PROBLEM SET – EXCLUSIONS FROM GROSS INCOME
PROBLEM 1. LIFE INSURANCE CONTRACTS
Joey is insured in a P 5,000,000 life insurance policy. The policy requires annual premium payments of P 100,000
for 10 years. If Joey outlives the policy after the 10 years, he will be paid a P 1,500,000 maturity value. Compute
for the exclusions from gross income for each independent situation:
a. Joey has died on the 8th year of coverage and his heirs received P 5,000,000 proceeds. F5,000,000
b. Joey’s insurance company asked for an extension of payment of proceeds and will pay P 5,200,000.
c. Joey outlived the policy and collected the maturity value of P 1,500,000.
d. Joey assigned the policy to Chandler for P 500,000 after 4 years of paying annual premium payments.
=>
-
-
-
PROBLEM 2. PROPERTY INSURANCE CONTRACTS
Phoebe Company secured a fire insurance covering the half of its commercial building for P 600,000. The building
was destroyed by fire when the current value of the building was P 2,000,000. The company recovered the
insurance proceeds in full. Determine the exclusion from gross income.
PROBLEM 3. COMPENSTION FOR INJURIES
Ross was hit by a taxi. He paid P 70,000 for hospitalization expenses. The court awarded him a total indemnity
of P 600,000 after he sued the taxi driver. The breakdown is as follows:
>directal
Moral damages
Reimbursement of hospital bills
Lost salary
for
injury
450,000
o
70,000
P
- 7520,000
80,000
↳ inclusion
in al
Determine the exclusions from gross income.
PROBLEM 4. STATE MANDATED CONTRIBUTIONS
Rachel has a gross compensation of P 500,000 in 2022. His employer deducted the following from his income:
-
SSS Contributions
PhilHealth Contributions
HDMF Contributions
Labor union dues
Creditable withholding tax
Determine the gross taxable compensation income.
P
50," 000)
15,000
12,000
9,000
6,000
90,000
0
=
44,500
90,000
-
PROBLEM 5. BARANGAY MICRO-BUSINESS ENTERPRISES
0
Monica has a restaurant with total assets of P 3,500,000 inclusive of a lot with book value of P 1,000,000. The
following are her transactions for the year:
Gross income – food sales
Interest on promissory notes
Royalties – sale of recipe books
Dividend income from domestic stock
P250,000
15,000
10,000
6,000 FI
-
Determine the exclusions from gross income.
265,000
Problem 1
a)
F5,000,000
b)
Return of premiu
-
exclusion from gross
5,000,000
200,000
taxable
5,000,000 exclusion;200,000 interest
income
for gross
interest
income
Is taxable
C)
* 1,550,000
Total Proceeds
Return
premium
ROC
d)
500,000
I
Total Proceeds
Return
ROC
Problem
1,000,000
of
- -
#
premium
of
2
*
600,000
Total proceeds
1,000,000
Return of
Premium
#000
ROC
-
exclusion
Di
-
Problem 3
moral
450,000
damages
#
Reimbursement of hospital bills
70,000
20
Problem
4
500,000
2022:
(15,000)
(12,000)
*458,000
=
-
(9,000)
44,500
-
44,508
190,000)
-
↳
(6,000)
0
Walang babayaram
Problem 5
Gross Income
intereston
-
food
sales
promissory
* 250,000
15,000
notes
*
265,000