>. Hperator of ta$i B ta$
-?. International carriers B ta$
-1. Seepers of garage B ta$
--. &ook publishers G$empt
-/. Vuasi#banks B ta$
-3. Dealer of household appliances vatable
-4. Dealer of commercial lot Eatable
-5. Insurance agent Eatable
-=. Gmployee G$empt
-6. 7ontractor Eatable
->. Processor of sardines Eatable
/?. !uto parts dealer Eatable
/1. 'anufacturer of hog feeds G$empt
/-. 0eller of fertilier and seeds G$empt
//. :isherman G$empt
/3. :ish vendor G$empt
Teacher’s Key Answers: 2016 Business and Transfer Taxation
1=
/4. Te$tile manufacturer Eatable
UPresumption if silent, the lessor or owner is domestic
True or Fa!e 1
1. True
-. True
/. True
3. True ;by optional registration< 2 note( the statement did not say )must
4. True ;0ee revenue regulation provisions<
5. :alse ;Je is vatable.<
=. True ;E!T e$empt sales are not sub@ect to E!T regardless of the seller.<
6. True
>. :alse ;Hnly on vatable sales.<
1?. :alse ;:ranchise grantees of gas and water only.<
11. True
1-. True
1/. True
13. True
14. :alse ;It is sub@ect to 1-B output E!T<
True or Fa!e "
1. :alse ;Fo output E!T because the E!T rate is ?B.<
-. :alse ;It is a ero#rated sale. :or a non#E!T ta$payer, it is e$empt.<
/. :alse ;4?B surcharge<
3. True
4. :alse ;Hutput E!T but without bene9t of input E!T, no percentage ta$<
5. True
=. :alse ;The =B standard input E!T is claimable in lieu of the actual input
E!T<
6. :alse ;4B 9nal withholding E!T<
>. :alse ;0ometimes it becomes 1-B of the sale when no input E!T is
claimable<
1?. True
11. True ;Technically true because the E!T payable is always negative<
1-. :alse
1/. :alse ;Two monthly installments, and a quarterly payment<
13. True
14. :alse
Mu#$%e Co$'e – Teor() Par# 1
1. 7
-. &
/.
3.
4.
5.
=.
6.
>.
7
&
&
&
!
7
7
1?. !
11. D
1-. &
1/. !
13. !
14. D
15. !
1=. !
16. &
1>. !
-?. 7
Teacher’s Key Answers: 2016 Business and Transfer Taxation
16
Mu#$%e Co$'e – Teor() Par# "
1. D
-. 7
/. D
3. 7
4. !
5. !
=. D
6. D
>. !
1?. 7
11. D
1-. D
1/. D
13. 7
14. !
15. &
1=. 7
16. D
1>. D
-?. D
-1. D
--. &
-/. &
-3. !
-4. &
Mu#$%e Co$'e – Pro*e+!) Par# 1
1. D
-. 7
/. 7
3. 7
4. &
5. &
=. D
6. ! ;7losest answer<
Hutput E!T ;P16?,??? $ 1-M11-< P 1>,-65
Input E!T 1-,???
E!T payable P =,-65
Fote( ! seller of goods is ta$able on )gross receipts not on revenues.
Professors may accept an )G answer if students indicated the P=,-65
answer.
>. D ;The output E!T is the E!T due and payable if the ta$payer did not
register as E!T ta$payer<
1?. 7
Hutput E!T ;P3/5,6??#P11,-??< $ 1-M11- P 34,5??
Input E!T 13,???
E!T payable P /1,5??
Fote( billed prices are inclusive of E!T.
11. 7
1-. 7
Data from the books of accounts are e/'u!$e of E!T. 0ales and purchases
accounts e$clude E!T.
!pril 'ay une
Teacher’s Key Answers: 2016 Business and Transfer Taxation
1>
Hutput E!T ;1-B of sales< P =4,??? P 36,??? P 1>4,???
Input E!T ;1-B of purchases< 36,??? 4?,3?? 1--,3??
E!T due P -=,??? #P -,3?? P =-,5??
"ess E!T due on monthly return -=,???
Vuarterly E!T due P 34,5??
Fote( The quarterly balance composes of cumulative balances. Fegative E!T
due means no E!T
payable.
1/. D
13. !
Fote( The input E!T on e$empt sales will be part of costs. Thus, ;P/??,??? 2
P-6?,???< A P-?,???.
14. 7
Fote( The P-6?,??? purchases is inclusive of E!T. Jence, the standard input
E!T ;=B of the
P/??,??? sales< can be deducted from the P-6?,??? purchases. This is
because e$cess actual input
E!T over the standard input E!T is included as part of costs and e$penses.
Nhile the e$cess of the
standard input E!T over the actual input E!T is included as gain part of gross
income. Jence,
;P/??,??? sales 2 P-6?,??? 2 =B $ P/??,???< A P31,???
15. &
The input E!T must be removed from the purchases ;cost of sales<. Jence,
KP/??,??? sales 2
;P-6?,??? purchases 2 P13,??? input E!T< A P/3,???.
1=. &
Input E!T on sales of registrable persons cannot be claimed as input E!T.
0ince, there is no e$press
provision that disallowed ta$ credits can be claimed as a deduction, it is safe
to treat it as nondeductible
against gross income. It must be emphasied that the claim of deductions
and ta$ credits
are construed against the ta$payer.
Mu#$%e Co$'e – Pro*e+!) Par# "
1. 7 ;P4??,??? $ 1-M11-< A P4/,4=1
-. ! ;'eat is E!T e$empt hence it must not be billed with E!T<
/. D
1 cavan rice P -,4?? P -,4??
Eegetables P 1,4?? 1,4??
7ooking oil -?? $ 11-B --3
Foodles 1,/?? $ 11-B 1,345
Total sales P 4,4?? P 4,56?
Fote( 11-B includes E!T.
3. !
Fote( The sale is e$empt since it did not e$ceed the P1,>1>,4?? price ceiling
on the sale of
residential lots.
