ReSA
The Review School of Accountancy
Tel. No. 735-9807 & 734-3989
TAXATION
First Pre-Board Examination
February 16, 2021(Tuesday)
06:00 PM to 09:00 P.M.
MULTIPLE CHOICE
INSTRUCTIONS: Select the correct answer for each of the following questions.
Mark only one answer for each item by shading the box corresponding to the
letter of your choice on the sheet provided. STRICTLY NO ERASURES ARE ALLOWED.
Use pencil no. 2 only.
1. (Estate Tax) Mr. Faustino Santos, testator, appointed Mr. Generoso Cruz as the
executor of the estate. Mr. Santos was a citizen of Argentina and a resident of
Buenos Aries, Argentina.
He was in Manila visiting his son when he died.
He
owned a Mercedes sports car and had several bank deposits in the USA.
The
executor asked you whether or not the car and the bank deposits in the USA will
still have to be declared as part of the Philippine gross estate of Faustino
Santos. Argentina does not impose transfer taxes of any kind. What answer will
you give him?
a. The car and the bank deposits in the USA have to be declared as part of the
Philippine gross estate because the decedent was in Manila at the time of his
death and, as such, properties wherever situated are included in the gross
estate.
b. The car and the bank deposits in the USA need not be declared as part of the
Philippine gross estate because when Mr. Santos died he was a non-resident
alien.
c. The car and the bank deposits in the USA have to be declared as part of the
Philippine gross estate only when the decedent specified in his will and
testament that such properties must form part of his gross estate.
d. The car and the bank deposits in the USA need not be declared as part of the
Philippine gross estate because Argentina does not impose transfer tax of any
kind.
2. (Estate Tax) The amounts withdrawn from the deposit accounts of a decedent
subjected to the 6% final withholding tax imposed under Section 97 of the
NIRC, shall be:
a. excluded from the gross estate for purposes of computing the estate tax.
b. included from the gross estate for purposes of computing the estate tax.
c. claimed as tax credit against estate tax due.
d. claimed as deduction from the gross estate.
3. (Estate Tax) A property was transferred mortis causa.
gathered from the transaction:
Fair market value, time of transfer –
Fair market value, time of death –
Consideration received when transferred –
The following data were
P500,000
P300,000
P350,000
How much shall be included in the gross estate?
a.
P500,000
c. P150,000
b.
P300,000
d. None of the choices
4. (Estate Tax) The following data pertain to a decedent who is a married man with a
surviving spouse died on February 1, 2019:
Conjugal real personal properties
P 10,000,000
Conjugal personal properties (including P800,000 bank
deposit which was withdrawn and subjected to 6% final
withholding tax)
4,800,000
Exclusive family home
30,000,000
Conjugal ordinary deductions claimed (including P200,000
funeral expenses and P300,000 judicial expenses)
2,500,000
The taxable net estate is:
a.
P42,000,000.
b.
P32,000,000.
c.
d.
P27,000,000.
P21,000,000.
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5. The decedent is a resident unmarried head of family with the following data:
Real and personal properties
P14,000,000
Family home
30,000,000
Ordinary deductions
Unpaid real estate tax
2,000,000
The taxable net estate is:
a.
P 42,000,000.
b.
P 32,000,000.
c.
d.
P 27,000,000.
P 23,000,000.
6. The decedent is a married man with a surviving spouse with the following data:
Conjugal real properties
P 6,000,000
Conjugal family house
1,000,000
Exclusive family lot
400,000
Other exclusive properties
4,500,000
Conjugal ordinary deductions
1,500,000
Exclusive ordinary deductions
500,000
The taxable net estate is:
a.
P 9,900,000.
b.
P 3,750,000.
c.
d.
P 3,500,000.
P 1,250,000.
7. Using the same data in the preceding number, how much is the estate tax payable?
a.
P 594,000
c. P 210,000
b.
P 225,000
d. P 75,000
8. (Estate Tax) Under the TRAIN, when is the time for filing of the estate tax
return?
a. Thirty (30) days from the decedent’s death
b. Two (2) months from the decedent’s death
c. Six (6) months from the decedent’s death
d. One (1) year from the decedent’s death
9. (Estate Tax) Which of the following statements is incorrect in connection with
cash installment payment of estate tax?
a. The cash installments shall be made within two (2) years from the date of
filing of the estate tax return.
b. The estate tax return shall be filed within one year from the date of
decedent’s death.
c. The frequency (i.e., monthly, quarterly, semi-annually or annually), deadline
and amount of each installment shall be indicated in the estate tax return,
subject to the prior approval by the BIR.
d. In case of lapse of two years without the payment of the entire tax due, the
remaining balance thereof shall be due and demandable without the applicable
penalties and interest.
