22 COPIES

COLLEGE OF MARY IMMACULATE PREFINAL EXAMINATION

POBLACION, PANDI, BULACAN
FIRST SEMESTER-AY 2018 - 2019

STUDENT NUMBER SURNAME GIVEN NAME MIDDLE NAME

COURSE YRLVL/SECTION ROOM DATE PROCTOR SCORE

INCOME TAXATION (TAX 01)

MULTIPLE CHOICE

1. Statement 1: The intention with regard to the length and nature of stay of an alien determines whether he
is a resident or nonresident.
Statement 2: A foreigner who has acquired residency in the Philippines shall only become a nonresident
when he actually departs with the intention of abandoning his residency in the Philippines.
a. True, True c. True, False
b. False, False d. False, True

2. Determine the correct classification of the following:

i. Manny, a Filipino businessman, went on a business trip abroad and stayed there most of the time
during the year.
ii. Kyla, a Filipino professional singer, held a series of concerts in various concerts around the world
during the current taxable year. She stayed there most of the time during the year.
iii. Efren, a Filipino “cue” artist went to Canada during the taxable year to train and participate in the
world cup of pool. He stayed there most of the time during the year.
A B C D
I NRC RC RC RC
Ii NRC NRC RC RC
iii NRC NRC NRC RC

3. Due to his expertise, Engr. Pedro D. Magiba (a freelancer) was hired by a foreign petroleum contractor in
Thailand to provide technical assistance for two months from February to March. He was hired again for
the months of June – July and October – December of the same taxable year. Engr. Pedro D. Magiba is a:
a. Resident citizen c. Special Filipino employee
b. Nonresident citizen d. None of the choices
Employment – requires him to be physically present abroad most of the time (> 183 days)

4. Taxable only on income from sources within the Philippines, except:

a. Resident citizen b. Nonresident citizen c. Resident alien d. Nonresident alien

5. Situs of taxation is world/global taxation:

A B C D
Resident citizen True False True True
Resident alien True False False False
Nonresident alien engaged in trade True False False True

6. Lulu, married, left the Philippines in the middle of the year on July 1, 2018 to go abroad and work there for
5 years. The following data were provided as of December 31, 2018.
Gross Business Income Business Expenses
PERIOD Philippines Abroad Philippine Abroad
s
January 1 to June 30 300,000 200,000 100,000 50,000
July 1 to December 31 600,000 400,000 150,000 50,000

Her taxable income is:

a. P 800,000 b. P 950,000 c. P 1,100,000 d. P 600,000
300 + 600 + 200 – 100 – 150 – 50 = 800,000
7. Based on problem no.6, but assuming she arrived from abroad on July 1, 2018 to permanently resettle in
the Philippines after working for five years abroad, her taxable income as of December 31, 2018 is:
a. P 750,000 b. P 1,000,000 c. P 1,150,000 d. P 600,000
300 + 600 + 400 – 100 – 150 – 50 = 1,000,000

8. Based on problem no.6, if she did not leave the Philippines at all, her taxable income as of December 31,
2018 is:
b. P 750,000 b. P 1,000,000 c. P 1,150,000 d. P 600,000
TNI within and abroad

Items 9 to 12 are based on the following information:

Fafa Carms, married, with two dependent children, received the following income:
Rent, Philippines P 1,000,000
Rent, Hongkong 200,000
Interest, peso deposit, Metrobank 100,000
Interest, US$ deposit, BDO ($10,000 x P42) 420,000
Interesy, deposit in Hongkong (HK$10,000 x P5) 50,000
Prize (cash) won in a local contest 8,000
Prize (TV) won in a local lottery 50,000
PCSO/Lotto winnings 2,000,000
Prize won in contest in USA 300,000
Lotto winning in USA 100,000
Dividend, domestic company 600,000

9. Assuming the taxable year is 2017, determine the taxable net income assuming he is:
RC NRC RA NRA-ETB
a. P 80,000 P 180,000 P 830,000 P 180,000
b. 180,000 80,000 1,000,000 1,000,000
c. 1,558,000 908,000 908,000 908,000
d. 1,658,000 1,008,000 1,008,000 1,008,000

