Beruflich Dokumente
Kultur Dokumente
Bellum de Asphodelia
1. True or False:
The situs of the franchise tax is the state where the franchise operates.
[FALSE]
The situs of the franchise tax is the state where the franchise is granted
2. Omar sold for P 10,000,000 his Baguio rest house with a fair market value of
P 12,000,000 to buy a new principal residence. If Omar utilized P 8,000,000 of
the proceeds of the sale in acquiring a new principal residence, the capital
gains tax payable is
[P 720,000]
3. This principle limits the authority of the government to effectively impose
taxes on a sovereign state and its instrumentalities, as well as on its property
held and activities undertaken in that capacity. [INTERNATIONAL COMITY]
4. A taxpayer is a married non-resident alien engaged in business in the
Philippines with two (2) qualified dependent children. His country gives a nonresident Filipino with income therefrom a basic personal exemption of P
4,000. He is entitled to total personal exemption of
[P 54,000]
50,000 + 4,000 (reciprocity) = 54,000
5. Which of the following statements is/are true regarding the limitation of
taxing power?
Statement 1: Tax exemption of the government is a constitutional limitation.
Statement 2: Non-infringement of religious freedom and worship is
constitutional limitation.
Statement 3: Internal revenue allotment to local government units is an
inherent limitation.
Statement 4: Territoriality or situs of taxation is an inherent limitation
[Statement 2 and 4]
Tax exemption of the government is an inherent limitation
Internal revenue allocation to local government unit is a constitutional
limitation
6. Mia received the following in December:
Thirteenth month pay
Christmas bonus
P
15,000
7,500
Monetized vacation leave for 5 days
10,000
How much is the taxable compensation income of Mia?
[P 0]
7. True or False:
The authority to promulgate all needful rules and regulations of the code is
vested on the Commissioner of Internal Revenue upon the recommendation
of the Secretary of Finance. [FALSE]
The authority to promulgate tax rules is vested on the Secretary of Finance
upon the recommendation of the Commissioner of Internal Revenue.
8. In 2014, Ares Corp., a calendar year corporation contributed P 80,000 to a
qualified charitable organization. Ares 2014 income was P 820,000. In 2014,
what amount can Ares deduct as charitable contribution?
A P 80,000
B P 45,000
C P 41,000
D P 51,000
[B]
(80,000 + 820,000) x .05 = 45,000
Contribution of a corporation which is subject to limit shall be 5% of the
taxable income of the corporation derived from trade or business before
deducting the contributions
9. The least source of tax laws:
A Statutes
B Presidential Decrees
C Revenue Regulations
D Tax treaties or conventions
[C]
10.A domestic corporation made a borrowing from XYZ bank thereby incurring a
business connected interest expense of P 60,000 for taxable year 2014.
During the same year, the corporation earned an interest income subject to
final tax I the amount of P 100,000. The deductible interest is
[P 26,667]
60,000 (100,000 x 33 1/3%) = 26,667
Bellum de Tartarus
1
items
Purchases of non-food items
Salaries of helpers
The percentage tax (tax due) is?
[P 16,350)
72,000
36,000
A property was transferred mortis causa. The following data were gathered
from the transaction:
Fair market value, time of transfer P620,000
Fair market value, time of death P 470,000
Consideration received when transferred P275,000
How much shall be included in the gross estate?
[P 195,000]
Within how many year/years from the date of sale can the delinquent
taxpayer or anyone from him redeem a property levied upon payment of
taxes, penalties and interest?
[1 year]
Bellum de Elysium
1. An individual whose residence is within the Philippines and who is not a
citizen thereof. [Resident Alien] (ET)
2. A taxpayer engaged in business incurred a partial loss of property as follows:
Book value of the asset at the time of loss
P
350,000
Cost to restore the property back to its normal operating condition
250,000
Insurance recovery
40,000
Salvage value
30,000
The deductible loss for the asset is?