4. &
Fote( The price e$ceeds the P/,1>>,-?? price ceilings. Jence, the invoice is
inclusive of E!T. The
E!T is computed as P/,>-?,??? $ 1-M11- A P 3-?,???.
5. &
Fote( The sale of fruit is E!T e$empt. Jowever, if it is invoiced in a E!T
invoice not on an )e$empt
invoice, the sale will be treated as a regular vatable sale. The E!T can be
computed as P-3,??? $
1-M11- A P-,4=1
=. & ;P1,???,??? purchases from E!T suppliers $ 1-B<
6. ! ;! non#E!T ta$payer cannot claim input E!T<
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-?
>. & ;The input E!T of the purchaser shall be the output E!T billed by the
seller.<
1?. 7
The E!T payable shall be computed out of vatable receipts ;non#life
premiums only<.
Hutput E!T ;P-??,??? $ 1-B< P -3,???
"ess( Input E!T ?
E!T payable P -3,???
Fote( recall that registrable ta$payers cannot claim input E!T.
11. &
Hutput E!T ;P14?,??? $ 1-B< P 16,???
"ess( Input E!T 1/,???
E!T payable P 4,???
Fote( even if the ta$payer did not e$ceed the E!T threshold in the past 1months if it registered as
a E!T ta$payer, it will be nonetheless sub@ect to E!T.
1-. 7 ;P/5,???  P-??,??? A P-/5,???. Input E!T traceable to e$empt sales
are non#creditable<.
1/. & ;P/??,??? 2 -/5,??? A P53,???<
13. D ;The P/??,??? purchases is understandable e$clusive of E!T because
there is no ;P/??,??? $
1-M11- or P/-,13/ answer. The input E!T is P/??,??? $ 1-B A P/5,???.<
14. D ;The creditable input E!T on government sale is the standard input E!T
equivalent to =B of the
sale. Jence, =B $ P1,???,??? A P =?,???.<
15. &
1=. ! ;The e$port sales of non#E!T sellers is an e$empt sales. Input E!T
traceable to it are noncreditable
but are part of costs and e$penses<
16. 7 ;The output E!T must be based on the gross receipts not on the net
receipts. The billing should be
understood to include the output E!T but since there is no answer for 1-M11$ P1,4??,???. The
same is impliedly e$clusive of E!T. The Hutput E!T should therefore be
computed as P1,4??,??? $
1-B A P16?,???.<
1>. D. If W is invoice price, K>4BW  1-B A P36,14? W A P 34,??? Then the
Hutput E!T is P34,??? $ 1-B
A P4,3??.
-?. 7. ;Invoice price A P=3,>??  P/,4?? A P=6,3??. Then the Hutput E!T
shall be P=6,3?? $ 1-M11- A
P6,3??.<
CHAPTER 2
True or Fa!e 1
1. :alse ;+<
-. :alse ;+0P<
/.
3.
4.
5.
=.
6.
>.
:alse ;:'E or +0P<
:alse
True
:alse
:alse
:alse ;:'E<
:alse ;e$cept notes<
1?. True
11. :alse
1-. True
1/. :alse ;ordinary assets are also vatable<
13. True
14. :alse ;!E or RE wMe higher<
15. :alse ;e$clusive<
1=. :alse ;only real property<
16. :alse
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-1
1>. :alse ;not services, real property only<
-?. :alse
True or Fa!e "
1. True
-. True
/. True
3. True
4. True
5. :alse
=. :alse ;unless ta$payer is dealer in securities<
6. :alse
>. :alse
1?. :alse
11. :alse ;5? days<
1-. True
1/. True
13. True
14. True
15. True
1=. :alse
16. :alse
1>. True
-?. :alse
Mu#$%( Co$'e – Teor( Par# 1
1. &
-. !
/. 7
3. D
4. 7
5. !
=. 7
6. &
>. &
1?. 7
11. D
1-. 7
1/. D
13. &
14. 7
Mu#$%e Co$'e – Teor( Par# "
1. D
-. &
/. 7
3. 7
4. 7
5. 7
=. 7
6. D
>. D
1?. 7
11. !
1-. !
1/. ! ;Fon#E!T ta$payers who issues E!T invoice or H will pay E!T<
13. !
14. !
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-Mu#$%e Co$'e – Pro*e+! Par# 1
1. ! ;Fon#E!T ta$payer is not sub@ect to E!T<
-. ! ;P3?,???  P1,???< $ 1-B
/. D ;P/4?,??? $ 1-B<
3. D ;P4??,??? $ 1-B # unreasonably lower 0P<
4. D ;P-' $ 1-B, basis is :'E as 9$ed by law<
5. 7 ;P-=?,??? $ 1-B, cash discount is contingent<
=. ! ;Fon#E!T ta$payer<
6. & ;P3??,??? $ 1-B # this is sales of goods<
>. & ;P5??S  P-??S< $ 1-B, note the term, )fees inherently e$cludes
Hutput E!T
1?. & ;P4?3S $ 1-BM11-B P-??S $ 1-B<
Mu#$%e Co$'e – Pro*e+! Par# "
1. & ;P5=1,??? $ 1-B<
-. 7 ;P4??,??? 2 P -?,???< $ 1-B
/. & ;P4??,???  P4?,???< $ 1-B
3. & ;P/??,??? $ 1-BM11-B, presumption( invoice is inclusive of E!T<
4. & ;The H#E!T is correctly billed, hence, it is the output E!T<
5. & ;Fon#E!T sellers billing E!T are nevertheless sub@ect to E!T<
=. D ;monthly, monthly and quarterly<
6. 7 ;P-,4??,??? $ 1-B, appraisal is not used<
>. D ;Fote( une is end of second quarter, uly and !ugust are months of third
quarter, hence, monthly
reporting applies<
1?. D
Mu#$%e Co$'e – Par# ,
1. ! ;Fote( IPM0P A P1??S$=MP-' A /4B, failed installment test<
-. ! ;Fote( IPM0P A -4B hence, P3' $ 1-B $ 1M/5<
/. 7 K;P133,???M1-B< divided by ;1M-?<<
3. & ;IP A -?B $ P1.4'  P5?S A /5?S< P/5?SM1.4' A -3B Hutput E!T A
P1.4' $ 1-B A P16?S
Fovember A /??SM1.4' $ P16?S A P/5S
December A P5?SM1.4' $ 16?S A P=.-S but December is end of quarter
hence, P/5SP=.-S A
P3/.-S
4. D ;P-' $ 1-B<
5. D ;P-??SP/??SP3??S< $ 1-B
=. D ;P4??S $ 1-B<
6. & ;P-??S  P14?S  P-4?S  /?S< $ 1-B Fote the anuary unsold must
have been deemed sold in
'arch.
