SOLUTIONS MANUAL
TRANSFER & BUSINESS TAXATION, 2019 Edition
By: TABAG & GARCIA
CHAPTER 1 – SUCCESSION & TRANSFER TAXES
TRUE OR FALSE
1. TRUE
6. TRUE
11. FALSE
16. TRUE
2. TRUE
7. FALSE
12. TRUE
17. FALSE
3. TRUE
8. FALSE
13. TRUE
18. TRUE
4. FALSE
9. TRUE
14. TRUE
19. TRUE
5. FALSE
10. FALSE
15. FALSE
20. TRUE
MULTIPLE CHOICE
1. D
12. C
23. D
34. D
45. B
2. A
13. C
24. B
35. B
46. C
3. D
14. B
25. D
36. B
47. D
4. C
15. D
26. D
37. D
48. D
5. C
16. C
27. B
38. B
49. A
6. A
17. B
28. D
39. D
50. B
7. B
18. D
29. A
40. D
51. A
8. A
19. C
30. D
41. B
52. D**
9. B
20. B
31. B
42. D
53. D
10. A
21. B
32. A
43. B
54. D
11. D
22. B
33. D
44. B
55. B
**Inheritance and repudiation takes effect upon death of the decedent
CHAPTER 2 – GROSS ESTATE
PROBLEM SOLVING
(P2.1)
(1) P19,300,000
(2) P19,300,000
(3) P11,000,000
Family home in the Philippines
Parcel land of with vacation house in Malaysia
Farm land in the Philippines
Shares of stock of a DC
Shares of stock of a foreign corporation the entire business of which
is in the Philippines, deposited in a bank safety deposit box in
Malaysia
Receivable from a friend who has no property whatsoever
(4) P14,300,000
Citizen/ Resident NRA with R NRA w/o R
(# 1 & 2)
(# 3)
(# 4)
P8,000,000 P8,000,000 P8,000,000
5,000,000
3,000,000
2,000,000
3,000,000
3,000,000
2,000,000
500,000
500,000
300,000
300,000
200,000
200,000
Receivables under insurance policies:
▪ Life insurance with his estate as revocable beneficiary
▪ Life insurance with his daughter as revocable beneficiary
▪ Life insurance with his son as irrevocable beneficiary
▪ Life insurance (group) taken by the employer of the decedent
TOTAL GROSS ESTATE
300,000
300,000
-
-
-
-
-
-
P19,300,000 P11,000,000 P14,300,000
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(P2.2)
To Juan
P25,000,000
To Pedro
18,000,000
To Maria
15,000,000
To Sisa
20,000,000
Total Gross Estate P78,000,000
(P2.3)
Shares of stock (Frozen Co.)
[(P8M+3M)/800,000sh x 100,000 shares P1,375,000
Shares of stock (Divergent Co..)
100,000 shares x P15**
1,500,000
Shares of stock (Lenovo Co..)
100,000 shares x P12
1,200,000
P4,075,000
***Mean value shall be used only if the quotation price at the date of death is not determinable (RR 2-2003)
(1)P230,0000; (2)P1,100,000; (3)P0; (4)P5,000,000; (5)P1M + [1M x (1M x 10% x 1.5)] = P1,150,000
Total Gross Estate
(P2.4)
MODIFIED IDENTIFICATION
EXERCISE A
1. Included
6. Excluded
2. Included
7. Excluded *
3. Excluded 8. Included **
4. Included
9. Excluded
5. Excluded 10. Included***
*Designated by the prior decedent
**Exclusions from the gross estate. Nonetheless, the tax code requires these items to be included first in the gross
estate before deducting the same from the gross estate.
*** Bequests to charitable institutions are considered exclusions from the gross estate only if the problem clearly states
that not more than 30% were used for administrative purposes. However, even if not more than 30% of the bequests
were used for administrative purposes, since whether or not such is exempt will undergo scrutiny first by the BIR, these
items shall be included first in the gross estate before deducting the same for estate tax purposes.
EXERCISE B
EXERCISE C
1. P0; valid sale
2. P0; valid sale
3. P0; valid sale
4. P4,000,000
5. P6,000,000
1. P10M
2. P20M
3. P5M
4. P10M
5. P0
TRUE OR FALSE
1. TRUE 6. FALSE 11. FALSE 16. TRUE
2. TRUE
7. FALSE 12. TRUE 17. TRUE
3. TRUE
8. FALSE 13. TRUE 18. FALSE
4. FALSE 9. TRUE 14. FALSE 19. TRUE
5. TRUE 10. TRUE 15. FALSE 20. FALSE
MULTIPLE CHOICE
1. A 16. D 31. C 46.
2. B 17. C 32. C 47.
3. D 18. B 33. B 48.
4. B 19. D 34. A 49.
C
D
C
C
61.
62.
63.
64.
A
A
A
C
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5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
C
C
A
B
A
A
A
B
D
A
C
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
A
D
A
A
B
C
C
C
C
D
B
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
B
B
D
B
B
C
C
C
B
B
B
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
B
D
D
C
C
C
B
D
C
C
A
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
D
B
A
C
C
D
C
A
D
D
Supporting Computations (Multiple Choice):
(22).
Common stock-Sunchamp [(P40+39)/2] x 2,000 shares
P79,000
Common stock – AgriNurture (1,500 shares x P45)
67,500
Preferred stock – Greenery (3,000 shares x P50 par value) 150,000
Car @ FMV
400,000
Real properties @ zonal value
120,000
Total Exclusion from the gross estate
P816,500
(23).
Bank deposit in the foreign branch of a domestic bank P500,000
Bank deposit in Makati branch of a foreign bank
300,000
Shares of stock issued by a domestic corporation
1,000,000
(certificate kept in Canada)
Franchise exercised in Manila
800,000
Receivable, debtor from Mindanao
200,000
Total Exclusion from the gross estate
P2,800,000
(24).
House and lot, family home in Quezon City
P1,500,000
Bank deposit in Makati branch of a foreign bank
300,000
Shares of stock issued by a domestic corporation 1,000,000
(certificate kept in Canada)
Franchise exercised in Manila
800,000
Receivable, debtor from Mindanao
200,000
Total Inclusion from the gross estate
P3,800,000
(26).
Shares of stocks, domestic corp. P250,000
(certificate kept in UK)
Shares of stocks, domestic corp.
100,000
(certificate kept in Phils.)
Franchise exercised in the Phils.
200,000
Receivables, debtor is from Phils.
50,000
Intangibles subject to reciprocity P600,000
(27).
Land & building, Philippines
P2,000,000
House and lot, Philippines
3,500,000
Shares of stocks, domestic corp. (certificate kept in UK)
250,000
Shares of stocks, domestic corp. (certificate kept in Phils.)
100,000
Franchise exercised in the Phils.
200,000
Receivables, debtor is from Phils.
50,000
Gross Estate
P6,100,000
(33).
​(P12M/100,000) x 1,000 shares = P120,000
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(34).
​P100 x 1,000 shares = P100,000;
(35).
​P110 x 1,000 shares = P110,000
(36).
​(P140 + P80/2) x 1,000 shares = P110,000
Par Value=P10M/100,000 = P100/share
(44).
Consideration FMV upon transfer FMV upon death Gross Estate
received
Land
P1,500,000
P1,500,000
P2,000,000 None. Valid sale
Shares of stock
100,000
50,000
150,000 None. Valid sale
Vintage car
50,000
80,000
100,000
P50,000
Painting
250,000
400,000
500,000
250,000
INCLUSION IN THE GROSS ESTATE
P300,000
(48).
P200,000
​Includible in the Gross Estate = FMV @ time of “+” less Consideration received = P300k-P100k =
CHAPTER 3 – DEDUCTIONS FROM THE GROSS ESTATE
PROBLEM SOLVING
(P3.1) (a) P2,500,000 computed as follows:
Loss due to shipwreck, two (2) months after the decedent’s death. P500,000
Robbery loss
P2,000,000
Allowable Deduction
P2,500,000
(b) P500,000 computed as follows:
Loss due to shipwreck, two (2) months after the decedent’s death. P500,000
Allowable Deduction
P500,000
(P3.2) P5,715,000 computed as follows:
Ordinary Deductions:
Claim against insolvent person (500,000-400,000)
Unpaid taxes on the estate before death
Unpaid mortgage on the estate
Funeral expenses (no longer allowed under TRAIN Law)
Judicial expenses (no longer allowed under TRAIN Law)
Unpaid loans arising from debt instruments (notarized)
Unpaid loans arising from debt instruments (not notarized). The debt
instrument was issued by a financial institution not requiring
notarizations for debt instruments issued
Casualty loss
Special Deductions:
Standard deduction
Medical expenses (no longer allowed under TRAIN Law)
Total Allowable deduction from the gross estate
(P3.3)
P100,000
150,000
200,000
125,000
75,000
65,000
5,000,000
P5,715,000
(Claim Against Insolvent Persons)
Case A: P100,000
Case B: P333,333 computed as follows:
Receivable
P500,000
Collectible portion (400/1,200) x 500,000 (166,667)
Deductible claim (Uncollectible portion) P333,333
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Case C: P0.