[P 180,000] (AP)
Lower of the book value and cost to restore less insurance recovery and
salvage value
250,000 40,000 30,000 = 180,000
3. Identify whether the following statements are true/false:
Statement 1: A protest must be filed within 60 days from receipt of
assessment
Statement 2: Supporting documents shall be submitted within 60 days from
the date of the filing of the protest
Statement 3: Claim for refund must be within 3 years from the date of
payment
Statement 4: The states shall prescribe within 5 years from assessment or
within period for collection agreed upon in writing before expiration of the 5year period
[FALSE, TRUE, FALSE, TRUE] (DT)
4. On May 2014, Cha gave a piece of land to Evette, her best friend who passed
the board examination. The land has a fair market value of P 120,000 and
had an unpaid tax of P 15,000 which was assumed by the done. How much
was the donors tax due?
[P 31,500] (EP)
(220,000 15,000) x .30 = 31,500
5. Refers to the mass of properties left by a deceased person. [Estate] (ET)
6. A retailer of goods, whose accounting method is under the accrual basis, has
gross sales of P 2,750,000 with a cost of sales amounting to P 2,440,000. The
tax payer opted to use OSD as deductions. Assuming the taxpayer is an
individual, how much is his taxable income?
[P 1,600,000] (AP)
(2,750,000 x .60) 50,000 = 1,600,000
7. True or false:
Non-resident aliens engaged in trade or business in the Philippines cannot
avail deductions from gross income. [FALSE]
Non-resident alien not engaged in trade or business in the Philippines may be
entitled to personal exemptions subject to reciprocity. [FALSE] (AT)
Only NRA-NETB cannot avail deductions from gross income.
NRA-ETB may be entitled to personal exemptions subject to reciprocity
8. Arthur is a mining engineer employed by Goldie Co., a mining firm. The
companys mine is in Mindanao. Arthur was provided by the company with
living quarters at the mind site which fair value is P 25,000 a month.
Determine the fringe benefit tax due.
[P 0] (AP)
The living quarters is necessary for the conduct of the business, thus, no
fringe benefit tax is due.
9. True or False:
Statement 1: Commissions and honorarium are taxable incomes of minimum
wage earners.
Statement 2: Minimum wage earners are still required to file income tax
returns
[TRUE, FALSE] (ET)
10.In 2013, MG Co., a domestic corporation has net income from within the
Philippines of P 450,000 and from the USA, P 360,000. Income tax paid on
income from USA is P 102,000. The tax credit on income tax paid to US
government is
[P 102,000] (DP)
Net income, Philippines
Net income, USA
Taxable income
Income tax (30%)
Tax paid in USA
Limit (360/810) x 243,000
Tax credit (lower)
P 450,000
360,000
810,000
243,000
P 102,000
108,000
P 102,000
24%
Selling price
500,000
Less: Book Value
Cost
520,000
Accumulated depreciation
135,000
385,000
Gross profit
115,000
Income to be reported in 2013:
(120,000/500,000) x 115,000 = 27,600
13.Indicate whether the following statements are true or false:
Statement 1: The nature of the excess minimum tax over the normal tax is a
deferred asset.
Statement 2: Any excess of MCIT over NIT can be carried forward on a
quarterly or annual basis as the case maybe
[TRUE, TRUE] (ET)
14.Britney died in USA with the following properties:
Condominium unit in Seattle
Shares of stock in a foreign corporation
Interest in a partnership, domestic
Bank deposit in New York City bank
Car in Davao, donated inter vivos to son
P 3,000,000
750,000
500,000
250,000
650,000
If the decedent was a non-resident alien (with reciprocity), how much is the
gross estate?
[P 0] (AP)
When the decedent is a non-resident citizen, real and personal properties
which situs is in the Philippines are included in the gross estate. However,
since there is reciprocity, properties situated in the Philippines will not be
included in the computation of gross estate.
15.
Profits of a corporation that are permitted to accumulate instead of
being distributed by a corporation to its shareholders for the purpose of
avoiding income tax with respect to its shareholders or the shareholders of
another corporation.
[Improperly Accumulated Earnings] (ET)
16.Rap, a farmer, had the following data for a year:
Sales of livestock and farm products raised
Sales of livestock and farm products purchased
Cost of raising livestock and farm products
Cost of livestock and farm products purchased and sold
Gain on sale of farm equipment
Proceeds from crop insurance
Inventory of livestock and farm products:
January 1
15,000
December 31
12,000
The gross income under accrual method is?
[P 267,000] (DP)
P 200,000
80,000
75,000
35,000
5,000
20,000
100,000
15,000
20,000
50,000
185,000
0
1,700
1,700
85,000