TAXATION

INSTRUCTIONS: Select the best answer for each of the following questions. ALL questions are compulsory and
MUST be attempted. Mark only one answer for each item on the answer sheet provided. Strictly NO ERASURES
ALLOWED. Erasures will render your examination answer sheet INVALID. Use PENCIL NO. 2 only. GOODLUCK!

1. The Congress, after much public hearing and

consultations with various sectors of society, came to 5. Situs of taxation is world/global taxation
the conclusion that it will be good for the country to A. B. C. D.
have only one system of taxation by centralizing the Resident citizen True True True False
imposition and collection of all taxes in the national Nonresident True True False False
government. Accordingly, passed law that would citizen
abolish the taxing power of all local government units. OCWs True True False False
Would such a law be valid under the present Special Filipino True True True False
Constitution? employee
I. Yes, the law centralizing the imposition and Resident alien True False False False
collection of all taxes in the national government
Nonresident alien True False False False
would not contravene the Constitution as long as a
Special alien True False False False
new law is enacted for the common good of the
employee
people.
II. No because under the present Constitution, each
local government unit shall have the power to 6. Determine the correct classification of the following:
create their own sources of revenue and to levy I. Manny, a Filipino businessman, went on a business
taxes, fees, and charges subject to such guidelines trip abroad and stayed there most of the time
and limitations as Congress may provide consistent during the year.
with the basic policy of local autonomy. II. Kyla, a Filipino professional singer, held a series of
concerts in various countries around the world
III. No. It is clear that Congress can only give the
during the current taxable year. She stayed abroad
guidelines and limitations on the exercise by the
most of the time during the year.
local governments of the power to tax but what
III. Efren, a Filipino “cue” artist who went to Canada
was granted by the fundamental law cannot be
during the taxable year to train and participate in
withdrawn by Congress.
the world cup of pool. He stayed therein most of
a. I only c. I, II and III
the time during the year.
b. II and III only d. None of the above
A. B. C. D.
2. Statement 1: Income tax collected from the taxpayers I NRC RC RC RC
is the main source of revenue of the local government. II NRC NRC RC RC
Statement 2: Taxes collected are the main source of III NRC NRC NRC RC
revenue of the government.
A. B. C. D. 7. LJ, married, left the Philippines in the middle of the year
Statement1: True True False False on July 1, 2015 to go abroad and work there for five (5)
Statement2: True False True False
years. The following data were provided as of
3. Which of the following statements is true?
December 31,2015:
Gross Business Business Expenses
a. The power of taxation and eminent domain are
both exercisable only by the government and its PERIOD Income
Phls. Abroad Phls. Abroad
political subdivision.
b. In police power, the property taken is preserved Jan. 1 to P300,000 P200,000 P100,000 P50,000
June 30
for public use.
c. The power of eminent domain is created by the July 1 to 600,000 400,000 150,000 50,000
Dec. 31
constitution.
d. The exercise of the power of eminent domain and
His taxable income is:
police power can be expressly delegated to the
local government units by the law making body. a. P750,000 c. P1,100,000
b. P950,000 d. P600,000
4. Under the Final Withholding Tax system, which of the
8. Vincent sold his principal residence for P10,000,000 to
following statements is not correct?
a. Income tax withheld by the withholding agent is his friend. Its FMV when he inherited it from his father
was P12,000,000 although its present FMV is
constituted as a full and final payment of the
income tax due from the payee on the said P15,000,000. He used ½ of the proceeds to buy a new
principal residence within eighteen (18) months after
income.
b. The liability for payment of the tax rests primarily the sale. Assume further that Vincent properly
informed the BIR about the sale within the required
on the payee as a recipient of income.
c. In case of failure to withhold the tax, the period. It shall be:
a. Exempt from capital gains tax
deficiency tax shall be collected from the
withholding agent. b. Subject to P300,000 capital gains tax
c. Subject to P450,000 capital gains tax
d. The payee is no longer required to file an income
tax return for the particular income. d. Subject to P600,000 capital gains tax

