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The Professional CPA Review School

Main: 3F C. Villaroman Bldg. 873 P. Campa St. cor Espana, Sampaloc, Manila
 (02) 735 8901 / 735 9031 / 0922 861 0191
email add: crc_ace@yahoo.com
Baguio Davao
2nd Flr. #12 CURAMED BLDG. MARCOS HIGHWAY, BAGUIO 3/F GCAM Bldg. Monteverde St. Davao City
 (074) 442-1440 / 0922-8499196  (082) 285-8805 / 0925-7272223

TAXATION MAY 2019 BATCH


FIRST PRE-BOARD EXAMINATION FEB 9, 2019; 7:30AM-10:30AM

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer
for each item by Shading the corresponding letter of your choice on the answer sheet provided.
STRICTLY NO ERASURES ALLOWED. Use Pencil No. 2 only.

1. The power to tax is not without limitations. Such limitations maybe inherent (restrict the power not
embodied in the constitution) or constitutional (expressly found in the Constitution or implied in its
provisions). Which of the following is an inherent limitation?
A. Equal protection of the laws.
B. No imprisonment for non – payment of poll tax.
C. Exemption from taxation of government entities.
D. Exemption of religious, charitable and educational entities, non – profit cemeteries and
churches from property taxation.

2. Which of the following is not a condition imposed by the Constitution in the exercise of the power
of eminent domain?
A. The payment of just compensation.
B. The observance of due process in taking private property.
C. The existence of public use for taking private property.
D. The consent of the private property owner to sell the property to the government.

3. How broad is the power of the legislature to impose taxes?


Ans. 1 – The legislature has limited discretion as to the persons, property or occupations to be
taxed, where there are no constitutional restrictions, provided the subject or object to be taxed is
within the territorial jurisdiction of the State.
Ans. 2 – The legislature has the right to finally determine the amount or rate of tax, in the absence
of any constitutional prohibitions and it may levy a tax of any amount it sees fit.
A. True, True
B. True, False
C. False, True
D. False, False

4. Account receivable by the estate of the decreased, his executor or administrator as insurance
under a policy taken by the decedent covering his own life is:
A. Excluded from gross estate.
B. Part of gross estate if the beneficiary is revocable.
C. Part of gross estate if the beneficiary is irrevocable.
D. Part of gross estate whether the beneficiary is revocable or irrevocable.

5. The following, except one, are the basic principles of a sound taxation system. The exception is:
A. It is generally payable in money.
B. It should consider the taxpayer’s ability to pay.
C. It should be capable of being effectively enforced.
D. The sources of revenue must be sufficient to meet government expenditures and other public
needs.
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 2

6. Statement I. Government owned and controlled corporations are subject to tax unless expressly
exempted.
Statement II. Government agencies performing governmental and proprietary functions are
exempt from tax unless expressly taxed.
A. True, True
B. False, False
C. True, False
D. False, True

7. It is an aspect of taxation that is administrative in character and the power to exercise it is vested
to the department of finance.
A. Levying
B. Collection
C. Imposition
D. Legislation

8. Which of the following aspects of taxation is (are) administrative in nature?


I. Levy II. Assessment III. Collection
A. I only
B. I and II
C. II and III
D. III only

9. Which of the following are the elements of impact of taxation?


I. Levy II. Imposition III. Assessment IV. Collection
A. I only
B. I, II and III
C. III and IV
D. I, II, III and IV

10. Congress passed a sin tax law that increased the excise tax rates on cigarettes by 1,000%. The
law was thought to be sufficient to force many cigarettes manufacturers out of business. One
cigarette manufacturer that would go out of business questioned in court the new sin tax law
because it would not be able to pay the increased tax. The cigarette manufacturer is:
A. Wrong because taxes are the lifeblood of the government.
B. Correct because Congress, in this case exceeded its power to tax.
C. Correct because no government can deprive a person of its livelihood.
D. Wrong because the law recognizes the fact that the power to tax carries with it the power to
destroy.

11. The Municipality of Itogon passed an ordinance imposing a tax on installation managers. At that
time, there was only one installation manager in the municipality, thus, only he would be liable for
the tax. Is the law constitutional?
A. It is unconstitutional for lack of legal basis
B. It is constitutional as it applies to all persons in that class.
C. It is constitutional because the power to tax is the power to destroy.
D. It is unconstitutional because it clearly discriminates against this person.

12. Yamaha Corporation manufactures motorcycles and is almost at the point of bankruptcy. It has no
more cash and all it has are unsold motorcycles. It received an assessment from the BIR for
deficiency income taxes. It wants to pay but due to lack of cash it seeks permission to pay in kind
with motorcycles. Should the BIR grant the requested permission?
A. It should grant permission to make payment convenient to taxpayers.
B. It should not grant permission because a tax is generally a pecuniary burden.
C. It should grant permission else Yamaha Corporation would not be able to pay.

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 3

D. It should not grant permission because the government does not have the storage facilities for
motorcycles.

13. Panelco is a power generation and distribution company operating mainly in Agno, Pangasinan. It
owns electric poles which it also rents out to other companies that use poles such as telephone
and cable companies. The municipality of Agno passed an ordinance imposing a fee equivalent to
1% of the annual rental for these poles. Panelco questioned the legality of the ordinance on the
ground that it imposes an income tax which local government units are prohibited from imposing.
Rule in the validity of the ordinance:
A. The ordinance is valid as an LGU may impose tax on income.
B. The ordinance is void as the 1% of annual rental fee is excessive and oppressive.
C. The ordinance is valid as it is a legitimate exercise of police power to regulate electric poles.
D. The ordinance is void as the fee is based on rental income and is therefore a tax on income.

14. Which of the following statements is incorrect?


A. In case of doubt, statutes levying taxes are construed strictly against the government.
B. The reversal of ruling shall not generally be given retroactive application if said reversal will
be prejudicial to the taxpayer.
C. The construction of a statute made by his predecessor is not binding upon the successor if
thereafter he becomes satisfied that a different construction should be given.
D. A memorandum circular promulgated by the Commissioner of Internal Revenu (CIR) that
imposes penalty for violations of certain rules need not be published in a newspaper of
general circulation or official gazette because it has the force and effect of law.