Debtor is not insolvent
Case D: P250,000
Total Assets
Taxes payable (Gov’t is a priority creditor)
Assets after deducting unpaid taxes
P1,200,000
(800,000)
P400,000
Receivable (CAIP)
P500,000
Collectible (400/800) x 500,000
(250,000)
Deductible Claim against Insolvent Persons P250,000
(P3.4) P200,000 computed as follows:
Uncollectible receivable from Juan P100,000
Uncollectible receivable from Manuel 100,000
Total
P200,000
(P3.5) P133,333 computed as follows:
Debtor’s Assets
P400,000
Taxes payable (Gov’t is a priority creditor)
(200,000)
Assets after deducting unpaid taxes
P200,000
Receivable (CAIP)
P200,000
Collectible (200/600) x 200,000
(66,667)
Deductible Claim against Insolvent Persons P133,333
(P3.6) P262,500 computed as follows:
Value to take
P937,500
st
(187,500)
1 Deduction: Mortgage paid
Initial basis
P750,000
nd
2 Deduction: Proportionate deduction
(750/4,500) x 562,500
(93,750)
Final Basis
P656,250
x Vanishing rate
40%
Vanishing Deduction
P262,500
(P3.7)
STANDARD DEDUCTION
CASE
A
B
C
D
E
P5,000,000
P5,000,000
P5,000,000
P500,000
P500,000
(P3.8)
FAMILY HOME
Case A: P0
Case B: P5,000,000
Case C: P0; exclusive property of the surviving spouse
Case D: P10,000,000
Case E: P12M/2 = P6,000,000
Case F: [ 5M + (5,000,000/2)] = P7,500,000
(P3.9)
Question 1: P7,308,013;
Question 2: P7,308,013;
(Decedent: Resident Citizen)
(Decedent: Resident Alien) (same computation with Q#1).
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Domestic shares of 2,000 shares inherited 6 years ago
P8,000,000
House and lot, family home, located in Davao, inherited 2 years ago
Jewelry items, in the Philippines at the time of death
2,000,000
400,000
Jewelry items kept in a vault abroad
200,000
Bank deposit in a Philippine branch of a U.S. bank
5,000,000
Interest from bank deposit (after death)
-
Transfer for Public Use (donation to the gov’t provided in his will)
250,000
GROSS ESTATE
P15,850,000
ORDINARY DEDUCTIONS:
Funeral expenses, Philippines
-
Judicial expenses, abroad
-
Judicial expenses, Philippines
-
Claims against the estate
120,000
Transfer for Public Use
250,000
Vanishing deductions
(Shares of stocks = None; House and Lot = Allowed)
1,171,987** (1,541,987)
SPECIAL DEDUCTIONS
Standard Deduction (TRAIN Law)
5,000,000
Family Home
2,000,000
Medical Expenses
-
RA 4917
NET TAXABLE ESTATE
Value to take
st
1 Deduction: Mortgage paid
Initial basis
nd
2 Deduction: Proportionate deduction
(1,500/15,850) x P370,000
Final Basis
x Vanishing rate
Vanishing Deduction
- (7,000,000)
P7,308,013
P1,500,000
P1,500,000
(35,016)
P1,464,984
80%
P1,171,987**
(P3.10)
Question No. 1
TFPU
P300,000
House and Lot in Makati (Family Home)
1,500,000
Farm Lot
Other real properties
Claim against insolvent person
Transfer in contemplation of death
Total Gross Estate
825,000
15,000,000
225,000
1,250,000
P19,100,000
Allowable Deductions
Funeral expenses
-
Judicial expenses
-
TFPU (correct amount)
(300,000)* *
Claim against insolvent person
(225,0000)**
Unpaid mortgage on farm lot
(75,000)**
Standard deduction
(5,000,000)
Medical expenses
Family Home
TAXABLE NET ESTATE
(1,500,000)
P12,000,000
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Question No. 2
Value to take
P575,000
Mortgage paid (P150,000-P75,000)
(75,000)
Initial Basis
500,000
Proportional deduction
(500/19,100) x 600,000**
(15,707)
Final Basis
484,293
Vanishing deduction rate
20%
Vanishing Deduction***
P96,859
NET ESTATE without VD (from Q#1)
P12,000,000
Vanishing Deduction***
TAXABLE NET ESTATE
(96,859)
P11,903,141
(P3.11)
Question No. 1
VALUE TO TAKE (LAND)
MORTGAGE PAID
INITIAL BASIS
P1,250,000
(50,000)
1,200,000
Proportionate Deduction:
(1,200/12,800 x P700,000**)
FINAL BASIS
(65,625)
P1,134,375
VANISHING DEDUCTION %
VANISHING DEDUCTION
40%
P453,750
Correct ELIT + TFPU:
=1,200k+100k-300k-600k+300k TFPU=P700,000***
Question No. 2
Gross Estate
Correct Losses, Indebtedness, Taxes (LIT)
P12,800,00
0
(400,000)
TFPU
(300,000)
Vanishing deduction
(453,750)
Standard deduction
(5,000,000)
Family Home
(2,000,000)
Medical expenses (repealed under TRAIN
Law)
Death benefits under RA4917
Net taxable estate
(200,000)
P4,446,250
TRUE OR FALSE
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1. TRUE
6. FALSE 11. TRUE 16. TRUE
2. TRUE
7. TRUE 12. FALSE 17. TRUE
3. TRUE
8. FALSE 13. TRUE 18. TRUE
4. TRUE
9. TRUE 14. FALSE 19. TRUE
5. FALSE 10. TRUE 15. TRUE 20. FALSE
MULTIPLE CHOICE
1. C 11. D 21. D 31. D
2. D 12. D 22. C 32. A
3. C 13. A 23. C 33. A
4. D 14. A 24. A 34. C
5. A 15. B 25. C 35. D
6. A 16. B 26. B 36. A
7. A 17. B 27. B 37. A
8. D 18. C 28. D 38. A
9. D 19. A 29. A 39. C
10. C 20. C 30. B 40. B
Supporting Computation (Multiple Choice):
(6.) A
Real property tax for the year 2017
P100,000
Notarized interest bearing promissory note
100,000
Accrued interest on the promissory note at the time of death 20,000
Income tax due for 2013
200,000
Allowable deductions
P420,000
(12). D
Income tax from practice of profession , 2017
P300,000
Income tax from practice of profession for Jan.-June, 2018 100,000
Real property taxes for 2016 and 2017
150,000
Business taxes for 2017
100,000
Deductible taxes
P650,000
(29). A
Value to take/Initial Basis
Mortgage paid
Initial basis
P900,000
(50,000)
850,000
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nd
2 Deduction:
(850/1,000 x P100,000**)
(85,000)
Final Basis
P765,000
x Vanishing rate
40%
VANISHING DEDUCTION P306,000
** Mortgage P150,000 – 50,000
(39). C
Gross Estate
P6,000,000
(Tangible property Phils.; with reciprocity)
Prorated LIT (1,200,000 x 6,000/10,000,000) (720,000)
Standard deduction
(500,000)
Taxable Estate
P4,780,000
(40). B
Shares, domestic corporation
P500,000
Tangible personal property
1,500,000
Gross Estate
2,000,000
Prorated LIT (500,000 x 2,000/2,500) (400,000)
Standard deduction
(500,000)
Taxable Estate
P1,100,000
TAX DUE
Estate Tax Due (P1.1M x 6%)
P66,000
CHAPTER 4 – PROPERTY RELATIONS
PROBLEM SOLVING
P4.1
ACP CPG
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
C
C
C
C
C
C
E
E
C
C
C
E
C
E
E
C
C
C
E
C
E
C
C
C
C
E
E
C (All fruits or income e are common property under CPG. Hence,
the property purchased shall be classified as common.
15. E E
P4.2
Absolute Community of Property (ACoP)
a) P12,400,000
b) P19,500,000
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c) P9,750,000
d) P17,150,000
Exclusive
Land inherited during marriage
Common
Total
P24,000,000
Other personal property owned before marriage
P16,000,000
Other personal property acquired during marriage
5,000,000
Total
Deductions:
P24,000,000 P21,000,000 P45,000,000
Casualty loss
(500,000)
Funeral expenses (no longer allowed under TRAIN Law)
-
Judicial expenses (no longer allowed under TRAIN Law)
-
Unpaid Taxes
(400,000)
Claims against the estate
(600,000)
Vanishing deduction**
(11,600,000)
(13,100,000)
Net estate before special deduction and share of the
surviving spouse
Standard deduction
P12,400,000 P19,500,000 P31,900,000
(5,000,000)
Medical expenses (no longer allowed under TRAIN Law)
-
Share of the Surviving Spouse (19,500,000/2)
(9,750,000)
NET TAXABLE ESTATE
P17,150,000
VANISHING DEDUCTION**
Value to Take/Initial Basis
Proportional Deduction (15,000/45,000 x P1,500,000)
Final Basis
P15,000,000
(500,000)
P14,500,000
x Vanishing Deduction %
Vanishing Deduction
80%
P11,600,000
Conjugal Partnership of Gains (CPG)
e) P28,400,000
f) P3,500,000
g) P1,750,000
h) P25,150,000
Exclusive
Land inherited during marriage
Other personal property owned before marriage
Total
P24,000,000
16,000,000
Other personal property acquired during marriage
Total
Deductions:
Common
5,000,000
P40,000,000 P5,000,000
Unpaid Taxes
P45,000,000
(400,000)
Claims against the estate
(600,000)
Casualty Loss
(500,000)
Funeral expenses
-
Judicial expenses
-
Vanishing deduction (same computation)
(11,600,000)
(13,100,000)
Net estate before special deduction and share of the
surviving spouse
Standard deduction
P28,400,000 P3,500,000
P31,900,000
Medical expenses
Share of the Surviving Spouse (3,500,000/2)
NET TAXABLE ESTATE
(5,000,000)
(1,750,000)
P25,150,000
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P4.3
Decedent: Non-resident alien
a) P1,621,396
b) P4,451,136
c) P3,346,964
d) P200,818
Exclusive Common
Exclusive properties, Phils.