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9. Mr. Almansor Sebastian, an Arabian and a resident of a. P380,500 c. P595,000
Saudi Arabia, requested you to determine his taxable b. P304,000 d. P446,500
income tax for 2015. His gross income in the
Philippines is composed of P400,000 interest income 13. Mike Ong received P100,000 winnings from
from various peso bank deposits, P200,000 FCDS bank cockfighting. Determine his tax liability.
deposits, P100,000 dividend income from domestic I. Subject to 10% OPT (tax on winnings) under
corporations and PCSO winnings of amounting to Section 126 of the Tax Code
P500,000. The total income subject to tax in the II. Subject to basic income tax
Philippines is III. Subject to 20% final tax on passive income
a. P0 c. P1,000,000 IV. Subject to 10% OPT (tax on winnings) under
b. P1,000,000 d. P1,200,000 Section 126 of the Tax Code and 20% final tax on
passive income
10. Ms. Ganda Mee, a resident citizen with four (4) a. I only c. III only
qualified dependent illegitimate children living with and b. II only d. I and III
dependent also for her chief support provided the
following data for the year: 14. Mike Ong received P100,000 winnings from
Compensation income as a Secretary P375,000 horseracing. Determine his tax liability.
to the President of MVUS Corporation I. Subject to 10% OPT (tax on winnings) under
(net of P125,000 withholding tax) Section 126 of the Tax Code
Mid-year bonus and 13th month pay 60,000 II. Subject to basic income tax
Rental income from condominium units 228,000 III. Subject to 20% final tax on passive income
in Ortigas(net of withholding tax) IV. Subject to 10% OPT (tax on winnings) under
Income as a professional singer in an 229,500 Section 126 of the Tax Code and 20% final tax on
international hotel in Makati (net of passive income
creditable withholding tax) a. I only c. III only
Income from talent fees paid by TV 955,000 b. II only d. I and III
Shows as regular host
(gross amount however the creditable 15. A “Joint Account” is constituted when one interests
tax was already remitted) himself in the business of another by/and
Interest income from deposits in 50,000 I. Contributing capital thereto.
domestic bank II. Sharing in the profits or losses in the proportion
Royalty income from pocketbooks 300,000 agreed upon.
published III. They are not subject to any formality.
IV. It may be privately contracted orally or in writing.
During the year, two of her children became gainfully a. I and II only c. I, II, III and IV
employed, one got married at the age of 19 and the b. I, II and III only d. None of the above
eldest reached the age of 21. Determine the correct
amount of basic tax and final tax on passive income 16. Statement 1: The share of a co-venturer individual in
A. B. C. D. the net income of a tax-exempt joint venture or
Basic Tax P235,250 P235,250 P283,000 P283,000 consortium is subject to normal income tax under
Final Tax P40,000 P70,000 P40,000 P70,000 Section 24A of the tax code.
Statement 2: The share of a co-venturer individual in
the net income of a tax-exempt joint venture or
Use the following data for the next three (3) questions
consortium is subject to creditable withholding tax of
Hajib, a Russian national who is an employee in the
20%.
regional area headquarter of a multinational corporation,
a. Only statement 1 is correct
occupying “managerial” position, had the following data
b. Only statement 2 is correct
for taxable year 2015:
c. Both statements are correct
Salaries received P600,000
d. Both statements are incorrect
Allowances and honoraria 50,000
Other emoluments 100,000
17. The following information were taken from the records
Monetary value of fringe benefits subject to 170,000
of NFJPIA Inc., a domestic corporation already in its
fringe benefit tax
fifth year of operation:
De minimis benefits (within the ceiling) 50,000
Gross profit from sales P3,100,000
Dividend income from a domestic corporation 40,000
Capital gain on sale directly to 100,000
Interest income from peso bank deposit 50,000
buyer of shares in a domestic
Interest income from foreign currency deposit 20,000
corporation
under FCDS
Dividend from:
PCSO winnings (gross) 1,000,000
Domestic corporation 20,000
Raffle draw winnings 80,000
Resident foreign corporation 10,000
Gain from sale of shares of a domestic
Interest on: 20,000
corporation sold directly to a buyer 150,000
Bank deposit
Gain from sale of a vacant lot in Quezon City 500,000
Trade receivable 50,000
held as investment
Business expenses 2,100,000
(SP=P2,500,000; Cost=P2,000,000; Zonal
Income tax withheld 115,000
Value=P2,500,000)
Quarterly income tax payments 160,000
11. The total income tax expense of Hajib in the Income tax payable prior year (10,000)
Philippines is:
a. P535,000 c. P570,000
b. P565,000 d. P315,000
12. Assuming the taxpayer is a Special Filipino Employee,
his total combined taxes on all income from the
Philippines is:

