COMPETENCY
APPRAISAL
Donor’s Tax
THE DONOR'S TAX
The donor's tax is imposed on annual net gifts reckoned over a calendar year basis. For every taxable donation,
the donor shall determine and report his/her net gift. The tax is paid within 30 days after every donation. Net gift
refers to the net economic benefits from the transfer that accrues to the donee.
Donor’s Tax
THE DONOR'S TAX
The donor's tax is imposed on annual net gifts reckoned over a calendar year basis. For every taxable donation,
the donor shall determine and report his/her net gift. The tax is paid within 30 days after every donation. Net gift
refers to the net economic benefits from the transfer that accrues to the donee.
Donor’s Tax
VALUATION OF NET GIFT
The following are considerations in measuring net gift:
1. Valuation rules
2. Timing of valuation
3. Donation of common properties
4. Encumbrances on the property donated
Valuation of property donated
For purposes of donor's taxation, the valuation of properties donated follow the same rules as those of estate
taxation, namely:
A. Real property-the higher of zonal or fair value per assessor's office (Sec. 102, NIRC)
B. Personal properties –
1. Shares of stock
a. If listed in the PSE-the average high and low price of the stocks at the date of donation
b. If not listed:
i. Preferred stocks- par value
ii. Common stocks - the book value appearing in financial statements published nearest to the date of
donation
Donor’s Tax
Illustration 1: Fair value of real properties
Mr. H donated a parcel of land in favor of his son. The land had a zonal value of P3,000,000, an assessed value of
P2,000,000, and an independent appraisal value of P4,000,000.
The amount to include in net gift shall be P3,000,000. Independent appraisal value shall not be used in accordance
with the NIRC.
Illustration 2: Fair value of old items
Tony donated a Toyota Fortuner to his brother Andrew. The car was acquired five years ago at P1,800,000. At the
date of donation, the car was saleable as second hand at P1,000,000 but was subject to a P300,000 mortgage
which Tony promised to pay before transfer of title.
The donation shall be included in net gift at P1,000,000. Note that the P300,000 mortgage is not assumed by the
donee.
Donor’s Tax
Illustrative 3: Fair value of listed shares
On June 4, 2019, Mr. Angelo donated 1,000 shares of the stocks of Albatross Corporation, a listed corporation.
The shares of Albatross Corporation had the following trading prices on June 4, 2019:
Opening price
P800
Highest intra-day trading price
870
Lowest intra-day trading price
790
Weighted average traded price
820
Last trading price
850
The donation shall be included in net gift at P830,000, computed as [(P870 + P790)/2 x 1,000]. The regulation
requires the use of simple average of the high and low not the weighted average price.
Donor’s Tax
Filing Date
BIR Form 1800 is filed within 30 days after the donation is made. A separate return is required for donations made
at different dates during the year reflecting therein any previous net gift made in the same year.
Only one return is required for donations made on at a single day even if made to several donees. If the donation
is a conjugal or communal property, each spouse shall file a separate return corresponding to their respective
share in the conjugal or community property.
Donor’s Tax
FOREIGN TAX CREDIT
Residents and citizens with foreign donation may be subjected to foreign donor's tax. To minimize international
double taxation, our tax law allows a credit for taxes paid in a foreign country. Foreign tax credit is computed
depending on whether a single foreign country or multiple foreign countries are involved.
Donor’s Tax
Donor’s Tax
Donor’s Tax
THEORY PART 1
1. A gift is valued at the date of
a. death of the donor.
b. notarization of the donation.
c. completion or acceptance of the donation.
d. payment of the donor's tax.
2. A donation of real property is valued at
a. zonal value of the property.
b. value per tax declaration.
c. independent appraisal value
d the higher of zonal value or value per tax declaration.
3. Which type of donation is exempt?
a. Renunciation of the right to collect an indebtedness of a debtor
b. General renunciation of inheritance by an heir
c. Transfer for an insufficient consideration
d. Irrevocable donation in trust
4. The donation of preferred stocks are valued at
a. Book value
b. Par values
c. Second-hand value d. Independent appraisal value
Donor’s Tax
5. For purposes of donor's taxation, the fair value of common stocks is determined as its book value using the
a. Asset appraisal method
c. Adjusted net asset method
b. Independent appraisal method
d. Market price averaging method
6. Which is correct regarding donation of common properties?
a. Both spouses shall file separate donor's tax returns
b. Either spouse shall file a donor's tax return.
c. The spouses shall file a consolidated donor's tax return.
d. Any of these at the discretion of the spouses
7. The donation of common property shall be considered
a. one-half made by the husband and one-half made by the wife.
b. totally made by the spouse signing the deed of donation.
c. void unless with the consent of both spouses.
d. donation made by the head of the family.