RC NRC, RA, NRA-ETB

Rent, Philippines 1,000,000 1,000,000
Rent, Hongkong 200,000 0
Interest, peso deposit, MBTC 20% FWTx 20% FWTx
Interest, US$ deposit, BDO 7.5% FWTx 7.5% FWTx for RA;
Exempt for NRC & NRA-
ETB
Interest, deposit in Hongkong 50,000 0
Prize (cash) won in a local contest 8,000 8,000
Prize (TV) won in a local lottery 20% FWTx 20% FWTx
PCSO/Lotto winnings Exempt Exempt
Prize won in contest in USA 300,000 0
Lotto winnings in USA 100,000 0
Dividends, domestic company 10% FWTx 10% FWTx for RA & NRC;
20% for NRA-ETB
Basic Exemption (50,000) (50,000)
Additional exemption (50,000) (50,000)
TAXABLE NET INCOME 1,558,000 908,000

NOTE:
 Taxable income = generally pertaining to incomes subject to basic income tax (BTx) and included in the income tax
return of the taxpayer
 Passive income subject to final withholding taxes (FWTx) and capital gains subject to CGTs are non-returnable income
 Passive income subject to FWTx shall refer only to those derived from Philippine sources
 Passive income derived from abroad received by RCs are subject to BTx
 The final tax on interest income earned under FCDS (7.5% prior to 2018; 15% beginning Jan. 1, 2018) is applicable only
to resident taxpayers
 Prior to TRAIN Law, PCSO/Lotto winnings are exempt, except if received by NRA-NETB
  Prizes:
o Not more than P10,000 = BTx
o More than P10,000 = 20% FWTx; 25% FWTx for NRA-NETB
 Winnings:
o PCSO/Philippine Lotto
Prior to TRAIN Law; Exempt, except if received by NRA-NETB
Beginning 2018:
 Not more than P10,000 – Exempt
 More than P10,000 = 20% FWTx (RC, NRC, RA)
 Received by NRA-ETB = Exempt regardless of amount; not revised under the TRAIN Law
 Received by NRA-NETB = 25% FWTx regardless of amount. All income received from sources within
the Philippines by NRA-NETB is subject to 25% FWTx except for interest income received under
FCDS/FCDU

10. Assuming the taxable year is 2018, determine the taxable net income assuming he is:
RC NRC RA NRA-ETB
a. P 80,000 P 180,000 P 830,000 P 180,000
b. 180,000 80,000 1,000,000 1,000,000
c. 1,558,000 908,000 908,000 908,000
d. 1,658,000 1,008,000 1,008,000 1,008,000

RC NRC, RA, NRA-ETB

Rent, Philippines 1,000,000 1,000,000
Rent, Hongkong 200,000 0
Interest, peso deposit, MBTC 20% FWTx 20% FWTx
Interest, US$ deposit, BDO 15% FWTx 15% FWTx for RA;
Exempt for NRC & NRA-
ETB
Interest, deposit in Hongkong 50,000 0
Prize (cash) won in a local contest 8,000 8,000
Prize (TV) won in a local lottery 20% FWTx 20% FWTx
PCSO/Lotto winnings Refer to Notes in #9
Prize won in contest in USA 300,000 0
Lotto winnings in USA 100,000 0
Dividends, domestic company 10% FWTx 10% FWTx for RA & NRC;
20% for NRA-ETB
Basic Exemption N/A N/A
Additional exemption N/A N/A
TAXABLE NET INCOME 1,658,000 1,008,000

NOTE:
 Under RA 10963 (TRAIN Law), personal exemptions (basic and additional) as deductions from gross income are no
longer allowed beginning January 1, 2018

11. Assuming the taxable year is 2017, determine the total final tax assuming he is:
RC NRC RA NRA-ETB
a. P 553,000 P 490,000 P 550,000 P 150,500
b. 121,500 90,000 150,000 687,500
c. 131,000 90,000 90,000 90,000
d. 142,000 90,000 150,000 150,000

RC & RA NRC NRA-ETB NRA-NETB

Interest, peso deposit, MBTC @ 20%; 25% 20,000 20,000 20,000 25,000
Interest, US$ deposit, BDO @ 7.5%; 31,500 exempt exempt exempt
exempt
Prize (TV) won in a local lottery @ 20%; 10,000 10,000 10,000 12,500
25%
PCSO/Lotto winnings exempt exempt exempt 500,000
Dividends, domestic company @ 10% 60,000 60,000 0 0
Dividends, domestic company @ 20% 0 0 120,000 0
Dividends, domestic company @ 25% 0 0 0 150,000
Total FWTx 121,500 90,000 150,000 687,500