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The income tax due at the end of the year: 22. An offshore banking unit, already in its 8 th year in the
a. P318,000 c. P43,000 Philippines, has the following data in its income and
b. P63,200 d. P33,000 expenses for the year 2015:
Foreign currency transactions
Next two (2) questions are based on the following: with:
Be Jolly Corporation has the following information for the Non-residents 1,800,000
taxable year 2015: Local banks 1,200,000
Branches of foreign banks 1,000,000
QUARTER RCIT MCIT Creditable Another OBU 500,000
Withholding Other residents (Interest 800,000
Tax Income)
First 200,000 160,000 40,000
Second 240,000 500,000 60,000 Other income:
Third 500,000 150,000 80,000 Rent income 1,000,000
Fourth 300,000 200,000 70,000 Miscellaneous income 500,000

Additional Information: Operating Expenses 2,380,000

a) MCIT carry-over amounts to P60,000;
b) Excess tax credits from prior year amounts to How much is the total income tax for the year?
P20,000. a. P80,000 c. P372,500
b. P292,500 d. P0
18. How much was the income tax payable for the second
quarter? Use the following data for the next two questions:
a. P660,000 c. P200,000 Bobadilla Uro Partnership is a general professional
b. P460,00 d. P160,000 partnership, with Bobadilla, married, and Uro, single,
participating equally in the income and expenses. The
19. Using the same data except that the MCIT on the 4 th following are the data for the partnership and the
Quarter is P500,000, how much was the annual income partners in a calendar year:
tax payable? BU Uro Bobadilla
a. P330,000 c. P380,000 Partnership
b. P1,310,000 d. P360,000 Gross
Income P600,000 P150,000 P200,000
20. JC Corporation, a domestic corporation had the Expenses 350,000 70,000 120,000
following data for 2015:
Sales P5,000,000 NOTE: Uro uses his personal car in going to meetings
Cost of goods sold 2,000,000 with client. He was able to determine that the allocated
General selling and administrative 500,000 depreciation and gasoline expense to such meetings is
expenses P35,000. The said amount was not included in the
Interest income from Philippine bank 100,000 expenses claimed by the partnership.
deposit
Rental income (net of 5% withholding 190,000 23. The taxable income of Uro is
tax) a. P220,000 c. P155,000
Dividend Income: b. P120,000 d. P30,000
From domestic corporation 60,000
From foreign corporation 50,000 24. The taxable income of Uro if the Partnership is engage
Capital gains from sale of domestic in trade or business is:
shares of stocks sold Directly to 75,000 a. P220,000 c. P155,000
buyer b. P120,000 d. P30,000
Dividend declared and paid during the 500,000
year 25. The taxable income of Uro if the Partnership opted to
Retained earnings, 12/31/2014 1,000,000 use Optional Standard Deduction is:
Par Value of outstanding shares, 500,000 a. P220,000 c. P155,000
12/31/2015 b. P120,000 d. P30,000
Appropriation for future plant 800,000
expansion Use the following data for the next two (2) questions:
A resident alien had the following data in 2014:
The Improperly accumulated earnings tax was: Gross income, Philippines P2,000,000
a. P208,125 c. P213,625 Business expenses 1,200,000
b. P108,125 d. P105,125
Dividends received:
21. Offshore Banking Units (OBUs) are tax exempt on From domestic corporation (net)
income derived from 60% of its income came from 90,000
I. Foreign currency transactions with local the Philippines
commercial banks. 40% of its income came from 72,000
II. Foreign currency transactions with branches of the Philippines
foreign banks authorized by BSP. From resident foreign corporation
III. Interest income derived from foreign currency (gross)
loans granted to other residents. 60% of its income came from 50,000
a. I only c. I and II only the Philippines
b. II only d. II and III only 40% of its income came from 40,000
the Philippines