10. (Estate Tax) Mr. Primitivo Primero died and was survived by his wife and two (2)
children, Faye and Faith. After getting her share in the conjugal property, the
surviving spouse renounced her share in the hereditary estate in favor of Faith
to the exclusion of Faye. Was the renunciation subject to donor’s tax?
a. Yes, because the renunciation was made categorically in favor of identified
heir to the exclusion or disadvantage of the other co-heirs.
b. No. because the renunciation was considered a general renunciation.
c. Yes, because , as a rule, renunciation of share in the hereditary estate is
always subject to donor’s tax.
d. No, because, as a rule, the surviving spouse cannot renounce her share in the
hereditary estate.
11 to 13 are based on the following: A resident decedent, single, died February 14,
2018. The estate’s decedent showed the following:
Real property in the Philippines
P4,000,000.00
Personal property outside the Philippines
2,000,000.00
Proceeds of life insurance upon the life of
decedent,
decedent’s
estate
designated
as
irrevocable beneficiary
1,000,000.00
Proceeds of life insurance, decedent’s spouse
designated as irrevocable beneficiary
500,000.00
TAXATION – FIRST PRE-BOARD EXAMINATION (BATCH 41)
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Medical expenses one year prior to decedent’s
death (including unpaid amount of P400,000)
Funeral expenses (only P100,000 paid)
Claims against the estate
700,000.00
250,000.00
1,000,000.00
11. (Estate Tax) How much was the taxable net estate?
a.
P4,300,000.00
c. P1,000,000.00
b.
P4,100,000.00
d. None of the choices
12. (Estate Tax) How much was estate tax payable?
a.
P443,000.00
c. P60,000.00
b.
P388,000.00
d. None of the choices
13. (Estate Tax) How
purposes?
a.
P6,000,000.00
b.
P2,700,000.00
much
were
the
c.
d.
total
deductible
items
for
estate
tax
P1,700,000.00
None of the choices
14. (Donor’s Tax) Under the TRAIN, the donor’s tax for each calendar year shall
be:
a. six percent (6%) computed on the basis of the total gifts made during
the calendar year.
b. six percent (6%) computed on the basis of the total gifts in excess of
Thee hundred thousand pesos (P300,000) exempt gift made during the
calendar year.
c. six percent (6%) computed on the basis of the total gifts including
those made in the previous calendar year in excess of Two hundred fifty
thousand pesos (P250,000) exempt gift made during the calendar year.
d. six percent (6%) computed on the basis of the total gifts in excess of
Two hundred fifty thousand pesos (P250,000) exempt gift made during the
calendar year.
15. (Donor’s Tax) First statement:
The computation of the donor’s tax is on a
cumulative basis over a period of one calendar year.
Second statement:
Husband and wife are considered as separate and distinct
taxpayers for purposes of the donor’s tax.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
16. (Donor’s Tax) Patricia donated P110,000.00 to her friend Kimberly who was getting
married. Patricia gave no other gift during the calendar year. What is the
donor's tax implication on Patricia’s donation?
a. The P100,000.00 portion of the donation is exempt since given in consideration
of marriage.
b. A P10,000.00 portion of the donation is exempt being a donation in
consideration of marriage.
c. Patricia shall pay a 6% donor's tax on the P110,000.00 donation.
d. The P110,000.00 donation is exempt from donor's tax.
17. (Donor’s Tax) Mr. Gerardo Ireneo transfers inter vivos a personal property to his
son on March 15, 2018. His son who lives in another province let his father know
that he is accepting the gift on March 31, 2018.
The personal property was
delivered and received on April 15, 2018. When shall be the last day to file the
donor’s tax return and pay the donor’s tax to avoid penalties?
a.
April 14, 2018
c. May 15, 2018
b.
April 30, 2018
d. None of the choices
18. to 20. are based on the following: The following donations during the
calendar year 2018 are made to relatives:
Date
January 30, 2018
March 30, 2018
August 15, 2018
Amount
P 2,000,000
1,000,000
500,000
18. (Donor’s Tax) How much is the tax due on the gift made on January 30, 2018?
a.
P 204,000
c. P 80,000
b.
P 105,000
d. P 50,000
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19. (Donor’s Tax) How much is the tax due on the gift made on March 30, 2018?
a.
P 204,000
c. P 60,000
b.