12. Assuming the taxable year is 2018, determine the total final tax assuming he is:
RC NRC RA NRA-ETB
a. P 553,000 P 490,000 P 150,000 P 687,500
b. 121,500 90,000 121,500 150,000
c. 131,000 90,000 90,000 90,000
d. 553,000 490,000 550,000 687,500

RC & RA NRC NRA-ETB NRA-NETB

Interest, peso deposit, MBTC @ 20%; 25% 20,000 20,000 20,000 25,000
Interest, US$ deposit, BDO @ 15% 63,000 exempt exempt exempt
Prize (TV) won in a local lottery @ 20%; 10,000 10,000 10,000 12,500
25%
PCSO/Lotto winnings @ 20%; 25% 400,000 400,000 exempt 500,000
Dividends, domestic company @ 10% 60,000 60,000 0 0
Dividends, domestic company @ 20% 0 0 120,000 0
Dividends, domestic company @ 25% 0 0 0 150,000
Total FWTx 553,000 490,000 150,000 687,500

Items 13 to 16 are based on the following information:

Ana, a self-employed resident citizen provided the following data for 2018 taxable year:
Sales 2,800,000
Cost of sales 1,125,000
Business expenses 650,000
Interest income from peso bank deposit 80,000
Interest income from bank deposit under FCDS 120,000
Gain on sale of land in the Philippines held as capital asset
With cost of P1,500,000 when the zonal value is P1,200,000 500,000

13. How much is the total income tax expense of Ana for the year?
a. P321,500 b. P342,500 c. P351,500 d. P358,000

Gross income from business 1,675,000

Business expenses (650,000)
Taxable net income 1,025,000
Basic Income Tax [130,000 + (225,000 x 30%)] 197,500
FWTx on passive income (80,000 x 20%) 16,000
Interest income on FCDS (120,000 x 15%) 18,000
CGT on real properties (2,000,000 x 6%) 120,000
SP = Cost + Gain = 2M vs. ZV 1.2M .
Total income tax expense 351,500

14. How much is the total income tax expense of Ana assuming she opted to be taxed at 8%?
a. P321,500 b. P342,500 c. P351,500 d. P358,000

Gross sales 2,800,000

Less: Tax exempt income (250,000)
Taxable net income 2,550,000
Basic Income Tax (2,550,000 x 8%) 204,000 *
FWTx on passive income (80,000 x 20%) 16,000
Interest income on FCDS (120,000 x 15%) 18,000
CGT on real properties (2,000,000 x 6%) 120,000
SP = Cost + Gain = 2M vs. ZV 1.2M .
Total income tax expense 358,000
 *The 8% income tax rate is based on gross sales and/or receipts and other non-operating income in excess of
P250,000.

15. Assuming Ana is a VAT-registered taxpayer, how much is her total income tax expense assuming she opted
to be taxed at 8% income tax rate?
a. P321,500 b. P342,500 c. P351,500 d. P358,000

Same solution in number 13

16. Using the same data except that her gross sales for the year was P3,800,000, how much is the total income
tax expense of Ana assuming she opted to be taxed at 8% income tax rate?
a. P321,500 b. P342,500 c. P351,500 d. P652,000

Gross income (3.8M – COS 1.125M) 2,675,000

Business expenses (650,000)
Taxable net income 2,025,000
Basic Income Tax [490,000 + (25,000 x 32%)] 498,000
FWTx on passive income (80,000 x 20%) 16,000
Interest income on FCDS (120,000 x 15%) 18,000
CGT on real properties (2,000,000 x 6%) 120,000
SP = Cost + Gain = 2M vs. ZV 1.2M .
Total income tax expense 652,000
Ana is not allowed to avail the 8% tax because her gross sales for the year exceeded the revised VAT threshold
of P3,000,000. Hence, she is subject to VAT (business tax) in addition to income tax. The 8% tax is in lieu of the
BTx (graduated tax rate) and 3% other percentage tax (OPT) under Section 116 of the Tax Code, as amended.
Ana is subject to VAT, not the 3% OPT under Section 116.