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26. The taxpayer’s taxable income is

a. P750,000 c. P796,000 32. Juan received as gift from his mother property
b. P780,000 d. P800,000 purchased ten years ago for P100,000. At the time of
donation, the property had a fair market value of
27. Lenovo, Inc., a resident foreign corporation, has P2,000,000. After owning the property for 3 years,
earned the following income during the taxable year: Juan sold them for P2,500,000. Which of the following
DIVIDEND INCOME FROM: statements is correct?
 Microsoft, a non-resident foreign P 500,000 a. The gain on the sale was a capital gain of
corporation P2,400,000.
 Intel, a resident foreign 400,000 b. The gain on the sale was an ordinary gain of
corporation (ratio of Philippine P2,400,000.
income over world income for the
past 3 years is 40%) c. The holding period of the asset is immaterial
 Panday, a domestic corporation 300,000 d. The gain on the sale going into the net taxable
INTEREST INCOME FROM: income was P2,400,000.
 Current account, BDO 600,000
 Savings deposit, ABN-AMRO 700,000 33. Mr. Mapagbigay had the following data during the
bank, UK year:
 FCDU deposits 800,000 Gross income from business P1,000,000
ROYALTY INCOME from various 100,000 Compensation income 40,000
domestic corporations Long-term Capital gain 50,000
Short-term Capital loss 20,000
The total final tax on passive income for the taxable Operating expenses 400,000
year is: Donation to an accredited 30,000
a. P200,000 c. P230,000 NGO
b. P1,088,000 d. P328,000 Donation to church 40,000

28. Which of the following test of source of income is How much is the taxable income?
incorrect? a. P505,000 c. P535,000
a. Interest income - residence of the debtor b. P525,000 d. P555,000
b. Income from services – place of performance
c. Royalties – place of use of intangible 34. Based on the above problem, but the taxpayer is a
d. Gain on sale of real property – place of sale. corporation, how much is the taxable income?
a. P570,000 c. P560,000
29. Situs of taxation on income from sale shares of a b. P545,000 d. P600,000
domestic corporation.
a. Always treated as income derived from within the 35. BSE College, a proprietary educational institution,
Philippines spent P10 million for the construction of a new school
b. Always treated as income derived from without the building. The amount spent for the construction -
Philippines a. Must be claimed as expense in the year of
c. May be treated as income within or without the completion
Philippines depending on the place of sale b. Capitalized and claim annual depreciation over the
d. May be treated as income within or without the life of the building
Philippines depending where the shares are kept c. Capitalized or expensed outright at the option of
the school
30. Situs of taxation on income from sale shares of a d. Capitalized or expensed outright at the option of
foreign corporation. the BIR
a. Always treated as income derived from within the
Philippines Use the following data for the next two (2) questions:
b. Always treated as income derived from without the Floyd, not a dealer in securities, had the following
Philippines transactions on ordinary shares of JJ Co. (a domestic
c. May be treated as income within or without the corporation) for 2015 taxable year:
Philippines depending on the place of sale Jan. 12 Purchase 100 shares P100,000
d. May be treated as income within or without the June 20 Sold the shares purchased on 80,000
Philippines depending where the shares are kept Jan. 12
June 30 Purchased 70 shares 50,000
31. Joseph provided the following data on sale of his Oct. 15 Sold the shares purchase on 75,000
personal property sold in 2013 held by him for 15 June 30
months:
Cost P225,00 36. How much was the loss on wash sale?
0 a. P20,000 c. P14,000
Mortgage assumed by the buyer 270,000 b. P6,000 d. P0
Installment Collection Schedule:
- 2013 67,500 37. How much was the capital gain on sale of shares on
- 2014 67,500 October 15?
- 2015 45,000 a. P25,000 c. P5,500
b. P11,000 d. P0
How much is the income subject to income tax in
2013, 2014, and 2015? 38. Which of the following is subject to 3% percentage tax
a. P56,250, P33,750 and P22,500, respectively under Section 116 of the Tax Code?
b. P112,500, P67,500 and P45,000, respectively I. Fruit dealer whose gross receipts for the year
c. P225,000, P0 and P0, respectively amounted to P1,200,000 only.
d. None of the choices

