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RQ-Donors Tax

Adamson University
College of Business Administration
ACCOUNTANCY DEPARTMENT

Name: _______________________________ Score: __________

I. Write True if the statement is true; otherwise, write False. Erasures are not allowed. (10 points)

1. Dowries or gifts made on account of marriage, on or before its celebration, or within one year
thereafter, by parents to each of their legitimate, illegitimate, recognized natural, or adopted children, to
the extent of the first 10,000 shall be exempt from donors tax.
2. Where property, other than real property, is transferred for less than an adequate and full consideration
in money or moneys worth, then the amount by which the value of the consideration exceeded the fair
market value of the property shall be deemed a gift, and shall be included in computing the amount of
gifts made during the calendar year.
3. The return of the donor shall be filed within thirty (30) days after the date the gift is made and the tax
due thereon shall be paid at the time of filing.
4. For donation inter vivos, the tax for each calendar year shall be computed cumulatively over a period
equivalent to the lifetime of the donor.
5. Gifts of conjugal property made by both spouses shall be considered as having been made one-half by
the husband and the other half by the wife and is taxable to each donor spouse.
6. For purposes of donors tax, second-degree cousins are strangers to each other.
7. The gift is perfected from the moment the donor delivers the gift actually or constructively to the
donee.
8. Donors tax is a tax imposed on the property transferred by way of gift inter vivos.
9. For purposes of donors tax, the grandson of the daughter of the donors grandson is a relative of the
donor.
10. In the case of gift made by a non-resident, the return may be filed with the Philippine Embassy or
Consulate in the country where is domiciled at the time of the transfer, or directly with the Office of the
Commissioner.

II. Determine the donors tax due on each donation made by each spouse. (7 points)

Mr. and Ms. K made the following donations of conjugal funds and properties (unless stated otherwise) in 2016
as follows:
February 14: To L, a legitimate son, a piece of land with a FMV of P400,000 on account of Ls
graduation from college
May 14: To M, a legitimate daughter on accounts of Ms marriage to be celebrated on December 25,
2016, house and lot with a FMV of P1,000,000
June 14: To N, brother of Mrs. K, P200,000
September 14: To O, the efficient and beautiful secretary of Mr. K for taking care of Mr. K while Mrs.
K is vacationing in USA, jewelry worth P300,000
October 14: To P, the honest and good-looking driver of Mrs. K who accompanied Mrs. K on her trip to
and from USA, a diamond ring worth P500,000
December 14: To Q, the daughter of O on account of Qs birthday, pieces of jewelry inherited by Mr. K
during marriage, with a FMV of P400,000
December 25: To R, a legitimate son, a residential house and lot with a FMV of P1,200,000 but subject
to the condition that R would assume the mortgage indebtedness in the amount of P400,000

III. Determine whether the transaction is subject to donors tax. If subject to donors tax, compute the
donors tax due. Otherwise, justify the exclusion. (10 points)

During his 100th birthday, Madunong gave gifts as follows:


A house and lot worth P800,000 to his personal nurse, Osang. The donation is written in his last will
and testament.
A Pajero car worth P200,000 to his driver, Mabagal. The donation was made orally.
A business empire worth P10,000,000,000 to his legitimate son. 80% of the business is located in UAE.
The donation is revocable.
Furniture and fixtures worth P600,000 to his five housemaids. The donation shall take effect upon his
death.
A time deposit of 100,000 to his illegitimate daughter.

IV. Compute the donors tax payable after tax credit. (3 points)

An American citizen resident in Dau, Pampanga, has the following tax record during the year:

Philippines Australia United States


Net gifts P5,000,000 P3,000,000 P2,000,000
Donors tax paid P300,000 P100,000

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RQ-Donors Tax

Adamson University
College of Business Administration
ACCOUNTANCY DEPARTMENT