Professional Documents
Culture Documents
Taxation Quizzer PDF
Taxation Quizzer PDF
DONOR’S TAX
7. Which of the following transactions is deemed a taxable gift?
a. Condonation or remission of a debt
b. Sale of residential house and lot for less than adequate and
full consideration in money or money’s worth
c. Both (a) and (b)
d. Neither (a) nor (b)
11. Caroline donated P110,000.00 to her friend Vicky who was getting
married. Caroline gave no other gift during the calendar year.
What is the donor's tax implication on Caroline’s donation?
a. The P100,000 portion of the donation is exempt since given
in consideration of marriage.
b. A P10,000 portion of the donation is exempt being a donation
in consideration of marriage.
c. Caroline shall pay a 30% donor's tax on the P110,000
donation.
d. The P100,000.00 portion of the donation is exempt under the
rate schedule for donor's tax.
14. Andy, married, donated a land commonly owned by him and her spouse
worth P500,000 to her friend Joan. Only Andy signed the deed of
donation. Joan assumed P200,000 unpaid mortgage on the property.
How much is the donor’s tax due?
a. P6,000 c. P1,000
b. P90,000 d. P45,000
ESTATE TAX
16. Which of the following is not a part of the gross estate?
a. Conjugal property
b. Community property
c. Exclusive property of the decedent
d. Exclusive property of the surviving spouse
17. Who among the following transferors is not liable for estate tax
on the property transferred during his lifetime?
a. The testator who bequeaths property to his heirs in a last
will and testament executed and probated during his lifetime
b. The donor who reserves his right to amend or revoke the
donation of property in favor of the donee
c. The donee of an appointed property who is required under a
power of appointment to transfer such property upon death to
his eldest child
d. The transferor of personal property who sold it for
insufficient consideration
20. When the payment of estate tax will cause undue hardship upon the
heirs or the estate which is undergoing judicial settlement before
the court, the BIR Commissioner may grant an extension for a
period not exceeding:
a. 5 years
b. 3 years
c. 2 years
d. 1 year
Deductions claimed:
Funeral expenses 250,000
Fire loss of apartment (occurred 4 80,000
months after death)
Bad debts (represents unpaid receivable 100,000
from Bert, an insolvent)
Mortgage on inherited land 30,000
Vanishing deduction on inherited 40,000
land
Vanishing deduction on donated land 20,000
Standard deduction 2,000,000
*VANISHING DEDUCTIONS:
Land Inherited by Father:
Value at the time of Death 210,000
Less: Mortgage Paid (10,000)
Initial Basis 200,000
Pro rata: 200/5000 x 400,000 (16,000)
Final Basis 184,000
Vanishing Rate (4 years but not more 5 yrs) 20%
Vanishing Deduction 36,800
**If TRAIN Law is applied the Estate tax is P 49,152 (P819,200 x 6%)
24. Abe, married resident alien, died on January 15, 2017. She left
the following properties, expenses and obligations:
RESIDENT ALIEN
Particulars Exclusive Community Total
All Properties w/i & w/o 3,000,000 7,000,000 10,000,000
Funeral Expense (200,000) (200,000)
Judicial Expense (200,000) (200,000)
Transfers (50,000 + 70,000) (120,000) (120,000)
Gross Estate 2,880,000 6,600,000 9,480,000
Share of Surviving Spouse (3,300,000)
Medical Expenses (500,000)
Family Home (1/2 of 1,800,000) (900,000)
Standard Deductions (1,000,000)
Net Estate 3,780,000
27. Based on the preceding number, the gross estate if the property
relationship is absolute community of property is:
a. P2,600,000 c. P1,950,000
b. P3,600,000 d. P2,500,000
VAT
28. LBJ made the following sales during the 12-month period:
32. A subdivision developer sold five (5) residential house and lots,
each to different vendees, for P3,000,000 per lot, or a total
sales of P15,000,000 for the taxable period.
These sales shall be classified as:
a. 12% VAT transactions
b. 0% VAT transactions
c. VAT exempt transactions
d. None of the foregoing
33. CP operated a retail business that had been generating sales not
exceeding the threshold for VAT exempt persons. However, he
desires to be registered under the VAT system for the first time
in order to benefit from input tax credits.