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II. An individual taxpayer whose gross sales for the c. The P150,000 selling price is subject to stock
year amounted to P100,000. transaction tax of ½ of 1%.
III. School bus operator whose gross receipts for the d. The sale is exempt from business tax
year amounted to P1,919,500
a. I and II only c. All of the above 45. In 2015, ADB Finance purchased debt securities from
b. I and III only d. None of the above various companies (listed) for P100,000. ADB
classified the securities as Trading Securities/FAFVPL
39. The taxpayer is a trader of poultry feeds. Determine under the applicable accounting standards. ADB
his applicable business tax. received interest income from those securities
a. Subject to 12% vat amounting to P20,000. Determine the applicable tax.
b. Vat exempt but subject to 3% OPT under Section a. The P20,000 interest income is subject to normal
116 corporate tax of 30%
c. 12% vat or 3% OPT, at his option b. The P20,000 interest income is subject to 20%
d. Exempt from 12% vat and OPT final tax
c. The P20,000 interest income is subject to 5%
40. In the case of a person whose VAT registration is capital gains tax
cancelled and who becomes liable to the 3% tax on d. The P20,000 interest income is tax exempt
VAT-exempt persons under Section 116 of the tax
code, the tax shall accrue from the date of cancellation 46. JJ wants to procure marine insurance for his vessels
and shall he paid within: from International Aquatic Insurance Co., a non-
a. 10 days after the end of each taxable month resident foreign corporation, through its agent, in the
b. 15 days after the end of each taxable month Philippines. He paid premiums in 2016 amounting to
c. 20 days after the end of each taxable month P5 million. How much is the premiums tax payable on
d. 30 days after the end of each taxable month the transaction?
a. P500,000 c. P200,000
41. Which one of the following percentage taxes is paid on b. P250,000 d. nil
a quarterly basis?
I. Tax on overseas dispatch, message, or 47. Bulwagan ng Katotohana, radio and television
conversation originating from the Philippines broadcasting franchisee, recorded the following gross
II. Amusement taxes and taxes on winnings receipts and expenses during the taxable year:
III. Stock transactions tax Advertising revenue from:
IV. Percentage tax on international carriers Television division P20,000,000
a. I and II only c. I, II and III only Radio division 5,000,000
b. III and IV only d. I, II, III and IV Donation received for calamity 5,000,000
victims
42. In 2015, ADB Finance (domestic corporation) Expenses:
purchased various equity securities from listed Salary 8,000,000
domestic corporations for P100,000. ADB classified Other Operating 7,840,000
the securities as Trading Securities/FAFVPL under the expenses, including VAT
applicable accounting standards. ADB received
P10,000 dividend income from such investments in What is the amount of business tax advantages
2016.. Determine the applicable tax of ADB. (disadvantages) if AB-GMS is VAT-registered?
a. The P10,000 dividend income is subject to normal a. P840,000
corporate tax of 30% b. P1,699,200
b. The P10,000 dividend income is subject to a final c. (P2,250,000)
withholding tax of 10% d. (P1,410,000)
c. The P10,000 dividend income is subject to a final
withholding tax of 20% 48. Statement 1: International air carriers and
d. The dividend income is tax exempt international shipping carriers shall not be subject to
12% value added tax but to 3% common carrier’s tax
43. In 2015, ADB Finance (domestic corporation) based on gross receipts derived from their transport of
purchased various equity securities from listed passengers and goods from Philippines to other
domestic corporations for P100,000. ADB classified countries.
the securities as Trading Securities/FAFVPL under the Statement 2: In cases when the Gross Philippines
applicable accounting standards. ADB sold the shares Billings Tax of 2.5% for international carriers is not
in 2016 for P150,000. Determine the applicable tax. applicable (i.e., tax exempt based on reciprocity or
a. The P50,000 gain is subject to normal corporate treaty), the common carrier’s tax under Section 118 of
tax of 30% the NIRC, as amended, shall still apply.
b. The P50,000 gain is subject to 5% capital gains tax A. B. C. D.
c. The P150,000 selling price is subject to stock Statement 1 True True False False
transaction tax of ½ of 1%. Statement 2 True False True False
d. The sale is exempt from business tax
49. Farmers products (FP) is a buyer and miller of
44. In 2015, ADB Finance purchased equity securities from
agricultural products. During the first quarter, its
ABC Corporation (non-listed) for P100,000. ADB
transactions are recorded as follows:
classified the securities as Available for Sale
Units Cost/kg.
Securities/FAFVOCI under the applicable accounting
Purchase of palay 500,000kg 15
standards. ADB sold the shares in 2016 for P150,000.
Purchase of corn 200,000kg 8
Determine the applicable tax.
Milling of palay of 4,000,000k 2
a. The P50,000 gain is subject to normal corporate
customers g
tax of 30%
Milling corns of customer 3,000,000k 2
b. The P50,000 gain is subject to 5% capital gains tax
g