15. Which statement below expresses the lifeblood theory?


A. The assessed taxes must be enforced by the government.
B. Taxation is an arbitrary method of exaction by those who are in the seat of power.
C. The underlying basis of taxation is government necessity for without taxation a government
can neither exist nor endure.
D. The power of taxation is an inherent power of the sovereign to impose burdens upon subject
and objects within its jurisdiction for the purpose of raising government revenues.

16. Which statement is wrong?


A. The power to tax is subject to certain constitutional limitations.
B. The money contributed as tax becomes part of the public funds.
C. Generally, there is no limit on the amount of tax that may be imposed.
D. The power of taxation may be exercised by the government, its political subdivisions and
public utilities.

17. The government is said to be exempt from taxation. Which of the following is an exception to this
rule?
A. A government employee buying 30 printers for office use.
B. DSWD claiming tax exemption or goods donated by the LGUs of Laoag City.
C. A contractor for the government claiming exemption from contractor’s tax.
D. A contract entered into by the PNP and SM where SM furnishes the PNP with police
uniforms.

18. Which of the following is not within the scope of tax legislation?
A. Assessment of tax
B. Fixing the possible tax rate.
C. Determining the purpose of the tax.
D. Determining the subjects to be taxed.

19. Which of the following is not an inherent limitation in the exercise of the power of Taxation?
A. Territoriality
B. International comity

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 4

C. Public purpose test


D. Veto power of the President

20. Which of the following is not an exclusion from the gross estate?
A. Transfer to government.
B. Proceeds of life insurance
C. Transfer passing under a limited power of appointment
D. Foreign corporation shares of stock where 80% of its operation is in the Philippines owned by
a non- resident alien decedent.

21. A non- stock, non- profit entity shuts down and transfers all its property in favor of another entity
will not be subject to tax if it meets the requirements of the law, except:
A. The transferee is a non – government organization.
B. The transferee is another non –stock, non – profit organization.
C. Not more than 30% of the donation is used for administrative purpose.
D. The transferee is an educational, charitable, religious, cultural, social welfare, or philanthropic
organization.

22. What cannot be allowed as deduction from the gross estate?


A. Family home
B. Vanishing deduction
C. Optional standard deduction
D. Share of surviving spouse

23. Which of the following may be deducted from the gross estate?
A. Medical expenses C. Funeral expenses
B. Standard deduction D. Judicial expenses

24. If a Briton was a resident of the Philippines, is the property located outside the Philippines be
included in his gross estate?
A. No, only property located in the Philippines will be included because he was a Briton.
B. Yes, regardless of the location of the property will be included in the gross estate because he
was a resident.
C. No, he must be both a resident and Filipino citizen to include property outside the Philippines
in his gross estate.
D. Yes, regardless of location of the property will be included in the gross estate because he was
a British citizen.

25. An American living in New York died intestate leaving the following properties:
Dodge caliber in New York P 3,000,000
Tiny House in New York 5,000,000
Fixtures in the Tiny House 1,000,000
Proceeds of life insurance with Philam (philamerican) life 2,000,000
Which of the above-listed properties will be included in the decedent’s gross estate?
A. None.
B. All his properties.
C. Only the life insurance proceeds.
D. Only properties outside the Philippines.

Nos. 26 to 28 are based on the following information:


Sir Bigay made the following donations for the year 2018, as follows:
January – to his son amounting to P250,000.
February – to an officemate P30,000.
March – to his daughter who got married in the month P 60,000; and to his daughter-in-
law P40,000.

26. How much is the donor’s tax for the month of January?
A. Exempt B. P 1,800 C. P 6,000 D. P 7,800

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 5

27. How much is the donor’s tax for the month of February?
A. P 9,000 B. P 7,800 C. P 6,000 D. P 1,800

28. How much is the donor’s tax for the month of March?
A. P 6,000 B. P 7,800 C. P 9,000 D. P 14,000

Nos. 29 to 32 are based on the following information:


Mr. Regalo made donations for calendar year 2018 as follow:

Feb: To a legitimate daughter who got married on valentine’s day amounting to P 350,000.
July: To legitimate son’s birthday celebration amounting to P450,000.
To the National Government cash of P100,000.

29. How much is the donor’s tax due for the month of February?
A. P 5,400 B. P 6,000 C. P 20,400 D. P 21,000

30. How much is the donor’s tax due for the month of July?
A. P 18,000 B. P 26,400 C. P 27,000 D. P 33,000

31. Compute the donor’s tax due for the month of July if the gift given to the son was split into two: P
225,000 in July and P 225,000 in August 2019?
A. P 12,900 B. P 13,500 C. P 19,000 D. P 19,500

32. The donor’s tax due for the month of August 2019 is:
A. P 19,500 B. P 13,500 C. P 12,900 D. Exempt

33. The Bureau of Internal Revenue may grant an extension of time for filling the Estate Tax Return
settled judicially within?
A. I month B. I year C. 2 years D. 5 years

34. A non- stock non- profit entity shuts down and transfers all its property in favor of another entity. It
will not be subject to tax if it meets the requirements of the law, except?
A. The transferee is non – government organization.
B. The transferee is another non –stock, non – profit or organization.
C. Not more than 30% of the donation is used for administrative purpose.
D. The transferee is an educational, charitable, religious cultural or social welfare, or
philantrophic organization.