8. Donations of properties to joint donees are treated as
a. separate donations to be reported under a separate donor's tax return.
b. donations to each donee which will be classified according to the relation of each donee to the donor.
c. A donation to a partnership; hence, these are subject to 30% donor's tax.
d. a single donation which will be reported in a single donor's tax return.
Donor’s Tax
9. Which of the following donations is taxable?
a. Donation to an accredited charitable institution
b. Donation to an association
c. Donation to an educational institution accredited by CHED
d. All of these
10. Which of the following obligations, even if assumed by the donee, is not deductible in computing net gift?
a. Mortgage payable
b. Real property tax
c. Donor's tax
d. All of these
11. Which of these donations to a non-profit institution are exempt from donor's tax?
a. Donations restricted by the donor for salaries of staff of the non-profit institutions
b. Donations restricted by the donor for utilities expenses of the non-profit institutions
c. Donations restricted by the donor to be used only for program expenses of the non-profit institution to carry
out its organizational mission
d. All of these
12. Obligations, if assumed by the donor, are
a. deductible by residents or citizens.
b. deductible by non-resident aliens.
c. deductible by any donor.
d. never deductible.
Donor’s Tax
13. Statement 1: Where property is transferred during a person's lifetime for less than adequate and full
consideration in money or money's worth, then the amount by which the value of the property exceeded the
value of the consideration shall, for the purpose of the donor's tax, be deemed a gift.
Statement 2: Encumbrance on the property donated, if assumed by the donor, is deductible for donor's tax
purposes.
Which is true?
a. Statement 1 b. Statement 2
c. Both statements
d. Neither statement
THEORY PART 2
1. Statement 1: Donations abroad are exempt from donor's tax to an alien
Statement 2: Donations in the Philippines are exempt to a non-resident
Which is false?
a. Statement 1 b. Statement 2
c. Both statements
d. Neither statement
2. Which is correct regarding the exemption of donation to non-stock and non profit institutions?
a. It must be made to accredited institutions only.
b. It must be made to bona fide non-profit institutions, whether accredited or not.
c. The donor must be a resident or a citizen of the Philippines.
d. The property donated must be situated in the Philippines at the date of donation.
Donor’s Tax
3. Donations in the tax return is presented on a cumulative year-to-date basis. This is true to
a. Donations to individuals only
b. Donation to juridical persons only
c. Both donations to individuals and donations to corporations
d. Donations made in the Philippines only
4. Statement 1: Donor's tax rates vary depending on the applicable tax law at the time of gift.
Statement 2: The law in force at the time of completion or perfection of the gift shall govern the contract of
donation.
Which is correct?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement
5. Which of these donations to the government are subject to donor's tax?
a. Donations of tanks and ammunitions to the Philippine military
b. Donations of computers to the Department of Education
c. Donations to government-owned and controlled corporations
d. None of these
6. Counted from the date of donation, the donor's tax is paid within
a. 10 days.
b. 15 days.
c. 30 days.
d. 60 days.
Donor’s Tax
7. Which is not a required disclosure in the donor's tax return?
a. Current and past gifts during the year
c. Name of the donee
b. Donations made last year
d. Deductions claimed
8. Which is not included in net gift?
a. Transfers to the government
b. Transfers to non-profit and non-stock charitable institutions
c. Portion of the fair value of the property adequately paid for
d. All of these
9. Which of the following is included in net gift?
a. Transfers to the government
b. Transfers to non-profit and non-stock charitable institution
c. Portion of the donation representing dowry
d. Excess of the fair value of the property over the consideration paid by the donee
10. Which of these is not included in net gift?
a. Dowry gift to a step-child
b. Gift to a spouse
c. Gift to relatives d. Gift to a stranger
Donor’s Tax
11. Under the law, the donor's tax return shall be filed in
a. duplicate.
b. triplicate.
c. quadruplicate.
d. quintuplicate.