P 124,000
d. P 50,000
20. (Donor’s Tax) How much is the tax due on the gift made on August 15, 2018?
a.
P 204,000
c. P 80,000
b.
P 124,000
d. P 30,000
21. to 22. are based on the following: Mr. Jose Mapagbigay donated P500,000 to the
City of Manila and P100,000 to his best friend who graduated summa cum laude.
21. (Donor’s Tax) For donor’s tax purposes, how much should be the gross gifts?
a.
P 600,000
c. P 400,000
b.
P 500,000
d. None of the choices
22. (Donor’s Tax) For donor’s tax purposes, how much should be the deductions?
a.
P 500,000
c. P 100,000
b.
P 400,000
d. None of the choices
23. (Donor’s Tax) On one date, Lara made donations of property in the Philippines to a
non-stranger, and of property outside the Philippines to a stranger. In taking a
credit for the foreign donor’s tax paid, the credit shall be against the
Philippine donor’s tax on the:
a. donation to the non-stranger plus that to the stranger.
b. donation to the non-stranger.
c. donation to the stranger.
d. none of the options given.
24. (Donor’s Tax) On June 10, 2018 Mr. Paolo Sao donated P50,000 cash to his favorite
grandson who is getting married on June 16, 2018. For donor’s tax purposes the
exempt dowry shall be:
a.
P50,000.
c. P5,000.
b.
P10,000.
d. none.
25. (VAT) Mr. Andres, VAT-registered real estate dealer, transferred a parcel of land
held for sale to his son as gift on account of his graduation. For VAT purposes,
the transfer is:
a. not subject to VAT because it is a gift.
b. subject to VAT because it is a deemed sale transaction.
c. not subject to VAT because it is subject to gift tax.
d. subject to VAT because it is considered an actual sale.
26. (VAT) Sale of orchids and other ornamental plants is:
a.
subject to 12% VAT.
c. exempt from VAT.
b.
subject to 0% VAT.
d. none of the choices
27. (VAT) A VAT-registered taxpayer has the following transactions
particular month:
a. Sale of two (2) adjacent condominium units, P2,500,000
b. Sale of one (1) residential lot, P1,500,000
c. Sale of one (1) parking lot in the condominium, P500,000
d. Sale of fresh fruits, vegetable and fish, P2,000,000
He approaches you to ask how much shall be subject to VAT.
be?
a.
P4,500,000
c. P500,000
b.
P3,000,000
d. None of the choices
during
a
What will your answer
28. (VAT) A lessor leases his 15 residential units for P14,500 per month and the
other 15 residential units for P15,500 per month. During the taxable year, his
accumulated gross receipts amounted to P5,400,000. How much is the output VAT?
a.
P648,000
c. P313,200
b.
P334,800
d. None of the choices
TAXATION – FIRST PRE-BOARD EXAMINATION (BATCH 41)
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29 to 30 are based on the following: (VAT) The Anong Pizza Na, VAT-registered issued
the following official receipt to a customer who was with a senior citizen:
Ordered by a senior citizen
Parma pizza
Mango basil
Ordered by the non-senior citizen
House salad
Beef rendang
Avocado smoothie
Total sales (VAT inclusive)
P880.00
180.00
420.00
590.00
190.00
P1,060.00
1,200.00
P2,260.00
29. (VAT) How much is the VAT-exempt sale?
a.
P2,017.85
c. P946.43
b.
P1,060.00
d. None of the choices
30. (VAT) How much is the sales discount for senior citizen?
a.
P403.57
c. P189.29
b.
P212.00
d. None of the choices
31 to 34 are based on the following: A VAT subject real estate dealer sells a
residential lot on January 15, 2018. The following information are made available on
the terms of the sale:
Gross selling price
P
3,000,000
Initial payments on January 15, 2018
(consisting of down payment and installments
900,000
in the year of sale)
Balance to be paid in equal installment,
installments starting February 15, 2018
2,100,000
The zonal value of the residential lot was P2,800,000.
31. (VAT) Does the sale qualify under installment plan?
a. Yes, because the sale has initial payments and, therefore, qualify under
installment plan.
b. No, because the initial payments exceed 25% of the selling price.
c. Yes, because the initial payments include installments in the year of sale.
d. No, because the initial payments exceed 25% of the zonal value.
32. (VAT) What is the tax base for VAT purposes?
a.
P3,000,000
c. P2,100,000
b.
P2,800,000
d. None of the choices
33. (VAT) How much was the output tax on January 15, 2018 using 12% VAT rate?
a.
P 360,000
c. P 108,000
b.