Nos. 35 to 39 are based on the following information:


Don Pepe, single, but head of family, Filipino and resident of Manila died intestate on November
1, 2018. He left the following properties and interests:
House and lot ( family home ) in Manila P 800,000
Vacation house in New York City 5,500,000
Commercial land in Manila donated by his father in 2012 2,000,000
Toyota car in Manila being used by his fiancée 500,000
Proceeds of life insurance where the beneficiary is his fiancée 1,000,000
(revocable)
Furniture and appliances in Manila house 1,000,000
Claims against an insolvency person (Filipino resident) whose
assets total P10,000 and whose liabilities total P100,000 100,000
Shares of stock in XYZ Corporation (domestic)with FMV of 100,000

The expenses and charges against the estate are as follows:


Funeral expenses P 250,000
Unpaid real property taxes 600,000
Medical expenses of last illness 800,000
Claims against the estate 310,000

35. What is the gross estate and the allowable deductions therefrom?
A. P 5,500,000; P 3,500,000
B. 10,000,000; 6,110,000
C. 10,990,000; 6,200,000
D. 11,000,000; 6,800,000

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 6

36. What is the taxable net estate and the estate tax due?
A. P 2,000,000; P 120,000
B. 3,890,000; 233,400
C. 4,200,000; 252,000
D. 4,790,000; 272,400

37. If the decedent was a non – resident alien, what would be the gross estate for Philippines estate
tax purposes and the allowable deductions therefrom if there was no reciprocity?
A. P 5,500,000; P 1,000,000
B. 5,490,000; 1,400,000
C. 5,200,000; 1,200,000
D. 5,500,000; 500,000

38. In No. 37 what is the taxable net estate and the estate tax due?
A. P 5,000,000; P 300,000
B. 4,000,000; 240,000
C. 4,090,000; 225,400
D. 4,500,000; 270,000

39. What if Don Pepe before dying, asked your advice on how to transfer his properties to his heir with
the least tax consequences? What advice would you give?
A. Sell all properties to his heir.
B. Donate all properties to his heir.
C. Get a life insurance policy. When he dies the proceeds from such policy shall cover the estate
tax.
D. Create 2 corporations: Corporation X holding the assets of Don Pepe and Corporation Y in
which the heir is a majority shareholder. Have the 2 corporations merged or consolidated
where the heir exchanges his shares in Corporation Y for the shares in Corporation X, as set
forth in Sec. 40 (a) (2) of the Tax Code, as amended.

40. To mitigate the harmful effect of successive taxation of the same property occasioned by the death
occurring within a short period of time, the law allows as deduction:
A. Vanishing deduction. C. Share of surviving spouse.
B. Claims against the estate. D. Claims against insolvent person.

41. Which of the following is not a condition for the allowance of family home deduction in estate
taxation?
A. The total value of the family home must be included as part of the gross estate of the
decedent.
B. The family home must be the actual residential house of the decedent and his family at the
time of his death, as certified by the Barangay Chairman of the locality where the family home
is situated.
C. Allowable deduction must be an amount equivalent to the current fair market value of the
family home as declared or included in the gross estate or to the extent of the decedent’s
interest (whether conjugal/community or exclusive property), whichever is higher, but not
exceeding P10,000,000.
D. None of the choices.

42. Benru, revocably transferred his Montero car to his nephew. He challenged his nephew to pass
the CPA Licensure Examination because if he does, he will waive his power to revoke the transfer.
The nephew topped the CPA Licensure Examination, so Benru; waved his power to revoke the
transfer. The transfer is subject to:
A. Estate tax
B. Donor’s tax
C. Either estate tax or donor’s tax
D. Neither donor’s tax or estate tax

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 7

43. Which of the following renunciation is not subject to donor’s tax?


A. General renunciation by an heir, including the surviving spouse of his/her share in the
hereditary estate left by the deceased.
B. Renunciation by the surviving spouse of his/ her share in the conjugal partnership or absolute
community estate after the dissolution of the marriage in favor of the heirs of the deceased
spouse or any other person/s.
C. Renunciation by an heir, including the surviving spouse of his/her share in the hereditary
estate left by the deceased specifically done in favor of identified heir/s to the exclusion or
disadvantage of the co – heirs in the hereditary estate.
D. None of the choices.

44. Your bachelor client, a Filipino residing in Baguio City, wants to give his girlfriend a gift of
P500,000 in 2018. He seeks your advice for purposes of reducing, if not eliminating, the donor’s
tax on the gift. What advice will you give?
A. Advise his girlfriend to go abroad with him and give the gift while they are outside the country.
B. Give the full gift of P500,000 in 2018 and tell his girlfriend not to tell anyone that she receives
a gift because the BIR will not know that the gift is made to her.
C. Split the gifts into two: the first P250,000 gift to be given on December 25, 2018 and other
P250,000 to be given on January 1, 2019. Both gifts will be exempted from donor’s tax.
D. None of the choices

45. X and Y were to marry in three (3) months time. Meanwhile to express his affection, X donated a
house and lot to Y. Y, wrote back, accepting the donation and took possession of the property.
Before the wedding, however, Y suddenly died of heart attack. Can Y’s heirs get the property?
A. No, since the marriage did not take place.
B. No, since the donation and acceptance were not in public instrument.
C. Yes, since X freely donated the property to Y who became its owner.
D. Yes, since all the requisites of a donation of an immovable property are present.

46.
FMV, date of Consideration
Revocable transfer Death Transfer received
Land P 5,200,000 P 4,000,000 P 3,000,000
Automobile 0 1,000,000 1,500,000
Shares of Stock 200,000 500,000 400,000
Bond certificates 400,000 300,000 350,000
Transfers under power of
appointment:
Farm land, limited power 1,300,000 1,500,000 0
Land and building, general
power 1,800,000 2,000,000 1,000,000

Additional gross estate (if still any) is:


A. None B. P 3,000,000 C. P 3,500,000 D. P 4,300,000

47. The records pertinent to same properties of a resident citizen, who died on February 14, 2018,
reveal the following information:
Fair market value FMV
Date Acquired Date acquired 2/14/18
Land (inherited) 2/1/2017 P 500,000 P 700,000
Car (donated) 12/25/2014 300,000 200,000
Jewelry (inherited) 1/1/2013 100,000 150,000

The car donated to the decedent was mortgaged by the donor for P60,000 which was paid by
decedent before he died. The gross estate of the decedent amounted to P10 million while total of
deductible losses, indebtedness, taxes, and donation to the Government for public purpose
amounted to P2 million.
The vanishing deduction is:
A. P 360,000 B. P 364,800 C. P 380,800 D. P 524,800

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 8

48. The following transactions are considered “in the course of trade or business” and, therefore,
subject to business taxes, except:
A. Isolated services in the Philippines by non- resident foreign persons.
B. Isolated sale of goods or services for a gross selling price or receipts of P300,000.
C. Regular conduct or pursuit of a commercial or an economic activity by a stock private
organization.
D. Regular conduct or pursuit of a commercial or an economic activity by a non – stock, non –
profit private organization.