Total
P2,000,000
Conjugal properties, Phils.*
P5,000,000 P7,000,000
LIT**
(548,864)
Vanishing Deductions ***
(178,604)
Transfer for Public Use ****
(200,000)
Net Estate
P1,621,396 P4,451,136 P6,072,532
Share of the Surviving Spouse (4,451,136/2)
(2,225,568)
Standard deduction
(500,000)
Net Taxable Estate
P3,346,964
x Estate Tax Rate
6%
Estate Tax Due
P200,818
*The problem is silent as to reciprocity, hence, the gross estate should include tangible and intangible properties within the
Philippines.
**LIT:
Funeral expenses
PJudicial expenses
Claim against the estate
1,725,000
TOTAL ELIT
P1,725,000
X
7,000/22,000
ALLOWABLE ELIT
P548,864
**VANISHING DEDUCTIONS:
Value to take
P500,000
st
1 Deduction: Mortgage paid
Initial basis
P500,000
nd
2 Deduction: Proportionate deduction
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(500/7,000) x (548,864 + 200,000)
Final Basis
x Vanishing rate
Vanishing Deduction
(53,490)
P446,510
40%
P178,604
​
****
Since the properties were already classified as exclusive and common, it should be assumed that the exclusive
properties were already inclusive of transfer for public use.
P4.4
​ (Decedent: Resident Alien; Single)
(a) Net Taxable estate = P49,500,000;
House and lot, USA *
(b)Estate tax due = P2,970,000
P20,000,000
Investment in stock, Philippines
8,000,000
Investment in stock, USA
10,000 000
Investment in bonds, USA
7,000,000
Cash in bank, Philippines
3,000,000
Cash on hand, Philippines
500,000
Claim against insolvent person (fully uncollectible)
2,000.000
Car, Philippines
8,000,000
Receivable under RA 4917
500,000
Devise to Quezon City for children’s playground**
700,000
Total Gross Estate
P59,700,000
Ordinary Deductions:
Funeral expenses
P-
Judicial expenses
-
Unpaid Philippine income tax for income in 2017
1,200,000
Loss on December 31, 2018 due to theft
800,000
Devise to Quezon City for children’s playground
700,000
Claim against insolvent person (fully uncollectible) *** 2,000,000 (4,700,000)
Special Deductions:
Standard deduction
(5,000,000)
RA 4917
500,000
Medical expenses
-
Net Taxable Estate
P49,500,000
Estate Tax Due (P49,500,000 x 6%)
P2,970,000
*Family home is not allowed as a deduction for single decedent
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**To be deductible, the legacy/devise should be included first in the decedent’s gross estate
***Assume the debtor is an insolvent person.
​(Decedent: Resident Alien)
P4.5
a) Vanishing deduction = P4,560,976
b) Net Taxable estate = P44,689,024
c) Estate tax due = P2,681,341
Exclusive
Land
Conjugal
Total
P30,000,000
House and Lot (Family Home)
P50,000,000
Other tangible personal properties
22,000,000
Claims against insolvent persons
500,000 P102,500,000
Ordinary deductions:
Other claims against conjugal properties
(5,000,000)
Claims against insolvent persons
(500,000)
Unpaid mortgage**
(3,500,000)
VANISHING DEDUCTION*
(4,560,976)
Net exclusive/conjugal
Special deductions:
(13,560,976)
P25,439,024 P68,500,000 P93,939,024
Standard deduction
(5,000,000)
Family Home
(10,000,000)
Medical expenses
-
Share of the surviving spouse
(34,250,000)
TAXABLE ESTATE
P44,689,024
Estate Tax Due (P44,689,024 X 6%)
P2,681,341
Value to take/Initial Basis***
P25,000,000
2nd Deduction: 25,000/102,500 x 9,000,000 (2,195,122)
Final Basis
P22,804,878
x rate
20%
Vanishing Deduction*
P4,560,976
** P7,000,000 – 3,500,000 = P3,500,000
***The amount paid on the mortgage should not be considered in computing the vanishing deduction because the amount pertains to a
mortgage entered into by Pedro during his lifetime. To be considered in computing the VD, the mortgage should have been assumed
on the property at the time of inheritance or donation.
TRUE OR FALSE
1. TRUE 6. FALSE 11. TRUE
2. TRUE
7. TRUE 12. TRUE
3. TRUE
8. TRUE 13. TRUE
4. TRUE
9. TRUE 14. FALSE
5. FALSE 10. FALSE 15. TRUE
MULTIPLE CHOICE
1. A
8. B
15. C
2. B
9. D
16. D
3. A
10. C
17. C
22. C 29. A
23. D 30. C
24. A
4. C
11. B
18. C
25. B
5. D
12. D
19. A
26. A
6. D
13. C
20. D
27. C
7. D
14. D
21. B
28. A
Supporting Computations (Multiple Choice)
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(No. 19 & 20)
Gross Estate (CPG):
Rest House in Batangas
Exclusive Conjugal
P2,500,000
Car
1,000,000
Commercial land
5,000,000
Income from the commercial land
500,000
Income from exclusive property of the spouse
Jewelry owned before the marriage
200,000
300,000
Other properties at the time of her death
Gross Estate
(No. 21 & 22)
Gross Estate (ACoP):
Rest House in Batangas
1,000,000
P8,800,000 P1,700,000
Exclusive Common
P2,500,000
Car
1,000,000
Commercial land
5,000,000
Income from the commercial land
Jewelry owned before the marriage
Other properties at the time of her death
Gross Estate
(No. 23)
Conjugal properties
Conjugal Deductions:
500,000
300,000
1,000,000
P2,500,000 P7,800,000
P20,000,000
Funeral and judicial expenses (no longer allowed)
Casualty losses
(3,500,000)
Unpaid taxes
(2,000,000)
Claim against the estate
(4,500,000)
Net Conjugal properties
P10,000,000
Divide
2
Share of the Surviving Spouse
P5,000,000
(No. 24)
Real property, Philippines
P7,000,000
Real property, USA
5,000,000
Funeral expenses
Judicial expenses
Claim against insolvent persons
(50,000)
Unpaid taxes
(50,000)
Balance
P11,900,000
Standard Deductions
(5,000,000)
Medical expenses
Family Home (P1,500,000/2)
(750,000)
Share of the surviving spouse (P11,900,000/2) (5,950,000)
Net Taxable Estate
P200,000
(No. 25)
Real property, Philippines
Real property, USA
Funeral expenses
Judicial expenses
P40,000,000
50,000,000
-
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Claim against insolvent persons
(5,000,000)
Unpaid taxes
(5,000,000)
Balance
P80,000,000
Share of the surviving spouse (P80,000,000/2) (40,000,000)
Standard Deduction
(5,000,000)
Medical expenses
Family Home (P15,000,000/2)
(7,500,000)
Net Taxable Estate
P27,500,000
(No. 26)
Exclusive
Conjugal real properties
Conjugal family home
Paraphernal properties
(excluded; exclusive of the surviving spouse)
Exclusive properties
P2,500,000
Total
Ordinary Deductions:
Common
Total
P7,000,000
5,000,000
P2,500,000 P12,000,000 P14,500,000
Funeral expenses
-
Unpaid taxes
-
Casualty losses (from excl.property)
(100,000)
Other losses (P1M x 75%)
Net Estate before Special Deductions
Special Deductions:
(750,000)
(850,000)
P2,400,000 P11,250,000 P13,650,000
Standard Deductions
(5,000,000)
Medical expenses
-
Family Home (5,000,000/2)
(2.500,000)
Share of the surviving spouse (P11,250,000/2)
(5,625,000)
Net Taxable Estate
(No. 27)
P525,000
​ABSOLUTE COMMUNITY OF PROPERTY
Exclusive
Properties-Land
Other personal property owned before marriage
Common
P2,400,000
1,600,000
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Other personal property acquired during marriage
Gross Estate
Vanishing deduction
500,000
P2,400,000 P2,100,000
(1,120,000)
Claim against the estate
(200,000)
Losses
(100,000)
Net conjugal before special deductions
P1,800,000
Share of surviving spouse (P1,800,000/2)
P900,000
​CONJUGAL PARTNERSHIP OF GAINS
(No. 28)
Exclusive Common
Properties-Land
Total
P2,400,000
Other personal property owned before marriage
1,600,000
Other personal property acquired during marriage****
Gross Estate
Ordinary Deductions
P500,000
P4,000,000 P500,000 P4,500,000
Claim against the estate
(200,000)
Losses
(100,000)
Vanishing Deductions*****
(1,120,000)
Net Estate Before Special Deductions
P2,880,000 200,000
Share of the surviving spouse (P200,000/2)
(100,000)
