Tax Handout-OLFU
-ATTY. MACMOD
1.
a.
b.
Which is not included in the classification of income taxpayers?
Individuals
c.
Corporations
Partnerships
d.
Estate & Trusts
2.
a.
b.
All are sources of income except:
Capital
Labor
3.
a.
b.
One of them is governed by the 181 day or more rule:
Resident Alien
c.
Resident Citizen
d.
Non-resident Alien-ETB
Non-resident Alien-Not ETB
4.
a.
b.
Who is governed by Gross Income Taxation only?
Resident Alien
Resident Citizen
Non-resident Alien-ETB
Non-resident Alien-Not ETB
c.
d.
c.
d.
Sale or exchange of assets
Gifts, bequests or devices
(5-13)
A taxpayer, married with 5 minor children, 2 are not living with him, provided the following data: (CY)
Phil.
Abroad ($1=P50)
Compensation Income
P150,000
$2,000
(Net of P50,000 with tax)
Business Income
500,000
5,000
Other Income
100,000
1,000
Health Insurance Paid
2,000
Business Expenses
150,000
1,000
5.
If he is a resident citizen, his TNI is
a. P847,600
b. P850,000
c.
P875,000
d.
P1,000,000
e. not given
6.
If he is a non-resident citizen, his TNI is
a. P650,000
b. P550,000
c.
P525,000
d.
P522,600
e. not given
7.
a.
If he is a resident alien, his TNI is
P525,000
b. P875,000
c.
P522,600
d.
P847,600
e. not given
8.
a.
If he is a non-resident alien, ETB, TNI is
P650,000
b. P525,000
c.
P550,000
d.
P522,600
e. not given
9.
a.
If he is a non-resident alien, not-ETB his income tax due or still due is (disregard GBI)
P75,000
b. P150,000
c.
P240,000
d.
P25,000
10.
a.
If he is a Special, Alien, Employee, disregarding Business and other income, his income tax due is (before TRAIN)
P30,000
b. 75,000
c.
P150,000
d.
P250,000
e. not given
11.
a.
Assume TP chose 8% TRAIN tax, his income tax due is:
P73,500
b. P190,000
c.
P72,000
12.
a.
Under no. 5, but assuming he has paid income tax abroad amounting to $1,500, his income tax due after-tax credit is
P73,500
b. P245,000
c.
P170,000
d.
P240,000
e. not given
13.
a.
Under no. 5 again but assuming he opts to claim the OSD, his TNI is
P840,000
b. P800,000
c.
P715,000
d.
d.
P83,500
P595,000
e. not given
e. not given
e. not given
(14-18)
Are based on the following data: Grandpa James, Resident Filipino, had the following data for taxable year 2019:
(Exchange rate $1=P40)
Philippines
Abroad
Salaries
P165,000
$2,000
Income from merchandising
450,000
6,000
Business Expenses
120,000
1,500
Interest Income:
Personal receivables
10,000
From expanded FCDS
$2,500
On bank deposits (20% long term)
P 25,000
3,000
Dividend Income:
From domestic corporation
From resident corporation
From non-resident
Winnings from charity sweepstakes
Shares of stocks of domestic corporation
sold to a buyer (cost P10,000)
Prizes
10,000
Royalty (20% from books)
7,000
5,000
8,000
80,000
30,000
22,000
1,000
James is married with the following children as dependents:
R, born March 15, 2002, S, born April 5, 2003, T & U, born May 6, 2005, & V, born February 27, 2007. He also sold a
condominium unit in Manila (residential) for P4M although its FMV is P5M but with a zonal value of P8M. He used
P1M of the proceeds to buy a new principal residence, informing BIR about it within the required period.
14.
a.
The taxable net income is:
P756,000
b. P892,000
15.
a.
c. P798,000
d. P716,000
e. not given
Q’s total final taxes on his passive income is:
P15,400
b. P16,020
c. P16,160
d. P39,660
e. not given
16.
a.
His total capital gain’s taxes is:
P483,000
b. P251,720
d. P483,000
e. not given
17.
a.
If he is a NRC, his total final tax on passive income:
P16,020
b. P8,520
c. P16,160
d. P24,660
e. not given
18.
a.
If he is a NRA-not ETB his total combined taxes (disregard business income) on all income from Philippines is:
P83,000
b. P241,000
c. P326,000
d. P444,000
e. not given
c. P161,000
(19-20)
Mr. & Mrs. P, both CPA’s & residents of the Philippines had the following data for the current year:
Salaries
150,000
94,000
Bonus (13th month pay) Mrs. P.
Income from practice of profession, Mr. & Mrs. P.
