381233885-cpar-business-transfer-taxes-testbank
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lOMoARcPSD|7527748 381233885 CPAR Business Transfer Taxes Testbank Economics Research 1 (Bsba) (Adamson University) Studocu is not sponsored or endorsed by any college or university Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Estate tax Basic Terminologies 1.Anactwher ebyaper soni sper mi t t edwi t ht hef or mal i t i espr escr i bedbyl aw,t o cont r olt oacer t ai ndegr eet hedi sposi t i onofhi sest at e,t ot akeeffectaf t erhi s deat h. A.wi l l C.l egi t i me B.Successi on D.devi ce 2.Theper sonwhosepr oper t yi st r ansmi t t edt hr oughsuccessi on,whe t herornot hel ef tawi l l . A.successor C.l egat ee D.decedent B.hei r 3.Theper soncal l edt ot hesuccessi on,ei t herbyt hepr ovi si onofawi l lorby oper at i onofl aw. A.Hei r C.devi see B.l egat ee D.decedent 4.Successi onwhi chr esul t sf r om t hedesi gnat i onofanhei r ,madei nawi l l execut edi nt hef or m pr escr i bebyl aw. A.Test ament ar y C.i nt est at esuccessi on B.mi xedsuccessi on D.l egalsuccessi on 5.Tr ansmi ssi onofpr oper t i eswher et her ei snowi l l ,ori ft her ei sawi l l ,t hesame i sv oi dornobodysucceedsi nt hewi l l . A.t est ament ar ysuccessi on C.l egalsuccessi on B.mi xedsuccessi on D.escheat 6.Tr ansmi ssi onofpr oper t i eswhi c hi seffect edpar t l ybywi l landpar t l yby oper at i onofl aw. A.t est ament ar ysuccessi on C.l egalsuccessi on B.mi xedsuccessi on D.i nt est at esuccessi on 7.Anhei rt oapar t i cul arper sonalpr oper t ygi venbyvi r t ueofwi l l . A.Legacy C.devi see B.successor D.l egat ee 8.Anhei rt opar t i cul arr ealpr oper t ygi venbyvi r t ueofwi l l . A.devi se C.successor B.devi see D.l egat ee 9.Par toft het est at or ’ spr oper t ywhi chhecannotdi sposeofbecauset hel aw has r eser vedi tf orcer t ai nhei r swhoar ecal l edcompul sor yhei r s. A.l egi t i mat e C.f r eepor t i on B.l egi t i me D.est at e 10. Awi l lwhi chi sent i r e l ywr i t t en,dat edandsi gnedbyt het est at or . A.hi el ogl yphi cs C.hol ocaust B.hol ogr aphi c D.ownwi l l Pr obl em 1 Li waywaydi edl eavi ngt hef o; ; owi ngpr oper t i es: a.Houseandl oti nt hePhi l i ppi nes( mor t gagedf orP300, 000) 1, 250, 000 b.Condomi ni um uni ti nHongkong 1, 000, 000 c. Cari nPhi l i ppi nes 70, 000 d.Cari nHongkong 60, 000 e. Fr anchi seexer ci sedi nt hePhi l i ppi nes 300, 000 f . Fr anchi seexer ci sedi nNew Yor k,USA 25, 000 g. Domest i cshar es,cer t i ficat ekepti nNew Yor k,USA 55, 000 h.For ei gnshar es,90% ofbusi nessi nt hePhi l i ppi nes 60, 000 i . For ei gnshar es,30% ofbusi nessi nt hePhi l i ppi nes,wi t hbusi ness si t usi nt hePhi l i ppi nes. 15, 000 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 j . For ei gnshar es,60% ofbusi nessi nt hePhi l i ppi nes 75, 000 1.Thegr ossest at ei ft hedecedentwasar esi dentci t i z en,r esi dental i enoranonr esi dentci t i z enA.2, 910, 000 C.1, 620, 000 B.1, 770, 000 D.1, 750, 000 2.Thegr ossest at ei ft hedecedentwasanonr esi dental i en( nor eci pr oci t y) A.2, 910, 000 C.1, 825, 000 B.1, 750, 000 D.1, 320, 000 3.Thegr ossest at ei ft hedecedentwasanonr esi dental i en( wi t hr eci pr oci t y) A.2, 910, 000 C.1, 825, 000 B.1, 750, 000 D.1, 320, 000 Pr obl em 2 Juan,mar r i edt oJuana,di ed.Thef ol l owi ngpr oper t i eswer el ef tuponhi sdeat h: a.Dur i anpl ant at i oni nDavao,br oughti nt omar r i agebyH. -3, 000, 000 b.I ncomeofpl ant at i oni nDavaoear neddur i ngmar r i age - 250, 000 c. Shar esofst ockswi t hAgacor p.ear nedbyJuanadur i ng mar r i age - 420, 000 d.Di vi dendsf r om AgaCor p.ear neddur i ngmar r i age - 52, 000 e. Busi nCebu,i nher i t edbyJuandur i ngt hemar r i age - 760, 000 f .I ncomeofpassengerbusear neddur i ngt hemar r i age - 23, 000 g. Ri cel andi nLegaz pi ,i nher i t edbyJuanabef or emar r i age - 460, 000 h.I ncomeofRi cel andi nLegaz piear neddur i ngt hemar r i age 50, 000 i . Under wear ( pant i es,br assi er e)ofJuanabr oughti nt oJuana - 85, 000 j . Cash,uni dent i fiedwhenandbywhom acqui r ed - 55, 000 k.Jewel r i esi nher i t edbyJuanadur i ngmar r i agef r om hermot her - 320, 000 4.Theexcl usi vepr oper t i esofJuanunderconj ugalpar t ner shi pofgai nsA.5, 475, 000 C. 3, 760, 000 B.3, 815, 000 D.4, 610, 000 5.Thegr ossest at eofJuani ft hespousewer eunderconj ugalpar t ner shi pof gai nsA.5, 475, 000 C.4, 560, 000 B.4, 610, 000 D.3, 975, 000 6.Thecommuni t ypr oper t yoft hespousesunderabsol ut ecommuni t yofpr oper t y r egi meA.4, 287, 000 C.4, 560, 000 B.5, 475, 000 D.3, 975, 000 7.Thegr ossest at eofJuani ft hespouseswer eundert heabsol ut ecommuni t yof pr oper t yr egi meA. 5, 070, 000 C.4, 287, 000 B.5, 475, 000 D.4, 610, 000 Pr obl em 3 Mar ke tval ue–dat eof 1.Revocabl et r ansf er : a.Coconutpl ant at i on b.Mi t subi shipaj er o c. Shar esofst ock d.Del i ver yt r uck Tr ansf er Deat h P1, 500, 000 1, 200, 000 300, 000 400, 000 P1, 800, 000 1, 000, 000 220, 000 450, 000 Downloaded by Lee Park (Leepark6240@gmail.com) Consi der at i on P1, 000, 000 750, 000 250, 000 420, 000 lOMoARcPSD|7527748 2.Townhouse,i ncont empl at i onof deat h 2, 000, 000 2, 300, 000 1, 500, 00 8.Theamounti ncl udi bl ei nt hegr ossest at ei sA.1, 080, 000 C.1, 050, 000 B. 1, 850, 000 D.1, 500, 000 Pr obl em 4 Act ual a.P60, 000 b. 175, 000 c. 55, 000 d. 225, 000 Gr ossest at e P1, 500, 000 5, 000, 000 1, 150, 000 4, 750, 000 Deduct i bl e 60, 000 175, 000 55, 000 200, 000 Pr obl em 5 Al ,decedent ,hadt hef ol l owi ngdat aatt het i meofhi sdeat honJul y20,2013: Pr i ordecent–f at her Car Land Pr esentdecedent P250, 000 500, 000 P200, 000 900, 000 Thel andhadanunpai dmor t gageofP300, 000att het i mei twasi nher i t edf r om hi s f at heronJanuar y5,2010.Alwasabl et opayP200, 000bef or ehi sdeat h.Thegr oss est at eofAlwasP4, 000, 000whi l et heexpensesamountt oP900, 000br okendownas f ol l ows: Act ualf uner alexpenses Cl ai msagai nstt heest at e Cl ai msagai nsti nsol ventper sons Tr ansf ert oCi t yofMani l af orpubl i cpur pose Medi calexpenses RA4917 P175, 000 30, 000 20, 000 50, 000 545, 000 80, 000 I ncl udedi nt hegr ossest at ei shi sf ami l yhome.I twaspur chasedonFeb.2012at P1. 8M.Att het i meofhi sdeat h,i thadaval ueofP2, 000, 000 9. Theamountofvani shi ngdeduct i oni s— A.77, 500 C.173, 125 B.90, 625 D.181, 250 Pr obl em 6 I ndi cat ewhe t hert hef ol l owi ngi t emsofdeduct i onf r om gr ossest at ear e deduct i bl eornot . Items of Deduction ELIT Transfer for public use Vanishing deduction RA 4917 Share of surviving spouse Resident or Citizen Decedent NRA Decedent Downloaded by Lee Park (Leepark6240@gmail.com) Remarks lOMoARcPSD|7527748 Medical expenses Standard deduction Family Home Pr obl em 7 Count r yA:Ne test at eofP100, 000andest at et axpai dofP3, 500;Count r yB:Ne test at e ofP200, 000andest at et axpai dofP5, 000;Phi l i ppi nes:Ne test at eofP200, 000.The decedentwasaci t i z enandr esi dentoft hePhi l i ppi nes. 9.Theest at et axcr edi tf orf or ei gnest at et axpai di s: A.P9, 000 C.P8, 000 B.P8, 500 D.P7, 000 10.Theest at et axst i l ldueaf t ercr edi tf orf or ei gnest at et axespai di s: A.P6, 000 C.P7, 000 B.P6, 500 D.P15, 000 Pr obl em 8 PapaTaidi edonJanuar y3,2013.Theest at et axdueandpayabl eofP25, 000was pai donJanuar y3,2015. 11.Theest at et axdue,i ncl udi ngi ncr ement s, i fany A.38, 750 C.34, 375 B.36, 250 D.33, 750 12.Assumi ngt het axwaspai donJanuar y3,2016andt hef ai l ur et opayt axdueon t i mewasduet owi l l f ulnegl ect ,t het axduei s A.50, 000 C.37, 500 B.45, 000 D.33, 750 MULTI PLE CHOI CE QUESTI ONS 1.Whi choft hef ol l owi ngst at ement si scor r ect ? A.Thegr ossest at eofar esi dentci t i z endecedentwoul dnoti ncl udeal l pr oper t i es,whe t herr ealorper sonalandwhe t herwi t hi norwi t hout . B.Thegr ossest at eofanAmer i candecedentwhowasar esi dentoft he Phi l i ppi nesi ncl udesal lpr oper t i esi nt hePhi l i ppi nesonl y . C.Thegr ossest at eofaFi l i pi nodecedentwhowasr esi di ngi nAust r al i awoul d i ncl udeal lpr oper t i esr egar dl essofl ocat i on. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 D.Theper sonalpr oper t yofanonr esi dental i eni snoti ncl udedi nt hegr oss est at ei nt hePhi l i ppi nesi ft heyar ei nt angi bl e. 2.I ncomput i ngt hegr ossest at eofadecedent : A.I fhewasanonr esi dent ,butci t i z enoft hePhi l i ppi nes,t angi bl eand i nt angi bl epr oper t i es,r egar dl essofl ocat i on,shal lbei ncl uded B.I fhewasar esi dentwhowasnotaci t i z enoft hePhi l i ppi nes,t angi bl eand i nt angi bl epr oper t i es,r egar dl essofl ocat i on,shal lbei ncl uded C.I fhewasanonr esi dentwhowasnotaci t i z enoft hePhi l i ppi nes,t angi bl e andi nt angi bl eper sonalpr oper t i es,l ocat edi nt hePhi l i ppi nes,shal lbei ncl uded. D.Al labovest at ement sar ecor r ect . 3.Aci t i z enoft hePhi l i ppi nes,si ngl e,di edar esi dentofCanada,l eavi ngt hef ol l owi ng pr oper t i es: Realpr oper t yi nCanada,i nher i t edf r om f at heroneandonehal f year sago P2, 000, 000 Per sonalpr oper t yi nt hePhi l i ppi nesi nher i t edf r om f at her Fami l yhomei nCanada Thegr ossest at esubj ectt oPhi l i ppi neest at et axi s: 1, 600, 000 1, 400, 000 A.P3, 400, 000 C.P1, 600, 000 B.P5, 000, 000 D.P3, 000, 000 4.Whi choft hef ol l owi ngi snoti ncl udedi nt hegr ossest at e ? A.Rev ocabl et r ansf erwher et heconsi der at i onwasnotsuffici ent B.Rev ocabl et r ansf erwher et hepowerofr evocat i onwasnotexer ci sed C.Tr ansf erunderagener alpowerofappoi nt mentwher et heconsi der at i onwas notsuffici ent D.Tr ansf erunderaspeci alpowerofappoi nt ment 5.Ar evocabl et r ansf erwi t haconsi der at i onr ecei v ed: Consi der at i onr ecei ved Fai rmar ke tval ueofpr oper t yatt het i meoft r ansf er Fai rmar ke tval ueofpr oper t yatt het i meofdeat h Val uet oi ncl udei nt hegr ossest at ei s: P200, 000 300, 000 250, 000 A.300, 000 C.100, 000 B.250, 000 D.50, 000 6.Whi choft hef ol l owi ngi snoti ncl udedi nt hegr ossest at e ? A.Tr ansf eri ncont empl at i onofdeat hwher et heconsi der at i oni snotsuffici ent B.Rev ocabl et r ansf erwher et hepowerofr evocat i onwasnotexer ci sed C.Pr oceedsofl i f ei nsur ancewher et hebenefici ar ydesi gnat edi st heexecut or andt hedesi gnat i oni si r r evocabl e D.Pr oceedsofl i f ei nsur ancewher et hei r r ev ocabl ydesi gnat edbenefici ar yi st he mot her Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 7.Aci t i z enofJapan,r esi di ngi nHongkong,wi t hpr oper t i esi nHongkongandt he Phi l i ppi nes,hadt hef ol l owi ngdat aonpr oper t i esandr i ght satt het i meofhi sdeat h andt hei rval ues. Realest at e,Hongkong Realest at e,Phi l i ppi nes Shar esofst ockofadomes t i ccor por at i on Shar esofst ockofaJapanesecor por at i on Shar esofst ockofaCanadi ancor por at i on,doi ngbusi nessi nt he Phi l i ppi nesonl y Phi l i ppi nepesodeposi ti nMe t r obank Recei vabl eunderal i f ei nsur ancewi t hani nsur ancecompany doi ngbusi nessi nHongkong Thegr ossest at et hatshoul dber epor t edi nt hePhi l i ppi nesi s: A.P4, 350, 000 C.P2, 800, 000 B.P3, 700, 000 D.P4, 000, 000 P1, 000, 000 2, 000, 000 200, 000 300, 000 100, 000 500, 000 250, 000 8.Whi chst at ementi swr ong?Thegr ossest at eshal lbeval ued: A.Ati t sf ai rmar ke tval ueatt het i meofdeat h B.Ati t sf ai rmar ke tval ueatt her e t ur ni sdue C.I nr ealpr oper t y ,t hez onalval ue,whi chmaybehi ghert hant heassessed val ue D.I nt hecaseofcommonshar esofst ock,atbookval ue 9.Per sonalpr oper t ywi t hacostofP400, 000andaf ai rmar ke tval ueatt het i meof deat hP900, 000,butsubj ectt oamor t gageofP250, 000 a.Shal lbei nt het axabl ene test at eatP500, 000 b.Shal lbei nt hegr ossest at eatt hedecedent ’ sequi t yofP650, 000 c.Shal lbei nt hegr ossest at eatP400, 000 d.Shal lbei nt hegr ossest at eatP900, 000 10.1stst at ement :Formar r i agesonoraf t erAugust3,1988,t hepr oper t yr e l at i onshi p be t weenhusbandandwi f e,i nt heabsenceofawr i t t enagr eementbe t weent hem,i s t hesyst em ofabsol ut ecommuni t yofpr oper t y . 2nd st at ement :Ther emaybeapr oper t yr el at i onshi pofconj ugalpar t ner shi pofgai ns eveni fmar r i agewasonoraf t erAugust3,1988. a.Onl yt hefir stst at ementi st r ue b.Onl yt hesecondst at ementi st r ue c.Bot hst at ement sar et r ue d.Bot hst at ement sar ef al se 11.Whi c hoft hef ol l owi ngi scor r ect ?Undert hesyst em ofconj ugalpar t ner shi pof gai nsandabsol ut ecommuni t yofpr oper t y: a.Pr oper t yacqui r eddur i ngt hemar r i agebyi nher i t anceorgi f ti sexcl usi ve pr oper t yunderbot hsyst ems b.Pr oper t yownedbef or et hemar r i agei sexcl usi vepr oper t yunderbot hsyst ems c.I ncomeofpr oper t yunder( a)i sexcl usi vepr oper t yunderbot hsyst ems d.Pr oper t yunder( a)maybeconj ugalorcommuni t ywhenexpr essl ydecl ar edby t hebene f act orasconj ugalorcommuni t y Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 12.Oneoft hef ol l owi ngst at ement si swr ong: a.Amount sr ecei vabl eunderRA4917,anddur i ngt hemar r i age,ar econj ugal pr oper t i es b.I ncomeoutoft hel aboroft hehusbandi sconj ugalpr oper t y c.I ncomeoutofexcl usi vepr oper t yoft hewi f ei sconj ugalpr oper t y d.Pr oper t yi nher i t edwhent hef ai rmar ke tval uewasP600, 000,sol df orcash dur i ngt hemar r i agewhent heval uewasP1, 000, 000r esul t edi ngai nofP400, 000.The gai ni sconj ugalpr oper t y 13.Aci t i z enandr esi dentoft hePhi l i ppi nesdi edonOct ober5,2010.Hewasa mar r i edandt hepr oper t yr el at i onshi pdur i ngt hemar r i agewasabsol ut ecommuni t yof pr oper t y .Hel e f tbehi ndpr oper t i eswi t hmar ke tval uesasf ol l ows: Agr i cul t ur all and Houseandl otacqui r edbyi nher i t ancebef or et hemar r i age41/2yr s. ago,usedasf ami l yhome( wi t haFMVofP420, 000andamor t gageof P120, 000whenacqui r ed:P20, 000waspai dbyt hedecedentbef or ehe di ed) Jewel r yofwi f e,acqui r eddur i ngt hemar r i agewi t hheri ncome Cl ot hesacqui r eddur i ngt hemar r i age,wi t hi ncomedur i ngt he mar r i age: Foruseoft hedecedent Forusoft hewi f e Cashonhandandi nbanks: I ncomef r om uni dent i fiedsour ces Fr om asal eatal ossofexcl usi vepr oper t y Recei vedasgi f tsi xyr s.agoandbef or et hemar r i age( cur r entaccount ) Ot herpr oper t i es: Ownedbef or et hemar r i age Acqui r eddur i ngt hemar r i age Thegr ossest at ei s: a.P1, 560, 000 c.P2, 660, 000 b.P1, 100, 000 d.P3, 660, 000 P100, 000 500, 000 50, 000 60, 000 70, 000 300, 000 1, 500, 000 40, 000 90, 000 20, 000 14.Whi c hoft hef ol l owi ngst at ement si swr ong?For ,adecedentwhowasmar r i edat t het i meofdeat h,t her emaybededuct i bl ef uner alexpenses: a.Whe t herpai dorunpai d b.Byf uner alexpensesi ncur r edbef or ei nt er nment c.Reducest hedi s t r i but abl eest at ebyt heal l owabl e5% oft hegr ossest at e d.Atnotmor et hanP200, 000 15.Whi c hoft hef ol l owi ngdeduct i bl ef ort hepur posesofcomput i ngt hene t di st r i but abl eest at e ? a.Vani shi ngdeduct i on c.unpai dmedi calexpenses b.st andar ddeduct i on d.RA4917 16.Whi c hoft hef ol l owi ngst at ement si swr ong?Deduct i onf orf uner alexpensesshal l beal l owed: a.Shal li nnocaseexceed5% oft hegr ossest at e Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 b.Shal li nnocaseexceedP200, 000 c.Onl yi fpai doutoft heest at e d.Foranonr esi dental i en,onl yt hatwhi chwasact ual l yi ncur r edi nt he Phi l i ppi nes I TEMS17THROUGH 19ARE BASED ON THE FOLLOWI NG I NFORMATI ON: Ar esi dentci t i z endi edwi t hpr oper t i escons t i t ut i nghi sgr ossest at eofP5, 000, 000. Act ualf uner alexpensesamount edt oP220, 000andot herexpensesandcl ai mswhi ch ar ededuct i onsf r om t hegr ossest at eamount edt oP1, 200, 000. 