12. Which is not entitled to claim tax credit for foreign donor's tax paid?
a. Resident alien
b. Resident citizen
c. Non-resident citizen
d. Non-resident alien
13. The donor's tax may be paid to the following except
a. An authorized agent bank
c. Revenue collection officer
b. Revenue district officer
d. Barangay treasurer
14. If there is no BIR office in the place of the donor's residence, the donor's tax return shall be filed with the
a. office of the Commissioner.
c. revenue collection officer.
b. revenue district officer.
d. authorized municipal treasurer.
15. Where the donor has no residence in the Philippines, the donor's tax return shall be filed with
a. the office of the President.
b. the office of the Commissioner.
c. an authorized government depositary bank near the residence of the donee.
d. the Revenue District Office having jurisdiction over the place where the donee is located.
Donor’s Tax
16. Which of these donations to the Philippine government is subject to donor's tax if the donor is a resident?
a. Donation of properties located abroad
c. Both A and B
b. Donation of properties located in the Philippines
d. Neither A nor B
17. Which of these donations to the Philippine government is subject to donor's tax if the donor is a non-resident
alien?
a. Donation of properties located abroad
c. Both A and B
b. Donation of properties located in the Philippines
d. Neither A nor B
18. Which of the following properties, when donated, are not subject to donor's tax to the wife?
a. Capital properties
b. Paraphernal properties
c. Common properties
d. B and C
Donor’s Tax
PROBLEMS PART 1
1. Mr. and Mrs. Gaspar donated a piece of land to Mr. Lee in accordance with the wishes of Don Silvano, Mr.
Gaspar's father. Don Silvano donated the property to Mr. Gaspar as the first donee with Mr. Lee as the second
donee.
Which is correct?
a. Only Mr. Gaspar shall file the donor's tax return.
b. Both Mr. Gaspar and Mrs. Gaspar shall file separate donor's tax return.
c. The gift is exempt from donor's tax.
d. Mr. Lee shall file the donor's tax return.
2. In 2019, Eddie made a sole donation of P 300,000 cash to an accredited charitable institution for its program
expenses. Which is correct?
a. Eddie shall pay P3,000 donor's tax.
b. The donation is exempt because the donee is an accredited charitable. institution.
c. The donation is exempt because it does not exceed P100,000.
d. The donation is subject to the tax using the donor's tax table.
3. James was indebted to Juan for P500,000. Out of compassion to his brother James, Pedro assumed and paid
James' obligation. Which is correct? Mosa. James shall report the P500,000 as gross income. b. James shall report
the P500,000 in his donor's tax. c. Pedro shall report the P500,000 as donation and pay the donor's tax. d. Both
James and Pedro shall file a donor's tax return. 4. In 2019, Mr. Mabait made a lone donation of P 200,000 cash to
Donor’s Tax
PROBLEMS PART 1
1. Mr. and Mrs. Gaspar donated a piece of land to Mr. Lee in accordance with the wishes of Don Silvano, Mr.
Gaspar's father. Don Silvano donated the property to Mr. Gaspar as the first donee with Mr. Lee as the second
donee.
Which is correct?
a. Only Mr. Gaspar shall file the donor's tax return.
b. Both Mr. Gaspar and Mrs. Gaspar shall file separate donor's tax return.
c. The gift is exempt from donor's tax.
d. Mr. Lee shall file the donor's tax return.
2. In 2019, Eddie made a sole donation of P 300,000 cash to an accredited charitable institution for its program
expenses. Which is correct?
a. Eddie shall pay P3,000 donor's tax.
b. The donation is exempt because the donee is an accredited charitable. institution.
c. The donation is exempt because it does not exceed P100,000.
d. The donation is subject to the tax using the donor's tax table.
Donor’s Tax
3. James was indebted to Juan for P500,000. Out of compassion to his brother James, Pedro assumed and paid
James' obligation. Which is correct?
a. James shall report the P500,000 as gross income.
b. James shall report the P500,000 in his donor's tax.
c. Pedro shall report the P500,000 as donation and pay the donor's tax.
d. Both James and Pedro shall file a donor's tax return.
4. In 2019, Mr. Mabait made a lone donation of P 200,000 cash to Mrs. Malait, his half-sister. Which is correct?
a. The donation is subject to 6% tax.
c. Mrs. Malait shall pay the donor's tax. tax.
b. The donation is exempt from donor's
d. None of these.
5. In 2019, Mr. and Mrs. Mapagbigay made a single donation of P200,000 to their son on account of his
graduation from college. The donation was taken from the salaries of Mr. Mapagbigay. Which is correct?
a. The donation is exempt from donor's tax.
c. Both spouses will pay donor's tax.
b. The donation shall be subject to income tax.
d. Either of the spouses pays the donor's tax.