****If silent and unless the problem clearly illustrate that it is exclusive, assume the property is common.
Value to take
P1,500,0 00
st
1 Deduction: Mortgage paid
Initial basis
P1,500,000
nd
2 Deduction: Proportionate deduction
(1,500/4,500) x 300,000
Final Basis
x Vanishing rate
(100,000)
P1,400,000
80%
Vanishing Deduction
P1,120,000 *****
​
(No. 29)
Real property given as gift by his uncle
1,500,000
Land received as donation during marriage
500,000
Cash income from the real property received as gift
100,000
Total exclusive property
P2,100,000
​
(No. 30)
Real properties inherited before the marriage from his father who died 3 P500,000
years before the present decedent's death
House built on the inherited land using communal fund
Real properties received by the surviving spouse before the marriage
Real properties acquired by the spouses during the marriage
Claim against insolvent person
Personal properties acquired during the marriage
Total Community property
900,000
1,800,000
1,500,000
50,000
1,000,000
P5,750,000
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CHAPTER 5 – ESTATE TAX CREDIT AND DISTRIBUTABLE ESTATE
PROBLEM SOLVING
P5.1 One foreign country only:
a) Decedent is a resident citizen
Total Net Estate before special deductions
P10,000,000
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Less: Standard deduction
(5,000,000)
Net Taxable estate
P5,000,000
x Estate tax rate
6%
Estate tax due
P300,000
Less: Estate tax credit
Estate tax paid abroad
P200,000
vs. Limit (P4/10 x P300,000)
120,000
Allowed (lower)
(120,000)
Estate tax payable
P180,000
b) Decedent is a nonresident alien
Total Net Estate before special deductions (Phils. Only)
Less: Standard deduction
Net Taxable estate
x Estate tax rate
Estate tax payable (tax credit is not allowed to NRA
decedents
P6,000,000
(500,000)
P5,500,000
6%
P330,000
P5.2 More than one foreign countries:
Net Taxable Estate, world
P20,000,000
Estate Tax Due (P20M x 6%) P1,200,000
Estate tax credit **
(570,000)**
Estate tax payable
P630,000
Limit 1 (Per foreign country):
Canada: 8,000/20,000 x P1.2M
USA: 2,000/20,000 x P1.2M
Limit Actual Allowed
P480,00 P520,000 P480,000
120,000 90,000
90,000
P570,000
Limit 2 (all foreign countries):
10,000/20,000 x P1.2M
P600,000 P610,000
600,000
ALLOWED TAX CREDIT
(w/ever is lower between L1 and L2)
P570,000**
P5.3
Net Taxable Estate
P20,000,000
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Estate Tax Due (P20M x 6%)
P1,200,000
Estate tax credit**
(300,000)**
Estate tax payable after tax credit P900,000
Limit 1 (Per foreign country with tax payments only): Limit Actual Allowed
Singapore: 5,000/20,000 x P1,200,000
P300,000 P200,000 P200,000
China: not included in the determination of Limit 1
since there was no estate tax paid in China
Japan: 2,000/20,000 x P1,200,000
120,000 100,000 100,000
P300,000
Limit 2 (all foreign countries including China):
10,000/20,000 x P1,200,000
ALLOWED TAX CREDIT
P600,000 300,000 300,000
P300,000
P5.4
a) Net Taxable estate = P7,474,000
b) Estate tax due = P448,440
c) Net Distributable Estate = P11,731,560
House and lot (Family Home), USA
Cash in bank, USA
P8,000,000
650,000
Car, USA
2,000,000
Accounts receivable from an insolvent person in Quezon City
200,000
Investment in stock, Philippines
800,000
Parcel of land in Quezon City inherited from his father 2 ½ 1,000 000
years ago
Investment in bonds, foreign corporation**
700,000
Cash in bank, Philippines
450,000
Car, Philippines
800,000
Devise to Quezon City for children’s playground or TFPU***
1,400,000
Total Gross Estate
P16,000,000
Ordinary Deductions:
LITe:
Claim against the estate (Philippines)
P940,000
Unpaid Philippine income tax for 2016 and 2017
320,000
Loss on December 31, 2018 due to theft
180,000
Claim against insolvent person
200,000 (1,640,000)
TFPU
(1,400,000)
Vanishing Deduction
(486,000)
Special Deductions:
Standard deduction
(5,000,000)
Family Home in USA; (not allowed)
NET TAXABLE ESTATE
P7,474,000
Estate Tax Due (P7,474,000 x 6%)
P448,440
** Considered as Estate “within”
***To be deductible, the legacy/devise should be included first in the decedent’s gross estate;
Value to take/Initial basis
P1,000,000
nd
2 Deduction: Proportionate deduction
(1,000/16,000) x P1,640,000 + P1.4M (190,000)
Final Basis
P810,000
x Vanishing rate
60%
Vanishing Deduction
P486,000
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Total Gross Estate
P16,000,000
Deductions:
Actual funeral expenses
P480,000
Judicial expenses
300,000
Claim against the estate (Philippines)
940,000
Unpaid Philippine income tax for 2016 and 2017
320,000
Loss on December 31, 2018 due to theft
180,000
Claim against insolvent person
200,000
TFPU
1,400,000
Vanishing Deduction
No allowed
Standard deduction
Not allowed
Estate tax due
NET DISTRIBUTABLE ESTATE
448,440 (4,268,440)
P11,731,560
MULTIPLE CHOICE
1. C 5. A
2. C 6. C
3. D 7. B
4. C
Supporting Computations:
No.5
A
Net taxable estate
x Estate tax rate
Estate tax due
Less: Estate tax credit
P4,000,000
6%
P240,000
Limit = P1/4 x P240,0000 = P60,000 (60,000)
Actual tax paid abroad
= P80,000
Estate tax payable
P180,000
No. 6
C
Total net taxable estate P1,000,000
x Estate tax rate
6%
Estate tax
P60,000
Less: estate tax credit
NA
Estate tax payable
P60,000
No. 7 B
Gross Estate
Ordinary deductions - Philippines
(since the amount provided is P3M only, it shall be assumed that
such amount is exclusive of Standard Deduction and Family
Home)
Deductions - France
Net estate before special deductions
Less:
P20,000,000
(3,000,000)
(2,000,000)
P15,000,000
Share of the surviving spouse
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(P15M x 60% / 2)
Family home (P8M / 2)
Net taxable estate
x Estate tax rate
Estate tax due
Less: Tax credit
Limit: 4/6.5 x P390,000 = P240,000
Actual: P125,000
Estate tax payable
(4,500,000)
(4,000,000)
P6,500,000
6%
P390,000
(125,000)
P265,000
CHAPTER 6 – DONOR’S TAX
PROBLEM SOLVING
P6.1
QUESTION
TO
Abel
Jen
A
P800,000
3,000,000
B
P800,000
3,000,000
C
P800,000
3,000,000
Gore
250,000
250,000
250,000
Alexa
Earl
100,000
5,000,000
100,000
5,000,000
100,000
5,000,000
D
P800,000
E
P800,000
250,000
-
100,000
Hananiah
1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
Chen
100,000
100,000
100,000
100,000
Kristine
100,000
100,000
100,000
Gavrie
500,000
500,000
500,000
500,000
500,000
Land 1**
Land 2***
Land 3****
5,000,000 5,000,000 5,000,000
Car
200,000
200,000
200,000
200,000
200,000
GROSS GIFT P16,550,000 P16,550,000 P16,550,000 P3,000,000 P3,450,000
*The question is “gross gifts”, hence, disregard the mortgage.
**Sale of Land #1 is a transfer with insufficient consideration. However, unlike in Estate Taxation, Transfer
with insufficient consideration for donor’s tax purposes is not taxable if the property donated is a real property
classified as capital asset subject to capital gains tax.
*** Sale of Land # 2 is considered bona fide or valid sale.
****Sale of Land #3 is a transfer with insufficient consideration. Nonetheless, the sale is subject to donor’s tax
because the property was not subjected to capital gains tax. Capital gains tax on real properties are applicable
only on sale of real properties classified as capital assets located in the Philippines.
P6.2
ITEM
Q#A
Q#B
A
P4,500,00 P4,500,00
B
1,000,000
C
1,500,000
D
2,000,000
E
3,000,000 3,000,000
F
500,000
Car, Alabang
200,000
200,000
Car, Malaysia
200,000
Land Cebu
GROSS GIFT P12,900,000 P7,700,000
P6.3
(a) None; subject to CGT, not donor’s tax
(b) CGT = P2.5M x 6% = P150,000
(c) Donor’s tax = [(P2.5M – P1.5M) – 250,000] x 6% = P45,000 TRAIN Law
(d) CGT = P0
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P6.4
(a) Donor’s Tax = [(P850,000 – 400,000) – 250,000] x 6% = P12,000
(b) CGT = P0; the shares were sold at a loss.
(c) Donor’s Tax = P0; exempt from donor’s tax under the TRAIN Law
(d) CGT = P0; the shares were sold at a loss.