>. & ;P6??,??? $ 1-B<
1?. & ;P5??S  P6??,???< $ 1-B note lower rule on retirement or cessation
from business
Mu#$%e Co$'e – Par# 
1. D ;P1,6??,??? $ 1-B<
-. D ;P-4?S $ 1-B<
/. 7 ;P1,-??,???P/??,???< $ 1-B
3. 7 ;P/??S  P>??S< $ 1-B
4. D ;P>??S $ 1-B<, ero#rated sales do not result in any output E!T
5. 7 ;P1??SP14?SP-4?SP4?SP1-?S< $ 1-B prof. basketball and
bo$ing are sub@ect to B ta$es
=. ! ;&anks are sub@ect to B ta$<
6. 7 ;P3?'P1-'< $ 1-B, international operations is ero#rated
>. D ;P>' $ 1-B<
1?. & ;P1' $ 1-B< the passenger receipts is sub@ect to /B ta$
11. ! ;non#E!T ta$payer, ta$i operators are sub@ect to B ta$<
1-. ! ;sub@ect to B ta$<
1/. & ;P3'P-'< $ 1-B remember the e$emption limits on house X lot A
P/,1>>,-?? and residential
lot A P1,>1>,4??
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-/
13. D ;P1.4' P-'< $ 1-B ad@acent lots are consolidated for purposes of
the e$emption threshold
14. ! ;The consolidationMaggregation rules applies to house and lot and
house and lot and residential lot
and residential lot<
15. D ;P1.1' $ 1-B<, life premiums is sub@ect to B ta$
CHAPTER 3
True or Fa!e 1
1. :alse
-. :alse
/. :alse
3. True
4. True
5. :alse ;ero#rated if with approved application, e$empt if otherwise<
=. True
6. :alse
>. :alse
1?. :alse
11. :alse
1-. :alse ;treated as e$empt<
1/. :alse ;e$empt from B ta$<
13. True
14. :alse ;more than =?B<
True or Fa!e "
1. :alse ;?B E!T<
-. True
/. :alse ;sub@ect to ?B E!T<
3. True
4. True
5. :alse ;?#rated<
=. True
6. True
>. :alse ;1-B E!T<
1?. True
11. True ;e$empt from B ta$ and E!T<
1-. :alse ;sub@ect to B ta$<
1/. True
13. True
14. :alse
Mu#$%e Co$'e – Teor() Par# 1
1. !
-. &
/. D
3. !
4. !
5. D
=. &
6. !
>. 7
1?. D
11. &
1-. &
1/. D
13. 7
14. !
15. 7
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-3
1=. D
16. 7
1>. &
-?. !
Mu#$%e Co$'e – Teor() Par# "
1. !
-. 7
/. D
3. &
4. &
5. !
=. &
6. D
>. &
1?. D
11. &
1-. 7
1/. D
13. !
14. D
Mu#$%e Co$'e – Pro*e+! 1
1. &
-. &
;P3??,??? 2 P-??,??? A P-??,???. The input E!T is claimable as ta$ credit or
ta$ refund.<
/. & ;Ta$ bene9t( P5?,??? deduction $ /?B A P16,???, P3?,??? ta$ credit $
1??B A P3?,???<
3. & ;To be sub@ect to ero#rating, an proceeds of an e$port sales must be
inwardly remitted and
accounted for under the rules of the &0P. G$port sales that do not conform to
ero#rating
requirements are e$empt.<
4. &
7hina ;L1?,??? $ P3-< P 3-?,???
Jong Song ;Y 6??,??? $ P?.4?< 3??,???
Total ero#rated sales P 6-?,???
Fote( !s a rule, e$port sales must be a foreign consumption ;sales to non#
resident< and is paid for in
acceptable foreign currency to be considered for ero#rating.
5. & ;There is no output E!T on e$port sales. &ut the P/??,??? domestic
sales has P/??,??? $ 1-B A
P/5,??? output E!T.<
=. G ;Fo answer<
Direct e$port sales ;L1??,??? $ P3-.4?< P 3,-4?,???
7onsignment ;L 4?,??? $ 5?B sold $ P3-.4?< 1,-=4,???
Total ero#rated sales P 4,4-4,???
7onsignment sales abroad are not deemed sold even if it e$ceeds 5? days on
consignment. Jence,
only the actual portion sold can be considered for ero#rating. G$port sales
denominated in Pesos
cannot be considered e$port sales.
6. !
G$port sales - commission ;L6?,??? $ P3/.?? $ 1?B< P /33,???
7onsignment 1 ;L4?,??? $ P3/< -,14?,???
Total ero#rated sales P -,3>3,???
G$port commissions are considered for ero#rating.
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-4
>. D
1?. 7 ;The test for being an e$port oriented enterprise is when an enterprise
e$ported more than =?B of
its production in the %re'e4$56 year.<
Mu#$%e Co$'e – Pro*e+! "
1. 7 ;P1,-??,???  P6??,???<
-. & ;&oth sales components are vatable. The sale of gold is sub@ect to ero#
rated E!T. The sale of silver
is sub@ect to 1-B output E!T. The output E!T is P>,4?? $ 1-B A P1,13?.<
/. ! ;Fote that the ta$payer is non#E!T hence its e$port sales are e$empt
rather than ero#rated
sales.<
3. 7 ;P/,???,???  P1,-??,???<
4. &
5. D ;The sale to an e$port#oriented enterprise is a constructive e$port even
if not e$ported actually
e$ported. The sales to a &HI enterprise is considered an e$port sales if the
latter e$ports 1??B of its
produce.<
=. D
0ales to diplomatic missions P -,???,???
