AE 226 BUSINESS AND TRANSFER TAXATION
QUIZ ON DONOR’S TAXATION
March 4, 2021
Test I. Multiple Choice (Theory)
Please place the letter of the correct answer on the space provided before the number.
C
1. An act of liberally whereby one disposes gratuitously of a thing or right in favor of
another who accepts it –
a. succession
b. occupation
c. donation
d. tradition
C
2. The gift tax is imposed on the transfer of property (not on the property itself), which is
why it has been sustained as a (an)
a. excise tax
b. property tax
c. donee’s tax
d. poll tax
B
3. Andrea went to Dakak Beach Resort and was given a prize of P50,000 by the resort
for being its 1,000th guest. Is the prize subject to donor’s tax? Income tax?
B
Donor’s tax
Income tax
a.
Yes
Yes
b.
No
Yes
c.
Yes
No
d.
No
No
4. The following are the requisites of a donation for purposes of the donor’s tax, except:
a. capacity of the donor.
b. capacity of the donee.
c. delivery of the subject matter of gift.
d. donative intent.
D
5. A donation of one (1) hectare of timberland –
a. Can be done orally or in writing
b. Must be in writing
c. Maybe in a private document
d. Must be in a public document
A
6. One of the following is a valid donation
a. Oral donation if a cellular phone worth P4,500.
b. Oral donation of a passenger jeepney worth P150,000.
c. A parcel of land worth P5,000 in a private document.
d. A parcel of land worth P500,000 in a private document.
A
7. Which of the following constitutes a taxable gift?
a. Creditor’s gratuitous discharge of a debtor’s obligation.
b. One-day rent-free use of another’s property.
c. A gratuitous transfer by an incompetent.
d. An agreement to make a future transfer which is not supported by a consideration.
B
8. A signed a deed of donation of a car to B on March 3, 2020. The donation was
accepted and the deed was signed by B, donee, on March 5 which acceptance was made
known to A on March 6. Physical possession of the car was transferred to B on March 7.
The counting of the 30-day period for filing of donor’s tax return and payment of tax shall
commence on
a. March 3
b. March 5
c. March 6
d. March 7
D
9. Distinctions between donor’s tax and estate tax, except
a. Period for payment of tax
b. Attachments to the tax return
c. Cause of the transfer
d. Tax rate
A
10. Which statement is false? Shares of stock shall be valued
a. If unlisted common shares – using adjusted net asset method
b. If unlisted preferred shares – par value
c. If unlisted common shares – book value
d. If listed shares – arithmetic mean of highest and lowest quoted prices in the stock
exchange on the valuation date
C
11. Which of the following is subject to donor’s tax?
a. Sale on promo of Toyota Fortuner to B by Toyota North Edsa. The regular price is
P1.9 million, sold at 1.6 million.
b. Sale of a residential lot; Market value is P1.5 million but sold for P1 million only.
c. A dying man sold his brand new car worth P1.8 million for P800,000 only.
d. Sale of a commercial building valued at P20 million for P12 million only.
D
12. The donor’s tax return shall contain the following, except
a. All previous net gifts made by the donor.
b. The deductions claimed and allowable.
c. Name of the donee.
d. Tax Identification Number (TIN) of donee.
Test II. Multiple Choice (Problem)
Please place the letter of the correct answer on the space provided before the number.
Show your solutions. Otherwise, no credit/s shall be given on the item.
B
13. Zeara made the following donations to Ellen, donee:
P500,000
Fair market value of land, with an unpaid mortgage of P200,000, 50% of
which shall be assumed by Ellen.
P600,000
Car, with an agreement that the tax of P36,000 on the donation shall be
assumed by Ellen.
The net gift on the donation is –
a. P1,100,000
b. P1,000,000
c. P934,000
d. P834,000
Items 14 and 15 are based on the following data:
Conde, resident, gave the following donations:
Donee
January 22, 2020
John Rey
Legitimate son, on account of passing the CPA board
exams – P400,000
Dipolog City
A parcel of land to be used for public purpose – P200,000
Ethelane
Niece, P150,000
March 25, 2020
Barba
On account of marriage on April 10, 2020 – P150,000
Phil Red Cross
For medical and rescue purposes, P50,000
D
14. The donor’s tax payable on January 22, 2020
a. P24,000
b. P45,000
c. P33,000
d. P18,000
C
15. The donor’s tax payable on March 25, 2020
a. P27,000
b. P45,000
c. P9,000
d. P18,000
Items 16 and 17:
Mr. and Mrs. Abano gave the following donations on July 1, 2020.
Community property was donated to Razel Mae, sister of Mr. Abano. The fair market value of
the property is P650,000.
To Abante, legitimate son on account of marriage, exclusive property of Mr. Abano worth
P150,000.
B
16. The donor’s tax due on Mr. Abano
a. P12,900
b. P13,500
c. P9,000
d. P8,400
D
17. The tax payable on Mrs. Abano assuming there was a previous donation of
P150,000 in 2019.
a. P13,500
b. P49,500
c. P19,500
d. P4,500
Questions 18 to 20:
Elleonor made the following donations:
March 5, 2020
June 3, 2020
C
P500,000
400,000
18. The tax due on March 5, 2020
a. P30,000
b. P150,000
c. P15,000
d. P14,000
B
19. The tax due on June 3, 2020
a. P24,000
b. P9,000
c. P10,000
d. Exempt
To Aristela, as a birthday gift
To Cris, as graduation gift
D
20. In the preceding question, if the return is filed and the tax is paid August 3, 2020, the
total amount payable (excluding compromise penalty) is – (round-off centavos to the nearest
peso)
a. P30,408
b. P30,245
c. P12,670
d. Exempt