17. Bustos, mixed income earner, self-employed resident citizen and currently the Finance Manager of Minasa
Omega Champion Corporation, provided the following data for 2018 taxable year:
Compensation income 1,800,000
Sales 2,800,000
Cost of sales 1,125,000
Business expenses 650,000
Interest income from peso bank deposit 80,000
Interest income from bank deposit under FCDS 120,000
Gain on sale of land in the Philippines held as capital asset
With cost of P1,500,000 when the zonal value is P1,200,000 500,000

How much is his total income tax expense assuming he opted to be taxed at 8%?
a. P321,500 b. P788,500 c. P808,000 d. P358,000

Gross sales 2,800,000

Business expenses 8%
8% Tax 224,000
Basic Tax on compensation income
1st 800,000 = 130,000
Excess over 800,000 @ 30% = 300,000 430,000
Total Basic Income Tax Due 654,000
FWTx on passive income (80,000 x 20%) 16,000
Interest income on FCDS (120,000 x 15%) 18,000
CGT on real properties (2,000,000 x 6%) 120,000
SP = Cost + Gain = 2M vs. ZV 1.2M .
Total income tax expense 808,000
If the SEP is a mixed income earner, the 8% income tax rate is based on Gross sales and/or receipts and other
non-operating income without deducting P250,000. The compensation income is not subject to 8% BTx rate.

18. In 2018, Berna signified her intention to be taxed at 8% income tax rate on gross sales in her 1st quarter
income tax return. Her gross sales during the year exceeded the VAT threshold of P3 million as follows:

Q1 Q2 Q3 Q4/Annual
(8% tax) (8% tax) (8% tax) (Graduated)
Sales 500,000 500,000 2,000,000 3,500,000
Cost of Sales (300,000) (300,000) (1,200,000) (1,200,000)
Gross Income 200,000 200,000 800,000 2,300,000
Operating expenses (120,000) (120,000) (480,000) (720,000)
Net taxable income 80,000 80,000 320,000 1,580,000

How much is Berna’s annual income tax payable?

a. P220,000 b. P289,200 c. P509,200 d. P2,060,000

Sales 6,500,000
Cost of sales (3,000,000)
Gross income 3,500,000
Operating expenses (1,440,000)
Net taxable net income 2,060,000
Basic Income Tax [490,000 + (60,000 x 32%)] 509,200
Less: Quarterly tax payments (Q1 – Q3) based on 8%
tax rate [(3M – 250,000) x 8%] (220,000)
Annual income tax payable 289,200
NOTE:
 Unless the taxpayer signifies in the 1 st Quarter Return of the taxable year the intention to elect the 8% income tax rate,
the taxpayer shall be considered as having availed of the graduated rates under Section 24(A) of the Tax Code, as
amended, and such election shall be irrevocable.
 Provided that, at any time during a given taxable year, a taxpayer’s gross sales or receipts exceeded the VAT threshold
of 3M (previously P1,919,500), he/she shall automatically be subjected to the graduated rates under Section 24(A)(2)(a)
of the Tax Code, as amended, with the following rules/guidelines:
o The taxpayer shall be allowed an income tax credit of quarterly payments initially made under the 8% option
o Taxpayer is likewise liable for business taxes, in addition to income tax. A percentage tax pursuant to Section
116 of the Tax Code, as amended, shall be imposed on the 1 st 3M and the excess shall be subject to VAT.
o Percentage tax due on the 3M shall be collected without penalty, if timely paid on the due date immediately
following the month the threshold was breached.

19. As a rule, the following individuals are liable for final income tax equal to 15% of their gross compensation
income prior to 2018 taxable year, except:
a. An alien employee of an Offshore banking Unit
b. An alien employee of Petroleum Service Contractors and Subcontractors
c. An alien employee of Regional, or Area headquarters of Multinational Companies
d. An alien employee of a Resident Foreign Corporation

20. Statement 1: Prior to 2018 taxable year, SAEs as well as SFEs of regional or area headquarters established
in the Philippines by multinational companies shall be subject to final tax of 15% on their gross
compensation income in the Philippines. (15% preferential income tax rate on compensation income)
Statement 2: Generally, a nonresident alien not engaged in trade or business is subject to 25% creditable
withholding tax on their gross income in the Philippines. (final withholding tax not creditable
withholding tax)
a. True, True b. False, False c. True, False d. False, True

21. Statement 1: An employee occupying managerial position is one who is vested with powers or
prerogatives to lay down or execute management policies and/or employees.
Statement 2: Exclusivity means just having one employer at a time.
a. True, True b. False, False c. True, False d. False, True
22. Technical position as described under RMC 41-09 (as amended) are limited only to positions that are:
i. Highly technical in nature
ii. Where there are no Filipinos who are competent, able and willing to perform the services for which
the aliens are desired.
a. I only b. II only c. Both I and II d. Neither I nor II

23. The following properties are classified as capital assets, except:

a. Interest of a partner in a partnership c. Land for sale by real estate dealer
b. Securities held as investment d. Residential house of the taxpayer

Items 24 to 29 are based on the following information:

Vladimir, a Russian national who is an employee in the regional area headquarters of a multinational
corporation, occupying managerial position, had the following data for taxable year 2016.