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Corn & Coconut, 1-31-13 20,000

FP milled its purchase for productions of rice and corn Purchases from VAT suppliers, VAT
grits with an output of 80% and sold the products to included:
various retailers for P30 per kilo of palay and P20 per Packaging Materials 56,000
kilo of corn grits. Supplies 16,800

How much is the VAT payable of FP during the quarter? The value-added tax payable for the month:
a. P1,680,000 c. P384,000 a. P56,060 c. P60,650
b. P1,440,000 d. P0 b. P54,900 d. P63,000

50. Farmer’s foods services (FFS) is an agricultural 54. Sweet Tooth Inc. is a manufacturer of sugar. It has the
contract grower. During the first quarter, its following data for the year 2013 (assume that amount
transactions are recorded as follows: is net of VAT unless otherwise stated):
Service rendered production Fee per pdn
units Sales from Raw Sugar P4,000,00
Hatching and sorting 1,600,000 10/tray 0
of eggs trays Sales from Refined Sugar 6,000,000
Dressing and packing 1,200,000 20/pack Sugar Cane Inventory, 12-31-12 1,500,000
broilers packs Purchases of Sugar Cane 7,000,000
Reforestation with 1,000,000 5/tree Sugar Cane Inventory, 12-31-13 2,500,000
government program trees Purchases from VAT suppliers, 672,000
gross of VAT
FFS conducts production 30 days in a month because How much is the VAT payable?
of the demand of the service. It also runs a canteen for a. P396,800 c. P368,000
its workers and passers-by. The canteen has a total b. P508,800 d. P480,000
sales of P50,000 a day.
Use the following data for the next three questions:
How much is the VAT payables of FFS during the A VAT-registered trader has the following transactions:
quarter? Sales of good to private entities, net of P2,500,000
a. P600,000 c. P135,000 VAT
b. P540,000 d. P0 Purchases of goods sold to private 896,000
entities, gross of 12% VAT
51. Determine the business taxes of the following: Sales to a government owned 1,000,000
I. Lease of residential units with a monthly rental per corporation (GOCC), net of VAT
unit not exceeding P12,800 (regardless aggregate Purchases of goods sold to GOCC, net 700,000
annual gross rentals). of 12% VAT
II. Lease of residential units with a monthly rental per 55. How much is the creditable input tax?
unit exceeding P12,800 but the aggregate of such
a. P166,000 c. P70,000
rentals of during the year do not exceed
b. P96,000 d. P180,000
P1,919,500.
III. Lease of commercial units regardless of monthly
56. How much is the input tax closed to expense
rental per unit.
(income)?
A B C D a. P14,000 c. (P14,000)
I None None None Vat b. P34,000 d. (P34,000)
II OPT OPT OPT Vat
III Vat OPT Vat Vat 57. How much is the VAT payable to the BIR?
a. P404,000 c. P204,000
52. CG Corporation is a vat registered entity with the b. P390,000 d. nil
following data for a taxable month:
Domestic sales P500,000 58. JJ gave gifts to the following persons on his 40th
Transaction deemed sales 500,000 birthday:
Export sales 500,000  A second hand car worth P350,000 to Kaskasero,
Sales to DEF, an export oriented 500,000 his trusted driver. The donation was made orally.
enterprises Since then, the driver had taken possession of the
(2/3 of DEF’s annual output is actually property.
exported)  To his Mayordoma, Ms. Mercy, a lot with a
Purchases (invoice cost from vat 224,000 bungalow thereon, The value of the property is
registered entities) P1,200,000. The donation provides that it may be
Purchases (invoice cost from non-vat 100,000 revoked anytime at the pleasure of JJ.
registered entities)  His flower shop worth P700,000 to Hardinero, his
gardener. The donation is provided in his will.
The vat payable of CG should be  Cash of P50,000 each to his three closest friends.
a. P216,000 c. P156,000
b. P204,000 d. P96,000 How much is the donor's tax due on the above
donations?
53. Mantika Corp., a VAT-registered Corp., is a producer of a. P720,000 c. P100,000
cooking oil from coconut and corn. It had the following b. P45,000 d. P1,000
data for the month of January 2014:
Sales, gross of VAT P784,00 59. Amanda Raya sold her properties to her son on the
0 following prices:
Corn & Coconut, 12-31-12 50,000  Residential house for P100,000
Purchases of Corn & Coconut 330,000  Personal properties for P50,000