Donor’s Tax
6. Jay donated P1,000,000 to the Autism Foundation, an accredited social welfare institution. Jay stipulated that
1/4 of the donation shall be given to Cancer Survivor Society, another accredited non-profit institution.
a. The entire P1M donation is exempt from donor's tax.
b. The entire P1M donation shall be subject to donor's tax.
c. P750,000 donation shall be subject to donor's tax.
d. P250,000 donation shall be subject to donor's tax.
7. Ms. Kris gave her longtime best friend and ABS-CBN Kapamilya co-host. Mr. Abunda, a Hummer worth P14M.
Which is correct?
a. The donation is subject to P840,000 tax.
b. The donation is exempt from donor's tax.
c. The donation is subject to P825,000 donor's tax.
d. The donation is a reportable item of gross income by Mr. Abunda,
8. Mr. Realty, a VAT taxpayer, transferred a commercial lot to his son as a wedding gift. The lot was worth
P1,000,000 at the time of donation, Which is incorrect?
a. The transfer is subject to VAT.
c. The transfer is subject to donor's tax.
b. The transfer is subject to capital gains tax.
d. All of these
Donor’s Tax
9. Mr. and Mrs. Aguinaldo donated a piece of land worth P500,000 to their daughter, Hanna, who is getting
married. In the same year, Mr. and Mrs. Aguinaldo made a prior donation of P100,000 to a family friend. Which is
correct?
a. Either Mr. or Mrs. Aguinaldo shall report a net gift of P350,000.
b. Either Mr. or Mrs. Aguinaldo shall report a net gift of P100,000.
c. Mr. and Mrs. Aguinaldo are exempt to pay donor's tax.
d. Both Mr. and Mrs. Aguinaldo shall report a net gift of P50,000.
10. Miss Gelen wanted to help her brother who is financially challenged. She donated an agricultural land worth
P1,000,000 and designated her brother and sister-in-law as donees.
How much shall be reflected in net gifts subject to tax?
a. P1,00,000
b. P 750,000
c. P 500,000
d. P0
Donor’s Tax
11. Mr. and Mrs. Teban donated a commercial lot as dowry to their daughter. The commercial lot is a conjugal
property valuing P800,000 at the date of donation. The spouses do not have other donation during the year.
Which of the following properly depicts the presentation of the donation in the donor's tax return of the spouses?
Mr. Teban
Mrs. Teban
a.
P400,000
P400,000
b. P275,000
P275,000
c. P150,000
P150,000
d. P750,000
P0
12. Don Nicodemo disposed an agricultural land to his granddaughters, Mara and Clara for a consideration of
P200,000. The property was worth P1,000,000 at the date of disposal. Compute the net gift subject to tax.
a. P 800,000
b. P550,000
c. P 300,000
d. P0
13. Mr. and Mrs. Manolo donated a property which Mr. Manolo inherited during their marriage. Which is
incorrect?
a. There is only one donor in the donation.
c. Mrs. Manolo shall not file a donor's tax return.
b. Only Mr. Manolo shall file a donor's tax return.
d. Both spouses shall file separate donor's tax returns.
Donor’s Tax
14. Mr. and Mrs. Miranda donated a car from the sole salaries of Mrs. Miranda. Which is correct?
a. There is only one donor in the donation.
b. Only Mr. Miranda is required to file a donor's tax return.
c. Only Mrs. Miranda is required to file a donor's tax return.
d. Both spouses shall file separate donor's tax returns.
15. Mr. and Mrs. Jerry made a donation of P800,000 to their daughter, Jemma, on July 1, 2018. On August 1, 2019,
they made another donation of P700,000 to Jemma. Compute the net gift of the spouses subject to tax as of
August 1, 2019.
Mr. Jerry
Mrs. Jerry
a. P 750,000
P 750,000
b. P 500,000
P 500,000
c. P 100,000
P 100,000
d. P 550,000
P0
Donor’s Tax
PROBLEMS PART 2
1. Mr. Alfonso donated a brewery with a value of P24M to Mr. Ginebra. Mr. Ginebra assumed the mortgage on
the property valuing P18M. Compute the net gift.
a. P24M
b. P18M
c. P 6M
d. P 5.75M
2. Magaling Company donated a commercial lot worth P1,000,000 to Bolatsing Company. The lot was
encumbered by a P400,000 mortgage which was assumed by Magaling. The property had P100,000 accrued
property tax which Bolatsing assumed.