Salaries received 600,000

Allowances and honoraria 50,000
Other emoluments 100,000
Monetary value of fringe benefits subject to fringe benefit tax 170,000
De minimis benefits (within the ceiling) 50,000
Dividend income from a domestic corporation 40,000
Interest income from peso bank deposit 50,000
Interest income from foreign currency deposit under FCDS 20,000
PCSO winnings (gross) 1,000,000
Raffle draw winnings 80,000
Gain from sale of shares of a domestic corporation sold directly to a buyer 150,000
Gain from sale of a vacant lot in Quezon City held as investment (SP = P1,500,000; Cost 500,000
= P1,000,000; Zonal value = P2,500,000)

24. The amount of income subject to a preferential tax rate of 15% should be:
a. P -0- b. P650,000 c. P750,000 d. P910,000
Salaries received 600,000 + allowances and honoraria 50,000 + other emoluments 100,000 = 750,000

25. The capital gains tax is:

a. P10,000 b. P40,000 c. P160,000 d. P165,000

On shares of stock = 100,000 x 5% + (50,000 x 10%) 10,000

On real property (2.5M x 6% 150,000
Total capital gains tax 160,000

26. The total income tax expense of Vladimir in the Philippines is:
a. P535,000 b. P595,000 c. P570,000 d. P315,000

Subject to preferential tax rate (750,000 x 15%) 112,500

Subject to 15% FBT = 170,000 / 85% x 15% 30,000
Capital gains tax (refer to number 25) 160,000
Income subject to 25% FWTx:
Dividend income from domestic corp. 40,000
Interest income, peso bank deposit 50,000
Interest income – FCDS exempt
PCSO winnings 1,000,000
Raffle draw winnings 80,000
Total 1,170,000
Tax rate 25% 292,500
Total income tax expense 595,000
NOTE:
 Income tax expense = BTx + FWTx + CGT
 De minimis benefits are tax exempt
 Interest income from bank deposit under FCDS is exempt. Prior to 2018, SAEs are treated as NRA-NETBs with respect to
their other income. Consequently, such interest income is exempt.
27. Assuming the taxpayer is a Special Filipino Employee, the amount of income subject to a preferential tax
rate of 15% should be:
a. P -0- b. P650,000 c. P750,000 d. P600,000
Since the total compensation composed of salaries, allowances/honoraria, and other emoluments is not at least
P975,000, the SFE shall be subject to basic income tax under Section 24(A) instead of the preferential tax rate of 15%.

28. Using the assumption in no. 27, the SFE’s total combined taxes on all income from the Philippines is:
a. P380,500 b. P304,000 c. P595,000 d. P410,500

CGT (as computed in number 25) 160,000

FBT (170,000 / 85% x 15%) 30,000
FWTx on passive incomes:
Dividend income from DC @ 10% 4,000
Interest income, peso bank deposit @ 20% 10,000
Interest income – FCDS @ 7.5% 1,500
PCSO winnings exempt
Raffle draw winnings @ 20% 16,000 31,500
BASIC INCOME TAX
Salaries, allowances, honoraria 750,000
Basic personal exemption (50,000)
Taxable net income 700,000
Basic Tax [125,000 + (200,000 x 32%) 189,000
TOTAL INCOME TAX EXPENSE 410,500

29. Assuming the taxpayer is a Special Filipino Employee employed by an Offshore Banking Unit, the amount of
income subject to a preferential tax rate of 15% should be:
a. P -0- b. P650,000 c. P750,000 d. P600,000
Prior to the effectivity of the TRAIN Law, if the SFE employed by an OBU or PC/SC, the compensation income shall be
subject to 15% preferential tax rate. The option to be taxed at 15% preferential tax rate if the SFE is an employee of
ROHQ/RHQ is not applicable for SFEs employed by OBUs and PCs/SCs.