49. Which of the following shall be subject to the 3% percentage tax on VAT – exempt person under
Section 109 (BB) of the Tax Code, as amended?
A. Sale of mango; gross annual sales do not exceed P3,000,000.
B. Milling of palay into rice; gross annual receipts exceed P3,000,000.
C. Sale of office supplies; seller not VAT – registered; gross annual sales do not exceed
P3,000,000.
D. Sale of processed agricultural product; not VAT – registered; gross annual sales exceed
P3,000,000.

Nos. 50 to 52 are based on the following accounting records of a VAT-registered taxpayer:


Accounts receivable, beginning P 100,000
Accounts receivable, ending 140,000
Inventory, beginning 50,000
Inventory, ending 65,000
Purchases 90,000
Sales 250,000
Purchase discount 5,000
Sales return 10,000
Collections 200,000
Cost of sales 70,000

50. How much is vatable sales?


A. P 250,000 B. P 240,000 C. P 230,000 D. P 200,000

51. How much is output tax?


A. P 24,000 B. P 27,000 C. P 28,800 D. P 30,000

52. How much is input tax?


A. None B. P 10,200 C. P 10,800 D. P 8,400

53. The following events happened in a VAT enterprise:


June : Performance of service.
July : Received invoice in the amount of P112,000.
August : Paid the services.
When and how much input VAT can be claimed?
A. July, P 12,000
B. July, P 13,440
C. August, P12,000
D. August, P13,440

No. 54 to 56 are based on the following information:


Viva Corporation has the following sales (total invoice) during a month:
Sale to private entities P 224,000
Sale to export-oriented enterprise 100,000
Sale of exempt goods 100,000
The following input taxes were passed – on by its VAT – registered suppliers during the month:
Input tax on taxable goods 5,000
Input tax on zero – rated sales 3,000
Input tax on sale of exempt goods 2,000
Input tax on depreciable capital goods not attributable to any
particular activity 20,000

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 9

54. The output VAT for the month is:


A. P 24,000 B. P 26,880 C. P 36,000 D. P 48,000

55. The input VAT for the month is:


A. P 5,000 B. P 8,000 C. P 15,000 D. P 23,000

56. The VAT payable for the month is:


A. P 1,000 B. P 7,200 C. P 9,000 D. P 16,000

57. The input taxes on zero – rated sales of goods may at the option of the VAT – registered person
be, except:
A. Credited.
B. Carried over to the next taxable quarter.
C. Refunded or converted into tax credit certificate.
D. Used as payment for other internal revenue tax, including withholding taxes.

58. When may a VAT registered person claim input taxes as allowable expense deductions from his
income tax return?
A. Input taxes from export sales.
B. Input taxes from exempt sales
C. Input taxes from capital goods
D. Input taxes from zero – rated sales.

Nos. 59 to 63 are based on the following data taken from a VAT – registered entity, inclusive of
VAT.
Sales to Government P 112,000
Regular sales 350,000
Zero – rated sales 250,000
Exempt sales 87,500
Purchases 532,000

59. How much is the output VAT?


A. P 12,000 B. P 37,500 C. P 49,500 D. P 79,000

60. How much is the actual input VAT?


A. P 20,350 B. P 49,750 C. P 57,000 D. P 563,840

61. How much of the actual input VAT can actually be claimed as input tax credit against the output
VAT?
A. P 50,350 B. P 49,750 C. P 57,000 D. P 63,840

62. How much VAT is charged to expense?


A. P 6,650 B. P 7,250 C. P 14,250 D. P 33,250

63. How much is the final withholding VAT?


A. P 4,400 B. P 5,000 C. P 7,000 D. P 12,000

64. Which of the following transactions is exempt from the value-added tax?
A. Services rendered by artists, actors and athletes.
B. Generation, transmission and distribution of electricity.
C. Services rendered by professionals, such as CPAs, Physicians and Lawyers.
D. Services rendered by international shipping or air passenger transport operations.

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 10

Nos. 65 and 66 and based on the following information:


A VAT-registered construction materials supplier is the winning bidder to exclusively supply
construction materials for the construction of a common terminal in Baguio City. For the month, it
has the following data, VAT exclusive:
Sales, net P 400,000
Purchases of merchandise 80,000
Purchase of delivery equipment, 5 – year life 1,200,000
PLDT bill 30,000

65. How much can the local government of Baguio City withhold as VAT from its payment to the VAT
– registered construction materials supplier?
A. None B. P 20,000 C. P 28,000 D. P 48,000

66. What if the buyer of the construction materials is non – government entity. How much will be the
VAT payable for the month?
A. None B. P 32,400 C. P 36,000 D. P 38,400

67. When to file the VAT return?


A. Weekly B. Monthly C. Quarterly D. Yearly

Nos. 68 to 70 are based on the following information:


Lola Bertol, 65 years old, grandmother, was treated by her grandchildren Luz, Vi and Minda to
Max’s Restaurant during grandparents day and their total bill is P2,240.

68. How much is the discount of the Senior Citizen?


A. P 100 B. P 160 C. P 200 D. P 400

69. How much is the VAT?


A. P 60 B. P 100 C. P 180 D. P 240

70. If the seller is non – VAT enterprise, how much is the discount of the Senior Citizen?
A. P 100 B. P 112 C. P 160 D. P 180

/cde

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 11

TAXATION

FIRST PRE-BOARD EXAMINATION

INSTRUCTIONS. Select the correct answer for each of the following questions. Mark only one answer
for each item by the corresponding of your choice on the answer sheet provided. STRICTLY NO
ERASURES ALLOWED. Use Pencil No. 2 only

1. In one view, the power to tax involves the power to destroy while in another view, the power to
tax does not involve the power to destroy. Which among the following statements does not
reconcile the two seemingly inconsistent views?
A. The power to tax could not be the subject of compensation and set-off.
B. The first view refers to a valid üx while the second view refers to an invalid tax.
C. An illegal tax could be judicially declared invalid and should not work to prejudice a taxpayer's
property.
D. The imposition of a valid tax could not be judicially retrained merely because it would prejudice
taxpayer's property.
Ans: A