The net gift shall be
a. P 1,000,000
b. P 900,000
c. P 600,000
d. P 500,000
3. Anderson donated a lot to the Philippine government. The lot had a zonal value of P4,000,000 and was
encumbered by a P1,000,000 mortgage. What Is the net gift subject to tax on the donation?
a. Po b. P1,000,000
c. P3,000,000
d. P4,000,000
Donor’s Tax
4. On July 1, 2020, Mr. Carrion donated P600,000 to his son as dowry for his upcoming marriage. He also gave
another dowry of P300,000 to his daughter who got married last April 30, 2020.
What is the total reportable net gift as of July 1, 2020?
a. Mr. Carrion shall report a P900,000 net gift.
c. Mr. Carion shall report a P400,000 net gift.
b. Mr. Carrion shall report a P650,000 net gift.
d. Both donations are exempt since they are dowry.
5. Henrie donated 20,000 common stocks of Quickie Birds Corporation. At the date of donation, Quickie Birds
Corporation had the following:
Shareholder's equity
P2,000,000
Outstanding common stocks
100,000
Per financial statements disclosures, Quickie had certain assets with fair value exceeding their book values by a
total of P1,200,000. Compute the amount to be reported
a. P200,000
b. P540,000
c. P 400,000
d. P 640,000
Donor’s Tax
6. Bruno had 120,000 in the stocks of Jonas Corporation. The published financial statement of Jonas nearest the
date of donation reveals the following:
Total assets at fair value
P 4,000,000
Total assets at historical cost
3,000,000
Total liabilities
600,000
Outstanding common stocks
1,000,000
Jonas Corporation is not liquidly traded at the Philippine Stock Exchange P2.8/share. The donation shall be
valued at
a. P 120,000
b. P 288,000
c. P 336,000
d. P 408,000
7. Mr. and Mrs. Julio transferred the following properties in 2019:
*P400,000 cash to daughter, Jane, as a graduation gift
*P600,000 land to son, Eugene, who is scheduled to wed next year
*P300,000 car to Horace, Mr. Julio's best friend, as a wedding gift
What is the respective net gift of Mr. and Mrs. Julio subject to tax as of the first gift?
a. P0; P0
b. P 200,000; P200,000
c. P400,000; PO
d. P0; P400,000
Donor’s Tax
8. What is the respective net gift of Mr. and Mrs. Julio subject to tax as of the last gift in 2019?
a. P525,000; P 525,000
b. P500,000; P500,000
c. P400,000; P400,000
d. P1050,000; P0
9. Shanon, a non-resident Japanese, donated domestic stocks valued at P500,000 to his half-sister who is getting
married abroad. Shanon designated the donation to the new spouses. He also donated her used car in Japan
worth P1,000,000 to the spouses. What is the net gift subject to tax?
a. P0
b. P 250,000
c. P 1,250,000
d. P 1,500,000
10. Mr. and Mrs. Crockie are resident aliens. They donated one of their investment in domestic bonds worth
P2,000,000 to Rey, their common child, who just got married. The country of the spouses where they are
nationals allows Filipinos therein exemption from gift taxes.
Compute the respective net gifts of Mr. and Mrs. Crockie subject to tax.
a. P 1,000,000; P 1,000,000
b. P500,000; P500,000
c. P 250,000; P 250,000
d. P0; P0
Donor’s Tax
11. Andro donated the following properties:
*P 2,000,000 car on November 2, 2018 to his favorite nephew
*P 3,000,000 agricultural lot on January 5, 2019 to his son who is getting married
*P 4,000,000 building on February 14, 2019 to his father who is getting married .
*P 5,000,000 cash on July 1, 2019 designated by Andro for the administrative expenses of a charitable institution
*P1,000,000 cash on August 1, 2020 to his mother-in-law
Compute the total net gift subject to tax as of February 14, 2019.
a. P8,750,000
b. P6,750,000
c. P 4,000,000
d. P 3,750,000
12. Compute the total net gift subject to tax in 2019.
a. P 14,750,000 b. P13,750,000
c. P11,750,000
d. P 6,750,000
13. Mark donated a used car to his best friend Marco. A new unit of the car is worth P1,800,000, The car is worth P
400,000 in the seconds market. Marco shall assume the donor's tax on the donation. Compute Mark's net gift
subject to tax.
a. P1,550,000
b. P400,000
c. P 391,000
d. P 150,000