What benefit may CP be entitled to once he registers under the VAT
system?
a. Tax refund
b. Presumptive input tax credit
c. Transitional input tax credit
d. None of the foregoing
34. What institution is required to deduct and withhold a final VAT of
5% on the purchase of goods or services subject to VAT?
a. National government or any political subdivision thereof
b. Government-owned or controlled corporations
c. Both (a) and (b)
d. Neither (a) nor (b)
38. Genson Distribution Inc., a VAT taxpayer, had the following data
in a month:
45. Bahay Kubo Inc. is a real estate dealer. Details of its sales
during the year showed the following:
Date of sale June 2, 2017
Consideration in the deed of sale P 5,000,000
Fair market value in the assessment rolls 4,800,000
Zonal Value 5,200,000
Schedule of payments:
June 2, 2017 1,000,000
June 2, 2018 2,000,000
June 2, 2019 2,000,000
How much is the output tax to be recognized for the June 2, 2018
payment?
a. P0 c. P249,600
b. P124,800 d. P624,000
48. COC Inc., in its first month of operation, and as a VAT taxpayer,
purchased various fixed assets. Purchases of fixed assets in the
first month were as follows:
49. Kusina Co., had its kitchen assembled by a VAT taxpayer. It took
six months for the contractor to finish the work. Kusina Co.
purchased materials in July from VAT suppliers at a cost of
P500,000, VAT not included. Payment to the contractor in July 2017
on the Construction in Progress, VAT not included was:
50. Data from the books of accounts of a VAT taxpayer for February:
Domestic Exports
Sales P 2,000,000 8,000,000
Purchases:
From VAT Suppliers:
Goods for sale 600,000 2,400,000
Supplies & services 90,000 360,000
From Suppliers Paying percentage tax:
Goods for sale 100,000 1,500,000
Supplies & services 20,000 80,000
If the input taxes attributable to zero-rated sales are claimed as
tax credit, the net value-added tax refundable is:
a. P136,000 c. P145,000
b. P203,924.70 d. P174,000
INCOME TAXATION
51. C. Lee, Chinese national, arrived in the Philippines on January 1,
2012 to visit his Filipina paramour. He planned to stay in the
country until December 31, 2016, by which time he would go back to
his legal wife and family in China. C. Lee derived income during
his stay here in the Philippines.
For the taxable year 2012, C. Lee shall be classified as a:
a. Resident alien
b. Non-resident alien engaged in trade or business in the
Philippines
c. Non-resident alien not engaged in trade or business in the
Philippines
d. Special alien employee
53. In which of the following cases will the dividend income from a
foreign corporation be classified as “income without”
a. Less than 50% of the foreign company’s gross income for the
preceding three (3) years prior to the dividend declaration
was derived from sources within the Philippines.
b. 50% of the foreign company’s gross income for the preceding
three (3) years prior to the dividend declaration was
derived from sources within the Philippines.
c. More than 50% of the foreign company’s gross income for the
preceding three (3) years prior to the dividend declaration
was derived from sources within the Philippines.
d. Always classified as income without”.
58. In 2017, Alice earned P500,000 as income from her beauty parlor
and received P250,000 as Christmas gift from her aunt. She had no
other receipts for the year. She spent P150,000 for the operation
of her beauty parlor. For tax purposes, her gross income for 2017
is
a. P750,000 c. P350,000
b. P500,000 d. P600,000
60. Mr. Yu leased his lot to Mr. Uy. The contract calls for Mr. Uy to
construct a house which would serve as the residence of the
latter, the ownership thereof to be vested in Mr. Yu after the
expiration of the lease. When the house was completely
constructed, the remaining term of the lease was 10 years. The
residential house had an estimated useful life of 15 years.
What is the tax implication of the leasehold improvement?
a. Mr. Yu derives taxable income on the improvement; Mr. Uy can
claim depreciation expense as a deduction from gross income.
b. Mr. Yu derives taxable income on the improvement; Mr. Uy
cannot claim depreciation expense as a deduction from gross
income.
c. Mr. Yu does not derive taxable income on the improvement;
Mr. Uy cannot claim depreciation expense as a deduction from
gross income.
d. Mr. Yu does not derive taxable income on the improvement;
Mr. Uy can claim depreciation expense as a deduction from
gross income.
61. Assume the same facts in the immediately preceding number, except
that at the time of the completion of the residential house, the
remaining term of the lease was 15 years while the useful life of
the house was 10 years.
What is the tax implication of the leasehold improvement?
a. Mr. Yu derives taxable income on the improvement; Mr. Uy can
claim depreciation expense as a deduction from gross income.
b. Mr. Yu derives taxable income on the improvement; Mr. Uy
cannot claim depreciation expense as a deduction from gross
income.
c. Mr. Yu does not derive taxable income on the improvement;
Mr. Uy cannot claim depreciation expense as a deduction from
gross income.
d. Mr. Yu does not derive taxable income on the improvement;
Mr. Uy can claim depreciation expense as a deduction from
gross income.