17.Theal l owabl ededuct i onf orf uner alexpensesi s: a.220, 000 c.200, 000 b.250, 000 d.Nonegi ven 18.Thet axabl ene test at ei s: a.P3, 600, 000 c.P3, 700, 000 b.P2, 600, 000 d.P3, 580, 000 19.Thedi st r i but abl eest at ewasdi mi ni shedby: a.P1, 420, 000 c.P1, 200, 000 b.P1, 400, 000 d.Someot heramount I TEMS20and21ARE BASED ON THE FOLLOWI NG I NFORMATI ON: Pr oper t i esi nt hePhi l i ppi nes–P500, 000;Pr oper t i esout si det hePhi l i ppi nes– P300, 000;Act ualf uner alexpensesi nt hePhi l i ppi nes–P20, 000;Act ualf uner al expensesout si det hePhi l i ppi nes–P10, 000. 20.I ft hedecedentwasaci t i z enorr esi dentoft hePhi l i ppi nes,t hededuct i bl ef uner al expensesi s: a.P30, 000 c.P18, 750 b.P40, 000 d.P25, 000 21.I ft hedecedentwasanonr esi dent ,notci t i z enoft hePhi l i ppi nes,t hededuct i bl e f uner alexpensesi s: a.P15, 625 c.P18, 750 b.P40, 000 d.P25, 000 22.St at ement1:Lossescanbededuct edonl yi fi ncur r eddur i ngt heset t l ementoft he est at e. St at ement1:Lossescanbededuct edonl yi ft hepr oper t yl osti si ncl udedi nt hegr oss est at e. a.bot hst at ementar et r ue. b.bot hst at ementar ef al se. c.t hefir stst at ementi st r ue,butt hesecondst at ementi sf al se. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 d.t hefir stst at ementi sf al se,butt hesecondst at ementi st r ue. 23.Whi c hst at ementi swr ong?Lossesar ededuct i bl ef r om t hegr ossest at e: a.i far i si ngf r om ear t hquake. b.i fnotcompensat edbyi nsur anceorot herf or m ofi ndemni t y . c.i ft hel ossar i sesf r om sal eofcapi t alasset s. d.mustbei ncur r eddur i ngt hese t t l ementoft heest at e. 24.Ar esi dentFi l i pi no,di edonMay5,2012andhi sest at ei ncur r edl ossesasf ol l ow: 1stl oss:Fr om fir eonJul y2,2012ofi mpr ovementonhi spr oper t ynotcompensat edby i nsur ance. 2nd l oss:Fr om floodonJul y2,2011ofhouse hol df ur ni t ur eal sonotcompensat edby i nsur ance. a.1stl ossi snotdeduct i bl eand2nd l ossi sdeduct i bl e. b.bot hl ossesar enotdeduct i bl e. c.bot hl ossesar ededuct i bl ef r om gr ossest at e. d.1stl ossi sdeduct i bl eand2nd l ossi snot . 25.Whi c hst at ementi scor r ect ?Realpr oper t ywi t hacostofP300, 000andaf ai r mar ke tval ueatt het i meofdeat hofP1, 000, 000,butsubj ectt omor t gageofP200, 000. a.Shal lbei nt het axabl ene test at eatP800,000. b.Shal lbei nt hegr ossest at eatt hedecedent ’ sequi t yofP800,000. c.Shal lbei nt hegr ossest at eatP300,000. d.Shal lbei nt hegr ossest at eatt hedecedent ’ sequi t yofP100,000. 26.Kenkoyi nher i t edpr oper t yonNovember1,2012,wi t haf ai rmar ke tval ueanda mor t gageatt hatt i meofP200, 000andP100, 000,r es pect i ve l y .Hemar r i edonJanuar y 10,2013,undert hepr oper t yr el at i onshi pofconj ugalpar t ner shi pofgai ns.OnMar ch 5,2014,hebor r owedP200, 000f r om abankandmor t gagedt hesamepr oper t y . Kenkoydi edwi t houtpayi nganyoft hemor t gagei ndebt edness.Di sr egar di ngaccr ued i nt er es tont hemor t gagei ndebt edness,deduct i onagai nstexcl usi vepr oper t yi s: a.P200, 000 c.P300, 000 b. P100, 000 d.Noneoft hese 27.Ar esi dentdecedentwasmar r i edundert heconj ugalpar t ner shi pofgai ns.An obl i gat i onofP100, 000,i ncur r eddur i ngt hemar r i ageandsecur edbyamor t gageof excl usi vepr oper t yi s: a.Adeduct i onf r om t hegr ossest at eatP100, 000agai nstconj ugalpr oper t y . b.Adeduct i onf r om t hegr ossest at eatP100, 000agai nstexcl usi vepr oper t y . c.Adeduct i onofP50, 00f r om t hegr ossest at eagai nstconj ugalpr oper t y . d.Adeduct i onofP100, 00f r om t hegr ossest at eagai nstexcl usi vepr oper t y ,but wi t har ecei vabl eofP50, 000f r om t hesur vi vi ngspouse. 28.Whi c hst at ementi scor r ect ?Cl ai msagai nstt heest at e,asdeduct i onf r om t hegr oss est at e: Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 a.Repr esent sobl i gat i onsenf or ceabl edur i ngt hel i f e t i meoft hedecedent . b.Shoul dal waysbeevi dencedbyanot ar i z eddocument . c.i ssuffici entf ordeduct i bi l i t yi faavl i dobl i gat i onundert hel aw onobl i gat i ons. d.I funpai dmor t gageofanonr esi dent ,notci t i z enoft hePhi l i ppi nes,t he pr oper t yshoul dbei ncl udedi nt hePhi l i ppi negr ossest at e. 29.Whi c hoft hef ol l owi ngi sdeduct i bl ef r om t hegr ossest at e ? a.I ncomet axpai doni ncomer ecei vedaf t erdeat h. b.Unpai dpr oper t yt axesaccr uedi nt heyearofdeat h. c.Donor ’ st axaccr uedaf t ert odeat h. d.Est at et axpai dt oaf or ei gncount r y . 30.Whi c hi swr ong?Deduct i onf ort r ansf er sf orpubl i cpur pose: a.Meansl egacyi nal astwi l landt est amentt ot hegover nment . b.Meansdevi cei nal astwi l landt est amentt ot hegover nment . c.I ncl udespr oper t i est r ansf er r edi nt ervi vos. d.wi l lnoti ncl udel egaci est ochar i t abl ei nst i t ut i ons. 31.I ndet er mi ni ngt het axabl ene test at eofadecedent ,whi choft hef ol l owi ngr ul esi s cor r ect ? a.Realest at eabr oadi snoti ncl udedi nt hegr ossest at eofadecedentwhowasa r esi dental i en. b.Vani shi ngdeduct i onmustbesubj ectt ol i mi t at i ons. c.Shar esofst ocksbei ngi nt angi bl epr oper t yshal lbei ncl udedi nt hedecedent ’ s gr ossest at ewher eversi t uat ed. d.Funer alexpensesar ededuct i bl et ot heext entof5% oft het ot algr ossest at e butnotexceedi ngP100, 000. 32.Whi c hoft hef ol l owi ngst at ementi scor r ect ?Pr oper t ysubj ectt ovani shi ng deduct i onshoul dbe: a.I ft hedecedentwasanotci t i z ennorr esi dentoft hePhi l i ppi nes,t hepr oper t y shoul dnotbel ocat edi nt hePhi l i ppi nes. b.I ft hedecedentwasaci t i z enorr esi dentoft hePhi l i ppi nes,t hepr oper t ymay notbel ocat edi nt hePhi l i ppi nes. c.I ft hedecedentwasaci t i z enbutar esi dentoft hePhi l i ppi nes,t hepr oper t y neednotbel ocat edi nt hePhi l i ppi nes. d.I ft hedecedentwasaci t i z enandr esi dentoft hePhi l i ppi nes,t hepr oper t y shoul dbel ocat edi nt hePhi l i ppi nes. 33.A r esi dentdecedent ,dur i nghi sl i f e t i me,wasundert heconj ugalpar t ner shi pof gai ns.Amonghi sal l owabl ededuct i onsf r om t hegr ossest at ei svani shi ngdeduct i on andt hef ol l owi ng: Funer alexpenses Judi ci alexpenses Cl ai msagai nstconj ugalpr oper t i es Downloaded by Lee Park (Leepark6240@gmail.com) P80, 000 100, 000 120, 000 lOMoARcPSD|7527748 Mor t gageonexcl usi vepr oper t y Casual t yl osses Bequestt ot hePhi l i ppi nesGover nment Fami l yHome Amountr ecei vedunderR. A4917 I nt hef or mul af orvani shi ngdeduct i onwher e: 40, 000 5, 000 60, 000 600, 000 60, 000 I ni t i albasi cofpr oper t y xDeduct i on Gr ossest at e Themul t i pl i er“ deduct i on”i s: a.P400, 000 c.P40, 000 b.P405, 000 d.P1, 005, 000 34.Aci t i z enoft hePhi l i ppi nesandr esi dentofBagui oCi t y ,di edt est at eonMay10, 2013.Amonghi sgr ossest at ear epr oper t i esi nher i t edf r om hi sdeceasedf at herwho di edonApr i l4,2010.Whatper cent ageofdeduct i onwi l lbeusedi ncomput i ngt he amountofvani shi ngdeduct i on? a.80% oft heval uet akenasbasi sf orvani shi ngdeduct i on. b.100% oft heval uet akenasbasi sf orvani shi ngdeduct i on. c.60% oft heval uet akenasbasi sf orvani shi ngdeduct i on. d.40% oft heval uet akenasbasi sf orvani shi ngdeduct i on. 35.St at ement1:Foravani shi ngdeduct i on,t her eshoul dal waysbet wodeat hswi t hi n fiveyear sf r om r ecei ptofpr oper t y . St at ement2:Foravani shi ngdeduct i on,t her eshoul dal waysbet wot r ansf erof pr oper t ywi t hi nfiveyear swhe t hert hefir stt r ansf erbegr at ui t ousoroner ous. a.Bot hst at ement sar et r ue. b.Bot hst at ement sar ef al se. c.Thefir stst at ementi st r ue,butt hesecondst at ementi sf al se. d.Thefir stst at ementi sf al se,butsecondst at ementi st r ue. 36.Aci t i z enandr esi dentoft hePhi l i ppi nes,mar r i ed,di ed,l eavi ngt hef ol l owi ng pr oper t i es: Realandper sonalpr oper t i esacqui r eddur i ngt hemar r i age 1 Landandbui l di ngi nher i t edf r om t hef at her1/2year sago( wi t h af ai rmar ke tval ueatt hatt i meofP1, 500, 000) ,andusedatt he t i meofhi sdeat hashomef orhi sf ami l y . Car ,pur chasedwi t hcashr ecei vedasgi f tf r om t hemot her dur i ngt heyear Cash( i ncl udi ngP500, 000r ecei vedbyi nher i t ancef r om t he f at her) Cl ai msagai nstconj ugalpr oper t i es Unpai dmor t gageont hel andandbui l di ngi nher i t ed( f r om an or i gi nalofP600, 000wheni nher i t ed) Thevani shi ngdeduct i oni s: a.P1,530, 000 c.P450,000 b.P1,080, 000 d.P1,130, 000 P3, 000, 000 2, 000, 000 500, 000 1, 500, 000 600, 00 100, 000 37.Whi c hst at ementi swr ong?Foranonr esi dent ,notci t i z enoft hePhi l i ppi nes: Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 a.Ther ear enospeci aldeduct i onsf r om t hegr ossest at e b.Ther ecanbenodeduct i onf orf uner alexpensesent i r e l yi ncur r edout si det he Phi l i ppi nes. c.Ther ecanbeavani shi ngdeduct i on. d.Ther ecanbeadeduct i onf ort r ansf erf orpubl i cuse. 38.Onl yoncest at ementi scor r ect .Deduct i onf orf ami l yhome: a.Shal lbeal l owedi ft hef ami l yhomei si nt hePhi l i ppi nes. b.Shal lbeatamaxi mum ofP1, 000, 000,basedoncost . c.Maybeal l owedf orf ami l yhomes( onei nt heCi t yandanot heri nt he Pr ovi nce) ,bot hi nt hePhi l i ppi nesandwi t hcer t i ficat esoft heBar angayCapt ai ns. d.Shal lbededuct edatl essert hanP1, 000, 000i f ,wi t hvani shi ngdeduct i onand unpai dmor t gageori ndebt edness,t heval ueoft hef ami l yhomei sal r eadyr educedt o z er o. 39.Whi c hst at ementi st r ue ? a.Asi ngl eper sonwhoi snotaheadoff ami l ymaynothaveadeduct i onf or f ami l yhome. b.Ther ecanbeadeduct i onf ort wof ami l yhomesi ft hei raggr egat eval uedoes notexceedP1, 000, 000. c.Deduct i onmaybecl ai medf oraf ami l yhomeofanonr esi dentoft he Phi l i ppi nesl ocat edout si det hePhi l i ppi nes. d.Af ami l yhomei sal waysconj ugal /communi t ypr oper t y . 40.Ar esi dentdecedentwasmar r i edatt het i meofdeat handundert hesyst em of conj ugalpar t ner shi pofgai ns.Amongt hepr oper t i esi nt hegr ossest at ewer e: Land,i nher i t edbef or et hemar r i age,f ai rmar ke tval ue Fami l yhomebui l tbyt hespousesont hei nher i t edl and P100, 000 800, 000 Deduct i onf orf ami l yhomei s: a.P900, 000 c.P400, 000 b.P500, 000 d.P450, 000 41.Oneoft hest at ementi swr ong.I dent i f y .Medi calexpensesdeduct i bl ef r om t he gr ossest at e: a.Onl yi ft hedecedentwasaci t i z enorr esi dentoft hePhi l i ppi nesatt het i meof deat h. b.I sact ualmedi calexpensesorP500, 000,whi c heveri sl ower . c.Neednotbeont hei l l nessr esul t i ngi ndeat h. d.Mustnotbepai dbe f or edeat h. 42.Thef ol l owi ngexpenses,exceptone,shoul dbepai dort akepl acewi t hi nacer t ai n per i odi nor dert obededuct i bl ef r om t hegr ossest at eofaci t i z enorr esi dentdecedent . Whi chi st heexcept i on? a.Vani shi ngdeduct i on c.Medi calexpenses Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 b.Judi ci alexpenses d.Cl ai msagai ns tt heest at e I t ems42t hr ough46ar ebasedont hef ol l owi ngi nf or mat i on: Aci t i z enandr esi dentoft hePhi l i ppi nes,di edonOct ober10,2010,l eavi ngt he f ol l owi ngpr oper t i es,r i ght s,obl i gat i onsandchar ges: Conj ugalpr oper t i es ( i ncl udi ngaf ami l yhomeofP3, 000, 000 andamountr ecei vabl eunderRA4917ofP200, 000) Excl usi vepr oper t i es( i ncl udi ngcashofP500, 000i nher i t ed41/2 year sago) Medi calexpensesunpai d,Januar y2012 Funer alexpenses Judi ci alexpenses Ot herobl i gat i ons 43.Thededuct i bl ef uner alexpensesi s: a.P350, 000 c.P500, 000 b.P100, 000 d.P200, 000 P6, 000, 000 4, 000, 000 600, 000 350, 000 500, 000 100, 000 44.Thevani shi ngdeduct i oni s: a.P460, 000 c.P92, 000 B. P184, 000 d.P138, 000 45.Thededuct i onf orf ami l yhomei s: a.P3, 000, 000 c.P1, 000, 000 b.P1, 500, 000 d.P500, 000 46.Thededuct i bl emedi calexpensesi s: a.P600, 000 c.P500, 000 b.P300, 000 d.250, 000 47.Thet axabl ene test at ei s: a.P4, 808, 000 c.P3, 808, 000 b.P4, 908, 000 d.P3, 908, 000 48.Est at et axcr edi tf orf or ei gnest at et axpai di savai l abl et ot heest at eof : a.Resi dentorci t i z enoft hePhi l i ppi nes b.Nonr esi dental i en c.Al lki ndsofdecedent s d.Noneoft hese 49. Gr ossest at e Cl ai msagai nstt heest at e Phi l i ppi nes For ei gn P6, 000, 000 P4, 000, 000 1, 000, 000 1, 000, 000 How muchwast hePhi l i ppi neest at et axduei ft hedecedentwasanonr esi dent ,not ci t i z enoft hePhi l i ppi nes,andt her ewasaf or ei gnest at et axpaymentofP400, 000? a.P0 c. P571, 875 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 b.P515, 000 d.P443, 000 50.Theest at et axr e t ur nshoul dbeaccompani edbyacer t i ficat eofani ndependent CPAi ft hegr ossest at ei s: a.P2, 000, 000 c.OverP2, 000, 000 b.P2, 000, 000orover d.P50, 000orover 51.Whi c hoft hef ol l owi ngst at ement si sf al se ?Whenanest at et axr e t ur nhadbeen fil edandt heest at et axhadbeenpai dbutsubsequent l y ,becauseofer r or si nt he r e t ur n,adefici encyest at et axhast obepai d: a.TheBur eauofI nt er nalRevenuecanaskpaymentf r om t hehei r st owhom t he est at ehadbeendi st r i but ed. b.TheBur eauofI nt er nalRevenuecannotaskt heexecut ororadmi ni s t r at ort o paybecausehewoul dhavebeendi schar gedf r om l i abi l i t yf ort heest at et axt ot he hei r soncet heest at et axhadbeenpai d. c.TheBur eauofI nt er nalRevenuecans t i l laskt heexecut ororadmi ni s t r at ort o pay ,eveni ft hehei r shavedi ssi pat edt hei nher i t ance,i ft heexecut ororadmi ni s t r at or di dnotaskf orawr i t t endi schar gef r om l i abi l i t yf r om t heBur eauofI nt er nalRevenue. d.TheBur eauofI nt er nalReveneushal lhaveal i enont hepr oper t i esoft he est at eonceademandf orpaymenthadbeenmade. 