0ales to ecoones ;L4?,??? $ P3-< -,1??,???
Total ero#rated sales P 3,1??,???
6. 7
0ale to &HI#registered entity with no domestic sales -,4??,???
0ale to e$port#oriented enterprise #with >0D ex$ort "ast year, 1,4??,???
Total P 3,???,???
>. ! ;The sale is not treated as ero#rated sale to the selling PGR! locator but
an import sale to the
purchasing buyer in the custom%s territory.<
1?. ! ;The ta$ incentive on ero#rated treatment on sales of electricity
pertains to generation company
not to a distribution ;electric cooperative< company.
CHAPTER 7
True or Fa!e 1
1. True
-. True
/. True
3. :alse
4. True ;!s a rule, true. If the ta$payer is a E!T#ta$payer, he cannot is not
allowed to claim input E!T
as deduction if the same is disallowed for credit or refund.<
5. :alse ;The option to credit or refund input E!T e$ists only in law on ero#
rated sales<
=. True
6. :alse
>. :alse ;1-B of selling price<
1?. True
11. True
1-. True ;The selling price in this statement is construed to mean the amount
appearing in the
document of sale.<
1/. :alse
13. True
14. True
True or Fa!e "
1. :alse ;incomplete -B of vatable beginning inventory or actual E!T on
beginning inventory,
whichever is higher<
-. True
/. :alse ;input E!T on goods is creditable or deductible, as the case may be,
upon %ur'a!e<
3. :alse ;input E!T on services is claimable as credit in the month of
%a(+e5#<
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-5
4. True
5. True
=. :alse ;It depends upon the monthly aggregate acquisition cost<
6. :alse ;over a period of 5? months or actual useful life in months whichever
is shorter<
>. True
1?. :alse ;Purchases of primary agricultural inputs only, e$cluding marine
inputs<
11. :alse ;Hnly manufacturers or processors can claim presumptive input
E!T.<
1-. :alse ;=B of sales to the government or +H77<
1/. :alse
13. True
14. True
15. True
1=. True
16. True
1>. :alse ;There is no such rule. This is not '7IT ta$ credit.<
-?. True
-1. :alse
Mu#$%e Co$'e – Teor() Par# 1
1. D
-. 7
/. !
3. D
4. 7
5. D
=. &
6. 7
>. &
1?. 7
11. D
1-. 7
1/. D
13. !
14. !
Mu#$%e Co$'e – Teor() Par# "
1. &
-. &
/. &
3. &
4. D
5. !
=. &
6. !
>. 7
1?. &
11. 7
1-. 7
1/. D
Mu#$%e Co$'e – Pro*e+!) Par# 1
1. ! ;Input E!T on purchases made not in the course of business is non#
creditable.<
-. ! ;Purchases from non#E!T ta$payer has no claimable input E!T. The seller
passes on a percentage
ta$ rather than an output E!T ;i.e. input E!T<.<
/. 7 ;!s a rule, importation is sub@ect to E!T. This applies without regard to
whether or not the foreign
seller is engaged or not engaged in business. The E!T is 1-B $ P14?,???
landed cost A P16,???.<
3. ! ;Fon#E!T ta$payers cannot claim credit for input E!T.<
4. D
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-=
7onsultancy fees P =??,???
Purchases of supplies -4?,???
Purchase of equipment 3??,???
Total vatable purchases P 1,/4?,???
'ultiply by( 1-B
Input E!T on purchases P 15-,???
The e$pensing of purchases in the accounting records is not sub@ect to E!T
but rather the purchases
of the item involved. Fote employment income ;i.e. salaries< is e$empt from
E!T.
5. 7 ;Fote that the E!T is incorrectly billed. Jence, it must be recomputed as
P--?,??? $ 1-M11-A
P-/,4=1.<
=. 7
Purchases of goods, e$clusive of E!T ;P4?,??? $ 1-B< P 5,???
Purchases of goods, inclusive of E!T ;P33,6?? $ 1-M11-< 3,6??
Purchase of services, inclusive of E!T ;P-/,4-? $ 1-M11-< -,4-?
Total input E!T P 1/,/-?
6. ! ;There is no indication in the problem that the ta$payer is also a E!T#
ta$payer. !s a rule,
percentage ta$payers are non#E!T ta$payers. Jence, cannot claim input
E!T.<
>. 7 ;The ta$able quarter of business ta$payer is aligned with his or its
accounting period. The calendar
year is presumed in the absence of an indication that a 9scal year is being
used. The third calendar
quarter ends 0eptember. Jence, the claimable input E!T in the third quarter
shall be P/-,??? plus
P3?,??? A P=-,???.
1?. 7 ;Fote that the amounts shown are )invoice prices. Jence, the input
E!T shall be computed out of
the vatable purchases as P3?,??? $ 1-M11- A P3,-65.
11. 7 ;P-4?,??? $ 1-B A P/?,???<
1-. 7 ;The term )billing means invoice price. Jence, the claimable input E!T
shall be P-4?,??? $
1-M11- A P-5,=45.<
1/. & ;P4?,??? $ 1-B A P5,??? input E!T on purchases in the month
purchased.<
13. ! ;P6?,??? $ 1-B A P>,5?? input E!T on services in the month paid.<
14. D
anuary input E!T P 5,???
:ebruary input E!T >,5??
'arch input E!T ;P-4?,??? $ 1-B< /?,???
Total 1st quarter claimable input E!T P 34,5??
15. 7 ;Fon#E!T ta$payer cannot claim input E!T.<
1=. &
Input E!T on regular sales 1=3,???
Input E!T on e$port sales 14?,???
Total Input E!T P /-3,???
Mu#$%e Co$'e – Pro*e+!) Par# "
1. &
Teacher’s Key Answers: 2016 Business and Transfer Taxation
-6
Purchased from non#E!T suppliers P -1?,???
Purchases from E!T suppliers, e$clusive of E!T ;P--,3??M11-B< -?,???
