Exam 1 - Taxation

1.

How much is the amount of basic real property tax that may be imposed by a province?
A.

1.0% of the assessed value

B. 2.0% of the assessed value

C. Not exceeding 1.0% of the assessed value
D. Not exceeding 2.0% of the assessed value
2.

Documentary stamps tax (DST) is one of the taxes due on sale, exchange, and transfer of capital
and ordinary assets. What is the rate to be applied for the DST of the gross selling price or zonal
value plus value of a house or building in the lot?
A.

1.25%

B. 1%
C. 1.5%
D. 1.75%
E.
3.

2%

What is the tax payable to the local government unit for sale, transfer or other disposition of real
estate, whether the real estate is a capital or ordinary asset?
A.

Value-added tax

B. Withholding tax
C. Capital gains tax
D. Sales tax
E.
4.

Transfer tax

Mr Reyes sold his vacant residential lot with an area of 300 square meters for P1,500,000.00. If the
zonal value of said property is P3,500 per square meter, how much will Mr. Reyes pay for Capital
Gains Tax?
A.

P50,000.00

B. P90,000.00
C. P13,000.00
D. P35,000.00
E.
5.

P63,000.00

The Documentary Stamps for the Donor's tax shall be paid on:
A.

After 20th day of the following month from notarization of deed

B. After 10th day of the following month from notarization of deed

C. After 15th day of the following month from notarization of deed
D. After 5th day of the following month from notarization of deed

E.
6.

None of the above no DST on Donors & Estate Tax

In case of redemption of the property sold due to delinquent real property taxes, the owner may
redeem the same including paying interest based on the purchase price from the date of sale to
the date of redemption in the amount of:
A.

One percent per month

B. Twenty five percent per annum

C. Twenty four percent per month
D. Two percent per month
E.
7.

Three percent per month

The basic real property tax for land located in a province shall be at the rate:
A.

Not exceeding 1% of assessed value

B. Not exceeding 2% of assessed value

C. 1% of assessed value
D. Not exceeding 6% of assessed value
E.
8.

Not exceeding 5% of assessed value

In case of disagreement with the valuation of the city assessor on the market value of theproperty,
the owner may appeal the same to the Board of Assessment Appeals within how many days
counted from receipt of the notice of assessment?
A.

30 days

B. 120 days
C. 90 days
D. 45 days
E.
9.

60 days

A tax on documents, instruments, loan agreements and papers evidencing the

acceptance,assignment, sale or transfer of an obligation, is called:
A.

Value Added Tax

B. Internal Tax
C. Documentary Stamps
D. Sales Tax
E.

Community Tax

10. A sale of an ordinary asset shall be considered as a sale on installment if the payments made in
the year of sale does NOT exceed:
A.

5% of the selling price

B. 30% of the selling price

C. 15% of the selling price

D. 25% of the selling price

E.

10% of the selling price

11. After a Deed of Absolute Sale is made, signed and notarized, when should the DocumentaryStamp
tax on sale of real property be paid:
A.

Within 5 days after the close month

B. Within 30 days
C. Within 15 days after the close month
D. Within 10 days after the close month
E.

Within 24 hours

12. A residential house and lot located in Quezon City is subject to pay the following real estate tax to
the city government:
A.

Transfer tax

B. Special Education fund tax

C. Capital gains tax
D. Business tax
E.

Mayor's permit

13. The rate of tax on the sale of a house and lot owned by a corporation in the amount ofP2,500,000
classified as a (capital asset)
A.

6%

B. 1.5%
C. 12%
D. 3%
E.

5%

14. The capital gains tax should be paid within how many days from the notarization of the deed
ofsale?
A.

15 days

B. 30 days
C. 7 days
D. 45 days
E.

10 days

15. Mr. Garcia sold his principal residence for the amount of P5,000,000 in order to buy another
residence that was worth only P4,000,000. As per the computation the zonal value of the house he
sold was P4,500,000 and assessor's value was P3,500,000. How much capital gains tax will Mr
Garcia still pay the BIR?
A.