2. Statement 1. Jurisdiction js the reason why the government could impose estate tax on the
property of resident alien decedents located outside the Philippines.
Statement 2. Symbiotic relationship between the taxpayers and the State is the reason why the
former must provide support to the latter so that it could continue to give protection.
A. Both statements are true,
B. Both statements are false.
C. Only statement 1 is true but not statement 2,
D. Only statement 2 is true but not statement 1.
Ans: A

3. A tax does not meet the public purpose inherent limitation if it:
A. Is for the benefit principally of limited subjects or objects.
B. Affects the areas as a community rather than as were individuals.
C. Is for the welfare of the nation or greater portion of the population.
D. Is designed to support the services of government for some of its recognized objects.
Ans: A
Nos. 4 to 6 are based on the following information: KaLansay, Filipino citizen, died on February 14,
2016, leaving the following:
Exclusive properties P2,000,000

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 12

Conjugal real properties (including the family home bought


by the spouses with FMV of at the time he died) 2, 500,000
Funeral expenses (40% Unpaid) 122,000
Judicial expenses (20% incurred 8/31/16) 60,000
Unpaid mortgage on inherited property 30,000
Notes payable (1/2 notarized) 80,000
Claim against insolvent person (50% collectible) 400,000
Proceeds of life insurance (beneficiary - estate irrevocable) 100,000
Medical expenses (1/2 paid) 300,000
The exclusive properties had FMV of P500,000 when inherited2-1/2 years ago with P80,000 unpaid
mortgage.
Based on the foregoing data:
4. The total conjugal property is:
A. P 2,500,000 B. P2,600,000 C. 2,900,000 D. P 3,000,000
Ans: D
Solution
Conjugal rea property 2,500,000.00
Claims againts Insolven person 400,000.00
Proceeds of life Insurance(irrevocable) 100,000.00
Total Conjugal property 3,000,000.00

5. The total exclusive property is:


A. P420,000 B. P500,000 C. P 1970,000 D. P 2,000,000
Ans: D
Solution
Exclusive propeties 2,000,000.00
6. The total ordinary conjugal deduction is:
A. P410,000 B. P422,000 C. P 440, 000 D. P 462,000
Ans: A
7. The total ordinary exclusive deduction is:
A. P 30,000 B. P88,000 C. P 246,000 D. P 276,240
Ans: D
8. The amount of vanishing deduction is:
A. P229,824 B. P246,240 C. P 257,184 D. P 273,600
Ans: B
9. The deduction for family home is:
A. None B. P600,OOO C. P1,000,000 D. P1, 200,000
Ans: B
10. The total amount of special deduction is:

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CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 13

A. P300,000 B. P 1,300,000 C. P 1,900,000 D. 2, 900,000


11. . The share of the surviving spouse in the net conjugal property is:
A. P 1,269,000 B. P 1,280,000 C. P 1, 289,000 D. P1, 295, 000
Ans: D
12. TheTaxable net estate is:
A. P270,000 B. P 929, 000 C. P 1,118,760 D. P 1,295,000
Ans: C
13. Dina Cabangon, a resident citizen, died on November 1, 2016 and her estate incurred losses due
to:
1st loss: From fire on February 5, 2017, of improvement on her property not compensated for by
insurance.
2nd loss: From tsunami triggered by tectonic-origin earthquake on May 10, 2017, of household
furniture and fixtures also not compensated by insurance.
A. Both losses are deductible from gross estate.
B. Both losses are not deductible from gross estate.
C. 1st loss is deductible from gross estate while the 2nd is not.
D. 1st loss is not deductible from gross estate while the 2nd loss is.
Ans: C

14. Palito, a citizen of the Phi!ippines and resident of Baguio City died intestate on Ju!y 4, 2017.
Among his gross estate is a property inherited from his deceased father who died June 10, 2014.
What percentage of deduction will be used in computing the amount of vanishing deduction?
A, 21% B. 40% C. 60% D. 80%
Ans: B

Number 15 to 19 are based on the following information:


I ne decedent was a head of famiiy Fiiipino citizen.
The administrator of the estate arrived at a net taxable estate as follows:

Real and personal properties P 5,000,000


Family home 1,5000,000
Ordinary deductions:
Funeral expenses (400,000)
Other deductions (950,000)
Special deductions:
Family home (1,500,000)
Medical expenses (600,000)
Taxable net estate P 3,050,000

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CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 14

15. The gross estate is:


A. P 5,000,000 B. P 5,750,000 C. P 6,000,000 D. P 6,500,000
Ans: D
16. The deduction for funeral expenses is:
A. P 0. B. P 200,000 C. P 325,000 D. P 400,000
Ans: B
17. The deduction for family home is:
A. P 0. B. P750,000 C. P 1,000,000 D. P 1,500,000
Ans: C

18. The total deductions to be claimed is:


A. P 2,650/000 B. P 2,950,000 C. P 3,650,000 D. P 3,875,000
Ans: C
19. The taxable net estate shall be:
A. P 2,850,000 B. P 2,950,000 C. P3,650,000 D. P 3,875,000
Ans: A
20. An estate tax return need not be filed by the executor, administrator or any of the (egal heirs on:
A. Transfers subject to tax.
B. Transfers consisting of registered or registrable property.
C. Exempt transfers where the gross value of the estate exceeds P200,000.
D. Exempt transfers where the gross value of the is P200,000 and below.
Ans: D
21. In transfer in contemplation of death, revocable transfer and transfer under a general power of
appointment, there are rules to observe to determine what amount to include in the gross estate.
Which of the following is not a rule to observe?
A. If the transfer was in the nature of a bona fide sale for an adequate and full consideration in money
or money's worth, no value shall be included in the gross estate.
B. If there was no consideration received on the transfer as in donation mortis causa, the value to
include in the gross estate shall be the FMW of the property at the time of the transfer.
C. If there was no consideration received on the transfer as in donation mortis causal the value to
include in the gross estate shall be the FMV of the property at the time of the decedent's death.
D. If the amount received on the transfer was less than adequate and full consideration in money or
money's worth, the value to include in the gross estate shall be the excess of the FMV of the
property at the time of the decedent's death over the consideration received.
Ans: B
22. For proceeds of life insurance not to be included as part of the gross estate:
A. Must have been taken out by the decedent upon his own life
B. Must have designated the estate of the decedent as revocable or irrevocable beneficiary,