Total vatable goods in beg. inventory P -/?,???
'ultiply by( -B
-B Transitional input E!T P 3,5??
!ctual E!T in beginning inventory ;P--,3?? $ 1-M11-< P -,3??
Transitional input E!T ;higher< P 3,5??
-. 7
Inventory of processed goods 1=?,???
Inventory of non#food goods -1?,???
Total vatable goods in beg. inventory P /6?,???
'ultiply by( -B
Transitional input E!T P =,5??
Fote( The actual presence of input E!T in the beginning inventory is not a
pre#condition to the claim
of transitional input E!T.
/. 7
-B Transitional input E!T ;P-4?,??? $ -B< P 4,???
!ctual E!T in beginning inventory ;P--?,??? $ 1-B< P -5,3??
Transitional input E!T ;higher< P -5,3??
3. !
-B Transitional input E!T ;P16,??? $ -B< P /5?.??
!ctual input E!T ;P16,??? $ 1-M11-< P 1,>-6.4=
Transitional input E!T ;higher< P 1,>-6.4=
Fote( Gquipment is not inventory.
4. &
aw land contributed by shareholders P11,-??,???
'ultiply by( -B
Transitional input E!T P --3,???
Fote( It must be emphasied that the actual presence of E!T in the beginning
inventory is not a precondition
to the claim of input E!T.
5. 7 ;The input E!T on the depreciable equipment is claimable in the month
of purchase because the
aggregate purchase price in that month did not e$ceed P1'.<
=. ! ;The input E!T on the goods is claimable in the month of purchase. The
input E!T on the purchase
of depreciable capital goods shall likewise be claimable in the month of
purchase because the
aggregatge acquisition costs of capital goods in the month did not e$ceed
P1'. Jence, P1,4??,??? $
1-B A P16?,???.<
6. ! ;The amortiation of input E!T applies only to4e%re'$a*e capital
goods. The input E!T on nondepreciable
capital goods may be claimed in the month of purchase. 0ince the aggregate
acquisition
cost of purchases of depreciable capital goods did not e$ceed P1', no
amortiation shall be made
for the month.<
>. ! ;Hnly input E!T incurred or paid in the course of business can be
claimed.<
1?. D ;Purchases from non#E!T supplier has no input E!T. The question here
is whether or not to
include the purchase of depreciable capital goods from non#E!T supplier to
the monthly aggregate
acquisition cost. 0ince the law did not e$pressly distinguish, the proper
interpretation shall be to
include the same in the monthly aggregate acquisition cost ;'!!7<.< The
P1.1 '!!7 e$ceeds P1',
the input E!T on purchases of depreciable capital goods must be amortied.
11. 7 ;P1,5?? for Fovember and P1,5?? for December. Fote that December
is the end of the quarter.<
Teacher’s Key Answers: 2016 Business and Transfer Taxation
->
1-. 7
Input E!T on truck ;P=??S $ 1-B M 5? months< P 1,3??
Input E!T on equipment ;P4??S $ 1-B M 36 months< 1,-4?
Total claimable amortiation of deferred input E!T in une P -,54?
Fote( The input E!T shall be amortied over 5? months or actual useful life in
months, whichever is
0JHTG.
1/. D ;0ame as P-,54?<
13. ! ;Fote that this is a 9scal quarter ending !ugust -?14.<
The '!!7 in !ugust did not e$ceed P1'. Jence, the P5??S $ 1-B or
P=-,??? input E!T shall be
claimable in that month. The total claimable input E!T in !ugust shall be
computed as follows(
7laimable input E!T in une ;amortiation of deferred E!T< P -,54?
7laimable input E!T in uly ;amortiation of deferred E!T< -,54?
7laimable input E!T in !ugust
!mortiation of deferred E!T from purchased in prior months -,54?
E!T on purchase of depreciable goods =-,???
Total claimable input E!T for the 9scal quarter ending !ugust -?14 P =>,>4?
14. & ;!n individual ta$payer is allowed to use only the calendar year.<
The '!!7 e$ceeds 1', hence, any input E!T on depreciable capital goods
must be amortied.
Input E!T in uly A P1,56?,??? $ 1-M11- A P16?,??? M 5? months A P/,???.
The input E!T shall be amortied over not more than 5? months.
15. 7
Fote( The '!!7 e$ceeds P1'. The input E!T in !ugust ;P1,-/-,??? $1-M11-<
or P1/-,??? shall be
amortied over 36 months ;3 years $ 1-<. Jence, P1/-,???M36 months A
P-,=4?.
The claimable input E!T in !ugust shall be(
!mortiation of deferred E!T from uly P /,???
!mortiation of deferred E!T from !ugust -,=4?
Total claimable input E!T P 4,=4?
1=. 7
7laimable input E!T in uly P /,???
7laimable input E!T in !ugust 4,=4?
7laimable input E!T in 0eptember ;from uly and !ugust< 4,=4?
Total claimable input E!T for the quarter P 13,4??
16. 7 ;This problem is defective in the sense that it did not provide the
month of acquisition of the
commercial lot but it may still be answered. 0tudents must develop a level of
critical thinking to
determine the intent of the e$aminer using the choices as clues.<
The :ebruary ;monthly< E!T return shall be undoubtedly P-3,???. 'arch is
the end of the quarter.
Ne e$pect a P36,??? answer if the lot is acquired :ebruary and P=-,???
;P-3,??? $ /< if the lot is
acquired anuary. The only feasible answer here is P-3,??? P36,???.
Fote( 7ommercial lot is non#depreciable. The input E!T is not amortied. The
input E!T however on
its purchase may be claimed in installment as the buyer pays E!T on the
installments.
1>. 7 ;The !pril input E!T shall be amortied. Jence, P1,-??,??? $ 1-BM5?
months A P-,3??.<
-?. & ;The input E!T on the 'ay purchase of capital goods shall not be
amortied. Jence, P1-?,???,
computed as ;P3??SP5??S<$1-B plus P-,3??. Jence, P1--,3??.
-1. !