P60,000

B. P240,000
C. P210,000
D. P270,000
E.

P300,000

16. The Local Board of Assessment Appeals may have the following members except:
A.

City Prosecutor

B. City Treasurer
C. Provincial Prosecutor
D. Registrar of Deeds
E.

City Engineer

17. In local taxation, issuance of warrant of levy by provincial, municipality, or city treasurer shall be
done within:
A.

1 year

B. 3 years
C. 4 years
D. 2 years
E.

5 years

18. The provincial, city, or municipal assessor shall undertake a general revision of real
propertyassessment every
A.

4 years

B. 5 years
C. 2 years
D. 1 year
E.

3 years

19. The creditable withholding tax on the sale of an ordinary asset should be filed and paid to theBIR:
A.

Within 10 days from date of sale

B. Within 30 days from notarization of deed of sale

C. Within 30 days from date of sale
D. Within 10 days from notarization of deed of sale
E.

Within 10 days from the close of the month of sale

20. Which of the following properties, if sold. will not be subject to value added tax?
A.

3-door commercial apartment for rent

B. Residential house and lot

C. Condominium office unit

D. Office building of a corporation
E.

Residential apartments obeing leased

21. Real property declared for the first time shall be assessed for the period during which it wouldhave
been liable but in no case for more than____.
A.

36 months

B. 5 years
C. 24 months
D. 2 years
E.

10 years

22. After full payment of capital gains tax and documentary stamp tax on sale of a piece of land, the
BIR shall then issue this document to the taxpayer.
A.

Certificate Authorizing Payment

B. Certificate Authorizing Registration

C. Certificate of Payment
D. BIR Authority to Accept Payment
E.

Official Receipt

23. The zonal value of a property can be obtained from?

A.

Bureau of Internal Revenue

B. Registry of Deeds
C. Office of the Sherif
D. Assessors Office
E.

Land Registration Authority

24. Which price of a house and lot package sold by a dealer is subject to E-VAT?
A.

P1,000,000

B. P2,500,000
C. P2,000,000
D. P 1,500,000
E.

P3,000,000

25. The sale and transfer of title from real estate dealer to a buyer of a house and lot atP2,000,000.00
is subject to the following EXCEPT:
A.

Creditable Withholding Tax

B. Transfer and Registration fees

C. Expanded Value Added Tax

D. Capital gains tax
E.

Documentary stamp

26. In case of real property paid under deferred payment basis, the documentary stamp tax
shallaccrue upon:
A.

Execution of Deed of Absolute Sale

B. Notarization of transfer document

C. Payment of the Option Money
D. Payment of the full amount
E.

Execution of Contract to Sell

27. Jake and Rosie sold their house which is their principal residence. You as their broker have toadvise
them that the transaction is exempt from the capital gains tax if they spend how manypercent of
the sales proceeds in acquiring or constructing their new principal residence?
A.

50%

B. 75%
C. 100%
D. 60%
28. For the exemption in payment of capital gains tax to be valid, within how many months from the
sale or disposition of their principal residence should Jake and Rosie use the proceeds inacquiring
or constructing their new principal residence:
A.

24 months

B. 36 months
C. 18 months
D. 12 months
29. Despite the exemption from the capital gains tax if Jake and Rosie will use the sales proceeds in
acquiring or constructing their new principal residence, what must the buyer do before paying the
agreed upon selling price in order to ensure payment of all taxes due on the transaction?
A. Withhold and deduct the six percent capital gains tax from the agreed selling price and pay it
directly to the BIR for later refund upon proof by Jake and Rosie.
B. Withhold and deduct the six percent capital gains tax from the agreed selling price and deposit
the amount in cash or manager's check in Jake's and Rosie' s account
C. Demand a provision in the deed of sale that any future liabilities shall be for the account of the
sellers
D. Withhold and deduct the six percent capital gains tax from the agreed selling price and deposit
the amount in cash or manager's check in an interest-bearing bank account under an escrow
agreement between the bank, the concerned RDO, the sellers and the buyer
30.
At the end of the prescribed period for acquiring or constructing their new principal residence,
Jake and Rosie must submit documentary evidence showing that they used the proceeds of the sale to

acquire a new principal residence. Within how many days from the end of the prescribed period should
they submit the documentary evidence so that they shall not be declared deficient in the payment of
their capital gains tax on the sale?
A.

