Income subject to tax, 201110,000c. Income reportable in 2012 ( 20,000 x50%)P 10,0004.Whenever a stockholder is indebted to the corporation and said creditorcorporation decides to condone the debt, such condonation has the effect of apayment of dividend to the stockholder..5.Hilario is not required to report income on the condonation considering that thecondonation of debt was given without requiring him to render services.6.Yes.7.Under the tax benefit rule, whenever a bad debt is claimed as deduction fromgross income and it resulted to a reduction in its tax liability, the recovery of suchis subject to tax.8.a.Value-added tax- not taxableb.Real property tax- taxablec.Income tax- not taxabled.Stock transaction tax- not taxablee.Special assessment- not taxablef.Occupation tax- taxableg.Estate tax- not taxableh.Income tax paid to a foreigncountry- taxable if claimed as deductioni.Community tax- taxable j.Excise tax- taxable9.a. Yes,b. subject to a final tax of 10%c. They are not subject to tax.d. both the stockholders who were paid stocks and cash dividends are subject tofinal tax.10.a. Dividends received from domestic – not taxableb. Dividends received by resident foreign fromdomestic- not taxablec. Dividends received by nonresident foreign corporation from domestic – 15%final tax if the country in which the nonresident foreign corporation is domiciledshall allow tax credit of 15% in its income tax payable in such foreign country.11.a.Miss Supsup is entitled to 10% of the value of confiscated smuggled goods butnot exceeding P1,000,000.b.The reward received by Miss Supsup is subject to a final withholding tax of 10%.