7laimable input E!T in !pril P -,3??
7laimable input E!T in 'ay 1--,3??
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/?
7laimable input E!T in une ;P-,3??P-??S $ 1-B< -5,3??
Total claimable input E!T for the quarter P 141,-??
--. &
The input E!T on the equipment must have been amortied over 5? months
starting Hctober -?1-.
0ince credit for input E!T is made at the end of the month, no amortiation is
provided for 'ay
-?14. !s of 'ay -?14, /1 months lapsed. There are /? remaining monthly
amortiation as of 'ay
-?14. !ny unamortied input E!T may be claimed in the month of sale. Thus,
P-3?,??? $ ;5?#/1<M5?
A P115,???.
-/. ;Fo answer. It should be P1-?,???.< ;P3S for !pril and P115S for 'ay<
-3. 7 ;7onstruction in progress is not a purchase of capital goods but a
purchase of service. Jence, the
input E!T paid shall be claimed in the month of payment.<
The claimable input E!T for anuary shall be P1,1-?,??? $ 1-M11- A
P1-?,???. The claimable input
E!T for :ebruary shall be P>4-,??? $ 1-M11- A P1?-,???.
-4. 7
7laimable input E!T for anuary P 1-?,???
7laimable input E!T for :ebruary 1?-,???
7laimable input E!T for 'arch ;P1,/33,??? $ 1-M11-< 133,???
Total claimable input E!T for the quarter P /55,???
Mu#$%e Co$'e – Pro*e+!) Par# ,
1. & ;Hnly purchases of agricultural inputs is allowed the presumptive input
E!T hence, P14?,???
purchases of tomatoes $ 3B A P5,???.<
-. D
Input E!t on Tin cans ;P6?S $ 1-B< P >,5??
Input E!T on wrapper ;P-?S $ 1-B< -,3??
Presumptive input E!T on tomatoes 5,???
Total creditable input E!T P 16,???
/. ! ;Hnly manufacturers and processors are allowed the presumptive input
E!T.<
3. 7 ;P4??,??? $ 3B A P-?,???<
4. ! ;! processor of sugar for others is not allowed to claim a presumptive
input E!T. Hnly
manufacturers or processors of 0a 'a'i 7o Pae for their own account are
allowed the
presumptive input E!T<
5. 7
aw coconut ;to be processed into copra< P /??,???
7opra from farmers 34?,???
Total agricultural inputs purchased P =4?,???
'ultiply by( 3B
Presumptive input E!T P /?,???
=. & ;P-?,??? $ 3B A P6??. Fote that Zour and oil are industrial 9nished
;processed< products rather
than agricultural inputs.<
6. 7
Input E!T on purchase of Zour ;P-??S $ 1-B< P -3,???
7oconut oil ;P3?S $ 1-B< 3,6??
Hther seasonings ;P3?S $ 1-B< 3,6??
Presumptive input E!T on eggs 6??
Total creditable input E!T P /3,3??
>. ! ;P44?,??? $ =B A P/6,4??.<
1?. D ;!ctual input E!T A 1-B $ P3??S A P36,??? 0tandard input E!T A
P/6,4?? A[ "oss or an item of
deduction of P>,4??.<
!nalysis by accounting entries(
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/1
Purchases 3??,???
!ctual input E!T 36,???
7ashM!ccounts payable 336,???
7ashMeceivable 466,4??
:inal withheld E!T ;P4B $ P44?S< -=,4??
0ales 44?,???
Hutput E!T 55,???
Hutput E!T 55,???
"ossMcost of salesMe$pense >,4??
:inal withheld E!T -=,4??
!ctual input E!T 36,???
11. ! ;P-,4??,??? $ 1-B A P/??,???<
1-. 7 ;P3,???,??? $ 4B A P-??,???<
1/. 7 ;P3,???,??? $ =B A P-6?,???<
13. Fo answer
Hutput E!T ;1-B $ P3'< 36?,???
"oss -?,???
!ctual input E!T /??,???
:inal withheld E!T -??,???
14. 7 ;P3?S carry#over from 1st quarter and P-?S from !pril.<
15. ! ;P3?S carry#over from 1st quarter plus the P/-?S input E!T in !pril.<
1=. 7 ;une is the end of the quarter so the input E!T carry over must be
those from the 1st quarter,
P3?S.<
16. D
Hutput E!T P -6?,???
"ess( 7reditable input E!T
Input E!T carry#over, prior quarter P -?,???
Input E!T during the quarter /1?,??? //?,???
E!T payable ;P 4?,???<
"ess( E!T paid in prior months of quarter ; 1?,???<
Input E!T carry#over ;P 5?,???<
1>. ! ;P/3?,??? output E!T 2 ;P/??,???  ;P1-?,??? 2 P4?,???<< A P/?,???
CHAPTER 18
True or Fa!e
1. :alse
-. :alse ;agricultural product in srcinal state<
/. True
3. True
4. True
5. :alse
=. True
6. True
>. True
1?. :alse ;+enerally, there is no such remedy under the law. G$ceptionally,
refund can be made only in
the case of input E!T on ero#rated sales and when the ta$payer retired or
ceased business.<
11. :alse ;The term )only made this statement false. In e$ceptional case of
retirement or cessation
from business, this may be refunded.<
1-. True
1/. True
13. :alse
14. :alse ;Nithin -4 days<
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/Mu#$%e Co$'e – Teor(
1. !
-. 7
/. D
3. !
4. !
5. 7
=. 7
6. D
>. 7
1?. 7
Mu#$%e Co$'e – Pro*e+!) Par# 1
1. &
-. D ;-,??? bags $ P1,3??Mbag $ 1-B<
/. 7 ;P//5,??? advanced E!T  P/??,??? $ 1-B  P11-,??? $ 1-M11- 
P1,6??,??? $ 3B<
3. &
4. !
5. D
=. &
6. 7
>. 7
1?. 7
11. D
1-. !
1/. !
13. 7
Mu#$%e Co$'e – Pro*e+!) Par# "
1. 7
-. D
/. D
3. D
4. !