P 300,000
d. None
34. (VAT) How much was the output tax on February 15, 2018 using 12% VAT rate?
a.
P 360,000
c. P 108,000
b.
P 300,000
d. None
35. (VAT) If a VAT-registered person issues a VAT invoice or VAT official receipt for
a VAT-exempt transaction, but fails to display prominently on the invoice or
receipt the words “VAT-exempt sale”, the transaction shall:
a. still be exempt from value-added tax.
b. become taxable and the issuer shall be liable to pay VAT thereon.
c. be effectively subject to zero percent.
d. be considered erroneous transaction and must be disregarded.
36. (VAT) Suppose the accounting period adopted by the taxpayer is fiscal year ending
October 2018, when is the due date for the filing of his monthly VAT declarations
for the first and second month of the first fiscal quarter?
a. November 20, 2018 and December 20, 2018
b. August 20, 2018 and September 20, 2018
c. November 20, 2017 and December 20, 2017
d. December 20, 2017 and January 20, 2018
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37 to 39 are based on the following: (VAT) A taxpayer is engaged in VAT-subject
transactions but his annual gross sales do not exceed the VAT threshold. Hence, he
did not register under VAT system. However, during the current year, his quarterly
gross sales follow:
First quarter
Second quarter
Third quarter
Fourth quarter
P1,000,000
1,000,000
1,000,000
1,000,000
37. (VAT) Which of the following statements is correct?
I – The taxpayer is required to update his registration
non-VAT to VAT taxpayer in the fourth quarter.
II - The taxpayer is required to update his registration from
VAT to VAT taxpayer until taxpayer is liable to VAT.
III - VAT shall be imposed prospectively.
IV
Percentage
tax
due
on
the
non-VAT
portion
of
sales/receipts shall be collected without penalty,
timely paid on the due date immediately following
month/quarter when taxpayer ceases to be a non-VAT.
a.
b.
c.
d.
from
non-
the
if
the
I, II, III and IV are correct
I, II and III are correct
Only I and II are correct
Only III and IV are correct
38. (OPT) How much is the percentage tax due?
a.
P480,000
c. P90,000
b.
P120,000
d. None of the choices
39. (VAT) How much is the VAT due?
a.
P480,000
b.
P120,000
c.
d.
P90,000
None of the choices
40. (OPT) Who of the following is not subject to tax on winnings under Section 126?
a. Person who wins in horse races
b. Winners from double, forecast/quinella and trifecta bets
c. Winners in cockfighting
d. Owners of winning race horses
41 to 44 are based on the following: (OPT) Vanderwoodsen, VAT-registered, is a radioTV broadcasting franchise grantee.
The previous year, its gross receipts did not
exceed P 10,000,000. In the first month of the current year, it had the following
data:
Gross receipts, sale of airtime
P2,000,000
Payments received from user of radio station’s
communications facilities for overseas communications
500,000
Rentals of office spaces
3,500,000
Business expenses
700,000
41. (OPT) How much was the franchise tax due?
a.
P 75,000
c. P 50,000
b.
P 60,000
d. None of the choices
42. (OPT) How much was the overseas communications tax?
a.
P 250,000
c. P 75,000
b.
P 200,000
d. P 50,000
43. (VAT) How much is output VAT, if any?
a.
P720,000
c. P420,000
b.
P660,000
d. None of the choices
44. (OPT) Can the franchise grantee register under the VAT system?
a. Yes. Franchise grantees of radio and/or television broadcasting
gross receipts of the preceding year do not exceed P10,000,000
the business covered by the law granting the franchise may
registration.
b. No. Franchise grantees of radio and/or television broadcasting
gross receipts of the preceding year do not exceed P10,000,000
TAXATION – FIRST PRE-BOARD EXAMINATION (BATCH 41)
whose annual
derived from
opt for VAT
whose annual
derived from
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c.
d.
Page 7 of 16
the business covered by the law granting the franchise cannot opt for VAT
registration.
Yes. As a rule, it is mandatory for franchise grantees of radio and/or
television broadcasting whose annual gross receipts of the preceding year do
not exceed P10,000,000 to register under the VAT system.
No. It is unwise to register because the taxpayer cannot claim input tax
credits.
45. (OPT) A proprietor of bowling alleys has the following gross receipts during the
month of July, 2018:
Gross receipts from bowling operation
P2,000,000
Gross receipts from sale of food and drinks inside the
bowling alley
1,000,000
Gross receipts from rental of stalls inside the bowling alley
500,000
How much is the amusement tax?
a.
P1,050,000
b.