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Deductions claimed:
The current fair market value on the date of sale was Funeral expenses 575,000
P1,000,000 for the house, and P500,000 for the Judicial expenses 67,500
personal properties. Assuming that you know the facts Donation mortis causa to Quezon City 150,000
as a BIR officer, the correct total tax payable on the government
transaction is – Unpaid mortgage on the farm lot 75,000
Medical expenses (included in the 225,000
a. P12,000 c. None funeral expenses incurred within the 1
b. P72,000 d. P38,000 year period with receipts)
The farm lot was inherited 5 ½ years by the decedent
60. The spouses Esme and Carlisle wanted to donate a before his death with a value then of P575,000 and a
parcel of land to their son Edward who is getting mortgage indebtedness of P150,000.
married in December, 2014. The parcel of land has a
zonal valuation of P420,000.00. What is the most The taxable net estate is:
efficient mode of donating the property? a. P3,757,500 c. P2,757,500
a. The spouses should first donate in 2014 a portion b. P4,982,500 d. P2,672,329
of the property valued at P20,000, then spread
the P400,000 equally for 2015, 2016, 2017 and 64. Jiraiya, non-resident Japanese, died leaving the
2018. following:
b. Spread the donation over a period of 5 years by Exclusive properties, Philippines P560,000
the spouses donating P100,000 each year from Conjugal properties, Philippines 420,000
2014 to 2018. Conjugal properties, Abroad 1,820,000
c. The spouses should each donate a P110,000 Funeral expenses 100,000
portion of the value of the property in 2014 then Judicial expenses 100,500
each should donate P100,000 in 2015. Unpaid expenses 150,500
d. The spouses should each donate a P100,000 Losses: occurring 3 mos. After death 120,000
portion of the value of the property in 2014, and due to fire
another P100,000 each in 2015. Then, in 2016, Donation mortis causa to Makati City 180,000
Esme should donate the remaining P20,000. Hall
Family Home (inc. above), located 1,000,000
61. On July 18, 2014, Mr. Dela Cruz gave a property with a abroad
fair market value of P550,000 to Lester, a legitimate Standard deduction 1,000,000
son, and Jennifer, Lester’s bride, on account of their The taxable net estate is:
marriage celebrated on July 19, 2013. The donor’s tax a. P516,500 c. P1,900,000
payable is: b. P635,150 d. P2,100,000
a. P87,100 c. P84,100
b. P38,000 d. P15,800 65. Expenses not essential in the proper settlement of the
estate but incurred for the individual benefit of the
62. During the current year, Mr. and Mrs. Cabarles, non- heirs, legatees, or devisees are not allowed as “judicial
resident citizens, donated the following: expenses.” Which of the following is not allowed as
Sept. 25: To Leona, a legitimate child, on account of deduction from the gross estate under this category?
marriage last month, a conjugal property I. Attorney's fees paid by the heirs to their respective
located in the Philippines, FMV, P620,000. lawyers arising from conflicting claims are not
deductible as judicial expenses.
To Leo, nephew of Mr. Cabarles, on II. Premiums paid by a judicial administrator on his
account of marriage, a property located in
bond.
USA exclusively owned by him with fair
market value of P150,000 (gift tax in USA, III. Compensation of trustees
P 5,500) a. I only c. I and II only
b. II only d. I, II and III
Oct. 9 : To Leonor, a legitimate child, conjugal
property in the Philippines with fair market The next two (2) questions are based on the data provided
value of P100,000. below:
Mr. J. Chavez died leaving the following properties:
The gift tax payable on the October 9 gift of the Rest house in Cebu, acquired before 6,000,000
husband is: marriage
a. P14,000 c. P500 Income from rest house in Cebu 600,000
b. P1,800 d. P4,200 Condominium in Davao, brought to 3,600,000
marriage by wife
63. Mr. Nakalimot Huminga, head of family died on Income from condominium in Davao 360,000
January 15, 2013, leaving the following properties and Town house in Quezon City, acquired 10,500,000
obligations: during marriage
Cash in bank, 50%, donated mortis P300,000 Income from town house in Quezon City 1,050,000
causa to Nat’l Govt;50-% to Q.C. Car, inherited by wife during marriage 1,300,000
gov’t (the testator provided in his Will that it
House and lot in Makati, F. Home 1,500,000 shall form part of the common properties
Personal properties 1,500,000 of the spouses)
Farm lot 825,000 Jewelry, acquired during marriage for 200,000
Claim against an insolvent debtor 225,000 exclusive use of the wife
Transfer in contemplation of death 1,500,000
(gratuitous) 66. How much is the conjugal properties under Conjugal
Transfer passing under special power of 75,000 Partnership of Gains?
appointment a. P12,510,000 c. P18,510,000