52.Whenadonat i onwhi chpai dadonor ’ st axwasac t ual l yadonat i onmor t i scausa, asascer t ai nedbyt heBur eauofI nt er nalRevenue,whi choft hef ol l owi ngi st r ue ? a.Thedonat i onshal lber equi r edt opayt heest at et axoni t spr operval uat i onat t het i meofdeat h,andt her ecanbear e f undf ort hewr ongpaymentoft hedonor ’ st ax. b.Thedonat i onshal lber equi r edt opayt heest at et axsot hatt heest at et ax comput edshal lber educedbyt hedonor ’ st axal r eadypai d. c.Thedonat i onshal lnotpayanyt r ansf ert axanymor e. d.Thedonat i onhast opayt heest at et axi naddi t i ont ot hedonor ’ st ax pr evi ousl ypai d. 53.Taxpayerdi edFebr uar y2,2013.Noj udi ci alpr oceedi ngswer ei ns t i t ut edf ort he set t l ementofhi sest at e.Re t ur nwasfil edandt axofP20, 000waspai dNovember2, 2013.Theest at et axdue,i ncl udi ngi ncr ement s,asofNovember2,2013i s: a.P26, 000 c. P31, 000 b.P26, 250 d.P31, 500 end- Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 TAX.M-1402Donor ’ sTax Pr obl em 1 Ar agavet hef ol l owi ngpr oper t i est ovar i ousdoneesonDecember25,2012: Houseandl oti nLondon P3, 500, 000 Apar t menthousei nNagaCi t y 8, 000, 000 Cari nI r i gaCi t y 520, 000 Cari nLondon 900, 000 Savi ngsdeposi twi t hBPI 50, 000 Ti medeposi ti naNew Yor kBank 120, 000 Account sr ecei vabl e,debt orr esi di ngi nt hePhi l i ppi nes 140, 000 Account sr ecei vabl e,debt orr esi di ngi nHongkong 35, 000 Fr anchi seexer ci sedi nNew Yor k 225, 000 Fr anchi seexer ci sedi nPhi l i ppi nes 120, 000 I nvest menti nGoodTi meCo. ,par t ner shi pest abl i shedi nHongkong 160, 000 I nvest menti nLover sCompany ,par t ner shi pest abl i shedi nt hePhi l ’ s. 125, 000 1.Thegr ossgi f ti fAr ai sar esi dentorci t i z en a.P13, 895, 000 c.P8, 520, 000 b.P8, 955, 000 d.none 2.Thegr ossgi f ti fAr ai sar esi dentandci t i z enofuni t edst at es( wi t houtr eci pr oci t y) . a. 13, 895, 000 c.8, 520, 000 b.8, 955, 000 d.None 3.Thegr ossgi f ti fAr ai sar esi dentandci t i z enoft hedonorasdi mi nut i onont he pr oper t ydonat ed. a. 13, 895, 000 c.8, 520, 000 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 b.8, 955, 000 d.None Pr obl em 2 Anacl e t ogavet hef ol l owi ngdonat i onst o: 021412—Az ucena,l egi t i mat edaught eronaccountofmar r i agel astDecember31, 2010—P190, 000. 060112—Br usco,br ot heronaccountofmar r i ageschedul edDecember31,2011— P160, 000. 101312—Car i z osa,l egi t i mat edaught er ,onaccountofmar r i ageonNovember12, 2011—P180, 000 051513—Dal maci o,f at her ,onaccountofmar r i age,l andwi t haf ai rmar ke tval ueof P1, 000, 000butmor t gagef orP100, 000whi chwasassumedbyt hedonee. 4.Thegi f tt axpayabl eonFebr uar y14,2012 a.190, 000 c.2, 000 b.1, 800 d.200, 000 5.Thegi f tt axpayabl eonJune1,2012 a.6, 200 c.1, 200 b.8, 000 d.350, 000 6.Thegi f tt axpayabl eonOct ober13,2012 a.15, 200 c.7, 800 b.15, 800 d.7, 200 7.Thegi f tt axpayabl eonMay15,2013 a.900, 000 c.44, 000 b.1, 000, 000 d. 38, 000 Pr obl em 3 Mr .andMr s.Al avadogavet hef ol l owi ngdonat i ons: May3,2013 Conj ugalpr oper t yval uedatP300, 000donat edt oBar umbado, l egi t i mat esonwhogotmar r i edJanuar y1,2013. Jul y14,2013 Capi t alpr oper t ydonat edt oCar l ot a,l egi t i mat edaught erwhogot mar r i edJune1,2013.Val ue–P500, 000. Dec.30,2013 Conj ugalpr oper t ydonat edt oCar l ot a.Thedowr yhasf ai rmar ke t val ueofP800, 000 8.Thegi f tt axdueofMr s.Al avadoonMay3,2013 a.1, 000 c.800 b.5, 600 d.6, 000 9.Thegi f tt axdueofMr .Al avadoonJul y14,2013. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 a.21, 800 c.12, 600 b.21, 000 d.6, 400 10.Thegi f tt axdueofMr s.Al avadoonDecember30,2013 a.15, 000 c.8, 200 b.9, 000 d.15, 800 Pr obl em 4 Anaconda,r esi dent ,gavet hef ol l owi ngdonat i ons: Donee Januar y22,2013 Bar bado Legi t i mat eson,onaccountofgr aduat i on–P140, 000. NagaCi t y Apar celofl andt obeusedf orpubl i cpur posed–P200, 000. Cor onado Legi t i mat echi l donaccountofi t sf or t hcomi ngmar r i ageonFebr uar y14, 2013–P6, 000. Di mal upi g P7, 000. Legi t i mat edaught er ,onaccountofmar r i ageonFebr uar y4,2012.- Mar ch25,2013 Bar bado Onaccountofmar r i ageonApr i l10,2013–P150, 000. Cor onado Addi t i onaldonat i ononaccountofmar r i ageFeb.14,2013–P69, 000. Di mal upi g Addi t i onaldonat i ononaccountofmar r i ageFeb.4,2012–P200, 000. Devt .Academyoft hePhi l ’ s Foreducat i onandt r ai ni ngpur poses,P50, 000. 11.Thedonor ’ st axdueonJanuar y22,2013. a.800 c.140, 000 b.660 d.6, 600 12.Thedonor ’ st axdueonMar ch25,2013. a. 16, 700 c.9, 200 b.15, 900 d.15, 720 Pr obl em 5 Mr .andMr s.Al banogavet hef ol l owi ngdonat i ons: Jul y1,2013 Communi t ypr oper t ywasdonat edt oBal aoi ng,si st erofMr . Al bano.Thef ai rmar ke tval uei sP650, 000. Sept .25,2013 boyf r i end. CashofP300, 000t oCuar t o,sonofMr s.Fr om hert eenage Nov . 10,2013 CashofP250, 000wasdonat edt oBal aoi ng. 13.Thedonor ’ st axdueonMr .andMr s.Al banoonJul y1,2013– a.7, 000; 7, 000 c. 97, 500; 7, 000 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 b.7, 000; 97, 500 d.97, 500; 97, 500 14.Thedonor st axdueonMr .Al banoonSept ember25,2013– a.1, 000 c.45, 000 b.90, 000 d.6, 000 15.Thedonor ’ st axdueonMr .andMr s.Al banoonNovember102013,2013– a.5, 000;37, 500 c. 37, 500; 37, 500 b.10, 000;5, 000 d.500, 500 Pr obl em 6 Ar andasisol dt hef ol l owi ngasse t s: Dat eofSal e Jewel r y June11 Buyer Mar ketVal ue Sel l i ngPri ce Ni ece Res.House June22 P Gi r l f r i end 130, 000 P 15, 000 Cost/ Book val ue P100, 000 1, 000, 000 600, 000 750, 000 Apt .House Sept .25 Legal l yadopt edc hi l d 900, 000 600, 000 750, 000 Del .Tr uck 400, 000 350, 000 Oct .10 Cont r ol l edcor p. 450, 000 16.Thegi f tt ax,i fany ,i neachoft hei ndependentt r ansact i onsabove. ( a) Jewel r y Resi dent i alhouse Apt .house Del i ver yt r uck P 300 ( b) ( d) 300 P 600 120, 000 None 120, 000 6, 000 6, 000 1, 000 1, 000 15, 000 15, 000 None None P ( c) P 600 75, 000 Pr obl em 7 17.Whi c hoft hef ol l owi ngexampl esi st axabl e ? a.A,Amer i canci t i z endonat edapar celofl andl ocat edi nt heuni t edSt at et oS, ar esi dental i en. b.OnJune1,2013,Tmadeagi f tofP200, 000t ohi sdaught eronaccountof hermar r i agecel ebr at edonMay1,2012. c.U,ami ni mum wageear ner ,gi veshi ssonagi f twor t hP2, 000asabi r t hday gi f t . d.VandW ar et heonl yhei r sofX.Vr enounceshi sshar eofi nher i t ancei nf av or ofW Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Pr obl em 8 18.St at ement1:Asar ul e,donat i onst ocandi dat esi nl ocaland/ornat i onalel ect i ons ar enotsubj ectt odonor ’ st ax. St at ement2:Donat i ont oapol i t i calpar t yi snotsubj ectt odonor ’ st axi fi ti s r epor t edbyt hedonort ot heComel ecandbyt hecandi dat ei nhi sSt at ementof Expendi t ur es. a.Tr ue;Tr ue c.Fal se;Fal se b.Tr ue;Fal se d.Fal se;Tr ue Pr obl em 9 19.Oneoft hef ol l owi ngst at ementi sf al se: a.Cont r act sofdonat i onbe t weenhusbandandwi f ear evoi di nmostcases. b.Thedonat i onbyt hepubl i cwor kscont r act ort oaMayor ,i nvi ew ofherpubl i c officei sv oi di nal lcases. c.Donat i onsbe t weenper sonsgui l t yofadul t er yorconcubi nagear ev oi d. d.Donat i ont oaconcei vedorunbor nchi l dr eni sval i d. Pr obl em 10 20.A,aci t i z enandr esi dentoft hePhi l i ppi nes,madedonat i onsonJanuar y10,2013, asf ol l ows:Donat i ont oB,al egi t i mat eson,onaccountofmar r i age,t obecel ebr at edon Febr uar y14,2013,pr oper t yi nt heUni t edSt at es( onwhi chaU. S.donor ’ st axof P1, 200waspai d) ,wi t haf ai rmar ke tval ueofDonat i ont oB,cashi nt hePhi l i ppi nesof Donor ’ st axcr edi tf ordonor ’ st axpai dt ot heU. S. : a. P1, 200 c.P600 b.P1, 000 d.P2, 000 Pr obl em 11 21.Oneoft hef ol l owi ngst at ement si scor r ect .Thedonor ’ st axr e t ur n: a.Mustbefil edwi t hi nt hi r t ydaysaf t ert heendoft hecal endaryear . b.Mustbefil edwi t hi nt hi r t ydaysf r om t hedat eofdonat i on. c.Mus tbeaccompani edbyacer t i ficat eofani ndependentCer t i fiedpubl i c Account anti ft hegr ossgi f ti sP50, 000ormor e. d.I nt hecaseofhusbandandwi f emaki ngdonat i ons,onedonor ’ st axr e t ur n shal lbefil edandsi gnedbyei t hert hehusbandort hewi f e. 22.Oneoft hef ol l owi ngst at ement si snott r ue.Whi chi si t ?I fonanyonedat et her e i sadonat i onbyonedonort oadoneewhoi snotast r angert oge t herwi t hadonat i on t oadoneewhoi sast r anger : Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 a.Ther ewi l lbet wosepar at edonor ’ st axr e t ur nbecauset hedonor ’ st axont he donat i ont oanons t r angeri satgr aduat edr at eswhi l et hedonor ’ st axont hedonat i on t oast r angeri satt heflatr at eof30%. b.Ther ewi l lbeonedonor ’ st axr e t ur nonl y ,wher et hedonor ’ st axatgr aduat ed r at esont hedonat i ont oanons t r angerwi l lbeshownt oge t herwi t ht hedonor ’ st axat t heflatr at eof30% ont hedonat i ont oast r anger ,t het ot albei ngt hedonor ’ st axt o pay . c.I ft her ewer epr evi ousdonat i onst os t r anger sdur i ngt heyear ,t hepr i orne t gi f t st os t r anger sneednotbeaddedanymor ei nt hecomput at i onofaggr egat ene tgi f t s, donor ’ st axonaggr egat ene tgi f t sanddonor ’ st axdueont hedonat i onst ost r anger s. d.Adonat i ononaccountofmar r i age,be f or et hemar r i age,byapar entt oason anddaught er i nl aw shal lbeconsi der edasdonat i onst oanonst r angerandst r anger . 23.OnMar ch6,2013,aFi l i pi noci t i z endonat edhouseandl otwi t hf ai rmar ke tval ue ofP200, 000t ohi schi l donaccountofmar r i ageonJanuar y1, 2013.Gi f tt axr e t ur n wasfil edandt axpai donJul y5,2013.Thedonor ’ st axdue,i ncl udi ngi ncr ement s,as ofJul y5,2013i s: a.2, 400 c.2, 600 b.2, 340 d.1, 800 Mul t i pl eChoi ceQuest i ons 1.Whi choft hef ol l owi ngst at ementi swr ong?Adi s t i nct i onbe t weenadonat i oni nt er vi v osandadonat i onmor t i scausai s: a.Thefir stt akeeffectdur i ngt hel i f e t i meoft hegr ant orwhi l et hesecondt akes effectaf t ert hedeat hoft hegr ant or . b.Thefir sti ssubj ectt ot hedonor ’ st axwhi l et hesecondi ssubj ectt ot heest at e t ax. c.Thefir stal waysr equi r esapubl i cdocumentwhi l et hesecondmaynotr equi r e apubl i cdocument . d.Thefir sti sval uedatf ai rmar ke tval ueatt het i met hepr oper t yi sgi venwhi l e t hesecondi sval uedatf ai rmar ke tval ueatt het i meoft hedeat hoft hegr ant or . 2.Thef ol l owi ngar et her equi si t esofadonat i onf orpur posesoft hedonor ’ st ax,except one: a.capaci t yoft hedonor c.del i ver yoft hesubj ectmat t erofgi f t b.capaci t yoft hedonee d.donat i vei nt ent 3.1stst at ement :Asol dhi scar(cost ,P300, 000)t oB f orP500, 000.Thecarhasaf ai r mar ke tval ueofP900, 000att het i meofsal e.Thedi ffer enceofP400, 000i nsel l i ng pr i ceandf ai rmar ke tval ueconst i t ut esagi f tsubj ectt odonor ’ st ax. 2nd st at ement :C pur chasedal otandcot t agei nAl ami nosCi t y( homeof100i sl ands)i n 2009f orP1, 000, 000.I twasusedassummervacat i onhousebyhi sf ami l y .I n2010,C deci dedt osel lt hel otandcot t aget oD f orP2, 000, 000al t houghi t spr esentmar ke t val uei sP2, 500, 000.TheP500, 000di ffer encei nsel l i ngpr i ceandmar ke tval uei sagi f t butnotsubj ectt odonor ’ st ax. a.bot hst at ement sar et r ue Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 b.bot hst at ement sar ef al se c.Thefir stst at ementi st r ueandt hesecondst at ementi sf al se. d.Thefir stst at ementi sf al seandt hesecondst at ementi st r ue. 4.St at ement1:Thegr ossgi f t sofadonorwhoi sanonr esi dental i enwi l li ncl udeal l pr oper t i esr egar dl essofl ocat i on. St at ement2:Thegr ossgi f t sofadonorwhoi sanonr esi dental i enoft hePhi l i ppi nes, wi l li ncl udeonl ypr oper t yl ocat edi nt hePhi l i ppi nes. a.bot hst at ement sar ecor r ect b.bot hst at ement sar ewr ong c.Thefir stst at ementi scor r ectandt hesecondst at ementi swr ong. d.Thefir stst at ementi swr ongandt hesecondst at ementi scor r ect . 