P630,000
c.
d.
P525,000
None of the choices
46. (OPT) Which of the following statements is incorrect?
a. The percentage taxes are basically on sale of services.
b. The percentage taxes are generally paid monthly.
c. The percentage taxes may be shifted to customers or clients.
d. An isolated transaction not in the course of trade or business will not result
in a liability for a percentage tax.
47. (IND) A nonresident alien individual who shall come to the Philippines and stay
therein for an aggregate period of more than 180 days during the calendar year
shall be deemed a “nonresident alien doing in the Philippines”:
a. regardless of whether or not he is actually engaged in business in the
Philippines.
b. only when he is actually engaged in business in the Philippines.
c. when his income does not come from the performance of personal services in the
Philippines.
d. when he comes to the Philippines for a definite purpose which in its nature
would require an extended stay and to that end makes his home temporarily in
the Philippines, although it may be his intention at all times to return to
his domicile abroad.
48. (IND) Under the TRAIN, the term ‘taxable income’ as applied to individuals means:
a. the pertinent items of gross income specified in the Tax Code, less
deductions if any, authorized for such types of income by the Tax Code or
other special laws.
b. the pertinent items of gross income specified in the Tax Code, less
deductions including personal exemptions, if any, authorized for such
types of income by the Tax Code or other special laws.
c. the pertinent items of gross income specified in the Tax Code.
d. the pertinent items of gross income specified in the Tax Code excluding
salaries received from employment.
49 and 50 are based on the following: (IND) Ms. Cyril is employed in MAFD Corporation
and is also a part-time real estate agent for a real estate broker. In addition to
the SMW of ₱180,000 she received from her employer, she likewise received ₱75,000 as
commissions from her real estate dealings for the year 2018.
49. (IND) How much is the exempt income?
a.
P255,000
c.
b.
P180,000
d.
P75,000
None of the choices
50. (IND) How much is the taxable income?
a.
P255,000
c. P75,000
b.
P180,000
d. None of the choices
51. (IND) To be considered physically present abroad most of the time during the
taxable year, a contract worker must have been outside the Philippines for not
less than:
a.
180 days
c. 185 days
b.
183 days
d. 190 days
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52. (IND) Denzell Wetta, an American management expert is hired by a Philippine
corporation to assist in its organization and operation for which he has to stay
in the Philippines for 5 months.
He came to the Philippines for this definite
purpose but the nature of his job may require him to extend his stay and live
temporarily in the Philippines. The American management expert intends to leave
the Philippines as soon as his job is done.
For income tax purposes, the American management expert shall be classified as:
a. resident alien.
b. nonresident alien engaged in trade or business.
c. nonresident alien not engaged in trade or business.
d. resident citizen.
53. (IND) First statement:
The husband and wife shall compute their individual
income tax separately based on their respective total taxable income.
Second statement:
If any income cannot be definitely attributed to or
identified as income exclusively earned or realized by either of the spouses, the
same shall be divided equally between the spouses for the purpose of determining
their respective taxable income.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
54. Ms. Allyza is employed in JBC Corporation, She the following for the
current year:
Statutory minimum wage,
inclusive of the 13th month pay
Overtime pay
Night-shift differential
Commission from the same employer
Total
(IND) How much is the exempt amount?
a.
P260,000
c.
b.
P240,000
d.
P175,000
40,000
25,000
20,000
P260,000
P20,000
None of the choices
55 and 56 are based on the following: A married resident citizen has five (5)
qualified dependent children. The following information pertains to his income and
expenses in the year 2018:
Salary, net of P20,000 withholding tax
P
380,000
Interest income, bank deposit-BPI, Manila
50,000
Yield from money market placement,
State Investment House, Manila
30,000
Rent expense, apartment house
36,000
Health insurance premium paid
5,000
55. (IND) How much is the taxable compensation income?
a.
P400,000
c. P250,000
b.
P336,000
d. P230,000
56. (IND) How much is the tax due?
a.
P80,000
b.
P30,000
c.
d.
None, exempt from tax
None of the choices
57 and 58 are based on the following: A single resident citizen has two (2) qualified
dependent children. During a particular year, he earns and spends the following:
Gross income from practice of profession
P 250,000
Expenses in connection with the practice
of profession
50,000
Hospitalization insurance premium paid
2,000
57. (IND) How much is the taxable net income?
a.
P250,000
c. P100,000
b.
P200,000
d. P 98,000
58. (IND) How much is the tax due?
a.
P50,000
b.
P40,000
c.
d.
None, exempt from tax
None of the choices
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