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TeamPRTC

b. P22,310,000 d. P23,610,000

67. How much is the community properties under Absolute

Community of Property? 70. A taxpayer disclosed to you the following information:
a. P12,510,000 c. P18,510,000 Date of filing the Income Tax Mar. 28, 2012
b. P22,310,000 d. P23,610,000 Return:
Date assessment was June 20, 2014
68. Marcelina filed her 2013 Income Tax Return and paid received:
the tax due thereon on April 1, 2014. The last day for Request for reinvestigation July 4, 2014
the Bureau of Internal Revenue to send an assessment was filed:
is Assuming the taxpayer submitted the documents
a. April 1, 2017 c. April 15, 2017 supporting his motion on August 26, 2014. The Bureau
b. April 15, 2019 d. April 15, 2024 of Internal Revenue should act on the protest not later
than
69. Apolonio filed his Income Tax Return (ITR) for taxable a. September 26, 2014
year 2013 on May 2, 2014. After an investigation, it b. April 15, 2015
was discovered that the tax paid was deficient. The c. February 26, 2014
last day for the BIR to send an assessment: d. February 22, 2015
a. April 15, 2017 c. May 2, 2016
b. May 2, 2017 d. April 15, 2016 ***End of Mock Board Exam***

DONOR’S TAX TABLE

Over But not over The tax shall be Plus Of the excess over

- P100T Exempt
P100T 200T 0 2% P100T
200T 500T 2,000 4% 200T
500T 1M 14,000 6% 500T
1M 3M 44,000 8% 1M
3M 5M 204,000 10% 3M
5M 10M 404,000 12% 5M
10M 1,004,000 15% 10M

ESTATE TAX TABLE

Over But Not Over The Tax Shall be Plus Of the Excess Over

P 200,000 Exempt
P 200,000 500,000 0 5% P 200,000
500,000 2,000,000 P 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 And Over 1,215,000 20% 10,000,000

INCOME TAX TABLE FOR INDIVIDUALS

Over But not over The Tax Shall be Plus Of excess over
10,000 - 5% -
10,000 30,000 500 10% 10,000
30,000 70,000 2,500 15% 30,000
70,000 140,000 8,500 20% 70,000
140,000 250,000 22,500 25% 140,000
250,000 500,000 50,000 30% 250,000
500,000 - 125,000 32% 500,000

 - end - 

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