1. Kendrick received the following items during the year: P200,000 donation from his girlfriend; P100,000
service fee from professional services; P300,000 inheritance from his deceased father; P100,000 income from
illegal gambling; P50,000 gain on sale of his personal car; P250,000 profits from his bar restaurant How
much is the total income subject to regular income tax?
3 points
A. P1,050,000
B. P750,000
C. P550,000
D. P500,000
Sarah is a resident citizen, and the table below shows Sarah's income,
2. What is the total income of Sarah which is subject to Philippine income tax.
2 points
A. P390,000
B. P1,080,000
C. 1,030,000
D. 1,420,000
3. In relation to the preceding number, assuming that Sarah is a resident alien, compute the total income
subject to Philippine income tax.
2 points
A. P390,000
B. P1,080,000
C. 1,030,000
D. 1,420,000
4. Which is not a feature of final tax?
1 point
A. Covers certain passive income
B. Covers all capital gains
C. Withholding at source
D. None of these
5. Which of the following properties when classified as capital asset is subject to capital gains tax?
1 point
A. Domestics stocks sold directly to buyer
B. Sale of real property
C. Both A or B
D. Neither A nor B
6. Which statement is correct?
1 point
Dealers of real properties can use the installment method without limitation.
B. Dealers of personal properties can use the installment method without limitation.
C. Non-dealers of properties can use the installment method if initial payment exceeds 25% of the selling pri ce.
D. Non-Dealers of properties can use the installment method only if initial payment does not exceed 25% of the selling
price.
7. Which is an incorrect statement regarding the use of accounting period?
1 point
A. Individuals can either choose the calendar year or fiscal year accounting period
B. The regular accounting period for any taxpayer is 12 months.
C. Individual taxpayers are not allowed to report income using fiscal accounting period.
D. Corporations may opt to use either calendar or fiscal accounting period.
8. An individual income taxpayer shall file his or her income tax return on or before the:
1 point
A. 15th day of the fourth month of the same calendar year.
B. 15th day of the fourth month of the following calendar year.
C. 15th day of the fourth month of the same fiscal year.
D. 15th day of the fourth month of the following fiscal year.
9. Mrs. Julian started business on July 15, 2016. What should be the coverage of her 2016 income tax return?
1 point
A. January 1 to July15, 2016
B. July 15,2016 to December 31, 2016
C. July 16, 2016 to July 15, 2017
D. January 1 to December 31, 2016
10. A corporation reporting on a fiscal year ending every March 31 shall file its 2017 income tax return not
later than:
1 point
A. April 15, 2017
B. June 15, 2017
C. July 15, 2017
D. April 15, 2018
11. The following are the requisites to be entitled to a tax informer’s reward except:
1 point
A. Definite sworn information which is not yet in the possession of the BIR.
B. The information furnished lead to the discovery of fraud upon internal revenue laws or provisions thereof
C. Enforcement results in recovery of revenues, surcharges and fees an/or conviction of the guilty party or imposition of
any fine or penalty.
D. The informer must be a BIR official or employee or other public official or employee.
12. X provided information to the BIR leading to the recovery of P12,000,000 unpaid taxes. How much will
X receive as Tax informer’s reward net of tax?