5.Ther eci pr oci t ycl ausei nt hedonr ’ st axl aw appl i est oa: a.Nonr esi dentci t i z en b.Resdi ental i en c.Resi dentci t i z en d.Nonr esi dental i en 6.I nt hepr evi ousquest i on,t her eci pr oci t ycl auseappl i est o: a.Realpr oper t y c.I nt angi bl eper sonalpr oper t y b.Tangi bl eper sonalpr oper t y d.Al loft hese 7.I fhei sar esi dental i enhi sgr ossgi f ti s: a.P2, 100, 000 c.P2, 950, 000 b.P1, 950, 000 d.P3, 000, 000 8.I fhei sanonr esi dentJapanese,andt her ei sr eci pr oci t yl aw,hi sgr ossgi f ti s: a.P850, 000 c.P1, 050, 000 b.P650, 000 d.P700, 000 9.Whi choft hef ol l owi ngst at ement si scor r ect ?Adonat i oni nt ervi vosbyhusbandand wi f e,j oi nt l ydur i ngt hemar r i age a.I sadonat i onofconj ugalpr oper t yt hatwi l lr equi r eonecomput at i onoft he donor ’ st ax,i ft hespousesar eundert hesyst em ofconj ugalpar t ner shi pofgai ns. b.I sadonat i onofcommuni t ypr oper t yt hatwi l lr equi r eonecomput at i onoft he donor ’ st ax,i ft hespousesar eundert hesyst em ofabsol ut ecommuni t yofpr oper t y . c.I sadonat i onofexcl usi vepr oper t ybyt heei t herspouset hatwi l lr equi r eone comput at i onoft hedonor ’ st ax,i ft hespousesar eundert hesyst em ofconj ugal par t ner shi pofgai ns. d.I sadonat i onofeachspouset ot heext entofonehal ft hatwi l lr equi r e separ at ecomput at i onf ort wodonor ’ st axes,underwhi cheverpr oper t yr el at i onshi p exi st sbe t weent hespouses. 10.Si t uat i on1:M,i nt r adi ngbusi ness,hadar ecei vabl eofP150, 000f r om N.Wi t hout exer t i ngut mosteffor tt ocol l ect ,M cancel edt hei ndebt ednessofN. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Si t uat i on2:O sol dt oPper sonalpr oper t ywor t hP200, 000f oraconsi der at i onof P50, 000,t ot akeeffecti mmedi at el yuponr ecei ptoft heconsi der at i on. a.Si t uat i on1i nvol vesadonat i onofP150, 000andshoul dbecover edbya donor ’ st axr e t ur nwi t hi nt hi r t ydaysf r om t hedat eofcancel l at i onoft hei ndebt edness. b.Si t uat i on1i sbaddebtexpensesoft hebusi nessandshoul dnotbet r eat edas i nvol vi ngat axabl edonat i on. c.Si t uat i on2shal lbeconsi der edabadbar gai nandnoti nvol vi ngat axabl e donat i on. d.Si t uat i on2i nv ol v esadonat i onofP200, 000andshoul dbecover edbya donor ’ st axr e t ur nwi t hi nt hi r t ydaysf r om t hedat eoft hesal e. 11.Q sol dhi sl and( capi t alasse t )onSept ember5,2012t ohi sbestf r i endf or P300, 000whent hemar ke tval uewasP500, 000Hegaveacommi ssi onofP20, 000t o t hebr okerandspentf ordocument ar yst ampt axesandt r ansf erf eest heamountof P4, 000.Thei nt er nalr evenuet axpayabl ei s: a.Fi nalcapi t algai nt axofP30, 000 b.Fi nalcapi t algai nt axofP18, 000 c.Donor ’ st axofP60, 000 d.None,asi ti sexemptf r om anyi nt er nalr evenuet axes 12.St at ement1:I nshowi nggr ossgi f t si nt hedonor ’ st axr e t ur n,bui l di ngsshoul dbe val uedatt hecur r entf ai rmar ke tval ueasshowni nt heassessmentr ol l s,ort hef ai r mar ke tval ueasde t er mi nedbyt heCommi ssi onerofI nt er nalRevenue,whi c heveri s hi gher . St at ement2: I nshowi nggr ossgi f t si nt hedonor ’ st axr e t ur n,per sonalpr oper t y shoul dbeval uedatcur r entf ai rmar ke tval ueoratcost ,whi cheveri sl ower . a.Bot hst at ement sar ecor r ect b.Bot hst at ement sar ef al se c.Thefir stst at ementi scor r ectandt hesecondst at ementi swr ong. d.Thefir stst at ementi swr ongandt hesecondst at ementi scor r ect . 13.Adonat i ononaccountofmar r i agewi l lgaveadonoradeduct i onf r om t hegr oss gi f t smadei f : a.Thedoneei sal egi t i mat echi l dc.Thedoneei snotast r anger b.Thedoneei sanybody d.Noneoft hese. 14.Whi c hoft hef ol l owi ngst at ement swr ong?Adeduct i onf oradonat i ononaccount ofmar r i age: a.Shal lbeal l owedt oar esi dentci t i z enwhent hepr oper t ydonat edi sl ocat ed out si det hePhi l i ppi nes. b.Shal lbeal l owedt oar esi dentci t i z enwhent hepr oper t ydonat edi sl ocat ed wi t hi nt hePhi l i ppi nes. c.Shal lbeal l owedt oar esi dental i enwhent hepr oper t ydonat edi sl ocat ed out si det hePhi l i ppi nes. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 d.Shal lbeal l owedt oar esi dental i enwhent hepr oper t ydonat edi sl ocat ed wi t hi nt hePhi l i ppi nes. 15.Al loft hef ol l owi ngst at ement sar ewr ong,exceptone.I ft hedonori sanonr esi dent , notci t i z enoft hePhi l i ppi nes: a.Pr oper t ysi t uat edabr oadbutdonat edt oaci t i z enoft hePhi l i ppi neswi l lpay t hedonor ’ st ax. b.Pr oper t ysi t uat edi nt hePhi l i ppi nesbutdonat edt oadoneeaboar dwi l lnot payt hedonor ’ st ax. c.Pr oper t yout si det hePhi l i ppi nesdonat edonaccountofmar r i aget oar esi dent oft hePhi l i ppi neshasadeduct i onofP10, 000. d.Pr oper t yi nt hePhi l i ppi neswi t haval ueofP150, 000donat edt oaci t i z enof t hePhi l i ppi neswi l lpayadonor ’ st ax. 16.Husbandandwi f emadeoutofconj ugalcashofP1, 000, 000,adonat i onon accountofmar r i age,t oal egi t i mat echi l d.Whi choft hef ol l owi ngst at ement si snot cor r ectondeduct i onf ordonat i ononaccountofmar r i age ? a.P10, 000t oeachspouse,onsepar at ecomput at i onf ordonor ’ st ax. b.P5, 000t oeachspouse,onsepar at ecomput at i onf ordonor ’ st ax. c.P10, 000onasepar at ecomput at i onf ordonor ’ st axoft hehusband. d.P10, 000onasepar at ecomput at i onf ordonor ’ st axoft hewi f e. 17.Onacont r i but i ont ot heRomanCat hol i cChur chbyani ndi vi dual ,whi c hoft he f ol l owi ngcor r ect l yst at e/st r uer ul e/si ncomput i ngt hedonor ’ st ax. a.Ther ei snodeduct i onf r om t hegr ossgi f t . b.I ti snotconsi der edagi f tonwhi cht her ewi l lbeadonor ’ st ax. c.I ti sconsi der edagr ossgi f tandadeduct i onf r om t hegr ossgi f t . d.I tpayst hedonor ’ st axatt het i meoft hecont r i but i onatt hegr aduat edr at es ofdonor ’ st ax. 18.Si nceadonat i ont oachar i t abl ei nst i t ut i onhasadeduct i onwi t houtanycei l i ng. St at ement1:Thene tgi f twi l lbez er o,sot hati ncomput i ngt hedonor ’ st ax,t he donat i onmaybeomi t t edi ngr ossgi f ti fi ti sl i kewi seomi t t edi ndeduct i ons. St at ement2:Thegr ossgi f t sshoul dber epor t edandt hededuct i onshal lbe cl ai med. a.Bot hst at ement sar ecor r ect . b.Bot hst at ement sar ewr ong. c.Thefir stst at ementi scor r ectandt hesecondst at ementi swr ong. d.Thefir stst at ementi swr ongandt hesecondst at ementi scor r ect . 19.Whi c hoft hef ol l owi ngdonat i onsi snotent i t l edt odeduct i on? a.Donat i ont oc har i t abl ei nst i t ut i on b.Donat i ont osci ent i ficor gani z at i on c.Donat i ont osoci alwel f ar e Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 d.Donat i ont oapol i t i calpar t y 20.R donat edat ot alamountofP500, 000,½ t ot heQuez onCi t yHal land½ t oa char i t abl ei ns t i t ut i on,TAHANANG WALANG HAGDANAN.Uponi nqui r y ,i twasver i fied t hatt hechar i t abl ei nst i t ut i on’ st ot alr ecei pt sf r om donat i onamount edt oP10M andi t s t ot aladmi ni st r at i veexpensesr eachedP4. 0M.R cancl ai m at ot aldeduct i on/exempt i on of : a.P250, 000 c.P200, 000 b.P500, 000 d.None 21.Al loft hef ol l owi ngexceptonear eexemptf r om gi f tt axunderspeci all aws: a.Donat i ont oI nt egr at edBaroft hePhi l i ppi nes b.Donat i ont oDevel opmentAcademyoft hePhi l i ppi nes c.Donat i ont oPhi l i ppi neI nst i t ut eofCer t i fiedPubl i cAccount ant s d.Donat i ont oI nt er nat i onalRi ceResear c hI ns t i t ut e 22.Fi r stdi st i nct i on:Ther at esf ordonor ’ st axar el owert hant hosef orest at et ax,i nal l cases. Seconddi st i nct i on:I ndonor ’ st ax,t heexempt i oni sP200, 000 whi l ei nest at et axi ti s P100, 000. a.Bot hdi st i nct i onar ecor r ect c.Fi r s ti scor r ect ,secondi swr ong b.Bot hdi st i nct i onar ewr ong d.Fi r sti swr ong,secondi scor r ect 23.Whi c hst at ementi swr ong?Thedonor ’ st ax: a.I scomput edont hebasi soft hene tgi f t sofacal endaryear . b.I scomput edandpai dwi t hi n30daysf r om t hedat eofdonat i on. c.I scomput edsepar at el yf oreachspousei ncaseofaj oi ntdonat i on. d.Becomepr opor t i onat e l ybi ggeronl at erdonat i ons. 24.St at ement1:Al lgi f t smadeont hesamedat epayonedonor ’ st axonl y . St at ement2:Adonat i ont oal egi t i mat echi l donaccountofmar r i age,whent he pr oper t ydonat edwasal r eadydel i ver ed,wi l lnotpayt hedonor ’ st axi ft hedonee’ s mar r i agedi dnotact ual l yt akepl ace. a.Bot hst at ement sar et r ue. b.Bot hst at ement sar ef al se. c.Thefir stst at ementi st r ueandt hesecondst at ementi sf al se. d.Thefir stst at ementi sf al seandt hesecondst at ementi st r ue. 25.I ncomput i ngt hedonor ’ st axonasubsequentdonat i on,t hedonormustal so consi der : a.Al lpr i orne tgi f t sdur i nghi sl i f e t i me. b.Al lpr i orne tgi f t sdur i ngt hecal endaryear . c.Thepr esentandt hei mmedi at el ypr ecedi ngdonat i on. d.Onl yt hepr esentdonat i on. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 26.Donat i onsononedat ebyH,af at her ,ofpr oper t yandcash,asf ol l ows:ToI ,a l egi t i mat edaught er ,onaccountofmar r i age,l andwi t haf ai rmar ke tval ueofP500, 000 butsubj ectt omor t gageofP100, 000whi chi sassumedbyI .t oJ,al egi t i mat eson,on accountofmar r i age,cashofP200, 000.Thene tgi f t smadear e: a.P680, 000 c.P590, 000 b.P580, 000 d.P700, 000 27.Whooft hef ol l owi ngi sas t r angerundert hedonor ’ st axl aw? a.Achi l dofabr ot her c.Agr anduncl e b.Agr andchi l d d.Asecondcousi n 28.Fordonor ’ st axpur poses,oneoft hef ol l owi ngi snots t r anger . a.sonbyanat ur aladopt i on c.gr andson b.st epson d.soni nl aw 29.Oneoft hef ol l owi ngi sn` otar el at i vebyconsangui ni t ynt hecol l at er all i newi t hi n t hef our t hdegr eeofr e l at i onshi p. a.daught eroft hedonor ’ snephew c.ni eceoft hedonor b.Fi r stcousi noft hedonor d.secondcousi noft hedonor 30.St at ement1:Adonat i ont oacor por at i oni sadonat i ont oast r anger . St at ement2:adonat i onbyonespouset ot hel egi t i mat echi l dbyaf or mermar r i ageof t heot herspousei sadonat i ont oast r anger . a.bot hst at ement sar et r ue b.bot hst at ement sar ef al se c.Thefir stst at ementi st r ueandt hesecondst at ementi sf al se. d.Thefir stst at ementi sf al seandt hesecondst at ementi st r ue. 31.Whi c hoft hef ol l owi ngst at ementi swr ong?Adonat i onbyhusbandandwi f eoutof conj ugalorcommuni t ypr oper t yt oabr ot heroft hewi f e. a.I sonehal fadonat i ont oanons t r angerbyt hewi f e. b.I sonehal fadonat i ont oas t r angerbyt hehusband. c.I sadonat i ononwhi cht hehusbandmustpayadonor ’ st axof30% onhi sne t gi f t . d.I sadonat i ononwhi cht hehusbandmustpayt hegr aduat eddonor ’ st axon hi sne tgi f t . 32.Whent hedoneeorbenefici ar yi sas t r anger ,t het axpayabl ebyt hedonorshal lbe. a.30% oft hegr osspr ofit s. b.30% oft hene tpr ofit s. c.Basedont hegr aduat edr at eswi t ht hefir stP100, 000ne tgi f texempt . d.Basedont hegr aduat edr at eswi t ht hefir stP100, 000ne tgi f texemptor30% oft hene tgi f t swhi cheveri shi gher . Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 33.N madeadonat i ont oO andP,sonanddaught er i nl aw,onaccountofmar r i age,of r ealpr oper t ywi t hf ai rmar ke tval ueofP1, 500, 000,butsubj ectt oamor t gageof P300, 000whi chwasassumedbyt hedonees. Thet ot aldonor ’ st axi s: a.77, 750 c.185, 950 b.84, 950 d.199, 400 Ques t i ons34t hr ough37ar ebasedont hef ol l owi ngdat a: Mr .andMr s.K,madet hef ol l owi ngdonat i ons. 1/25/2013 5/31/2013 7/15/2013 8/20/2013 ToL,t hei rl egi t i mat eson,onaccountofmar r i agel ast1/20/2012,car wor t hP400, 000,wi t hP200, 000mor t gage,½ wasassumedbyt heone. t oM,br ot herofMr .K,hi scapi t alpr oper t ywor t hP200, 000on accountofmar r i age6mont hsagoofM wi t hacondi t i ont hatt heone wi l lpayt hedonor ’ st axt her eon. ToN,daught erofMr s.K byf or mermar r i age,onaccountofher mar r i age12mont hsago,Mr s.K’ spar apher nalpr oper t ywor t h P100, 000. ToN onaccountoft hesamemar r i age,conj ugalcaroft hecoupl e wor t hP400, 000,wi t hP200, 000unpai dmor t gage,½ assumedbyN. AndP500, 000wor t hofl andt ot hei rf oursonsonaccountoft hei r gr aduat i on,20% ofwhi chwasownedbyt hei rKumpadr ewhoagr eed t odonat ehi sshar et hr uapubl i cdocument . 34.Thegi f tt axdueofMr .K asofMay31,2013i s: a.8, 000 c.7, 200 b.7, 000 d.6, 600 35.Thegi f tt axdueofMr s.K asofJul y15,2013i s: a.3, 600 c.2, 800 b.2, 600 d.4, 000 36.Thegi f tt axesdueofMr .& Mr s.K onAug.20,2013ar e a.P69, 000& P18, 800,r espect i vel y b.P17, 000& P18, 800,r espect i ve l y c.P54, 000& P15, 800,r espect i ve l y d.P54, 000& P18, 800,r espect i ve l y 37.Thegi f tt axdueoft hei rKumpadr ei s: a.P30, 000 c.P45, 000 b.P10, 000 d.none I t ems38t hr ough41ar ebasedont hef ol l owi ngi nf or mat i on: Q aci t i z enoft hePhi l i ppi nesmadet hef ol l owi ngdonat i onsi n2013: 01/10/2013 05/10/2013 :ToR,al egi t i mat edaught er ,onaccountofmar r i agecashof P200, 000. :ToS,al egi t i mat eson,onaccountofmor t gage,pr oper t ywi t haf ai r mar ke tval ueofP200, 000andamor t gaget her eon,whi chwas assumedbyS,ofP40, 000. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 10/10/2013 12/10/2013 :ToT,af r i end,anor di nar ydonat i onofP10, 000. :ToU,ani ece,adonat i ononaccountofmar r i ageofP15, 000. 38.Thedonor ’ st axont hedonat i onofJanuar y10,2013: a.P150 c.P900 b.P600 d.P1, 800 39.Thedonor ’ st axont hedonat i onofMay10, 2013: a.P5, 750 c.P4, 500 b.P24, 000 d.P5, 800 40.Thedonor ’ st axont hedonat i onofOct ober10, 2013: a.P1, 000 c.P6, 250 b.P3, 000 d.P6, 150 41.Thedonor ’ st axont hedonat i onofDecember10, 2013: a.P1, 350 c.P6, 500 b.P2, 450 d.P600 42.St at ement1.Taxcr edi tf ordonor ’ st axpai dt of or ei gncount r yi sal l owedonl yi ft he donori saci t i z enorr esi dentoft hePhi l i ppi nes: St at ement2.Ther ecanbeadonor ’ st axpai dt oaf or ei gncount r yeveni ft heci t i z en orr esi dentdonorhadnodonat i onofpr oper t yi nt hePhi l i ppi nes. a.Bot hst at ement sar et r ue. b.Bot hst at ement sar ef al se. c.Thefir stst at ementi st r ueandt hesecondst at ementi sf al se. d.Thefir stst at ementi sf al seandt hesecondst at ementi st r ue. 43.Donat i onst oal egi t i mat echi l dof : Pr oper t yi nt hePhi l i ppi nes Pr oper t yout si det hePhi l i ppi nes,onaccountofmar r i age Donor ’ st axpai dt of or ei gncount r y Donor ’ st axdueaf t ert axcr edi tf orf or ei gndonor ’ st axpai d: a.P2, 200. 00 c.P4, 625. 50 b.2, 750. 00 d.P3, 208. 33 P110, 000 200, 000 4, 500 Quest i ons44and45ar ebasedont hef ol l owi ngdat a: Mr .O,madet hef ol l owi ngdonat i onsf ort heyear2013: Apr i l15 Jul y20 - ToP,l egal l yadopt edchi l donaccountofmar r i agel astweek,car wor t hP710, 000i nt hePhi l i ppi nes. - ToQ,hi sdaught er ,cari nUSAwor t hP300, 000.Theypai d$180 donor ’ st axi nUS.