Within 15 days

B. Within 30 days
C. Within 45 days
D. Within 60 days
31. Exemptions on payment of the six percent (6% ) capital gains tax on the sale of an individual
seller's principal residence who will use the proceeds to purchase a new place of residence may be
availed of only once every:
A.

5 years

B. 8 years
C. 10 years
D. 12 years
32. You have just closed the sale of a 700 square meter commercial lot in Pasig. The selling price
agreed upon is P35,000 per square meter. You have to advise the seller, who has agreed to pay all
the expenses, to prepare several checks. What amounts should he indicate for the capital gains
tax, the documentary stamps tax, and your 5% commission check? The zonal valuation of the lot is
P37,000 per square meter.
A.

Capital Gains Tax P1,470,000.00

Documentary Stamps Tax P 367,500.00
Commission P1,225,000.00

B. Capital Gains Tax P1,554,000.00

Documentary Stamps Tax P 388,500.00
Commission P1,225,000.00
C. Capital Gains Tax P1,554,000.00
Documentary Stamps Tax P 388,500.00
Commission P1,295,000.00
D. Capital Gains Tax P1,470,000.00
Documentary Stamps Tax P 367,500.00
Commission P1,295,000.00
33. Your client Ricky has a property in a residential area that is actually being used as a beauty salon.
The tax declarations of the lot and the structure indicate the following data:Lot area = 275 sqm
Market value of the land = P4.525.00 per sqm Market value of the structure = P2,400,000.00
Assessment level: Residential= 20% Commercial = 50 % Property tax rate = 1.5% Special
Education Fund = 1% of the assessed value. What is the total combined assessed value of the land
and the improvement?
A.

P3,644,375.00

B. P1,822,187.50
C. P1,244,375.00
D. P2,400,000.00
34. A house and lot, with a land area of 400 square meters was sold at P2,500,000. Per tax declaration
the fair market value of the house is P 1,000,000, and the lot is P1,200,000. The zonal value of the
lot is P5,000 per square meter The sale is subject to capital gains tax. What is the tax base?
A.

P2,000,000

B. P2,200,000
C. P2,500,000
D. P3,000,000
E.

P3,500.000

35. A house and lot, with a land area of 400 square meters was sold at P2,500,000. Per tax declaration
the fair market value of the house is P 1,000,000, and the lot is P1,200,000. The zonal value of the
lot is P5,000 per square mete The sale is subject to capital gains tax. How much is the capital gains
tax?
A.

P120,000

B. P132,000
C. P150,000
D. P180,000
E.

P210,000

36. A house and lot, with a land area of 400 square meters was sold at P2,500,000. Per tax declaration
the fair market value of the house is P 1,000,000, and the lot is P1,200,000. The zonal value of the
lot is P5,000 per square mete The sale is subject to capital gains tax.How much is the documentary
tax?
A.

P30,000

B. P33,000
C. P37,500
D. P45,000
E.

P47,500

37. If the value added tax is P720.000, what would be the selling price before VAT?
A.

P3,000,000

B. P4,000,000
C. P5,000,000
D. P6,000,000
E.

P7,000,000

38. If the value added tax is P720,000, what would be the selling price inclusive of VAT?

A.

P5,720,000

B. P6,720,000
C. P7,720,000
D. P8,720,000
E.

P9,250,000

39. The document which must not be presented to the Assessor to efect transfer of tax declaration is:
A.

Copy of the new owner's duplicate title in the name of the Transferee

B. Copy of the documents of absolute sale or transfer in favor of the Transferee

C. Copy of the BIR Certificate Authorizing Registration (CAR)
D. Copy of the Transfer Tax receipt
E.

Copy of the lot and building plans

40. Mr Juan de la Rosa sold his property at P5,000,000.00 inclusive of the capital gains
tax,documentary stamp tax and the broker's commission of five (5%) percent. What will be his
netproceeds after deduction of expenses?
A.

P4,380,000.00

B. P4,375,000.00
C. P4,500,000.00
D. P4,365,000.00
E.

P4,000,000.00