P6.5 – Donations were made after the effectivity of TRAIN Law
a) March 1 = Exempt
b) May 30 = P21,000
c) June 30 = P90,000
d) July 31 = P0; exempt
e) September 30 = P447,200
Solution:
Gross Gifts – March 1
P200,000
Less: Tax exempt gift
(250,000)
Net taxable gift
P-
Donor’s Tax Due/ Payable – March 1 Exempt
Gross gift – May 30
P500,000
Less: Mortgage assumed by the donee
(100,000)
Add: Prior net gift
200,000
Total Gifts as of May 30
P600,000
Less: Tax Exempt gift
(250,000)
Taxable gift – May 30
P350,000
x
Donor’s Tax Due
Less: Tax paid
Donor’s tax payable-May 30
Gross gift – June 30
Add: Prior net gift
Total gifts as of June 30
6%
P21,000
P21,000
P300,000 Apply cumulative rule regardless of the
relationship between the donor and the donee
600,000
900,000
Less: Tax Exempt gift
(250,000)
Taxable gift – June 30
P650,000
x
6%
Donor’s Tax Due
P39,000
Less: Tax paid as of May 30
(21,000)
Donor’s tax payable-June 30
P18,000
Gross gift – September 30
P3,000,000
Less: Mortgage assumed by the donees (600,000)
Add: Prior net gift
Total gifts as of June 30
900,000
P3,300,000
Less: Tax Exempt gift
(250,000)
Taxable gift – Sept. 30
P3,050,000
x
Donor’s Tax Due
Less: Tax paid as of June 30
Donor’s tax payable-Sept. 30
6%
P183,000
(39,000)
P144,000
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P6.6 – Donations were made before and after effectivity of TRAIN Law
1) March 30, 2018 = P0
2) May 25, 2018 = P0, exempt
Solution
March 30, 2018
Gross gift
P100,000
(250,000)
Less: Tax exempt gift
Taxable net gift
P-
May 25, 2018
Gross gift - church
P200,000
Deductions
(200,000)
Add: Prior net gift
100,000
Less: Tax exempt gift
(250,000)
Taxable gift
P0
Tax Due
P0; exempt
P6.7
1) June 6, 2018 = P0; exempt
2) October 8, 2018 = P2,160
3) November 4, 2018 = P240
June 6, 2018
Husband
Gross Gift (P460k + 20K)/2 P240,000
Mortgage assumed
Net gift
Wife
(2,000)
(2,000)
P238,000
P238,000
Less: Tax exempt gift
(250,000)
(250,000)
Net Taxable gifts – June 6
(P12,000)
(P12,000)
P0
P0
Donor’s Tax Payable
October 8, 2018
Husband
Gross Gift
P30,000
Wife
Total
-
Prior Net Gift
238,000
238,000
Total net gifts
P268,000
P268,000
Less: Tax exempt gift (250,000)
(250,000)
P18,000
P18,000
x6%
x6%
P1,080
P1,080
-
-
Tax Paid-June 6
Donor’s Tax Payable
P0
P30,000
Dowry
Donor’s Tax Due
Total
P240,000
P1,080
P1,080 P2,160
November 4, 2018
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Husband
Gross Gifts (charitable org.; exempt)
Tax exempt gift
Taxable gift
Total
P-
P-
2,000
2,000
268,000
268,000
(250,000)
(250,000)
P20,000
P20,000
To a family friend
Prior net gifts
Wife
@6%
@6%
Donor’s Tax Due
P1,200
P1,200
Less: Donor’s tax paid
(1,080)
(1,080)
Donor’s Tax Payable
P120
P6.8 (1)P6,000
(2)P0
(3)P36,000
P120 P240
(4)P30,000
Feb. 15, 2018
Mr.Macariola Mrs.Macariola Total
Gross Gifts
Mortgage assumed
P200,000
P200,000
(50,000)
(50,000)
Net Gift
P150,000
P150,000
Less: Exempt gift
(250,000)
(250,000)
Net Taxable gift
Donor’s Tax Due
P-
P-
P0; exempt
P0; exempt
P-
March 30, 2018
Mr.Macariola Mrs.Macariola Total
Gross Gifts
P200,000
Prior net gift
150,000
Net gift
P350,000
Less: Tax exempt gift
(250,000)
Net Taxable Gift
P100,000
Donor’s Tax Due @ 6%
P-
6,000
Donor’s tax paid
-
Donor’s Tax Payable
P6,000
P6,000
June 1, 2018
Mr.Macariola Mrs.Macariola Total
Gross Gifts
Prior net gift
Net gift
Less: tax exempt gift
P-
P100,000
150,000
250,000
(250,000)
Net Taxable gift
P0
Donor’s Tax Due
P0
P0
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October 12, 2018
Mr.Macariola Mrs.Macariola Total
Gross Gifts (P400k+P400k)/2
P400,000
P400,000
Less: Mortgage assumed
(50,000)
(50,000)
Prior net gift
350,000
250,000
Net gift
P700,000
P600,000
Less: tax exempt gift
(250,000)
(250,000)
Net Taxable Gift
P450,000
P350,000
x
Donor’s Tax Due
6%
6%
P27,000
P21,000
Less: Donor’s Tax Paid
(6,000)
Donor’s Tax Payable
P21,000
(6,000)
P15,000 P36,000
October 12, 2018 - CLIFFORD
Gross gift
P100,000
Less: Tax exempt gift
(250,000)
Net Taxable gift
P0
Tax Due
P0; exempt
TRUE OR FALSE
1. TRUE 7. FALSE
2. TRUE 8. TRUE
3. FALSE 9. FALSE
4. TRUE 10. FALSE
5. TRUE 11. TRUE
6. TRUE 12. FALSE
MULTIPLE CHOICE
1. A
13. C
13.
14.
15.
16.
17.
18.
FALSE
FALSE
FALSE
FALSE
FALSE
FALSE
19.
20.
21.
22.
23.
24.
TRUE
FALSE
FALSE
FALSE
FALSE
TRUE
25. D
37. B
2. A
14. D
26. D
38. C
3. C
15. B
27. B
39. D
4. C
16. D
28. D
40. A
5. B
17. A
29. D
41. B
6. D
18. B
30. B
42. C
7. D
19. C
31. A
8. D
20. B
32. A
9. D
21. C
33. B
10. C
22. A
34. A
11. D
23. D
35. B
12. A
24. C
36. B
25.
26.
27.
28.
29.
30.
TRUE
TRUE
FALSE
TRUE
FALSE
FALS E
Supporting computation:
No. 27.
Gross Gifts (5M/2)
P2,500,000
Less: Tax Exempt Gift (250,000)
Net taxable gift
P2,250,000
No. 30 and 31. TRAIN Law
Net gift – Feb. 29
P500,000
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Less: Donation to the government (P500,000)
Net taxable gift – Feb. 29
P-; exempt
Gross gift April 1
Mortgage assumed by the donee
Net Gift
Less: Tax exempt gift
Net Taxable Gift
Donor’s Tax Due @ 6% (#30)
P1,000,000
(500,000)
P500,000
(250,000)
P250,000
P15,000,
Net gifts, May 31
P5,000,000
PNG-April 1
500,000
Cumulative Net gift, May 31
P5,500,000
Less: Tax exempt gift
(250,000)
Net taxable gift
P5,250,000
x
6%
Total
P315,000
Less: Donor’s tax paid April 1
(15,000)
Donor’s tax payable, May 31 (#31) P300,000
No. 32. TRAIN LAW
Net gifts of the spouses, March 1 P500,000
Divide by
2
Net gift, Mr. Mapagbihay, March 1 P250,000
Tax exempt gift
(250,000)
Taxable net gift, Mr. Mapagbigay
P0
Donor’s Tax Due, Mr. Mapagbigay
P0
No. 33.
Net gifts of the spouses, May 1
P400,000
Add: Prior net gift, March 1
500,000
Cumulative net gift
P900,000
Divide by
2
Cumulative Net gift, Mrs Mapagbigay P450,000
Less: Tax exempt gift
(250,000)
Cumulative taxable net gift
P200,000
x
6%
Donor’s tax due
P12,000
Less: Donor’s tax paid, March 1
Donor’s Tax Payable
P12,000
No. 34.
Mr.
Mrs.
Total gifts of the spouses (P1.1M/2) P550,000 P550,000
Less: Exempt gifts
(250,000) (250,000)
Net Taxable gift
P300,000 P300,000
x
6%
6%
Donor’s tax due per spouse
P18,000 P18,000
Total donor’s tax due of the spouses
P36,000
No. 35. TRAIN LAW
Gross gift-Jan. 24
Mortgage assumed by the donee
Net gift
Less: tax exempt gift
Taxable Net Gift
P2,000,000
(500,000)
P1,500,000
(250,000)
P1,250,000
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Donor’s Tax Rate (TRAIN Law)
Donor’s tax due/payable
6%
P75,000
No. 36. TRAIN LAW
Net gift-Nov. 30
P4,500,000
Net gift-Jan. 24
1,500,000
Cumulative Net gift
P6,000,000
Less: tax exempt gift
(250,000)
Taxable Net Gift
P5,750,000
Donor’s Tax Rate (TRAIN Law)
6%
Total donor’s tax due
P345,000
Less: Donor’s tax paid-Jan. 24
(75,000)
Allowable Donor’s tax credit:
(258,750)
Limit = 4.5/6 x P345,000 = P258,750
Vs. Actual = 400,0000
Donor’s tax due/payable
P11,250
CHAPTER 7 – BUSINESS TAXES
MULTIPLE CHOICE
1. A 6. B 11. C 16. C
2. D 7. C 12. B 17. D
3. D 8. D 13. C 18. D
4. D 9.. C 14. A 19. A
5. D 10. D 15. D 20. D
CHAPTER 8 – VALUE ADDED TAX
PROBLEM SOLVING
P8.1
Residential Units:
Case A OPT
Case B Exempt
Case C Exempt
Case D Vat
Commercial Units:
Case E Vat
Case F OPT
Case G OPT
Case H Vat
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P8.2
Case A X Case E V
Case I V
Case B X Case F X
Case J X (OPT)
Case C V Case G V (0%)
Case D V Case H V
P8.3
a) nil
b) Vat Payable = P134,400 x 3/28 = P14,400
c) Vat Payable = OV P201,600 x 3/28 – Input Vat P14,400 = P7,200
d) nil
P8.4
Cash Sales
P660,800
Sales on account
246,400
Transactions deemed sale (22,400+16,800+19,040+8,960) 67,200
Total sales subject to vat
P974,400
x
3/28
Output Vat
P104,400
Less: Input vat (P291,200 x 3/28)
(31,200)
Vat Payable
P73,200
P8.5
OUTPUT:
Sales (P8M – 400,000) x 12%
P912,000
Sales from consignment (March and Feb.)
(20+10) x P10,000 x 12%
Transactions deemed sales
January 8 consignment (20 x P10,000) x 12%
Goods withdrawn
36,000
24,000
6,000
Goods taken as payment to creditors
INPUT VAT
Purchase of goods, supplies, freight/insurance)
Capital goods (P1,100,000 x 12%) / 48 mos.