1 point
A. P1,200,000
B. P1,100,000
C. P900,000
D. P1,000,000
13. Which is correct with regard to the final income taxation?
1 point
A. Taxpayers need not file a final income tax return.
B. It covers all items of passive income from whatever sources.
C. It applies to all items of gross income of any non-resident earned from sources within the Philippines
D. It applies to passive income earned abroad.
14. Dividends declared by a resident corporation is:
1 point
A. Exempt from any tax
B. Subject to 10% final tax
C. Subject to regular income tax
D. Subject to 20% final tax.
15. Which of the following is an ordinary asset?
1 point
A. Personal car
B. Delivery truck
C. taxpayer’s principal residence
D. taxpayer’s wedding ring
16. Which is not an ordinary asset
1 point
A. Taxpayer’s personal laptop
B. Machineries and equipment
C. Real property held for sale by a real estate dealer
D. Leasehold improvement
17. Which of the following assets, if not used in business, is subject to regular income tax when sold?
1 point
A. Real property
B. Domestic stock rights
C. Domestic stock option
D. Taxpayer’s personal car.
18. Which of the following when sold may be exempted from the 6% capital gains tax?
1 point
A. Unused land to the government
B. Residential lot
C. Developed residential properties for sale
D. Principal residence.
19. Which is not subject to the 6% capital gains tax?
1 point
A. Donation of property
B. Foreclosure of mortgaged property
C. Expropriation of one’s property in favor of the government.
D. Sale of property for an insufficient consideration.
20. S1: The gain on sale of domestic stock directly to a buyer is presumed. S2: The gain on sale of real
properties is presumed.
1 point
A. Both statements are true
B. Both statements are false
C. Only statement 1 is true
D. Only statement 2 is true
21. The sale of an office building will be subject to:
1 point
A. 60% of 1% percentage tax
B. 6% capital gains tax
C. 15% capital gains tax
D. Regular income tax.
22. Which is an incorrect statement:
A. The capital gains tax on the disposition of capital stock presumes the existence of gain on the sales transactions.
B. The buyer of real capital asset shall withhold the tax at source and remit the same to the government.
C. Capital gains tax is identified under the NIRC as a form of final tax.
D. The capital gains tax on the disposition of real property presumes the existence of gain on the sales transaction.
23. X sold domestic stocks directly to a buyer at a mark-up on cost of P200,000. He paid P5,000 broker’
commission and P8,000 documentary stamp tax on the sale. Compute the capital gains tax:
2 points
A. P28,050
B. P14,500
C. P14,200
D. P13,700
24. Active income is subject to:
1 point
A. Regular income tax
B. Capital gains tax
C. final tax
D. any of these
25. Which of the following is not generally subject to regular income tax?
1 point
A. Compensation income
B. Business income
C. Professional income
D. Passive income
26. Progressive income tax is applicable to:
1 point
A. Corporate taxpayers
B. Individual taxpayers
C. Compensation earners only
D. Individuals in business only.
27. Which is a source of income subject to regular income tax?
1 point
A. Employment
B. Casual sales transaction
C. business/exercise of profession
D. All of the above
28. X wishes to file his 2019 income tax return. To avoid penalty, he must file his return on or before:
1 point
A. April 15, 2019
B. April 15, 2020
C. August 15, 2020
D. November 15, 2020
29. Which of the following is required to file an income tax return?
1 point
A. An employee covered by the substituted filing system.
B. A taxpayer deriving purely passive income subject to final tax.
C. A special alien with respect to his compensation income.
D. A non-resident citizen who derives his entire income form sources outside the Philippines.
30. The taxable income of a mixed income earner is the :
1 point
A. Net income from business less personal exemption
B. Net income from business
C. Taxable compensation income
D. Taxable compensation income plus net income from business.
31. Clara had a business net income of P300,000. She also earned P5,000 commission from selling cellular
cards and P12,000 dividends from a domestic corporation. Compute her income subject to regular income tax.
1 point
A. P300,000
B. P312,000
C. P305,000
D. P317,000
32. Proportional income tax does not apply to a:
1 point
A. Domestic corporation
B. Resident foreign corporation
C. Business partnership
D. General professional partnership.
33. Which is not a requisite of exemption of a retirement benefit plan?
1 point
A. 10 years of employment
B. The employer maintains a reasonable pension benefit plan
C. The retiree must be a senior citizen
D. First time availment of retirement exemption.
34. Which is an item of gross income subject to regular income tax?
1 point
A. Gain on sale of lot by a realty dealer.
B. Interest income from bank deposits
C. Passive royalty income
D. Capital gain on the sale of domestic stocks.
35. All of these are items of gross income subject to regular tax except:
1 point
A. Compensation income
B. Interest income from long-term bank deposits
C. Ordinary gain on sale of properties
D. Interest on notes receivables.