30. Leomar, resident citizen, is the Head for Operations of a regional operating headquarters (ROHQ) in the Philippines.
His compensation income during 2018 amounted to P1,800,000 exclusive of 13 th month pay and other bonuses. Can
Leomar choose to be taxed at 15% preferential rate?
a. Yes, because he is expected to receive an annual compensation income that exceeds the threshold
b. Yes, because an employee of ROHQ is qualified to be taxed at 15% preferential rate even during the effectivity of
RA No. 10963 (TRAIN Law)
c. No, because his total gross compensation income at the end of the year does not meet the threshold amount
d. No, the 15% preferential rate is no longer applicable beginning January 1, 2018 as provided for under RA No.
10963, otherwise known as the TRAIN Law

31. Statement 1: Tax on certain passive income is a capital gains tax.

Statement 2: Other income, for income tax purposes, is excluded in the determination of an individual
taxpayer’s returnable income.
a. True, True b. False, False c. True, False d. False, True

32. Which of the following shall not be subject to the 20% final tax beginning January 1, 2018?
a. Amount of interest from any currency bank deposit and yield or any other monetary benefit from deposit
substitutes and from trust funds and similar arrangements
b. Winnings other than Philippine Charity Sweepstakes and lotto winnings, regardless of amount
c. Philippine Charity Sweepstakes and lotto winnings exceeding P10,000
d. Prizes amounting to P10,000 or less
Subject to basic tax

33. A nonresident alien not engaged in trade or business derived P50,000 interest income from his long term bank
deposit here in the Philippines. How much is the income tax due of the said alien?
a. P10,000 b. P12,500 c. P5,000 d. P -0-
50,000 x 25% = 12,500 (tax exemption on long term bank deposit/investment is N/A to NRA-NETB

34. Which of the following income of an individual taxpayer is subject to final tax?
a. P10,000 prize in Manila won by a resident citizen
b. Dividend received by a resident citizen from a resident foreign corporation
c. Shares in the net income of a general professional partnership received by a resident citizen
d. Dividend received by a nonresident alien from a domestic corporation
 e. All of the above
f. None of the above

35. Which of the following interest income derived within the Philippines is subject to basic income tax?
a. Interest income from bank deposits
b. Interest income from loans
c. Interest income from deposit substitutes
d. Interest income from trust funds

36. A taxpayer received during the taxable year the following passive income derived from within the Philippines:
Interest on bank deposit under FCDU, net P231,250
Royalty on a software application (gross) 95,000
Dividend income from resident foreign corp. (gross) 150,000

If the taxpayer is a nonresident alien engaged in business, the final tax on the above passive income would amount
to:
a. P52,750 b. P19,000 c. P28,250 d. P37,750
95,000 royalty x 20% = 19,000 (FCDU = exempt / Dividend RFC = basic tax)

37. Which of the following royalties earned within the Philippines is not subject to 10% final withholding tax?
a. Royalties from computer software c. Royalties from literary works
b. Royalties from books d. Royalties from musical compositions

38. Share in the net distributable income of a general co-partnership by a resident citizen is subject to:
a. 10% final withholding tax c. 6% capital gains tax
b. 20% final withholding tax d. Basic income tax

39. Which of the following sale transactions will be subject to capital gains tax?
a. Sale of shares of stock by a dealer in securities
b. Sale of shares of stock during an Initial Public Offering
c. Sale of shares of stock not through the local stock exchange by a person who is not a dealer in securities
d. Sale of shares of stock through the local stock exchange by a person who is not a dealer in securities
e. All of the above
f. None of the above

40. Which of the following transactions is subject to 6% capital gains tax?

a. Sale of condominium units by a real estate dealer
b. Sale of real property utilized for office use
c. Sale of apartment houses
d. Sale of vacant lot by an employee

Items 41 to 43 are based on the following information:

Vincent sold a residential house and lot held for P10,000,000 to his friend. Its FMV when he inherited it from his father
was P12,000,000 although its present FMV is P15,000,000.