VAT PAYABLE
3,600 P981,600
82,080
2,750 (84,830)
P896,770
P8.6
Sale of school supplies
P1,680,000
Sale of gift items
1,008,000
Sales subject to output vat
P2,688,000
x
3/28
Output Vat
P288,000
Less:
▪ Input vat on purchases directly attributable to vatable sales
(Purchase of school supplies and gift items)
P1,344,000 x 3/28
P144,000
▪ Input vat on purchases attributable to vatable and nonvatable
sales (Purchase of computers)
P448,000 x 3/28 x (2,400/3,600)**
P32,000
▪ Purchase of office supplies used in vatable and non-vatable
transactions from non-vat registered suppliers
Vat Payable
nil (176,000)
P112,000
**Total Vatable Sales net of vat = P2,400,000
Non-vatable sales = P1,200,000
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Total Sales, net (vatable and non-vatable) = P3,600,000
P8.7
Output Vat (P896,000 x 3/28)
P96,000 Note:
Less: Input vat
▪ P224,000 x 3/28
▪ P112,000 x 3/28 x 80%
▪ P2,240 x 3/28 x 80%
Vat Payable
The input vat on capital goods is not amortized because the
acquisition cost is not more than P1M.
(24,000)
(9,600) The ratio of vatable sales to total sales = 80%
(192)
P62,208
​
P8.8
(a)
Total Input Vat (P374,000 + 69,848 + 154,000 + 55,000) x 3/28 = P69,948
(b)
Output vat (P330,000 + P274,996) x 3/28
P64,821
Less: Input vat (P374,000 + 69,848 + 154,000) x 3/28 (69,984)
Vat Payable
(P5,163)
Note:
▪ Sale to export oriented enterprise is considered is subject to 12% vat under the TRAIN Law.
▪ The input vat on purchase of goods intended for export may be refunded, deducted from output vat or
converted to a tax credit certificate.
​
P8.9
(a) P28,800
(b) P12,600
Output Vat (P350,000 x 12%)
P42,000
Less:
▪ Input vat on importation:
CIF (cost, insurance, freight) value
P229,195
Charges/expenses incurred in claiming the goods:
Wharfage
1,540
Arrastre
2,295
Customs duty
4,090
Brokerage fee and documentary stamps
Facilitation expense = bribe; illegal payment; not included
in the computation
Marine cargo insurance
Total
330
2,550
P240,000
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x
​(28
12%
,800)
(600)
▪ Input vat on Freight from customs to warehouse
Vat Payable
P12,600
​
P8.10
(a)
st
1 Quarter Output Vat (P3M x 12%)
INPUT VAT:
P360,000
Purchases (P1.2M x 12%)
(144,000)
Purchase of machinery (P2.5M x 12%) / 36 x 3mos. (25,000)
Unused input vat as of end of 2017
(125,000)
Vat Payable
P66,000
(b)
nd
2 Quarter Output Vat (4.8M x 12%)
Input Vat
P576,000
Purchases (P3M x 12%)
(360,000)
Unused input vat on capital goods (P2.5M x 12%-25,000) (275,000)
Excess Input vat
(P59,000)
​
P8.11
Output vat (P336,000 x 12%)
Input vat:
On purchases (P112,000 x 3/28)
Transitional input vat:
P40,320
(12,000)
Higher between 2% of beg. Invty vs. P10,000 (10,000)
Vat Payable
P18,320
P8.12
​
(a) P3,400
(b) P80,000
Output vat (P800,000 x 12%)
Less: Input Vat
P96,000
Presumptive I.V (P85,000 x 4%)
(3,400)
Purchased of olive oil (P67,200 x 3/28)
(7,200)
Purchased of can containers (P25,000 x 12%))
(3,000)
Payments for paper labels (P12,000 x 12%)
(1,440)
Purchased of cardboard for boxes (P8,960 x 3/28) (960)
Payments for hauling services
nil
Vat Payable
P80,000
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​
P8.13
Output vat (672,000 x 3/28)
Less: Input Vat
P72,000
Purchased of bottles (P22,400 x 3/28)
(2,400)
Purchased of can containers (P50,000 x 12%)
(6,000)
Payments for paper labels (P5,600 x 3/28)
(600)
Purchased of cardboard for boxes (P3,360 x 3/28) (360)
Payments for hauling services (P60,000 x 12%)
(7,200)
Vat Payable
P55,440
The taxpayer (processor of fruits) is not entitled to presumptive vat
​
P8.14
Subject to Value Added Tax
Hotel rooms (P1.8M x 12%)
Dining Hall:
P216,000
Sale of food and refreshments (P2.2M x 12%)
264,000
Sale of wine, beer and liquor (P950,000 x 12%)
Other revenues (P700,000 x 12%)
114,000
84,000
Subject to Percentage Tax (Amusement Tax)
Disco:
Sale of food and refreshments (P1.6M x 18%)
Sale of wine, beer and liquor (P1.2M x 18%)
TOTAL BUSINESS TAXES
288,000
216,000
P1,182,000
​
P8.15
OUTPUT VAT based on collections
(15M + 10M + 5M)
P3,600,000
INPUT VAT on purchases from:
Alpha (P12M – 1.2M) x 12%
Bravo (non-vat reg.)
Charlie (P4M – 1M) x 12%
Delta (P2M x 12%)
Vat Payable
(1,296,000)
(360,000)
(240,000)
P1,704,000
​
P8.16
Output vat ((P4M – 2.5M) x 12% P180,000
Less: input vat (P800,000 x 12%) (96,000)
Vat Payable
P84,000
P8.17
​
Ratio of Initial Payment over Selling Price:
Lot A = 50/250 = 20% ; Installment Sale
Lot B = 70/200 = 35%; Deferred Sale; Treated as Cash Sale
Lot C = 60/300 = 20%; Installment Sale
Nov. 2018 Dec. 2018
Lot A: P25,000 x 12%; P25,000 x 12%
Lot B: P200,000 x 12%
Lot C: P40,000 x 12%; P20,000 x 12%
P3,000
24,000
4,800
P3,000
2,400
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Vat Payable
P31,800
P5,400
​
P8.18
a) Output vat September 2018 = P3M x 12% = P360,000
The sale is a Deferred sale. Ratio of initial payments over SP is 30%.
b) Output vat January 2019 = P0
​
P8.19
Room charges
P1,000,000
Laundry services
25,000
Food and beverages
1,500,000
Corkage
15,000
Handling charges for providing telephone,
4,500
telex, cable or fax services
Cake shop sales
80,000
Total
P2,624,500
Vat rate
12%
Output Vat for the month
P314,940
TRUE OR FALSE
SET A
1. T 6. F 11. F 16.
2. F 7. F 12. F 17.
3. F 8. F 13. F 18.
4. T 9. T 14. F 19.
5. T 10. T 15. F 20.
T
F
F
T*
T
21.
22.
23.
24.
25
F
F
T
F
T
SET B
1. T 6.
2. T 7.
3. T 8.
4. F 9.
5. F 10.
T
T
T
F
F
21.
22.
23.
24.
25
T
T
T
T
F
61.
62.
63.
64.
65.
66.
67.
68.
C
B
C
D
A
C
B
D
F
F
F
T
F
11.
12.
13.
14.
15.
F
F
T
F
T
16.
17.
18.
19.
20.
MULTIPLE CHOICE
1. D 21. C
41. B
2. C 22. A
42. C
3. A 23. C
43. D
4. D 24. D*
44. D
5. D 25. C
45. B
6. D 26. C** 46. D
7. D 27. B*** 47. D
8. D 28. B
48. C
9. A 29. C
49. C 69. A
10. C 30. B
50. D 70. D
11. C 31. B
51. B 71. D
12. A 32. D
52. C 72. A
81.
82.
83.
84.
85.
86.
87.
D
A
B
C
C
C
D
13. A 33. A**** 53. B 73. D
14. D 34. B
54. D 74. B
15. C 35. B
55. D 75. C
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16. C 36. B
56. C 76. D
17. A 37. B
57. A 77. C
18. D 38. B
58. A 78. D
19. D 39. C
59. C 79. C
20. D 40. A
60. A 80. B
Supporting Computations/explanations:
​
No. 12
“III” is exempt only if contribution per member is not more than P15,000.
No. 20
Output Vat (P2,805,500 +P1,524,000) x 12% P519,540
Input vat (P1,102,200+P1,012,500) x 12% (253,746)
Vat Payable
P265,780
No. 21
rd
Output Vat, 3 quarter (P150,000 x 12%) P18,000
rd
Input vat, 3 quarter (P120,000 x 12%) (14,400)
Deferred input vat – previous quarter
(6,000)
Vat Payable (Carry-over)
(P2,400)
No. 24
No. 26
No. 27
No. 33
*No longer considered as export sale under the TRAIN Law.
**Letter “C” only on the assumption that the problem is pertaining to sale prior to the effectivity of the TRAIN Law.
***Letter “B” is no longer considered export sale upon \the effectivity of the TRAIN Law.
***Change Letter A to “II and IV only”. Items II and IV are subject to VAT under the TRAIN Law.
No. 37
AR, July 1
P180,000
Billings, July-Sept.
850,000
AR, Sept. 30
(120,000)
Collections
P910,000
Output vat @ 12%
109,200
Input vat on purchases @ 12% (57,600)
Vat Payable
P51,600
No. 38
Output vat (P5.5M x 12%) P660,000
Input vat on materials
(180,000)
Vat Payable September P480,000
No. 39
Output vat (P10M x 12%) P1,200,000
Input vat on materials
(480,000)
Input vat on capital goods (36,000)
(P3Mx12%) /60 mos.