( $1P56) - ToR ni ecei nmani l a,P200, 000wor t hofper sonalpr oper t y . - ToS,l egi t i mat edaught eronaccountmar r i agei nCebu,l astJul y18, 2012,carwor t hP400, 000butmor t gagef orP200, 000,½ ofwhi ch wasassumedbyt hedonee. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 44.Thegi f tt axdueaf t ert axcr edi tonApr i l15,2013i s: a.P30, 800 c.P44, 000 b.P35, 000 d.P33, 920 45.Thegi f tt axdueonJul y20, 2013i s: a.P40, 000 c.P84, 000 b.P36, 400 d.P38, 920 46.L,aci t i z enandr esi dentoft hePhi l i ppi nes,madet hef ol l owi ngdonat i onson Januar y14,2013:ToM,al egi t i mat echi l d,onaccountofmar r i ageont hesameday , pr oper t yi nJapan,whi chpai dt heJapanesegover nmentadonor ’ st axofP52, 000and wi t haf ai rmar ke tval ueofP610, 000 ToN,af r i end,or di nar ydonat i onofpr oper t yi nt hePhi l i ppi nes,subj ectt oamor t gage ofP60, 000whi chwasassumedbyN.Fai rmar ke tval ueoft hepr oper t y ,160, 000 Thet axcr edi tf orf or ei gndonor ’ st axpai di s: a.P34, 628. 06 c.P42, 857. 14 b.P52, 000. 00 d.P31, 520. 43 47.Mr .O madet hef ol l owi nggi f t st ohi sr el at i v es: Phi l . Gr ossgi f t USA UK P750, 000 P500, 000 P250, 000 P500, 000 250, 000 200, 000 150, 000 150, 000 25, 000 12, 000 10, 000 Deduct i ons Taxpai d I t al y Thegi f tt axdueaf t ercr edi ti s: a.P35, 600 c.P33, 520 b.25, 600 d.P39, 000 48.Mr .Pi saci t i z enandr esi dentoft hePhi l i ppi nes.OnJul y8,2013,hemade donat i onst oQ,af r i end,ofpr oper t i esi nCount r yYandCount r yZ.Donor ’ st axeswer e pai dt ocount r yt oCount r yYandaf ai rmar ke tval ueofP300, 000whi l et hepr oper t yi n Count r yZhadaf ai rmar ke tval ueofP200, 000.Thedonor ’ st axst i l ldueaf t ercr edi t f orf or ei gndonor ’ st axespai di s: a.P0 c.P145, 000 b.P15, 000 d.P10, 000 49.Ononedat e,ar esi dental i endonormadedonat i onsofpr oper t yi nt hePhi l i ppi nes t oanons t r angerandofpr oper t yout si det hePhi l i ppi nest oas t r anger .I nt aki nga cr edi tf ort hef or ei gndonor ’ st axpai d,t hecr edi tshal lbeagai nstt hePhi l i ppi nedonor ’ s t axont he: a.Donat i ont ot henonst r anger . b.Donat i ont ot hest r anger . c.Donat i ont ot henons t r angerpl ust hatt ot hes t r anger . d.Noneoft hese. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 50.Oneoft hef ol l owi ngst at ement si scor r ect .Whi chi si t ?I nt hepr epar at i onoft he donor ’ st axr e t ur n. a.Dowr i esar eshownasdeduct i onsf r om t hegr ossgi f t s. b.Dowr i esar enotshownanymor easgr ossgi f t sandasdeduct i ons. c.Spousesmaki ngdonat i onsofconj ugalorcommuni t ypr oper t ypr epar eone donor ’ st axr e t ur n. d.Donor ’ st axondonat i onst os t r anger sandt onons t r anger sar ecomput ed andshowni nsepar at er e t ur n. 51.Oneoft hest at ement st hatf ol l ow i scor r ect .Whi chi si t ?Adeedofdonat i onwas execut edbyG,r esi dentofDagupanCi t y ,i nf avorofH,ar esi dentofBagui oCi t y .H execut edadeedofaccept ancei nBagui oCi t y .Thedonor ’ st axr e t ur nmustbefil ed wi t ht heBur eauofI nt er nalRevenueOffice: a.Att her esi dentoft hedonor . b.Att her esi dentoft hedonee. c.Att her esi dentoft hedonorort he19one,whi chevert hedonorchooses. d.Noneoft heabove. 52.St at ement1.Adonat i ononwhi cht hedonor ’ st axwasnotpai di snotaval i d donat i on. St at ement2.Ti t l et ot hedonat edr ealpr oper t ycannotbet r ansf er r edt ot hedonee i nt heRegi st erofDeedsunl esst hedonor ’ st axont hedonat i onhadbeenpai d. a.Bot hst at ement sar et r ue. b.Bot hst at ement sar ef al se. c.Thefir stst at ementi st r ueandt hesecondst at ementi sf al se. d.Thefir stst at ementi sf al seandt hesecondst at ementi st r ue. 53.Oneoft hef ol l owi ngst at ement si swr ong: a.TheCommi ssi oneri snotal l owedt ogr antext ensi onoft i mewi t hi nwhi cht he donor ’ st axr e t ur nsmaybefil ed,andsuchext ensi onshal lnotexceedt hi r t ydays. b.Ther e t ur nmaybefil edi nonemuni ci pal i t yandt het axpai di nanot her muni ci pal i t y . c.Whendonor ’ st axi sassessedbyr easonofnegl i gence,i nt ent i onaldi sr egar dof r ul esandr egul at i ons,orf r audont hepar toft het axpayer ,noext ensi onoft i mef or paymentoft het axmaybegr ant edbyt heCommi ssi onerofI nt er nalRevenue. d.Agr ossgi f tofP50, 000f ort hewhol eyeart onons t r anger sneednotbe cover edbyadonor ’ st axr e t ur n. 54.St at ement1:Whenadonor ’ st axr e t ur nwasfil edandi twasf oundbyt heBur eau ofI nt er nalRevenuet ohaveer r or swhi chgaver i set oadefici encydonor ’ st ax,t he donormayber equi r edt opayt hedefici encyal t houghhedoesnotpossessorownt he pr oper t yanymor e. St at ement2:TheGover nmenti snotboundbyanyagr eementbe t weent hedonor andt hedonet hatt hel at t ershal lpayt axont hedonat i on. a.Bot hst at ement sar ecor r ect . Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 b.Bot hst at ement sar ewr ong. c.Thefir stst at ementi scor r ectandt hesecondst at ementi swr ong. d.Thefir stst at ementi swr ongandt hesecondst at ementi scor r ect . TAX.M-1403 VALUE ADDED TAX Problem 1 Topline Company sold to Bestbooks Enterprises goods worth P 10 000, exclusive of tax. Record the accounting entries in the sales book and in the purchase book if: 1. The buyer and the seller are subject to VAT. 2. Seller is VAT registered, while buyer is not. 3. Seller is no VAT registered, while buyer is VAT registered. Answer: Sales book 1. Cash/ accounts receivable P 11 200 Sales 10 000 Output Tax 1 200 2. Cash/ accounts receivable P 11 200 Sales 10 000 Output Tax 1 200 3. Cash/ accounts receivable P 10 000 Sales 10 000 Purchase book Purchases P 10 000 Input tax 1 200 Cash 11 200 Purchases P 11,200 Cash 11 200 Purchases P 10 000 Problem 2 Downloaded by Lee Park (Leepark6240@gmail.com) Cash 10 000 lOMoARcPSD|7527748 All amounts given are total invoice costs/prices: A, non-VAT taxpayer, sells to B, VAT taxpayer P 67 200 B, VAT taxpayer, sells to C, VAT taxpayer 100 800 C, VAT taxpayer, sells to D, VAT taxpayer, an exporter 168 000 D, VAT taxpayer, exports 300 000 1. The value-added tax of B: A. Payable of P 3 600 B. Payable of P 10 800 2. The value-added tax of C: A. Payable of P 7 200 B. Payable of P 6 720 3. The value-added tax of D: A. Payable of P 18 000 B. Refundable of P 18 000 C. Payable of P 10 080 D. Payable of P 12 096 C. Payable of P 8 064 D. Refundable of P 10 900 C. Payable of P 36 000 D. Refundable of P 36 000 Problem 3 H and W, husband and wife had the following gross sales (net of tax) during the year: W- restaurant owner P 800 000 Ha. Professional CPA P 350 000 b. Medium sized store: Sale of office/school supplies 120 000 Sale of books P 275 000 P1 4. Which of the following statements is true? A. For purposes of the threshold of P 1 919 500, the gross receipts of the husband and wife shall be combined. B. The gross receipts shall be subject to VAT even if she does not register voluntarily under the VAT system. C. For purposes of the threshold of P 1 919 500, the sale of office supplies and the practice of profession are considered as separate taxpayers. D. For purposes of the threshold of P 1 919 500, the aggregation rule for each taxpayer shall apply. Thus, the gross receipts from the medium sized store shall be added to the receipts from the practice of profession. Problem 4 5. Winery is a manufacturer of wine. During a particular calendar quarter, it had the following transactions (net of VAT): Jan. 4, 2013 : Consigned wine to a retailer in Makati City amounting to P 200 000. Feb. 14, 2013 : Exported P 1 000 000 worth of wine to Spain. Feb. 27, 2013 : President of Winery celebrated his birthday, consuming P 50 000 worth of wine given to him by the company as a birthday gift. Mar. 20, 2013 : Declared property dividend of one case of wine for every 10 shares, amounting to P 150 000. The output tax for the calendar quarter ended March 31, 2013 is: A. P 48 000 C. P 140 000 B. P 168 000 D. P 40 000 Problem 5 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Farmland Merchandising became subject to VAT effective January 1, 2013: The following are its records: Gross sales- January 1 to Dec. 31, 2012 P 2 900 000 January 2013 data: January 1 inventory: Purchased from VAT registered persons 48 000 Purchased from non-VAT registered persons 332 000 Actual VAT paid 5 140 Sales (total invoice amount) 224 000 Purchases (exclusive of VAT) 60 000 6. The VAT payable on January 2013 is P 11 660 C. P 16 400 A. B. P 9 200 D. None Problem 6 Azucarera de Papa is a processor of refined sugar. It purchases sugarcane from farmers for processing into intermediate stages until it becomes refined sugar. In a month, it had the following sales and purchases, no tax included: Sales P 880 000 Purchases of sugarcane 220 000 Purchases of containers and paper labels 100 000 7. The value-added tax payable is: A. P 67 200 C. P 84 800 B. P 89 200 D. P 69 200 Problem 7 8. In a month, total invoice prices/costs: Domestic sales Export sales Purchases from VAT-registered persons of: Goods exported Goods sold in the Philippines Operating expenses P 672 000 1 500 000 560 000 224 000 112 000 The input taxes attributable to export sales which may be refunded or credited against other internal revenue taxes, including any value-added tax on domestic sales, is: A. P 60 000 B. P 24 000 C. P 84 000 D. P 96 000 Problem 8 9. Bogart is an operator of parking lots. What business tax is due on his income from the business? A. Broker’s tax C. Caterer’s tax B. Common carrier’s tax D. Value-added tax Problem 9 Sale of services by a VAT-registered contractor: Collections on total invoice price for contracts completed (including P 448 000 for materials) Downloaded by Lee Park (Leepark6240@gmail.com) P 1 120 000 lOMoARcPSD|7527748 Receivables on billings (VAT included) Advances on contracts (VAT not included) Retentions on contracts made by clients out of contract price already earned 336 000 200 000 90 000 Purchases of: Materials (VAT included) Services of sub-contractor (VAT not included) Services of persons subject to percentage taxes Salaries of employees 224 000 448 000 56 000 60 000 10. Output taxes are: A. P 158 400 C. P 132 000 B. P 144 000 D. P 154 000 11. The input taxes are: A. P 67 200 C. P 77 760 B. P 72 000 D. P 80 640 12. The value-added tax payable is: A. P 64 800 C. P 86 400 B. P 86 400 D. P 66 240 Problem 10 13. Lesion is a lessor of real property and personal property (cars). The tax that he pays is: A. Excise tax C. Transaction tax B. Value-added tax D. None of these Problem 11 14. Which of the following shall be subject to 0% VAT? A. Sale of electricity by generation companies. B. Sale of electricity by transmission companies. C. Sale of electricity by distribution companies. D. Sale of power or fuel generated through renewable sources of energy. Problem 12 Japayuki Corp. imported an article from Japan. The invoice value of the following article was P 1 000 000 Yen (1 Yen= P0.50). the following were incurred in connection with the importation: Insurance Freight Postage Wharfage dues Arrastre charges Brokerage fee Facilitation fee P 15 000 10 000 5 000 7 000 8 000 25 000 3 000 The imported article was subject to P 50 000 customs duty and P 30 000 excise tax. Japayuki Corp. spent P 5 000 for trucking from the customs warehouse in Quezon City. 15. The VAT on importation is: A. P 65 800 C. P 65 000 B. P 78 000 D. P 50 000 16. Assuming that the imported article was sold for P 950 000, VAT exclusive, the VAT payable is: A. P 36 000 C. P 30 000 B. P 29 200 D. P 114 000 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Problem 13 M. Porter is VAT-registered. Importations were for: Own use Any value-added tax not included. Sale Invoice cost (Exchange rate is $1: P56) $ 80 000 $ 4 000 Expenses based on cost: Freight and insurance 4% 4% Other expenses up to the point of removal from customs house 6% 6% Transfer expenses from customs house to warehouse in Mania ½% ½% Selling price of goods imported for sale within the same taxable period of importation, valueadded tax included, was P 6 720 000. 