5. &
=. D
Hutput E!T ;P-.4' $ 1-B< P /??,???
"ess(
Traceable input E!T 6?,???
!llocated input E!T ;P=?S $ -.4'M='U< -4,???
E!T due and payable P 1>4,???
U3.4' non#vatable  P-.4' vatable A='
6. &
>. &
1?. 7
Mu#$%e Co$'e – Pro*e+!) Par# ,
1. &
-. &
Hutput E!T ;P/??S $ 1-B< P /5,???
"ess( Prorated input E!T
;P4?S/?S5SU< $ /??SM/' 6,5??
E!T payable P -=,5??
Teacher’s Key Answers: 2016 Business and Transfer Taxation
//
UFote that P/5?,???M1-B is more than 1' hence, the input E!T must be
amortied. Fote that input
E!T are common for vatable and non#vatable receipts hence, it must be
allocated to the two.
/. 7
3. 7
4. 7
5. D
=. D
6. &
>. 7
1?. !
11. !
1-. 7
CHAPTER 11
True or Fa!e 1
1. True
-. True
/. True
3. :alse
4. :alse
5. :alse
=. :alse
6. True
>. True
1?. True
11. :alse ;heir<
1-. True
1/. True
13. True
14. True
True or Fa!e "
1. :alse ;income ta$<
-. True
/. :alse ;&ene9t received theory<
3. True
4. True
5. :alse ;ad valorem<
=. :alse
6. True
>. :alse ;resident or citiens X non#resident aliens<
1?. :alse
11. True
1-. :alse ;non#resident aliens<
1/. True
13. True
14. True
True or Fa!e ,
1. :alse
-. :alse ;e$cept resident aliens<
/. True
3. True
4. :alse
5. True
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/3
=. True
6. :alse ;9nancial assets are intangibles<
>. :alse ;at the date of donation<
1?. True
11. True
1-. True
1/. True
13. :alse ;it depends upon motives of the transfer<
14. True
15. True
1=. True
16. True
1>. True
-?. True
Mu#$%e Co$'e – Teor() Par# 1
1. D
-. 7
/. &
3. &
4. !
5. 7
=. !
6. &
>. D
1?. &
11. 7
1-. &
1/. !
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Teacher’s Key Answers: 2016 Business and Transfer Taxation
/4
-1. D
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Mu#$%e Co$'e – Pro*e+ Par# 1
1. 7
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5. D
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Mu#$%e Co$'e – Pro*e+ Par# "
1. D
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3. D ;P3.4' 2 P-.4'<
4. D
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CHAPTER 1"
True or Fa!e 1
1. True
-. True
/. True
3. :alse ;testate<
4. True
5. :alse ;Testator<
=. True
6. True
>. :alse ;only by the decedent<
1?. :alse ;by the decedent during his lifetime<
True or Fa!e "
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/5
1. :alse
-. :alse ;both testate and intestate<
/. True
3. True
4. :alse ;sub@ect to limitations on legitime requirements<
5. :alse ;non#relatives may be included<
=. :alse ;in default of primary heirs<
6. True
>. :alse ;only in default of compulsory heirs( primary or secondary<
1?. :alse ;in default of compulsory heirs and relatives within the 9fth degree<
Mu#$%e Co$'e – Teor( 1)
1. &
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3. &
4. &
5. 7
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Mu#$%e Co$'e! – Teor( "
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13. &
14. D
CHAPTER 1,) <R 3#A#3
True or Fa!e) Par# 1
1. True
-. :alse ;and all personal properties( tangible or intangible<
/. :alse ;including intangible and intangible properties<
3. :alse
4. :alse
5. :alse ;It may be established at a later date<
=. :alse ;They are removed outright from the amount of gross estate<
6. :alse ;never<
>. True
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/=
1?. True
11. :alse ;at fair value<
1-. True
1/. True
13. :alse ;:air value<
14. True
True or Fa!e) Par# "
1. :alse ;It depends upon the motive of the transfer<
-. :alse ;These are not yet present properties at the point of death<
/. True ;These are present properties at the point of death<
3. True ;The funds used therefor e$ist at the point of death<
4. True
5. :alse
=. True
6. :alse ;as a rule e$cluded<
>. :alse
1?. True ;This applies regardless of who the bene9ciaries are<
11. True ;This rule apply regardless of designation<
1-. True
1/. True
13. True
14. :alse ;separate of the decedent and common properties<
15. :alse
1=. True
16. True
1>. True
-?. True
-1. True
--. True ;+enerally true. G$ception, when there is a consideration<
-/. :alse
-3. True
-4. True
Mu#$%e Co$'e – Teor() Par# 1
1. D
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Teacher’s Key Answers: 2016 Business and Transfer Taxation
/6
-3. D
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Mu#$%e Co$'e – Teor() Par# "
1. D
-. 7
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4. 7
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6. D ;Inadequate consideration<
>. 7
1?. D
11. D
1-. D
1/. &
13. & ;-??,??? shares $ P36.-?< A P>,53?,???
14. 7 ;L-,??? $ P3-.4?< A P64,???
Mu#$%e Co$'e – Pro*e+ Par# 1
1. & ;P=,???S 2 P/??S  P5??S<
-. 7 ;P3??S  P4,???S  P/4?S<
/. & ;P6?S  P>??S  P=?S<
3. D ;Fo need to compute<
4. &
5. 7 ;P4??S  P-,4??S  P5??S  P6??S<
=. 7 ;P1,-??S  P6??S  P3??S  P-??S<
6. D ;P-,???S  6??S  1,???S  P1,4??S<
>. 7 ;P6??S  P3??S<
1?. D ;!ll properties wherever situated are included<
11. D ;!ll properties<
1-. & ;P3'  P-', Fote that the decedent is a non#resident alien<
1/. ! ;the P5' properties are intangible personal properties<
13. 7 ;P6??S  P1,-??S<
14. 7
15. 7 ;P1,??? $ P1,???  3?,??? $ P/??  6?,??? $ P34< Fote +lobe and 0an
'iguel share are traded.