(Net of 10% withholding tax)
450,000
Expenses-professional practice
120,000
Rental income (net of 5% w/tax)
190,000
Rental expenses
80,000
Other income, Mr. P.
80,000
20% of the other income is non-taxable while 15% of the professional expenses is non-deductible. They have 12 minor children.
19. The taxable income of Mr. P is:
a.
P323,000
b.
P275,000
c. P266,000
d. P259,000
e. not given
20. The taxable income of Mrs. P is:
a.
P413,000
b.
P357,000
c. P419,000
d. P389,000
e. not given
(21-27)
Pugo and Pogi are partners who provided the following data about their partnership and their own data in their separate businesses:
Gross Income
Deductions
P&L Ratio
Status
Drawing Account
Other Income
Partnership
P2,000,000
500,000
200,000
0
Pugo
P1,000,000
300,000
4:6
Single
100,000
200,000
Pogi
P500,000
100,000
Married
100,000
300,000
21. If the partnership is a GPP, the taxable income of the partnership is
a.
P1,500,000
b. P1,300,000 c. P0
d. not given
22. The TNI of Pugo is
a. P1,500,000
b. P1,250,000
c. P850,000
d. 900,000
e. not given
23. The TNI of Pogi is
a. P1,600,000
b. P1,350,000
c. P650,000
d. P850,000
e. not given
24. If the partnership is an Ordinary Partnership its income tax due is
a. P450,000
b. P600,000
c. P390,000
d. P0
e. not given
25. The TNI of Pugo is
a. P1,450,000
b. P850,000
c. P900,000
d. P1,250,000
e. not given
26. The TNI of Pogi is
a. P1,350,000
b. P650,000
c. P700,000
d. P800,000
e. not given
27. Under no. 21 but Pugo opts to claim the OSD, his TNI is
a. P1,400,000
b. P670,000
c. P430,000
d. P850,000
e. not given
28. Mr. Fernando Estrada, a resident citizen died leaving a net estate of P4,000,000. His estate is under administration. The
net estate which included an apartment, realized a gross income of P500,000 (gross of 5% tax). The executor distributed
P75,000 and P95,000 to the daughter and son respectively. The estate also incurred expenses amounting to P100,000 but
25% of which is a non-deductible expense. The estate ha P1M cash in bank which also earned an interest of P100,000,
(PNB Mla.)
The taxable net income of the estate is:
a. P205,000
b. P180,000
c. P255,000
d. P305,000
e. not given
The Rainbow Corp. provided the following data for calendar year ending December 31, 200A: ($1-P50)
Philippines
Abroad
Gross Income
P4,000,000
$40,000
Deductions
2,500,000
15,000
Income tax Paid
3,000
29. If it is a domestic corporation, its income tax after tax credit is:
a. P730,000
b. P832,000
c. P880,000
d. P675,000
e. not given
30. If it is a resident corporation, its income tax is:
a. P730,000
b. P1,280,000
c. P880,000
d. P450,000
e. not given
31. If it is a non-resident corporation, its income tax is:
a. P730,000
b. P128,000
c. P880,000
d. P1,200,000
e. not given
32. Under no.29, but it opts to claim the tax paid abroad as deductions from gross income, its income tax is:
a. P730,000
b. P832,000
c. P880,000
d. P780,000
e. not given
33. If it is a private educational institution, its income tax after tax credit is:
a. P730,000
b. P832,000
c. P275,000
d. P150,000
e. not given
34. If it is a non-profit hospital, its income tax after tax credit is:
a. P730,000
b. P832,000
c. P275,000
d. P150,000
e. not given
35. If it is a resident international carrier, its income tax is:
a. P100,000
b. P10,000
c. P37,000
d. P125,000
e. not given
36. If it is a non-resident cinematographic film owner/lessor, its income tax is:
a. P1,000,000
b. P100,000
c. P300,000
d. P128,000
e. not given
37. If it is a non-resident lessor of vessel its income tax is:
a. P100,000
b. P180,000
c. P300,000
e. not given
d. P128,000
38. If it is a non-resident lessor of aircrafts, machineries and equipment, its income tax is:
a. P100,000
b. P180,000
c. P300,000
d. P128,000
e. not given
39. If it is a resident corporation but its expenses within and without is P3M, unallocated (disregard original data on
expenses), its income tax is:
a. P700,000
b. P320,000
c. P480,000
d. P600,000
e. not given
40. If it is a resident corporation and it remitted 60% of its net profit to its head office abroad, its total tax liability if (Original
data)
a. P480,000
b. P571,800
c. P196,000
d. P544,500
e. not given
41. If it is a private educational institution but P3.5M of its total gross income is from lease and restaurant business, its
income tax is:
a. P730,000
b. P275,000
c. P150,000
d. P675,000
e. not given
42. If it is a domestic corporation but its total expenses is P5,800,000 (disregard original data on expenses), its income tax is:
a. P730,000
b. P64,000
c. P120,000
d. P85,000
e. not given
43. Under no. 42, but the domestic corporation is a non-profit hospital, (disregard tax paid abroad) its income tax is:
a. P20,000
b. P64,000
c. P10,909
d. P120,000
e. not given
44. If the corporation is a non-stock educational institution which uses all its revenues or income for educational and
charitable purpose, its income tax is:
a. P 0 b.