17. The value-added tax payable on the importations of M. Porter is: A. P 492 800 C. P 517 440 B. P 491 300 D. P 620 928 18. The value added tax payable on the sale is: A. P 99 072 C. P 107 200 B. P 128 640 D. P 720 000 19. Which of the following sales of real properties shall not be exempt from VAT? A. Sale of real properties not primarily for sale to customers or held for lease in the ordinary course of trade or business. B. Sale of real properties utilized for low-cost and socialized housing. C. Sale of real properties utilized for commercial purposes. D. Sale of residential lot valued at P1 919 500 and below, or house and lot and other residential dwellings valued at P 3 199 500, and below. Problem 14 20. INDICATE if the following receipts from lease of residential units are subject to VAT or not: Case Monthly Rental Aggregate Annual Rental 1 2 3 4 5 P 7 000 12 800 9 500 13 000 13 000 P 2 600 000 1 400 000 1 450 000 1 919 500 2 600 000 Taxable/ Not taxable Not taxable Not taxable Not taxable Not taxable Taxable Problem 15 Miss Divina Valencia, a bold actress, had the following data for the quarter ending June 30, 2013 (amounts are exclusive of tax): Receipts from talent fees P 1 000 000 Gross receipts from taxicabs (4 units) 500 000 Purchases of wardrobes used in films 200 000 Purchases of spare parts of taxicabs 100 000 Public relation services for image build-up as an actress 85 000 Insurance premiums for taxicabs 61 000 Rent of office space used both for her occupation and taxicabs business, subject to VAT 400 000 21. The VAT payable by Miss Valencia isA. P 37 800 C. P 53 800 B. P (41 520) D. P 18 480 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Problem 16 Sosyal is a Vat-registered taxpayer. The following data from the books of accounts were transactions for each of the months of January, February and March (first quarter) of 2012: Credits to sales account Debits to purchases account on local purchases of goods from: VAT-registered persons Non-VAT registered persons Importation of goods, landed cost January P 440 000 110 000 20 000 February P 550 000 660 000 30 000 50 000 March P 770 000 330 000 15 000 22. The value-added tax payable at the end of January is: A. P 33 000 C. P 30 000 B. P 39 600 D. P 52 800 23. The value-added tax payable (refundable) at the end of February is: A. P (19 200) C. Due of 0 B. P 19 800 D. P 66 000 24. The output taxes on the return for the period ending March is: A. P 160 000 C. P 211 200 B. P 176 000 D. P 92 400 25. The value-added tax payable at the end of March 2012 is: A. P 13 800 C. P 13 200 B. P 33 600 D. P 39 600 Problem 17 26. The following first quarter data pertain to a value-added taxpayer whose purchases were all from value-added taxpayers: Output taxes, January Input taxes, January Output taxes, February Input taxes, February Sales, total invoice price, March Purchases, total invoice cost, March The value-added tax payable for March is: A. P 190 400 B. P 192 000 P 132 000 240 000 348 000 144 000 3 360 000 1 456 000 C. P 204 000 D. P 260 400 Problem 18 A VAT registered business has the following transactions: Sales of good to private entities, net of 12% VAT P 2 500 000 Purchases of goods sold to private entities, gross of 12% VAT 896 000 Sales to a GOCC, net of 12% VAT 1 000 000 Purchases of goods sold to GOCC, net of 12% VAT 700 000 27. How much is the withholding VAT? A. P 120 000 C. P 50 000 B. P 70 000 D. none of the above 28. What is the treatment of the excess actual input VAT attributable to sales to GOCC? A. Input tax credit C. income B. Expense or cost D. none of the above 29. How much is the VAT payable? A. P 244 000 C. P 120 000 B. P 204 000 D. none of the above Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Problem 19 Felicisima had the following data during the month of February: Sales, net of VAT Purchases of goods for sale, exclusive of VAT Purchases of machines (VAT not included) Machine life Case A 1 900 000 1 260 000 1 440 000 6 years Case B 2 800 000 1 600 000 900 000 3 years 30. The VAT payable in Case A: A. P 76 800 C. P 74 400 B. P 78 920 D. P 154 080 31. The VAT payable in Case B: C. P 142 200 A. P 36 000 B. P 141 000 D. P 300 000 32. The VAT payable in Case A if the life of the machine is 4 years only: A. P 73 920 C. P 73 200 B. P 154 800 D. P 74 400 MULTIPLE CHOICE QUESTIONS 1. The following are major internal revenue business taxes in the NIRC of 1997, except one: A. Income tax C. Value-added tax B. Excise tax D. Percentage tax 2. Alamid imported cigarettes from Taiwan for sale. At a later date, he sold cigarettes in the Philippines. He is subject to value-added tax. He is also subject to the business tax of: A. Excise tax C. Percentage tax B. Income tax D. None of these 3. Burgos is manufacturer of fermented liquors. In making sales, all taxes on the products and transactions are passed on to the buyers. For purposes of the value-added tax, which of these taxes listed below that he pays forms part of the gross selling price? A. Excise tax C. Percentage tax B. Value-added tax D. None of these 4. Cantor is a VAT-registered dealer of liquors. On his sales in the Philippines, his tax is: A. Excise tax C. Percentage tax B. Value-added tax D. None of these 5. Statement 1: A person subject to excise tax is also subject to value-added tax. Statement 2: A person subject to percentage tax is also subject to value-added tax. A. Both statements are correct B. Statement 1 is correct while statement 2 is wrong C. Both statements are wrong D. Statement 1 is wrong while statement 2 is correct 6. Which statement is correct? The value-added tax on importation: A. Should be paid by the tax-exempt importer, if he subsequently sells the goods to a non-tax-exempt purchaser. B. Should be paid by the non-tax-exempt purchaser to whom the tax-exempt importer sells it. C. Is a liability either of the tax-exempt importer or the non-tax-exempt purchaser. D. Shall not pay the value-added tax because the transaction was exempt at the point of importation. 7. The value-added tax of Gencor Co., before any tax credits, is: A. P 210 960 C. P 173 300 D. P 207 960 B. P 175 800 8. The business tax of Falcon Co., before any tax credits, is: Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 A. Value-added tax of P 3 960 C. Value-added tax of P0 B. Percentage tax of P 990 D. Percentage tax of P0 9. Which statement is wrong? Transactions considered “in the course of trade or business” and, therefore, subject to the business taxes include: A. Regular conduct or pursuit of a commercial or an economic activity by a stock private organization. B. Regular conduct or pursuit of a commercial or an economic activity by a non-stock, non-profit private organization. C. Isolated services in the Philippines by non-resident foreign persons. D. Isolated sale of goods or services for a gross selling price or receipts of P 500 000. 10. First statement: Sales of drugs and medicines of pharmacy run by the hospital to outpatients are subject to VAT. Second statement: Pharmacy items used in the performance of medical procedures in hospital units such as in the operating and delivery rooms and by other departments are considered part of medical services rendered by the hospital, hence, not subject to VAT. A. Both statements are correct B. Both statements are incorrect C. Only the first statement is correct D. Only the second statement is correct 11. To be exempt from value-added tax, the lease of residential units shall have: I. Monthly rental per unit of P 12 500 or less. II. Gross annual rentals exceeding P 1 919 500. A. Both I and II are necessary B. Both I and II are not necessary C. Only I is necessary D. Only II is necessary 12. Gross selling price includes all of the following, except one. Which one? A. Total amount which the purchaser pays to the seller. B. Total amount which the purchaser is obligated to pay to the seller. C. Excise tax. D. Value-added tax. 13. Statement 1: The output value-added tax is computed by multiplying the gross selling price by 12%; or multiplying the total amount indicated in the invoice by 12/112. Statement 2: The output value-added tax is computed by multiplying the total amount indicated in the invoice by 12%. A. Both statements are correct B. Both statements are wrong C. The first statement is correct but the second statement is wrong D. The first statement is wrong but the second statement is correct 14. Which statement is correct? A. The sales invoice that shows a total, with an indication that it includes the valueadded tax even if it does not show the tax separately, is a correctly prepared invoice. B. The invoice which shows the selling price and the value-added tax separately, but with a total which is a correct amount is a properly prepared invoice. C. An invoice which shows the selling price and the value-added tax separately, which is paid by the buyer, is violative of the revenue regulations on issuance of sales invoice. D. A sales invoice by a VAT taxpayer can be used only on a VAT sale. 15. S1: in the books of accounts of a VAT-registered taxpayer, sales are recorded net of output taxes. S2: in the books of accounts of a VAT-registered taxpayer, purchases are recorded net of input taxes. A. Both statements are correct B. Both statements are wrong Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 C. The first statement is correct but the second statement is wrong D. The first statement is wrong but the second statement is correct 16. Which of the following are not account titles with balances in the books of accounts of a VAT taxpayer? A. Output taxes C. Excess input taxes carry-over B. Input taxes D. VAT payable 17. Takuza, a Japanese residing in the Philippine, bought garments from Halili Corp., a domestic corporation, and exported the same to Japan. Total value of export is P 100 000. The output VAT due on the transaction is: A. P 12 000 B. P 10 000 C. None, because 0% applies D. None, because the sale is exempt from VAT 18. The allowable transitional input tax is: A. The lower between 2% of the value of beginning inventory or actual VAT paid on such inventory. B. The higher between 2% of the value of beginning inventory or actual VAT paid on such inventory. C. The actual VAT paid on the beginning inventory. D. 2% of the value of beginning inventory. 19. Which statement is wrong? A. There is a transitional input tax on sales of goods or properties. B. There is a transitional input tax on sales of services. C. There is a presumptive input tax on sales of goods or properties. D. There is a presumptive input tax on sales of services. 20. Ilarde, a VAT taxpayer, on January 1, 2013, made the following purchases from VAT sellers, for use in his business. The amounts stated below are not inclusive of value-added taxes: Machine 1, with a useful life of 20 years Machine 2, with a useful life of 3 years Patent, with usefulness of 10 months P 3 000 000 1 800 000 600 000 The input taxes from the purchases, available to Ilarde, for the month of January, 2013: A. P 19 200 C. P 79 500 C. P 70 000 D. P 84 000 21. A VAT-registered supplier sold goods amounting to P 500 000 gross selling price to a government-controlled corporation during a particular quarter. Which of the following statements is incorrect in relation to the sale of goods? A. The sale is subject to withholding of final VAT. B. The government-controlled corporation will withhold P 25 000 final VAT. C. The government-controlled corporation shall remit withholding VAT to the BIR within 10 days following the end of the month the withholding was made. D. The VAT-registered supplier may refuse the withholding of VAT as long as it is willing to pay the full 12% VAT. 22. Zorro had the following data arising out of sales and purchases in January, 2013: Output taxes on sales Input taxes on purchases of goods sold Input taxes on machine bought with a useful life of 12 years P 240 000 238 200 180 000 The value-added tax payable for the month: C. P 72 000 A. P 0 B. P 1 800 D. P 60 000 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 23. Kitkat, a VAT taxpayer, had the following data for the first 3 months of taxable year 2013: February March Data for the months January of VAT not included: Sales P 1 150 000 P 2 000 000 P 1 850 000 Purchases 600 000 1 600 000 900 000 There was a deferred input tax of P 20 000 at the end of the previous year. The valueadded tax payable at the end of March is: A. P 90 000 C. P 95 000 B. P 180 000 D. P 114 000 24. On January 5, 2013, Smarty Co., VAT-registered, sold on account goods for P 112 000 to Global Corp. The term was 2/10, n/30. Payment was made on January 10, 2013. The total amount due is. A. P 112 000 C. P 109 760 B. P 98 000 D. P 100 000 Items 24-25 After recognizing the value-added tax payable for the month of December 2012, the books of accounts of Colors, a merchandising company, showed a debit balance in the input taxes account of P 12 000. Sales and purchases at total invoice prices/costs for January 2013 were: Sales Sales return and allowances Sales discount Purchases of: Goods for sale, from VAT-registered persons Goods for sale, from non-VAT registered persons Services, from VAT-registered persons Equipment (life of 10 years) from VAT-registered person Importation of goods for sale: Invoice cost, country of origin Freight Insurance Customs duty Excise tax Other expenses prior to removal from customs custody Other expenses after removal from customs custody Operating expenses P 896 000 56 000 22 400 224 000 56 000 21 280 112 000 20 000 500 200 600 100 300 250 30 000 25. The value-added tax on the importation is: A. P 2 170 C. 2 634 D. P 6 234 B. P 2604 26. The value-added tax payable for January 2011 is: A. P 34 716 C. P 40 716 B. P 41 150 D. P 46 716 27. A VAT-registered stockbroker (not dealer in securities) who owns shares of stock as investments had the following selected data on gross receipts, costs and expenses (valueadded taxes not included), for January 2013: Commissions received from buyers Commissions received from sellers Selling price of shares of stock traded in the LSE: ABC Company XYZ Company P 200 000 300 000 400 000 600 000 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Cost of the shares sold: ABC Company XYZ Company 300 000 500 000 Cost of supplies used in the brokerage business paid to VAT-taxpayers amounted to P 33 600, value-added tax included. Salaries of employees amounted to P 67 200. The valueadded tax payable and the other percentage tax due for the month are: VAT payable Percentage tax due VAT payable Percentage tax due A. P 46 640 P 10 000 C. P 52 800 P 40 000 B. P 49 200 P 20 000 D. P 56 400 P 5 000 28. A VAT- registered public works contractor has the following data on services rendered to the government in the Philippines for the 1st quarter of 2013: Contract price on government contracts P 3 000 000 Collections from private sector clients 2 000 000 Collections on government contracts 1 000 000 Purchases for services of a VAT-registered subcontractor (used 400 000 in government contracts) Purchases (used in private sector and government contracts) 300 000 The tax payable for the quarter: A. P 50 000 B. P 170 000 C. P 120 000 D. None TAX.M-1404 OTHER PERCENTAGE TAX Q1: Which of the following statements is incorrect? A. B. C. D. The percentage tax is basically on sale of services. The percentage tax may be imposed on a sale of goods. The percentage tax may be imposed together with the value-added tax. The percentage tax may be imposed together with excise tax. Q2: 1. 2. 3. 4. 5. 