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CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 15

C. Must have designated a third person other than the estate, the decedent's executor or administrator
as revocable beneficiary.
D. Must have designated a third person other than the estate, the decedent's executor or administrator
as irrevocable beneficiary.
Ans: D
23. SK Litton, Filipino, has one year more to reach the optional retirement age of 60 years old as an
employee of a private firm. Unfortunately, he met a fatal vehicular accident that caused his
instantaneous death. He was survived by his wife and received P500,000 from SK's employer as
benefit under RIA, 4917, The amount that must be included as part of SK Litton's gross estate is:
A. None B. P 200,000 C. P250,000 D. P500,000
Ans: D
24. Continuing No. 23, the amount that must be claimed as a special deduction from SK Litton's gross
estate for the benefit received by the wife under R.A. 4917 is:
A. None B. P200,000 C. P250,000 D. P500,000
Ans: C
25. Going back to No. 23 and assuming this time that SK Litton was single when he died, the amount
that must be claimed as a special deduction from the gross estate for the benefit received under
RSA, 4917 is:
A. None B. P200,000 C. P 250,000 D. P500,000
Ans: D
26. Referring again to No. 23, the taxable net estte arising from the retirement benefit received under
R.A. 4917 irregardless of whether or not SK Litton died as married or single is:
A. None B. P200,000 C.P250,000 D. P500,000
Ans: A
27. Statement 1: When there is reciprocity; the transfer of intangible personal property located in the
Philippines of a resident alien donor is subject to tax.
Statement 2. Where a personal property classified as capital asset is transferred for less than
adequate and full consideration in money or money's worth, the fair market value of the property
less the consideration received is deemed a gift subject to donor's tax.
A. Both statements are right.
B. Both statements are wrong.
C. Statement 1 is right but statement 2 is wrong.
D. Statement 2 is right but statement 1 is wrong.
Ans: A
28. Mayaman wanted the painting hanging on the wall of his living room replaced with a new one. He
the sells it to his bosom friend, Salamat, at a very low price of P500,000. Its fair market value is
P750,000. He bought the painting several years ago at an exhibit held in Shangri-La for P300,000.
The gain on sale of the painting is
A. P200,000 B. P 300,000 C. P450,000 D. P500,000

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CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 16

29. Continuing No. 28, how much, if any, is the deemed gift?
A. None B. P250,000 C. P300,000 D. P450,00
Ans: B
30. In the preceding number, the rate/s of donor's tax, if appiicabie, is:
A. 30% of the net gift.
B. Not subject to donors tax.
C. 5% on the first P100,000 of the taxable net gift and 10% on any amount of taxable net gift in
excess of P100,000.
D. The progressive rates under Sec. 99 (A) of the NIRC of 1997 based on aggregate net gifts made
during a calendar year.
Ans: A

31. Which of the following statement is wrong?


A. Gift-splitting is a form of tax avoidance.
B. The uncle who is a brother of the donor's father-in-law is a stranger to the donor for purposes of
the donor's tax.
C. A gift made to a relative in January 2017 is to be added to the gift made to the same relative in
December 2017 in determining the donor's tax.
D. Renunciation by an heir including the surviving spouse of his share in the hereditary estate left by
the decedent is exempt from donor's tax even if done in favor of identified heir to the exclusion or
disadvantage of other co-heirs in the hereditary estate.
Ans: D
32. Properties owned before marriage and brought into the marriage are generally classified as:
I. Exclusive properties under conjugal partnership of gains.
II. Common properties under absolute community of properties.
A. Only I is correct, C. Both I and Il are correct
B. 11 is correct. D. Both I and Il are incorrect.
Ans: C
33. Statement 1. The Philippine Constitution does not prohibit double taxation-
Statement 2. If direct duplicate taxation occurs, the Éxpayer may seek relief under the uniformity
rule or equal protection guarantee.
A. . Only statement 1 is true.
B. Only statement 2 is true
C. Both statements 1 and 2 are true.

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 17

D. Both statements 1 and 2 are false.


ans: B
34. Community properties shall include all properties owned by the spouses at the time of the
celebration of the marriage or acquired thereafter. Which of the following is an exclusive
property?
A. . Properties inherited by the spouses as donation before the marriage.
B. Properties acquired by the spouses as donation before the marriage.
C. Properties acquired using the income of either spouse earned before marriage.
D. Properties acquired before marriage by either spouse who had legitimate descendants by a former
marriage.
Ans: D
35. Statement 1. Donations by an adopter to a legally adopted child or vice-versa shall be considered
as donations made to non-stranger.
Statement 2. Donations by and between a legally adopted child and the children or other blood
relatives of the adopter and vice-versa shall be considered as donations made to stranger.
A. Both statements are correct.
B. Both statements are incorrect.
C. Statement 1 is correct but not statement 2.
D. Statement 2 is correct but not statement 1,
Ans: A
36. Mr. and Mrs. Bigay wanted to donate a parcel of land to their son Pogi who is getting married in
December 2016. The parcel of land has a zonal value of P420,000. What is the most efficient
mode of donating the property?
A. Spread the donation over a period of 5 years by the spouses donating PIOO,OOO each year from
2016 to 2019 and P20,OOO in 2020.
B. The spouses should each donate a PI 10,000 portion of the value of the property in 2016 then each
should donated PIOO,OOO in 2017.
C. The spouses should first donate in 2016 a portion of the propetf valued at P20,000 then spread the
P400,OOO equally for 2017, 2018, 2019 and 2020.
D. The soouses should each donate a PIOO,OOO portion of the value of the proper-W in 2016 and
another P100,000 each in 2017. Then, in 2018, they should donate the remaining P20,000.
Ans: B
37. Malakas and Maganda got married before the effectivity of the New Family Code, devoid of any
pre- nuptial agreement, A year later, Maganda received a donation consisting of a 400 square-
meter lot with a modest bungalow house erected thereon. The couple leased the house to a tenant
and saved all the rentals thereon. The said rental receipts were then used to construct their own
residence on the vacant one-half portion (200 square-meter) of the same lot. Maganda died, and
the following information was available at the time of her death.
FMV of 400 square-meter lot P 800,000