P730,000
c. P120,000
d. P64,000
e. not given
Aliza University, a domestic corporation, had the following data for taxable year 200A:
Sales
P5,000,000
Cost of Goods Sold
2,000,000
General, Selling and Administrative Expenses
500,000
Interest Income from Phil. Bank Deposit
100,000
Rental Income (net of 5% withholding tax)
190,000
Dividend Income: From domestic corporation
60,000
From foreign corporation
50,000
Winnings from charity sweepstakes
2,000,000
Capital gains from sale of domestic share of stocks
Sold directly to buyer
75,000
Dividend declared and paid during the year
500,000
Retained earnings, beg. of the year (subjected to
IAE tax last year)
1,000,000
Paid up Capital
1,000,000
Note: The board of directors approved a resolution reserving P1,500,000 of its net profit for the year for plant expansion.
45. The income tax due after credit if any is:
a. P880,000
b. P870,000
c. P825,000
46. Based on the foregoing problem, the IAE tax if any is:
a. P208,125
b. P93,875
c. P207,125
d. P815,000
d. P72,875
e. not given
e. not given
47. Which of the following income of an individual taxpayer is subject to final tax?
a. P10,000 prize in Manila won by a resident citizen.
b. Dividend received by a resident citizen from a resident corporation.
c. Shares in the net income of a general professional partnership received by a resident alien.
d. Dividend received by a non-resident alien from a domestic corporation.
48. Interest received by nonresident individuals from a depository bank under the expanded foreign currency deposit system
is exempt from tax.
Passive income received by a resident citizen from sources outside the Philippines shall be generally subject to Section 24
(A) and final tax as passive income.
a. True, True
c. False, False
b. True, False
d. False, True
49. A nonresident alien deriving income from Philippine sources claims that he is entitled to personal exemptions. Which of
the following is not a condition for the allowance of personal exemptions to said taxpayer?
a. That he has stayed in the Philippines for an aggregate period of more than 180 days.
b. That his country has an income tax law that allows personal exemptions to Philippines not residing therein.
c. That he has filed a true and accurate return of his total income from all sources within the Philippines.
d. That he is not a minimum wage earner.
50. Which of the following statements is incorrect?
a. To be subject to final tax passive income must be from Philippine sources.
b. An income which is subject to final tax is excluded from the computation of income subject to Section 24 (A).
c. Lotto winnings are exempt from income taxation in the Philippines.
d. An income which is subject to creditable withholding tax is excluded from the computation of income subject to
schedular tax rates.
51. Proceeds of sale of any real property classified as capital asset are exempt from the 6% capital gains tax if used to build a
new principal residence within 18 months from the date of sale or of disposition and with proper notice to BIR.
Gain from sale of real property classified as capital asset to the Government may be taxed under Section 24 (A) at the option
of the individual taxpayer.
a. True, True
c. False, False
b. True, False
d. False, True
52. Which of the following statements is not correct?
a. Interest income from long term deposit is exempt from income tax.
b. Winnings from Philippine Charity Sweepstakes are exempt from income tax.
c. Royalties on books, literary works and musical composition are subject to 10% non-creditable withholding tax.
d. A prize of P10,000 is subject to 20% final tax.
53. The MCIT is only effective in the 5th year following the year in which the corporation commenced its business.
Banks are also covered by MCIT.
a. True, True
c. False, True
b. False, False
d. True, False
54. Non-resident corporations need not file any income tax returns.
Tax-exempt corporations are also required to file an ITR for administrative purposes only.
a. True, True
c. False, True
b. False, False
d. True, False
55. To record MCIT, the account deferred charges MCIT is:
a. Debited
c. Memo entry only
b. Credited
d. No entry required
56. 1st Statement: Domestic Corporation not falling under the definition of closely held corporations are considered publicly
held corporations.