Vat Payable June 30
P684,000
No. 41
Sales, shares held as inventory P5,000,000
Cos of shares, held as inventory (2,000,000)
Gross income
Vat rate
3,000,000
12%
Output vat
P360,000
Les: Input vat
Supplies expense
12,000
Rent expense
24,000 (36,000)
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Vat payable
P324,000
No. 49
Domestic sales (P600,000 x 12%)
Add: Transaction deemed sales
P72,000
Jan. 4 consignment (P200,000 x 12%)
24,000
Goods consumed on Fe. 27 (P50,000 x 12%)
6,000
Property dividends (P150,000 x 12%)
18,000
Total Output Vat
P120,000
No. 66 & 67
Output vat (P592,480 x 3/28)
P63,480
Less: Input Vat
Purchases of goods (P100,000 x 12%) P12,000
Purchases of services (P20,000 x 12%)
Transitional input vat
VAT Payable
2,400
4,800 (19,200)
P44,280
No. 72
Output Vat for October 2014 = P3M x 12 = P360,000
❖ Ratio of Initial Pay’t over Gross S.P. = P900,000/P3,000,000 = 30%
❖ If initial payment is more than 25% of Selling Price, the sale is classified as Deferred Sale which is treated as Cash
Sale. Therefore, the entire output vat is due on the month of sale.
No. 73
Output Vat for 2018 = P0;
The entire output vat was paid in 2017
No. 74
Downpayment
P112,000
st
112,000
1 installment payment
Total (vat inclusive)
224,000
Less: VAT (P224,000 x 3/28)
(24,000)
Initial Payment (exclusive of vat)
P200,000
Divide by contract Price (P1,120,000 x 3/28) 1,000,000
Ratio of Initial Payment over SP
20%
Output vat for 2017 (P200,000 x 12%)
P24,000
No. 75
VAT ON CASH SALE:
(ZV is higher than SP) (P600,000 x 12%)
P72,000
VAT ON DEFERRED SALE:
(Ratio of Initial payment over SP > 25%
36,000
(Deferred Sale)
(Treated as cash sale; SP is higher than FMV)
[(P336,000/1.12) x 12%]
TOTAL OUTPUT VAT
No. 78 and 79
Output vat (P336,000 x 3/28)
P108,000
P36,000
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Input vat (56,000 + 11,200) x 3/28 x 300/500 (4,320)
Vat Payable
P31,680
No. 80
OUTPUT VAT (P896,000 x 3/28)
INPUT VAT
P96,000
Purchases of goods, vat business, vat included
(P224,000 x 3/28)
MIXED Transactions:
(24,000)
Purchases of supplies, for vat & non vat business
[(112,000 x 3/28) x (800,000/1,000,000)]
(9,792)
Purchase of depreciable asset, for use in vat and non vat business
[(P2,240 x 3/28) x (800,000/1,000,000)]
VAT PAYABLE
P62,208
No. 81 and 82
OUTPUT VAT
Domestic sales (P330,000 + P274,996) x 3/28
P64,821
Export sales (zero rated)
0
INPUT VAT
Purchases of goods, supplies and services for domestic sales and for export (374,000 +
69,848 + 154,000 + 55,000) x 3/28
Vat Payable
(69,948)
(P5,127)
No. 83
Raw Materials (P560,000 x 3/28) x 400,000/1M
P24,000
Supplies (P448,000 x 3/28) x 400,000/1M
19,200
Equipment (P300,000 x 12% x 400,000/1M)
14,400
INPUT VAT ATTRIBUTED TO EXPORT SALES P57,600
CHAPTER 9 – OTHER PERCENTAGE TAXES
PROBLEM SOLVING
​
P9.1
1. A
2. F
3. F
4. A
11. A 21. A 31. C 41. A
12. A 22. A 32. A 42. F
13. A 23. A 33. A 43. A
14. A 24. C 34. A
5. A 15. A 25. C 35. B
6. F 16. F 26. C 36. F
7. C* 17. C 27. F 37. A
8. C* 18. C 28. F 38. F
9. C* 19. A 29. A 39. A
10. A 20. C 30. C 40. E
*#7 to #9: Assume the taxpayer is domestic common carrier by land. It is subject to OPT under Section 117.
#7-9: It is subject to OPT under Section 116
#18: Subject to Section 118 as to its cargo operations only
​
P9.2
1) 3% OPT on vat exempt sales (GR<3,000,000 & non-vat registered) =P1,275,000 x 3% = P38,250
2) Business Tax Due = P0; The taxpayer opted to be taxed at 8% (qualified) which is in lieu of the Basic Income Tax
Due and Business Tax Due under Section 116 of the Tax Code, as amended under TRAIN Law.
P9.3
​
1) Gross sales/receipts and other non-operating income = P1.8M + (570,000/95%) = P2.4M
Business Tax = P2.4M x 3% under Sec. 116 = P72,000
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2) Business Tax Due = P0; The taxpayer opted to be taxed at 8% (qualified) which is in lieu of the Basic Income Tax
Due and Business Tax Due under Section 116 of the Tax Code, as amended under TRAIN Law.
3) VAT = P2.4M x 12% = P288,000
​
P9.4
1) Gross sales/receipts and other non-operating income = P1,275,000
Business Tax = P1,275,000 x 3% under Sec. 116 = P38,250
The compensation income is not subject to business tax.
2) Business Tax Due = P0; The taxpayer opted to be taxed at 8% (qualified) which is in lieu of the Basic Income Tax
Due and Business Tax Due under Section 116 of the Tax Code, as amended under TRAIN Law.
​
P9.5
Gross receipts-passenger operations by land P240,000
(P8,000,000 x 3% CCT)
Gross receipts cargo operations
450,000
(P5M x 75% x 12%vat)
Rentals (P2M x 12%vat)
240,000
Total business taxes
P930,000
The basis of business tax in this particular problem shall be collections because the taxpayer is engaged in sale of
services.
​
P9.6
1) Taxpayer is non-vat registered
Gross receipts
P2,400,000
Add: AR, beginning
500,000
Less: AR, end
(600,000)
Collections
2,300,000
x
3%
Business Taxes under Sec.
P69,000
116
The basis of business tax in this particular problem shall be collections because the taxpayer is engaged in sale of
services.
The taxpayer is non-vat registered and the total gross receipts ≤ P3,000,000, hence, subject to 3% OPT under
Section 116 of the Tax Code, as amended.
2) Taxpayer is vat registered
Gross receipts
P2,400,000
Add: AR, beginning
500,000
Less: AR, end
(600,000)
Collections
2,300,000
x
12%
Business Taxes under Sec.
P276,000
116
The basis of business tax in this particular problem shall be collections because the taxpayer is engaged in sale of
services.
Although the total gross receipts ≤ P3,000,000, the taxpayer is vat registered. Hence, subject to 12% vat
P9.7
​
1) Income tax due = P400,000
▪ GR Passenger operations-Phils.
▪ GR cargo operations-Phils.
Total
GPB rate
Income Tax Due
P10,000,000
6,000,000
16,000,000
2.5%
P400,000
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2) Income tax due using preferential tax rate of 2% per treaty = P320,000
▪ GR Passenger operations-Phils. P10,000,000
6,000,000
▪ GR cargo operations-Phils.
Total
GPB rate
Income Tax Due
16,000,000
2%
P320,000
3) Business tax due = 3% CCT on cargo operations originating in the Philippines
= 3% x P6M = P180,000
​
P9.8
1. P0. Not subject to business tax but subject to a capital gains tax of P7,500.
[(5,000 sh. X P50) – P200,000 = P50,000 capital gain x 15%CGT under TRAIN Law = P7,500 CGT
2. P0. Not subject to business tax as well as income tax (CGT). The transaction resulted to a loss amounting to
P75,000, hence, not subject to CGT.
Purchase Price = P50/share; S.P.=P35/share; Loss = P15/share
3. Subject to P6,000 value added tax
4.
5.
P9.9
[(5,000 sh. X P50) – P200,000 = P50,000 capital gain x 12% = P6,000
A dealer in securities is subject to 12% value added tax based on gross income
Subject to OPT (stock transaction tax) of P720 computed as follows:
P120,000 x .006 (TRAIN Law) = P720
OPT = 5,000 shares x P18 x .006 = P540
​
1. P3,000 OPT.
2. P120 OPT.
P9.10
ratio=10/35=28.5%; IPO rate= 2%; Tax due on=P150,000 x 2% = P3,000
P20,000 x .006 = P100
​
1. P1,053,000 OPT (amusement tax).
P5,850,000 x 18% = P1,053,000
2. P720,000 OPT.
P4M x 18% = P720,000
3. P55,500 OPT.
P1,850,000 x 3% = P55,500
4. P198,000 VAT.
(P1850,000 x 12%) – (P224,000 x 3/28)] = P198,000
P9.11
1. P501,250 computed as follows:
st
1 Quarter % Business Tax
Interest and commission income from lending activities with P4,000,000 5%
maturity of 3 years
Interest and commission income from lending activities with 3,500,000 5%
maturity of 5 years
Interest and commission income from lending activities with 6,000,000 1%
maturity of 7 years
Other income from rentals of facilities and other assets
775,000 7%
Income from financial leasing (remaining maturity is more than 5 1,200,000 1%
yrs)
Dividends and equity shares in net income of subsidiaries
500,000 0%
Net trading gain (loss)
(150,000) NA
Total Gross Receipts Tax
P200,000
175,000
60,000
54,250
12,000
P501,250
2. P446,000
nd
2 Quarter % Business Tax
Interest and commission income from lending activities with P2,800,000 5%
maturity of 3 years
Interest and commission income from lending activities with 3,300,000 5%
maturity of 5 years
Interest and commission income from lending activities with 7,200,000 1%
maturity of 7 years
Other income from rentals of facilities and other assets
825,000 7%
Income from financial leasing (remaining maturity is more than 5
950,000 1%
P140,000
165,000
72,000
57,750
9,500
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yrs)
Dividends and equity shares in net income of subsidiaries
Net trading gain net of loss (P325,000-150,000)
Total Gross Receipts Tax
400,000 0%
175,000 7%
1,750
P446,000
TRUE OR FALSE
1. FALSE 11. TRUE 21. FALSE
2. TRUE 12. FALSE 22. TRUE
3. TRUE 13. FALSE 23. TRUE
4. FALSE 14. TRUE 24. FALSE
5. FALSE 15. TRUE 25. FALSE
6. FALSE 16. TRUE 26. TRUE
7. FALSE 17. FALSE 27. TRUE
8. TRUE 18. FALSE 28. TRUE
9. TRUE 19. TRUE 29. TRUE
10. FALSE 20. FALSE 30. FALSE
#4. False. Shall be either 0%vat or vat exempt only
#6. False. Shall be whichever is higher. However, the application of minimum quarterly receipts has been suspended.