41. The tax on the above transaction is:

a. P720,000 capital gains tax c. 30% donors tax
b. P900,000 capital gains tax d. Value added tax
15,000,000 x 6% = 900,000

42. Assuming the house and lot was Vincent’s principal residence and he used ½ of the proceeds to buy a new principal
residence within 18 months after the above sale. Assume further that Vincent properly informed the BIR about the
sale. It shall be:
a. Exempt from capital gains tax c. Subject to P450,000 capital gains tax
b. Subject to P300,000 capital gains tax d. Subject to P600,000 capital gains tax
½ x 15,000,000 x 6% = 450,000

43. Assuming the residential house was located abroad, the capital gains tax is:
 a. P -0- b. P300,000 c. P450,000 d. P480,000

44. The following may claim personal exemption prior to 2018, except:
a. Nonresident alien not engaged in trade or business
b. Nonresident alien engaged in trade or business
c. Resident alien
d. Citizens

45. Jaime, single, has the following dependents who live with him in 2016:
 Eddie, brother, 30 years old, mentally impaired
 Leah, sister, 16 years old, college student
 Faith, legally adopted child, gainfully employed
 Robert, not related to Jaime, 70 years old, qualified senior citizen

For income tax purposes, Jaime can claim in 2016:

Basic Exemption Additional Exemption
a. P50,000 Zero
b. P50,000 P25,000
c. P50,000 P50,000
d. P50,000 P75,000
Eddie is a qualified PWD under RA 10754

46. Using the same data in no. 45 except that the taxable year is 2018, Jaime can claim:
Basic Exemption Additional Exemption
a. Zero Zero
b. P50,000 P25,000
c. P50,000 P50,000
d. P50,000 P75,000

47. A nonresident alien derived interest income only in his bank deposit here in the Philippines under the FCDU system
of a domestic bank. The interest amounted to $500. How much is the income tax due of the said alien? ($1 = P50)
a. P -0- b. P3,000 c. P10,000 d. P8,000

48. The following winnings are exempt from income tax prior to the effectivity of RA 10963 (TRAIN Law), except:
a. Lotto winnings c. Winnings from raffle of a private company
b. Winnings from PCSO d. None of the choices

49. Which of the following income of a nonresident citizen will be taxed differently if the taxpayer is a nonresident alien
engaged in trade or business?
a. Interest income b. Royalties c. Dividends d. Prizes

50. If the amount of PCSO/Philippine lotto winnings received by a resident citizen in 2018 did not exceed P10,000, what
type of income tax will apply?
a. Final tax on passive income c. Basic income tax
b. Capital gains tax d. Exempt

*********************************************END*****************************************
********

COLLEGE OF MARY IMMACULATE PREFINAL EXAMINATION

POBLACION, PANDI, BULACAN
FIRST SEMESTER-AY 2018 - 2019

STUDENT NUMBER SURNAME GIVEN NAME MIDDLE NAME

COURSE YRLVL/SECTION ROOM DATE PROCTOR SCORE

INCOME TAXATION (TAX 01)

1. ________ 11. ________ 21. ________ 31. ________ 41. ________

2. ________ 12. ________ 22. ________ 32. ________ 42. ________

3. ________ 13. ________ 23. ________ 33. ________ 43. ________

 4. ________ 14. ________ 24. ________ 34. ________ 44. ________

5. ________ 15. ________ 25. ________ 35. ________ 45. ________

6. ________ 16. ________ 26. ________ 36. ________ 46. ________

7. ________ 17. ________ 27. ________ 37. ________ 47. ________

8. ________ 18. ________ 28. ________ 38. ________ 48. ________

9. ________ 19. ________ 29. ________ 39. ________ 49. ________

10. ________ 20. ________ 30. ________ 40. ________ 50. ________

__________________________________________________________________________________________________

COLLEGE OF MARY IMMACULATE PREFINAL EXAMINATION

POBLACION, PANDI, BULACAN
FIRST SEMESTER-AY 2018 - 2019

STUDENT NUMBER SURNAME GIVEN NAME MIDDLE NAME

COURSE YRLVL/SECTION ROOM DATE PROCTOR SCORE

INCOME TAXATION (TAX 01)

1. ________ 11. ________ 21. ________ 31. ________ 41. ________

2. ________ 12. ________ 22. ________ 32. ________ 42. ________

3. ________ 13. ________ 23. ________ 33. ________ 43. ________

4. ________ 14. ________ 24. ________ 34. ________ 44. ________

5. ________ 15. ________ 25. ________ 35. ________ 45. ________

6. ________ 16. ________ 26. ________ 36. ________ 46. ________

7. ________ 17. ________ 27. ________ 37. ________ 47. ________

8. ________ 18. ________ 28. ________ 38. ________ 48. ________

9. ________ 19. ________ 29. ________ 39. ________ 49. ________

10. ________ 20. ________ 30. ________ 40. ________ 50. ________