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CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 18

FMV of rented bungalow house 200,000


FMV of family house 500,000
The gross estate of Maganda amounts to:
A. P800,000 B. P1,000,000 C. P 1,250,000 D. P 1,500,000
Ans: D

38. Continuing No.38, the deduction for family home is:


A. P250,000 B. P 650,000 C. P1,000,000 D. P1,050,000
Ans: B
39. Assume the same facts in No. 38, except that the couple got married after the effectivity of the
New Family Code and assume further that it was Malakas who died (not Maganda). The gross
estate of Malakas would be:
A. Zero B. P250,000 C. P500,000 D.P700,000
Ans: A
40. Going back to No. 38, the gross estate of Malakas if he was the one who died (rather than
Maganda) Would d be.
A. Zero B. P250,000 C. P500,000 D. P700,000
Ans: C
41. A VAT-registered person made the following sales for the month of June 2016:
Cash sales, exclusive of VAT P 300,000
Open account sales, invoice price 550,000
Installment sales, invoice price 990,000
Consignments, VAT exclusive:
June 1 (sold already) 400,000
April 1 800,000
June 15 300,000
The total output tax is:
A. P 249,000 B. P345,000 C. P364,000 D. P381,000
42. The gross sale and/or receipts of a taxpayer for the year are from the following sources:
Grocery store P1,500,000
Sale of gold to the BSP 419,500
Passenger jeepneys for hire 500,000
Which of the following statement is correct?
A. The taxpayer is required to register for VAT because the basis for registration is the total gross
sales and/or receipts of P2,419,500.
B. The taxpayer may elect to register for VAT because his annual gross sales and/or receipts as basis
for optional registration amount to only P1,919,500.
C. The taxpayer may elect to register for VAT because his annual gross sales and/or receipts as basis
for optional registration amount to only

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 19

D. The taxpayer is not required to register for VAT because his annual gross sales and/or receipts has
no bearing in the optional or compulsory registration as VAT taxpayer.
Ans: B
43. As regards a revenue measure, which of the following statements is wrong?
A. The President may recommend a revenue bill to Congress.
B. The House of Representatives may propose amendments if the bill originates from the Senate.
C. The Senate may propose amendments if the bill originates from the House of Representatives.
D. A House of Representatives version and a Senate version approved separately and then
consolidated in the Bicameral Committee with both houses approving the consolidated version.
Ans: B
44. NatyGok, a spinster Filipino citizen and an avowed devotee of Mama Mary, is a living cancer
patient (stage four) and given only a month to live by her doctor. Her only asset is composed of
cash amounting to P5/000,000. Prior to her death, she asks you whether she would transfer her
property by way of donation inter vivos (donor's tax) or donation mortis causa (estate tax) to a
well-to-do cousin who pledged paying for the funeral expenses when her last moment comes.
You presented to her that the aggregate donor's tax due is P204,000 plus 10% of excess over and
the aggregate estate tax due is P135,000 plus 11% of excess over P2,000,000.
Naturally, NatyGok preferred paying the tax by means of donation inter vivos (rather than thru
donation mortis causa) because of the lesser transfer tax to be paid. Is she correct?
A. Yes, because NatyGok is still alive.
B. No, because the estate tax is cheaper by P49,000.
C. No, because whether donor's tax or estate tax is to be paid, the transfer tax amount would be the
same,
D. Yes, because there will be tax savings of P61,000.
Ans: B
45. Supposing that in the preceding number, the wealthy would be successor of NatyGok's property is
a second cousin, yet she still prefers paying donor's tax over that of estate tax. Is she correct?
A. Yes, because she is still alive.
B. NO, because the amount of transfer tax to be paid would-be the same under either donor's
taxation or estate taxation.
C. No, because the donor's tax will be expensive by over a million pesos.
D. Yes, because her wealthy successor is still a non-stranger cousin.
Ans: C

Nos. 46 to 48 are based on the following information: A widowed non-resident alien donor made the
following donations, all on the same day:
Donee Property FMV
To a daughter on her House and lot in the Philippines P2,000,000

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 20

wedding day.
To Development Academy Time deposit in BDO 500,000
of the Philippines. Unibank.
To a son on his birthday. Saving account in PNB
Unibank 300,000
There is an unpaid mortgage of P500,000 on the house and lot which the daughter assumed. Also, the
donor wants 25% of the gift to the son be donated to a Roman Catholic Church of his choice in the
Philippines,
46. The total gross gifts is:
A. P2,225,000 B. P2,300,000 C. P2,500,000 D. P2,800,000
47. The total exemptions or deductions is:
A. P75,000 B. P225,000 C. P1,075,000 D. P1,085,000
Ans: C
48. The taxable net gift is:
A. P 1,425,000 B. P1,725,000 C. P2,075,000 D.P2,150,000
Ans: B
49. The Commissioner of Internal Revenue may grant an extension of time for the payment of the
estate tax or any part thereof in case the estate is settled extrajudicial for a period not exceeding:
A. Two years from grant of the extension.
B. Five years from grant of the extension.
C. Two years from the settlement of the estate.
D. Five years from the settlement of the estate,
Ans: A
50. Which one of the following is not among the characteristics or nature of value-added Ex (VAT)?
A. It is an indirect tax.
B. It is a percentage tax.
C. It is a tax on property.
D. It is a tax on consumption.
Ans: C
51. The following are the various VAT methods and systems. Which one is a contradiction?
A. Tax credit method,
B. Cost deduction method.
C. Neither tax credit method nor cost deduction method.
D. Mixture of tax credit method and cost deduction method.
Ans: C
52. A business operator has his main office in Manila and two branch offices in Makati. How many
certificate of reaistratjon shall be issued by Bureau of Internal Revenue (BIR)?
A. Two, for the two branches.
B. Two, one for Manila and one for Makati.