2nd Statement: A closely held corporation under the Tax Code and a close corporation under the Corporation Code are the
same.
a. True, True
c. True, False
b. False, False
d. False, True
57. The improperly accumulated earnings tax shall not apply to the following, except:
a. Insurance companies
b. Educational Institutions
c. Publicly held corporations
d. Bank and Non-bank Financial Intermediaries
58. The improperly accumulated earnings tax is essentially a:
a. General tax
c. Penalty tax
b. Property tax
d. Excise tax
A taxpayer provided the following data for taxable year 2018:
Salaries
P1.5M
th
(with P120,000 13 mo. Pay but net of SSS, union dues, etc. amounting to P20,000).
Income from Grocery:
Gross Sales
Cost of Sales
Operating Exp.
Other income/non-operating
Income
P2.4M
P1M
600,000
100,000
59. The total income tax due is (TP availed of 8% GIT)
a. P320,000
c. P200,000
b. P313,000
d. P513,000
60. His business tax due is
a. P75,000 OPT
b. P72,000 OPT
c. P300,000 VAT
d. None
61. If the taxpayer did not avail of the 8% GIT, the total Income tax due:
a. P513,000
c. P580,000
b. P313,000
d. P589,200
62. His business tax due is
a. P300,000 VAT
b. P288,000 VAT
c. P75,000 OPT
d. P72,000 OPT
63. Assuming he has no salaries and he availed of the 8% GIT, the income tax is:
a. P200,000
c. P192,000
b. P300,000
d. P180,000
64. Back to the original data, but his Gross Sales reached P4M his new total taxable income is:
a. P2,500,000
c. P3,910,000
b. P3,000,000
d. P3,000,000
65. His business tax due is
a. VAT
b. OPT
c. Excise tax on certain goods
d. None
66. Mr. Cortez, Filipino, single, has the following transactions for the current year:
Business gross income
P200,000
Allowable deductions (including bad
debts of P10k, only ½ was written off) 60,000
Loss from gambling
10,000
Other transactions:
Selling price, partnership interest
100,000
Investment in partnership in 2005
20,000
Gain on sale of capital asset held for
5 years
10,000
Loss on sale of capital asset held for
10 months
12,000
Loss on account of failure to exercise
3-month option to buy property
2,000
Liquidating dividend from Z Co.
150,000
Cost of investment in Z Co. in 2014
60,000
Note: Last year, Mr. Cortez had a net income of P65,000 and a net capital loss of P92,000.
The taxable net income is:
a. P156,000
b. P141,000
c. P106,000
d. P101,000
67. A Taxpayer, married with a 2-year-old child, has the following transactions for the current year:
Salaries received as employee
P200,000
Sales
1,440,000
Cost of goods sold
660,000
Deductions:
Operating Expenses
440,000
Loss due to fire (properly reported)
60,000
Contributions:
To a government priority project
in education
12,000
To Quiapo church
42,000
Other income:
Rent
36,000
Capital gain from sale of CAR Family
held for 3 years
96,000
The taxpayer will report a taxable net income of:
a. P472,000
c. P445,400
b. P480,400
d. P520,400
68. Taxpayer, operating a grocery, has the following transactions for the current year:
Sales
P2,000,000
Cost of sales
1,150,000
Operating expenses
560,000
Interest income from BDO
10,000
Interest Expense
20,000
Other transactions:
a. Sale of office equipment held for 5 years:
Selling price
Cost
Accumulated deprecation
b. Sale of family van held for 3 years:
Selling price
Cost
100,000
120,000
80,000
300,000
210,000
c. Sale of family car held for 18 months:
Selling price
480,000
Cost
500,000
d. Sale of Residential lot held for 2 years
500,000
Cost
400,000
Taxpayer will report a taxable income of:
a. P305,000
c. P368,300
b. P335,000
d. P318,300
69. ABS Corporation, a domestic corporation now on its 5th year of operation provided the following data:
Gross sales
Sales returns and allowances
Cost of goods sold
Gain on sale of capital assets held for 7
months
Loss on sale of capital assets held for 15
months
Interest income (BPI)
Allowable business expenses
Income tax due is:
a. P8,800
b. P 7,500
P1,100,000
200,000
300,000
10,000
5,000
50,000
580,000
c. P12,000
d. P9,625
70. On October 1 of current year, Dragon Girl Co. leased a residential house for the use of one of its executives, Mr. Kurukuru,
a special alien employee. The rent agreed upon was P170,000 per month. The FBT monthly is:
a. P 54,400
c. P40,000
b. P 45,769
d. P15,000
Br
1
2
3
4
5
6
Taxable Income Per Year
P250K and below
Above P250K to P400K
Above P400K to P800K
Above P800K to P2M
Above P2M to P8M
Above P8,000,000
Income Tax Rate
0%
20% of the excess over P250,000
P30,000 + 25% of the excess over P400K
P130,000 + 30% of the excess over P800K
P490,000 + 32% of the excess over P2M
P2,410,000 + 35% of the excess over P8M