#7.False, CCT is based only on GR from cargo operations.
#9. True. For business tax purposes only; sources within for income tax purposes
#13. False. Shall be from the government
#14. True. i.e., Radio/television broadcasting companies whose GR exceeds the vat threshold of P10M preceding year.
MULTIPLE CHOICE
1. B 21. D 41. A
2. D 22. A 42. A
3. D 23. A 43. A
4. C 24. A 44. D
5. D* 25. B 45. C
6. C 26. A 46. A
7. A 27. B 47. D
8. A 28. D 48. B
9. D 29. B 49. A
61.
62.
63.
64.
65.
66.
67.
68.
69.
10. A 30. C
50. B
70. A
11. A 31. A
A
C
C
A
A
D
D
B
C
51. B
71. B
12. A 32. C** 52. C
72. C
13. C 33. D
53. C
73. A
14. D 34. B
54. C
74. B
15. A 35. D
55. B
75. A
16. B 36. D
56. B
76. B
17. C 37. D
57. A
77. B
18. D 38. D
58. C
78. A
19. B 39. A
59. C
79. C
20. B 40. C
60. P80,000*** 80. C
81.
82.
83.
84.
85.
86.
87.
88.
C
C
D
D
D
C
A
P1,440****
*Items I and II are not subject to business taxes while item III is subject to Sec. 117 instead of Sec. 116
**For Inte’l Carriers, passenger operation is exempt from business tax.
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Supporting Computations:
No. 6
​OPT on sale of refined sugar and cooking oil = (P500,000 + 500,000) x 3% = P30,000
No. 7
​(P280,000 + P220,000) x 3% = P15,000
No. 8
​
Collections = P50,000 + 100,000 – 75,000 = P75,000
OPT = P75,000 x 3% = P2,250
​
No. 9
Gross receipts (refer to #6) P75,000
x vat rate
12%
Output vat
P9,000
Input vat (P11,200 x 3/28) (1,200)
Vat Payable
P7,800
No. 10
​VAT Payable = (P1,350,000 + 625,000 – 1,200,000) x 12% = P93,000
No. 19
​P6.5M x 12% vat = P780,000
No. 20
​P660,00 x 3% = P19,800
No. 21
​(P400,000 + P100,000) x 12% = P60,000; shall be based on collections
No. 22
​CCT = (P800,000 + 400,000) x 3% = P36,000
No. 23
​CCT = [(100,00-18,000) + (165,000-13,500) + 90,000 + 35,500] x 3% = P10,770
No. 26
​P10M x 2.5% = P250,000
No. 27
​P10M x 1.5% = P150,000
No. 28
​exempt
No. 29
​B
No. 30
​(P10M x 40%) 3% = P120,000
​
No. 37
AR, beg.
P600,000
Revenues (P4M + P1M) 5,000,000
AR, end
(960,000)
Gross receipts
P4,640,000
Vat rate
12%
Business tax due
P556,800
​
No. 38
Covered by the Franchise
AR, beg.
Revenues
AR, end
Gross receipts
Franchise tax rate
Business tax due
Total Business Taxes
NOT Covered by the Franchise
P600,000 AR, beg.
4,000,000 Revenues
(800,000) AR, end
P3,800,000 Gross receipts
2% Franchise tax rate
P76,000 Business tax due
P176,800
No. 39
​2017 = P9M x 3% = P270,000;
No. 45
​P3M x 10% = P300,000
P---1,000,000
(160,000)
P840,000
12%
P100,800
2018 = P12M x 3% = P360,000
​
No. 46
Output vat (P5M x 12%)
P600,000
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Input Vat
▪ P300,000 x 12%
▪ P800,000 x 12% x 5/8
Vat Payable
No. 48
(36,000)
(60,000)
P504,000
​Statement 2 is False. The rate shall be 4% (twice the rate of Section 123 NIRC)
No. 54
OPT%
Interest income from lending activities from
inst1uments with remaining terms of:
Five years and less
5,000,000
More than five years
3,000,000
Dividends & equity shares from subsidiaries
1,000,000
Rental income
500,000
Net trading gains
300,000
Total Gross Receipts Tax
GRT
5% P250,000
1% 30,000
0%
0
7% 35,000
7% 21,000
P336,000
No. 55
OPT%
Rentals from safety deposit boxes
P880,000
Net foreign exchange gains
220,000
Net trading gains from trading of securities
660,000
Trust fees
110,000
Dividends from domestic corporations
30,000
Other service fees
220,000
Interest income from lending activities from
inst1uments with remaining terms of:
Five years and less
700,000
More than five years
800,000
Total Gross Receipts Tax
GRT
7% P61,600
7% 15,400
7% 46,200
7%
7,700
0%
0
7% 15,400
5%
1%
35,000
8,000
P189,300
No. 56
Interest income with maturity of less than 5 years (P500,000 x 5%) P25,000
Rentals (P500,000 x 7%)
35,000
Net trading loss = none; if net trading gain, tax is 7%
Gross receipt tax (GRT)
P60,000
No. 57
Interest income with maturity of less than 5 years (P1M x 5%) P50,000
Rentals (P500,000 x 7%)
35,000
Net trading gain
[200,000 – (100,000 net trading loss previous month) x 7%]
7,000
Gross receipt tax (GRT)
P92,000
No. 58
Interest withheld and paid (P100,000 x 5 years x 1%)
(P5,000)
Adjusted amount of tax due to pre-termination (P100,000 x 5 years x 5%) 25,000
Tax Payable
P20,000
No. 60
P80,000
​***Assume agent of a nonresident foreign insurance company;
No. 61
​[(P500,000 x 12%)-(300,000x12%)] = P24,000
No. 62
​P2M x 2% = P40,000
No. 68
​P7.5M x 18% = P1,350,000
No. 69
​P5M x 18% = P900,000
OPT under Sec. 124 = P2M x 4% =
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​
No. 70
P2.5M x 3% = P75,000; although the sales for the quarter alone is already P2.5M, it was clear in the preceding
number that the total sales never exceeded the vat threshold. Consequently, JC shall still be subject to OPT under Sec. 116.
No. 73
​Amusement tax = exempt
No. 74
​Amusement tax = (P5M + 3M) x 10% = P800,000
​
No. 76
Double = P200 bet/P20 per ticket = 10 tickets;
10 tickets x P180 net winnings per ticket x 4% = P72
Ordinary (winner take all) = P500 bet/P50 per ticket = 10 tickets;
= 10 tickets x P950 net winnings per ticket x 1% = P950
Forecast = Bet P1,000/20 per ticket = 50 tickets
= 50 tickets x P80 net winnings per ticket x 4% = P160
TOTAL = P1,182
No. 82
​OPT = P350,000 x .005 = P1,750
No. 83
​none; subject to CGT
No. 84
​Vat = (P1.5M – P1M) x 12% = P60,000
No. 86
​(120,000 – 30,000) x ½ x P30 x 1% = P13,500;
Ratio = 45/75 = 60%; IPO rate = 1%
​
No. 87
No. 88
(2,000 x P25 x 4% = P2,000;
Ratio = 2/75 = 2.67%; IPO rate = 4%
OPT = 6,000 x P40 x .006% = P1,440 ; The the old rate of .005 was used in arriving at P1,200****.
CHAPTER 10 – TAX REMEDIES
MULTIPLE CHOICE
1. D 16. A 31. D* 46. D 61. A
2. B 17. D 32. D 47. A 62. D
3. C 18. C 33. B 48. A 63. D
4. A 19. B 34. B 49. A 64. C
5. D 20. C 35. B 50. D 65. B
6. D 21. C 36. B 51. D 66. B
7. C 22. D 37. C 52. D 67. B
8. D 23. B 38. A 53. B 68. B
9. D 24. B 39. C 54. D 69. A
10. D 25. C 40. D 55. A 70. A
11. D 26. B 41. D 56. B 71. D
12. D 27. C 42. D 57. B 72. A
13. C 28. C 43. A 58. A 73. D
14. B 29. B 44. D 59. D 74. D
15. D 30. C 45. A 60. C 75. C
#17. The sixty (60)-day period for the submission of all relevant supporting documents shall not apply to requests for reconsideration under
RR 18-2013.
#23. (the taxpayer has, nonetheless, the option to wait for the decision of the BIR even beyond the 180 day period nder RR 18-2013.)
If the protest is not acted upon by the Commissioner’s duly authorized representative within one hundred eighty (180) days, THE
TAXPAYER MAY EITHER:
a) Appeal to the CTA within thirty (30) days after the expiration of the one hundred eighty (180)-day period; or
b) Await the final decision of the Commissioner’s duly authorized representative on the disputed assessment.
*#31.
BASED ON #30
30 | Transfer & Business Taxation(2019 Edition) by Tabag and Garcia
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