1=. D ;P1,-??S @eepney  P1,6??S :ord G$pdition  P3,???S land  4?? $
P1,6?? gold< A P=,>??,???
16. 7 KP1?' $ 3?B  ;P1' $ =?B< $ 3?B A P3,-6?,???
1>. D ;-4,???M1,???,??? $ P6,???,???< A P-??,???
-?. & ;L1-3,??? 2 L-3,???< $ P3-.4? A P3,-4?,???
Mu#$%e Co$'e – Pro*e+ Par# "
1. D ;P-??S  P/,???S  P-,???S<. The debts and obligations shall be
separately presented as
deductions.
-. 7 ;P4,???S  P1,???S<. The charitable donation is an e$clusion while the
Donation to the
government is a deduction<
/. 7 ;proceeds from Insurer ! and Insurer D<
3. D
4. 7
5. &
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6. &
>. D
1?. 7 ;P/,???S  P1,4??S<
11. D ;P5,???S  P-,???S  P/,???S< Fote( 'rs. Taray died not 'r. Taray.
1-. 7 ;P/,???S  P6,???S<
Teacher’s Key Answers: 2016 Business and Transfer Taxation
/>
1/. D ;P4,???S separate properties of 'aganda  -,4??S  P/,=??S<
13. 7 ;P/'P>'<
14. ! ;The P-' car is no longer owned, the intangible assets are e$empt
under reciprocity<
15. & ;P-,???,??? M P1-4< shares $ P1/3 A P-,133,???
1=. !
&ook value under ad@usted net assets method A K;1,???,??? shares $ P1-?<

P13,???,???M1,???,??? shares A P1/3Mshare
P1/3Mshare $ 1,???,??? $ -?B A P-5,6??,???
CHAPTER 1,-B
True or Fa!e 1
1. True
-. :alse ;it must be stipulated before the marriage<
/. :alse ;it depends upon the date of marriage and the default property
regime that is eQective<.
If the marriage occurred before !ugust /, 1>66 2 7P+ is presumed, on
!ugust /, 1>66 and later
years 2 !7P is presumed<
3. :alse ;It depends upon the regime agreed by the spouses<
4. :alse ;!7P operates retrospectively and prospectively<
5. True
=. True
6. :alse ;7P+ operates prospectively<
>. True ;actually all fruits, but the statement is technically correct<
1?. True
11. :alse ;under 7P+, these are separate<
1-. :alse ;8nder !7P, fruits follow principal<
1/. :alse
13. :alse
14. :alse ;it depends upon the regime. Fote those received by way of
gratuitous acquisitions before
marriage are common under !7P<
True or Fa!e "
1. :alse
-. True ;7P+ is prospective<
/. :alse ;!7P is retrospective<
3. :alse ;It depends whether the property was received before or after the
new marriage<
4. True
5. :alse ;all fruits under 7P+ are common<
=. :alse
6. True
>. :alse ;The rule is a prima facie presumption<
1?. True
11. True
1-. True
1/. :alse ;only the gain thereon<
13. True ;because fruits ;including gain< follows the principal<
14. True
15. True
1=. True ;The cost is a separate property, the gain is a con@ugal property<
16. :alse ;The cost and the gain are both con@ugal. Fote( all fruits are
con@ugal<
1>. :alse ;It depends upon the time the properties accrued<
-?. :alse
Mu#$%e Co$'e – Teor() Par# 1
1. 7
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3. 7
Teacher’s Key Answers: 2016 Business and Transfer Taxation
3?
4. &
5. &
=. D
6. 7
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Mu#$%e Co$'e - Teor() Par# "
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1. & ;P1,6??,??? 2 P1,???,???< &oth the P4??,??? realied gain and the
P/??,??? unrealied gain
forms part of the common properties under 7P+<
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1. 7
Teacher’s Key Answers: 2016 Business and Transfer Taxation
31
-. &
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CHAPTER 1
True or Fa!e 1
1. True
-. True
/. True
3. :alse ;starting from the date of death<
4. :alse
5. True
=. :alse
6. True
>. True
1?. :alse
11. :alse ;1M- of net common properties<
1-. True ;generally, e$cept vanishing deduction<
1/. True
13. True
14. :alse
15. :alse
1=. True
16. :alse
1>. :alse ;also applicable if donor%s ta$ is paid for property received by way
of donation<
-?. True
True or Fa!e "
1. :alse
-. :alse
/. :alse
3. :alse
4. :alse
5. :alse ;0D is allowed to F7<
=. :alse
6. :alse ;&efore not after<
>. True
1?. True
11. :alse
1-. True
1/. :alse ;up to P4??,???<
Teacher’s Key Answers: 2016 Business and Transfer Taxation
313. :alse ;claimable up to P1'<
14. True
15. True ;'atching rule<
1=. :alse ;must be within 5 months from death<
16. :alse ;not with medical<
1>. :alse ;:uneral e$pense must be cut#oQ from the date of interment<
-?. :alse ;G$cept transfer for public purpose<
Mu#$%e Co$'e – Teor() Par# 1
15. 7
1=. 7
16. D
1>. D
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Teacher’s Key Answers: 2016 Business and Transfer Taxation
3/
14. 7
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Initial value P 6??,???
"ess( 'ortgage paid 44?,???
Initial basis P -4?,???
"ess( Prorated deductions
;P-4?SMP-' $ ;P/??SP13?S< 44,???
:inal basis P 1>4,???
'ultiply by( Eanishing B 5?B
Eanishing deductions P 11=,???
ross estate E *F00K G *17200KH &ther ordinary deductions E *1?0K G
*00K #i.e. *F(0K<*((0K,
CHAPTER 1.
Mu#$%e-Co$'e – Teor(
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Teacher’s Key Answers: 2016 Business and Transfer Taxation
33
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CHAPTER 10
CHAPTER 12
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Teacher’s Key Answers: 2016 Business and Transfer Taxation
34
37
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=&
67
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Teacher’s Key Answers: 2016 Business and Transfer Taxation
35
Par# ,
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Teacher’s Key Answers: 2016 Business and Transfer Taxation
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