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 21

C. Three, for the two branches and the main office.


D. One, only for the main office in Manila.
Ans: C
53. Which one of the following is subject to VAT?
A. Keepers of garages.
B. Customs brokers and dealers in securities.
C. Crop insurance of non-life insurance companies,
D. Sale of marine food products in their original state by a dealer.
Ans: B
54. In the course of trade, business or exercise of profession taxpayers are required to register with the
BIR:
A. Monthly.
B. Quarterly,
C. Every year on January 31.
D. Once only before commencing operation.
Ans: C
55. A VAT-registered entity had the following data for the month of October 2016:
Sales (VAT excluded) P980,000
Merchandise paid to creditors (VAT excluded) 436,000
Purchases of goods (VAT included):
From VAT-registered supplier 756,000
From non-VAT person 75,000
Purchases of services (VAT included):
From VAT-registered person 61,600
From non-VAT person 25,000
Salaries and wages 50,000
Operating expenses 150,000
Purchases from person subject to percentage tax 25,000
The value-added tax payable for October 2016 is:
A. P64,200 B. P69,816 C. P76,800 D. P82,416
Ans: D
Nos. 56 to 58 are based on the following information:
From the books of accounts were transactions for each of the months of October, November and
December (last quarter) of 2016 of a VAT-registered taxpayer:
October November December
Credits to sales account P492,800 P616,000 P770,000
Debit to purchases account
on local purchases of goods from:
VAT-registered persons 123,200 739,200 369,600

SET A
CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 22

Non-VAT registered persons 44,800 67,200 33,600


There was debit balance in the Input Taxes account in the preceding quarter of P15,600.
56. The value-added tax payable at the end of October is:
A. P19,200 B. P24,000 C. P23,376 D. P28,752
Ans: D

57. The value-added tax at the end of November is:


A. Payable of PO C. Refundable of P13,200
B. Payable of P20,400 D. Refundable of P14,784
Ans: A
58. The value-added tax payable at the end of December is:
A. P18,4800 B. P33,264 C. P34,320 D. P49,104
Ans: B
59. After recognizing the value-added tax payable for the last calendar quarter of 2016, the books of
accounts of a VAT-registered retail store showed a debit balance in the Input Taxes account of
P2,500. Transactions in the first calendar quarter of 2017 per books were:
Sales P2,100,000
Sales discounts 42,000
Sales returns and allowances 105,000
Purchases (at total invoice costs) of:
Goods for sale from VAT-registered suppliers 840,000
Goods for sale from non-VAT registered persons 336,000
Services from VAT-registered service providers 280,000
Equipment (6-year life) bought at start of year from
VAT-registered person 1.176,000
Operating expenses 505,000
Value-added tax paid first two months of the quarter 16,920
Importation for sale:
Invoice cost from country of origin (1$ : P48.00) $10,000
Freight and insurance P15,000
Customs duty 26,000
Excise tax 2,500
Other expenses:
Prior to removal of the goods from customs custody 3,500
After removal of the goods from customs custody 2,000
Facilitation expense 5,000
The value-added tax on the importation is:
A. P62,040 B. P63,180 C. P63, 240 D. P63,480
60. Continuing No. 69, the value – added tax payable at the end of the quarter is:

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CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 23

A. P 25, 400 B. P31,790 C. P32,030 D. P32, 820


61. Statement 1. The basis of or rationale for taxation explains the reason why a state may impose
taxes
Statement 2. The theory of taxation explains why there is a need to impose taxes.
A. Both statements are true
B. Both statements are false.
C. Statement 1 is true while statement 2 is false.
D. Statement 2 is true while statement 1 is false.
Ans: A
62. Nature of the power of taxation:
A. An inherent power only.
B. A legislative power only.
C. Both an inherent power and a legislative power.
D. Neither an inherent power nor a legislative power.
Ans: C
63. A person may be imprisoned for:
A. Failure to pay a debt.
B. Non-payment of capitation tax.
C. Failure to pay the community tax.
D. Non-payment of value-added tax.
Ans: C
64. The NIRC of 1997 imposes different kinds of taxes on dispositions of property. These are VAT,
OPT, excise taxes, estate tax, donor's tax, etc. Which among the following transactions would be
subject to a transfer tax?
A. Sale of articles that are exempt from VAT.
B. Sale of cigars and cigarettes by a manufacturer.
C. Sale of automobile for less than an adequate and full consideration.
D. Sale of shares of stock that are listed and traded at the local stock exchange.
Ans: C
65. Donor's tax is imposed on the privilege to:
A. Receive property inter vivos.
B. Transfer property inter vivos.
C. Receive property mortis causa.
D. Transfer property mortis causa.
Ans: B
66. Which among the following distinguishes an estate tax from other kinds of taxes that are presently
imposed under the provisions of the NIRC of 1997?
A. It is a tax that is imposed upon gratuitous transfers.
B. It is a Ex that is imposed only upon the death of a person.

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CRC-ACE/TAXATION: FIRST PRE-BOARD EXAMS(May 2019 batch) Page 24

C. It is a tax imposed on the privilege to transfer property ownership.


D. It is a tax that is imposed upon the net value of the properties that are transferred.
Ans. C
67. Statement 1. In determining the situs of taxation, the subject matter of the tax is not to be
considered at all.
Statement 2. In a gratuitous transfer of property, situs is the taxpayer's residence, citizenship or
location of the property.
A. Both statements are correct.
B. Both statements are incorrect.
C. Statement 1 is correct but statement 2 is incorrect.
D. Statement 2 is correct but statement 1 is incorrect.
Ans: D
68. Which one of the following statements is not correct?
A. In the exercise of the power of taxation, the state can tax anything at any time.
B. Taxes may be imposed to raise revenues or to provide disincentives to certain activities within the
State.
C. The provisions of in the Philippine Constitution are grants of power and not limitations or taxing
powers.
D. The State can have the power of taxation even if the Constitution does not expressly give it power
to tax.
Ans: C
69. In donation, donor's tax is imposed as the ownership of the property passes from the:
A. Donee to the donor.
B. Donor to the donee.
C. Decedent to the heir.
D. Heir to the successor.
Ans: B
70. How many degrees or generation apart are third cousins?
A. Two B. Four C. Six D. Eight
Ans: D

END OF EXAMINATION

SET A