6. BUSINESS Barbershop Restaurant Department store Lodging house Rice retailer Fertilizer distributor VAT REGISTRATION VAT registered Not VAT registered VAT registered Not VAT registered Not VAT registered Not VAT registered ANNUAL SALES P 800 000 800 000 2 700 000 2 800 000 2 650 000 2 500 000 Which of the above establishments are not subject to VAT? A. 2, 4 and 5 B. 2 and 6 only C. 1, 2 and 5 D. 2, 5 and 6 Q3: Che-che is a CPA. The following are her data during the period (amounts are net of tax): Salary as accounting teacher and reviewer Motel business (amounts are exclusive of tax): Gross receipts from business (VAT registered) Discounts Purchases: From VAT-registered suppliers From non-VAT suppliers Business expenses (60% VAT) Practice of profession (not VAT-registered): Gross receipts P 20 000 250 000 25 000 28 000 27 500 25 000 47 500 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Purchases From VAT registered sellers From non-VAT sellers Expenses- profession 21 200 18 000 24 000 1. The VAT payable isA. P 2 640 C. P 3 480 B. 3 336 D. 21 840 2. The percentage tax payable isA. P 225 C. P 201 B. 1 425 D. 681 Q4: Trucseabus Company, Manila based, had the following receipts during the month: Bus (receipts from cargo senders, P 11 450) (total pass 45) To be received on freight collect conditions Salaries of drivers and conductors Cost of oil and gasoline Taxi Jeepney Cargo truck Sea vessel, MV Lolo Bogg (carriage of cargo 35%) P 100 000 4 320 25 000 30 000 40 000 10 000 70 000 400 000 During the month, one of the units of Accident Company bumped the taxi and paid Trucseabus Company P 15 000 for the damages done. The percentage tax due isA. P 4 026.9 B. 4 513.5 C. P 4 516.5 D. 6 696.81 Q5: Love Bus Transport Company, Monumento-Baclaran, operates ten (10) units of buses with a capacity of 50 passengers. During the month, it had the following data in its books: Receipts from passengers Receipts from cargoes Expenses for repair of transport units (VAT) Salaries of personnel Purchase of spare parts Registration with LTO Premiums on insurance per unit P 2 000 000 500 000 30 000 300 000 60 000 10 000 15 000 1. How much is the percentage tax payable? A. P 60 000 C. P 60 450 B. 48 750 D. 75 000 2. How much is the VAT payable? A. P 47 400 C. P 31 200 B. 46 200 D. 54 240 Q6: A common carrier by land is engaged in the transport of passengers, goods and cargoes. He is not VAT-registered. What business taxes is he liable to the government? A. 12% VAT B. 3% common carrier’s tax C. 3% tax on VAT-exempt persons on gross receipts from transport of goods and cargoes and 3% common carrier’s tax on gross receipts from transport of passengers. D. 12% VAT on gross receipts from transport of goods and cargoes and 3% common carrier’s tax on gross receipts from transport of passengers. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Q7: An international carrier is subject to the following taxA. B. C. D. 12% value-added tax and ordinary income tax on gross receipts within the Philippines. 0% VAT and 2.5% income tax on gross receipts within the Philippines. 3% other percentage tax on gross receipts 3% other percentage tax on gross receipts and ordinary income tax on gross income. Q8: The Socsksargen Group of Companies is engaged in different lines of business in region XII. Soc Corporation (not VAT registered) is engaged in the business of radio and television broadcasting. Ksar Corporation is a franchisee to supply water in the whole province of Sultan Kudarat and Gen Corporation has a franchise to generate and distribute electricity in the entire area covered by General Santos City. During the month, it had the following receipts: Socs Corporation Ksar Corporation Gen Corporation P 360 000 4 800 000 8 250 000 How much is the total franchise tax on Socsksargen Group of Companies? A. P 106 800 B. 175 800 C. P 345 500 D. 96 000 Q9: Malansa Company is a holder of a franchise to sell water. During the month, it had the following data: Gross receipts from the sale of water to the public Penalties imposed and collected on illegal connections Rent of its heavy equipment to a private subdivision developer Sale of scrap materials P 3 000 000 150 000 50 000 20 000 The franchise tax isA. P 61 400 B. 60 400 C. P 60 000 D. 61 000 Q10: DYYY is a franchisee to operate a radio station. The data in its books are as follows: Gross receipts last year Gross receipts during the month Payment to VAT suppliers of goods and services Payment to non-VAT suppliers of goods and services P 8 000 000 700 000 300 000 20 000 The business tax payable if it is not VAT-registered/VAT registered: Not VAT-registered A. P 261 000 B. 261 000 C. 21 000 D. 21 000 VAT-registered P 48 000 24 000 48 000 24 000 Q11: A telephone company, Vat-registered, provides services for domestic and overseas calls. What business taxes will be due from the services offered? A. VAT on both services B. Overseas communications tax on both services C. VAT on domestic calls and overseas communications tax on overseas calls. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 D. Franchise tax on both services Q12: Which of the following percentage taxes is not payable on or before the 20th day after the close of the month? A. Franchise tax B. Overseas communications tax C. common carrier’s tax D. tax on life insurance Q13: the Bayani Telephone Company, a franchisee to operate a landline telephone, billed Telly Babad the following: Amount collected on calls: Incoming calls (5% toll charges billed to local receiver) Outgoing overseas calls Domestic long-distance calls Monthly bills on subscribers P 4 300 9 350 1 200 525 The overseas communication tax on Telly Babad isA. P 1 280.00 B. 1 452.50 C. P 850.00 D. 871.50 Q14: Filipinas Life Insurance Company had the following data on collections of premiums and disbursements during the month: Life insurance P 150 000 45 000 25 200 Cash collections Checks Accounts receivable Payments of expenses to VAT businesses Payments of expenses to non-VAT businesses Non-life insurance P 145 700 34 600 58 900 43 000 35 000 The amounts indicated pertaining to VAT transactions do not include the value-added tax. 1. The premium tax due isA. P 11 010 B. 14 785 2. The VAT payable isA. P 17 484 B. 12 324 C. P 9 750 D. 3 900 C. P 16 476 D. 12 276 Q15: A domestic insurance company gave the following information for the month: Gross receipts from its insurance policies: Premium on life insurance Premium on non-life insurance Gross receipts as agent of a foreign insurance company: Premium on non-life insurance Premium on property insurance P 2 100 000 1 500 000 4 000 000 1 000 000 Percentage tax due for the month isA. P 355 000 B. 542 000 C. P 605 000 D. 710 000 Q16: The PBA is a professional basketball organization which holds the games in the Big Dome. In May of the current year, it had the following gross receipts: Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 From the gates Radio and television rights Advertisement inside the Big Dome Sale by canteen inside the Big Dome maintained by the Big Dome Ambulant vendors also provided by the company had a gross receipts of Expenses for the maintenance P 2 000 000 1 000 000 150 000 500 000 75 000 45 000 During the month, it was leased to a private group of persons who sponsored an international derby inside the Big Dome. The gross receipts amounted to P 2 500 000. It also hosted the UAAP Volleyball Championship between Ateneo Lady Eagles and De La Salle Lady Archers. Gross receipts from the gates amounted to P 250 000. The total amusement tax due isA. P 558 750 B. 933 750 C. P 1 008 750 D. 1 046 250 Q17: Carlos supplies foods and drinks in Peacock which is operated by a friend, Rudy. It’s gross sales (per invoice) during the month amounted to P 250 000 and his purchases from VAT suppliers amounted to P 185 000. The gross receipts of Rudy for the month was P 425 000. The amusement tax due isA. P 76 500 B. 45 000 C. P 121 500 D. 88 200 Q18: Boxing exhibitions shall be exempt from amusement tax when the following conditions are present: 1- Involves World, Oriental or Philippine Championships in any division. 2- Both of the contenders are citizens of the Philippines. 3- Promoted by citizens of the Philippines, or association at 60% of the capital is owned by Filipino citizens. A. All of the three conditions are correct. B. None of the three conditions are correct. C. Only conditions 1 and 2 are correct. D. Only condition 3 is correct. Q19: Revenues from the current period Collections during the period of: Revenues of prior periods Revenues of the current period Revenues of the succeeding period (advances) P 400 000 50 000 300 000 10 000 1. The business tax if a domestic common carrier by land for the transport of passengers: A. P 12 000 C. P 10 800 B. 9 000 D. 22 800 2. The business tax if a night club: A. P 54 000 C. 72 000 B. 64 800 D. 136 800 3. The business tax if a race track: A. P 120 000 C. P 90 000 B. 228 000 D. 108 000 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Q20: A horseracing aficionado has the following winnings during a particular race day: Total winnings Cost of winning tickets P 10 000 500 The tax on winnings is: A. P 1 000 B. 400 C. P 950 D. 380 Q21: A corporation where at least fifty percent (50%) in value of the outstanding capital stock or at least fifty (50%) of the total combined voting power of all classes of stock entitled to vote is owned directly or indirectly by or for not more than twenty (20) individuals. A. B. Closely held corporation Publicly held corporation C. Foreign corporation D. domestic corporation Q22: Yveth sold the following shares of stocks of a domestic corporations, thru her broker. Stocks of A Corporation Stocks of B Corporation Cost P 100 000 350 000 Selling Price P 180 000 320 000 Date of Sale 10-03-12 10-20-12 The total percentage tax if the stocks are: Listed & traded Not listed & traded A. B. C. D. P 2 500 2 250 2 500 2 250 P 8 000 5 000 None 8 000 Q23: Who is the taxpayer as far as the initial public offering in the local stock exchange of closely held corporations is concerned? A. B. C. D. The purchaser of shares of stock offered in the IPO The corporate issuer The corporate purchaser The local stock exchange Q24: ABC Corporation, closely held corporation, has an authorized capital stock of 100 000 shares with a par value of P 1.00 per share as of January 1, 2013: 25 000 thereof is subscribed and paid up by the following stockholders: Andi P 5 000 Bianca 5 000 Carla 5 000 Diana 5 000 Enciang 5 000 Total shares outstanding 25 000 ABC Corporation finally decides to conduct an IPO and initially offers 25 000 of its unissued shares to the investing public at P1.25 per share. After the IPO in March 2013, ABC Corporation’s total issued shares increased from 25 000 to 50 000 shares. At the IPO, Andi has likewise decided to sell her entire 5 000 shares to the public at P 1.50 per share. Thus, 5 000 shares have been offered in the primary offering and 5 000 shares in the secondary offering. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 1. How much is the percentage tax on ABC Corporation’s newly issued shares? A. P 375 C. 750 B. 1 500 D. 93.75 2. How much is the percentage tax on the secondary offering of Andi’s shares A. P 3 000 C. 300 B. 75 D. None 3. If in June 2013, ABC Corporation again decides to increase capitalization by offering another 300 000 of unissued shares to the public at P 2/share, such follow-through shall be subject exempt fromA. Percentage tax and documentary stamp tax B. Documentary stamp tax but not percentage tax C. Percentage tax but not documentary stamp tax D. Neither percentage tax nor documentary stamp tax 4. In case Diana decides to offer her existing 5 000 shares to the public subsequent to IPO at P 2/share, the percentage tax shall beA. P 25 C. 300 B. 50 D. 1 000 Q25: Manalo, a dealer in securities, sold P 1 500 000 (tax included) worth of shares it held as inventory to Romulo. The shares sold were acquired for P 1 000 000 (tax excluded) and were listed and traded in the local stock exchange. The tax due on the sale is: A. None B. P 7 500 percentage tax C. P 45 000 D. 60 000 value-added tax Q26: ABC Bank has the following income/loss for the following months: April March Interest income with maturity of less than 5 years P 50 000 P 100 000 Rentals 50 000 50 000 Net trading gain/loss (10 000) 20 000 The gross receipts tax for the months of March and April, respectively: A. 5 000; 8 500 B. 6 000; 9 900 C. 6 000; 9 200 D. 5 300; 9 200 Q27: Banco Deposito had the following data for the first month of the current year: Interest, commissions and discounts from lending activities (remaining maturity of instrument is 5 years) Income from financial leasing (remaining maturity of instrument is more than 5 years) Dividends and equity shares in net income of subsidiaries Rentals of properties Net trading gains within the taxable year on foreign currency P 5 000 000 3 000 000 1 000 000 500 000 300 000 How much is the gross receipts tax? A. P 386 000 B. 250 000 C. 336 000 D. 326 000 MULTIPLE CJOICE QUESTIONS 1. Which of the following statements in incorrect? A. A taxpayer whose annual gross sales and/or receipts exceed P 1 919 500 shall pay VAT even if he is not VAT-registered. B. A taxpayer whose annual gross sales and/or receipts do not exceed P 1 919 500 but who is VAT-registered shall pay VAT. C. Percentage tax may be imposed together with VAT. Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 D. Percentage tax may be imposed together with excise tax. 2. First statement: Persons whose transactions are exempt from value-added tax because their gross sales and/or receipts do not exceed P 1 919 500 may voluntarily apply for registration under the VAT system. Second statement: A VAT-registered person whose gross sales and/or receipts for two (2) consecutive years did not exceed P 1 919 500 may apply for cancellation of VAT registration and revert back to being VAT-exempt. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 3. A seller of goods is not VAT-registered. His annual gross sales amount to P 1 919 500. To what business tax is he liable? A. 3% tax on VAT-exempt persons C. 3% common carrier’s tax B. 12% value-added tax D. not subject to any percentage tax 4. Marino is an owner of a small variety store. His gross sales in any one year do not exceed P 1 919 500. He is not VAT-registered. The following sata are taken from the books of the variety store for the quarter ending March 31, 2013: Merchandise inventory, Dec. 31, 2012 P 10 000 Gross sales 45 000 Purchases from VAT-registered supplier 38 500 The percentage tax due is: A. P 1 000 B. 1 350 C. 4 500 D. none Items 5 and 6 are based on the following information: In the second quarter of 2013, a taxpayer engaged in the sale of services and whole annual gross receipts do not exceed P 1 919 500 has the following data: Accounts receivable, beginning of the quarter P 50 000 Sales during the quarter 100 000 Accounts receivable, end of quarter 75 000 Purchase of supplies, total invoice amount 11 200 5. The percentage tax due for the quarter is: A. P 2 250 C. P 1 914 B. 3 000 D. 2 664 6. Assuming the taxpayer is VAT-registered, the VAT payable is: A. P 2 250 C. 7 656 B. 9 000 D. 7 800 7. Which of the following franchise grantees is subject to the franchise tax? A. Franchise on radio and/or television broadcasting companies the annual gross receipts in the preceding year exceed P 10 000 000. B. Franchise on gas and water utilities. C. Franchise on toll road operations. D. Franchise on telephone communications. 8. Franchise grantees of gas and water utilities are subject to a franchise tax of: A. 2 % C. 4% B. 3% D. 5% 9. The franchise tax of grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed P 10 000 000 shall be: A. 2% of the gross receipts C. 10% of the gross receipts B. 3% of the gross receipts D. 12 % of the gross receipts Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 10. Kapatid is a radio-TV broadcasting franchise grantee. During the preceding year, its gross receipts did not exceed P 10 000 000. During the first quarter of the current year, it has the following data: Gross receipts, sale of airtime P 2 000 000 Gross receipts, use of radio station’s communication facilities 500 000 Business expenses 700 000 The franchise tax due for the quarter is: A. P 60 000 C. 75 000 B. 50 000 D. 54 000 11. Beneco is a holder of franchise to distribute and sell electricity. In a particular quarter, its gross receipts amounted to P 2 000 000 from distribution and sale of electricity. It has also receipts from the lease of its auditorium and theater amounting to P 600 000. The value-added tax or percentage tax due for the quarter is. A. P 40 000 percentage tax C. 52 000 percentage tax B. 72 000 value-added tax D. 312 000 value-added tax 12. The operator of one of the following places is not subject to amusement tax: A. Cockpits C. bowling alleys B. Racetracks D. KTV karaoke joints 13. First statement: All boxing exhibitions held in the Philippines shall be subject to amusement tax. Second statement: Admission charges to amusement places are required for the imposition of amusement tax. A. Both statements are correct C. only the first statement is correct C. Both statements are incorrect D. only the second statement is correct 14. Chavit, a Filipino citizen, promoted a world boxing championship in Manila featuring Pacman, a Filipino champion. Gate receipts amounted to P 3 000 000 and additional receipts from television coverage was P 2 000 000. The amusement tax due is: A. Exempt C. P 300 000 B. P 500 000 D. P 600 000 15. Assuming the above is not a world championship but a Philippine national boxing championship, how much is the amusement tax: A. Exempt C. P 300 000 B. P 500 000 D. P 600 000 16. Pana Lo operates a cockpit. Inside the cockpit, he also operates a restaurant. Data for a particular quarter follow: Gross receipts: Cockpit operation P 500 000 Restaurant operation: Sale of food 100 000 Sale of liquor 150 000 The amusement tax due from Pana Lo is: A. P 90 000 C. 225 000 B. 135 000 D. 112 500 17. Using the data in no. 16, except that the restaurant is not owned by Pana Lo but is owned by another person, not VAT-registered and whose annual gross receipts never exceeded P 1 919 500, the amusement tax due from Matuti is: A. P 90 000 C. 225 000 B. 135 000 D. 112 500 18. Continuing no. 17, the percentage tax due from the restaurant owner is: A. P 45 000 C. 30 000 B. 25 000 D. 7 500 Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 19. First statement: The 10% tax on winnings is based on actual amount paid for every winning ticket after deducting the cost of ticket. Second statement: The rate of tax on winnings in case of double forecast/ quinella and trifecta bets shall be four (4%) of the actual amount paid for every winning ticket after deducting the cost of the ticket. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 20. First statement: The tax on insurance premium applies to every person, company or corporation doing life insurance business or any sort in the Philippines, except purely cooperative companies and associations. Second statement: A person engaged in non-life insurance business is subject to valueadded tax. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 21. First statement: The tax on life insurance premium is 2% based upon the total premiums collected whether such premiums are paid in money, notes, credits or any substitute for money. Second statement: The tax on agents of foreign insurance companies is 10% based upon the total premiums collected. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 22. Shares of stock held as investment when sold through the local stock exchange shall be subject to: A. ½% of 1% based on gross selling price or gross value in money. B. 12% VAT based on gross income. C. 5% on first P 100 000 capital gain; 10% on excess of P 100 000. D. 4%; 2%; 1% based on gross selling price or gross value in money. 23. One of the following statements is incorrect. A. The ½% of 1% tax shall be collected by the broker who made the sale and shall be remitted within 5 banking days from the date of collection. B. The tax paid on sale of shares through local stock exchange and initial public offering (IPO) and secondary offering shall not be allowable deduction for income tax purposes, C. The ½% of 1% stock transaction tax is a final withholding tax on income. D. The ½% of 1% stock transaction tax is collected whether there is an imcome or a loss and is percentage tax. 24. Gloria invested P 500 000 in the shares of stock of Tabako Corp. the corporation’s shares are listed and are traded in the local stock exchange. Gloria sold the shares for P 350 000 through the local stock exchange. The percentage tax on the sale is: A. P 6 000 C. 1 750 B. 3 500 D. 2 500 25. Using the same data in no. 24 and assuming that Gloria sold the shares to Bayani, a direct buyer, the percentage tax on the sale is: A. none C. P 1 750 B. P 2 500 D. 10 000 26. One of the following is subject to common carrier’s tax. A. Owners of bancas B. Owners of animal-drawn to-wheeled vehicles C. Common carriers by air or water for transport of passengers, goods or cargoes D. Common carriers by land for transport of passengers 27. A person whose business is to keep automobiles for hire or keep them stored for use or order. A. Keepers of garage C. taxicab operator B. Common carrier D. tourist bus operator Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 28. First statement: The gross receipts of common carriers derived from their incoming and outgoing freight shall be subject to the local taxes imposed under the Local Government Tax Code. Second statement: The 3% common carrier’s tax is based on the actual quarterly gross receipts or minimum quarterly receipts whichever is lower. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 29. Saludo is an operator of a fleet of taxis in Metro Manila. Since he operates under the “boundary system”, the actual payments to him by the taxi drivers of the “boundary” was P 150 000. No official receipts are issued by the taxi drivers. Drivers causing damage to the taxi units paid Saludo P 10 000 for the quarter. The value-added tax or percentage tax due from Saludo is: A. P 4 800 percentage tax C. P 18 000 value-added tax B. P 4 500 percentage tax D. P 19 200 value-added tax 30. One of the following stataments is wrong. Operators of transport facilities by land are: A. Subject to the value-added tax on gross receipts from transporting passengers. B. Subject to the value-added tax on gross receipts from transporting goods and cargoes. C. Subject to percentage tax on gross receipts from transporting passengers. D. Subject to the value-added tax on gross receipts from renting out its transporting facilities. Items 31 and 32 are based on the following information: Saulod is a common carrier with passenger buses and cargo trucks. For the month of June 2013, it had the following data on revenues and receipts, taxes not included: For transporting passengers, gross revenues and receipts of P 330 000. For transporting cargoes, gross revenues of P 220 000, of which P 200 000 was received. For renting out to the MMDA its towing trucks, gross receipts of P 50 000, representing P 10 000 from gross revenue of the quarter ending March 31 and P 40 000 for the month of june. 31. The percentage tax is: A. P 17 400 C. 16 500 B. 9 900 D. 15 900 32. The output value-added tax is: A. P 24 000 C. 25 000 B. 28 800 D. 30 000 33. MV Black Mountain is a common carrier by sea. During a particular quarter, its receipts consists of the following: Gross receipts, without tax: Transport of passengers P 1 000 000 Transport of goods 1 500 000 Transport of cargoes 500 000 The output VAT and OPT due for the quarter are: Output VAT OPT due Output VAT OPT due A. P 240 000 P 30 000 C. P 0 P 90 000 B. 360 000 0 D. 360 000 30 000 34. One of the following is not subject to the 3% percentage tax. A. International air carrier doing business in the Philippines. B. International shipping carrier doing business in the Phils. C. Domestic carriers by land and keepers of garage. D. Franchise grantee of city gas and water utilities. 35. A telephone company, VAT-registered, provides services for domestic and overseas calls. What business taxes are due from the services offered? I. Value-added tax for domestic calls. II. Overseas communications tax for overseas calls. A. Yes to I and II C. yes to I only Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 B. No to I and II D. yes to II only 36. Banks and non-bank financial intermediaries performing quasi-banking functions are subject to: A. Value-added tax C. Franchise tax B. Gross receipts tax D. Amusement tax 37. The lease of property, real or personal, is subject to: I. 7% gross receipts tax if the lessor is a bank. II. 12% VAT if the lessor is not a bank. A. Yes to I and II C. yes to I only B. No to I and II D. yes to II only 38. Which of the following is subject to 0% gross receipts tax? A. Gross receipts on interest, commissions and discounts from lending activities and income from financial leasing. B. Dividends and equity shares in net income of subsidiaries. C. Royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income in the Tax Code. D. Net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments. 39. First statement: Just like value-added tax, percentage taxes are paid on a quarterly (cumulative) basis. Second statement: Generally, every person liable to pay the percentage taxes shall file a monthly return within 20 days after the end of each taxable month. A. Both statements are correct B. Both statements are incorrect C. only the first statement is correct D. only the second statement is correct 40. First statement: The monthly percentage tax returns of taxpayers shall be filed, and taxes paid, not later than the 20th day following the end of the month. Second statement: With respect to taxpayers enrolled with EFPS, the deadline for e-filing the monthly percentage tax return and e-paying the tax thereon shall be 5 days later than that set in the first statement. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 41. How is the percentage tax on the secondary offering of shares of stock of closely held corporation collected and paid? A. The stockbroker collects and remits the tax within 5 working days from the date of collection. B. The stockbroker collects and remits the tax within 5 banking days from the date of collection. C. The purchaser collects and remits the tax within5 days after the end of the quarter, fiscal or calendar. D. The local stock exchange collects and remits the tax within 5 banking days from the date of collection. 42. Which of the following percentage taxes are paid on a quarterly basis? I. Overseas communications tax III. Taxes on winnings II. Amusement tax IV. Stock transactions tax A. All of the above C. III and IV only B. I and II only D. II only 43. Any person retiring from a business subject to percentage tax shall notify the nearest internal revenue officer, file his return and pay the tax due theron within how many days after closing his business? A. 10 days C. 20 days B. 15 days D. 30 days Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 44. First statement: Other percentage taxes are indirect taxes that can be passed on by person required to pay to another person who shall bear the burden of the tax. Second statement: The persons liable to overseas communication tax may or may not be engaged in trade or business. A. Both statements are correct C. only the first statement is correct B. Both statements are incorrect D. only the second statement is correct 45. The lease of property, real or personal, by a bank is subject toA. 7% gross receipts tax C. 12% VAT B. 5% gross receipts tax D. 1% gross receipts tax Downloaded by Lee Park (Leepark6240@gmail.com) lOMoARcPSD|7527748 Downloaded by Lee Park (Leepark6240@gmail.com)