64. Which of the following taxes may be deducted from gross income?
a. Percentage tax on sale of listed stock
b. Business permit fee paid to the city government
c. Income tax
d. Tax on interest on bank deposit
65. Who among the following taxpayers may not claim a tax credit or
deduction on income tax paid to foreign countries?
a. Resident citizens
b. Resident aliens
c. Domestic corporations
d. General Co-Partnerships
69. Which of the following individual taxpayers may claim basic and
additional personal exemptions for income tax purposes?
a. Non-resident aliens engaged in trade or business in the
Philippines, in the absence of reciprocity
b. Non-resident aliens not engaged in trade or business in the
Philippines
c. Both (a) and (b)
d. Neither (a) nor (b)
71. Assume the same facts above, the basic and additional personal
exemptions of Wilma for the taxable year 2016 amount to:
a. P50,000 and P100,000, respectively
b. P50,000 and P75,000, respectively
c. P50,000 and P0, respectively
d. P0 and P0, respectively
72. Which of the following statements does not characterize a capital
asset?
a. It may be real or personal property.
b. It is not always subject to a holding period.
c. It is normally subject to value-added tax when it is sold.
d. It is not always subject to a final tax.
77. Determine which of the following trusts shall the taxable income
be consolidated and the income tax thereon computed on the basis
of such consolidated income?
a. Trust No. 1 and Trust No. 2 have the same grantor and with
different beneficiaries.
b. Trust No. 1 and Trust No. 2 have the same grantor and the
same beneficiary.
c. Trust No. 1 and Trust No. 2 have different grantors and the
same beneficiary.
d. Trust No. 1 and Trust No. 2 have different grantors and the
same fiduciary and beneficiary.
78. Inday is a resident citizen of the Philippines. Data for a year:
Gross income from business P 700,000
Royalty from books 40,000
Gain on direct sale to buyer of
shares of stock of a domestic corporation
held as capital asset 70,000
Loss 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
Business Expenses 300,000
How much is the total income tax expense for the year?
a. P177,500 c. P159,500
b. P80,000 d. P156,000
Tabular Schedule:
1st 250,000 Tax is 50,000
Excess of 250,000 - 350,000 = 100,000 x 30% 30,000
Capital Gains Tax on Shares (70,000 x 5%) 3,500
Royalty Income (40,000 x 10%) 4,000
Loss on Sale (Zonal Value 1.2 x 6%) 72,000
Total Income Tax Expense 159,500
Philippines
Interest income from bank deposits 45,000 x 20% = 9,000
Interest income from FCDU 50,000 x 7.5% = 3,750
Royalties from books 20,000 x 10% = 2,000
Royalties from computer programs 20,000 x 20% = 4,000
Dividend income from a
domestic corporation 27,000 x 10% = 2,700
Total Withholding Taxes 21,450
82. How much is the final withholding tax if the taxpayer is a non-
resident citizen?
a. P21,450 c. P17,700
b. P20,400 d. P36,250
Philippines
Interest income from bank deposits 45,000 x 20% = 9,000
Royalties from books 20,000 x 10% = 2,000
Royalties from computer programs 20,000 x 20% = 4,000
Dividend income from a domestic
corporation 27,000 x 10% = 2,700
Total Withholding Taxes 17,700
83. How much is the final withholding tax if the taxpayer is a non-
resident alien engaged in trade or business?
a. P21,450 c. P17,700
b. P20,400 d. P36,250
Philippines
Interest income from bank deposits 45,000 x 20% = 9,000
Royalties from books 20,000 x 10% = 2,000
Royalties from computer programs 20,000 x 20% = 4,000
Dividend income from a domestic
corporation 27,000 x 20% = 5,400
Total Withholding Taxes 20,400
84. How much is the final withholding tax if the taxpayer is a non-
resident alien not engaged in trade or business?
a. P21,450 c. P17,700
b. P20,400 d. P36,250
89. How much is the income tax expense of the Corporation for the
year?
a. P161,000 c. P172,000
b. P136,000 d. P125,600
93. The Improperly Accumulated Earnings Tax shall not apply to which
of the following corporations?
a. Banks and other non-bank financial intermediaries
b. Insurance companies
c. Publicly-held corporation
d. All of the choices
TAX REMEDIES
96. Rosalie, a compensation income earner, filed her income tax return
for the taxable year 2013 on March 30, 2014. On May 20, 2017,
Rosalie received an assessment notice and letter of demand
covering the taxable year 2013 but the postmark on the envelope
shows April 10, 2017. Her return is not a false and fraudulent
return. Can Rosalie raise the defense of prescription?
a. No. The 3 year prescriptive period started to run on April
15, 2014, hence, it has not yet expired on April 10, 2017.
b. Yes. The 3 year prescriptive period started to run on April
15, 2014, hence, it had already expired by May 20, 2017.
c. No. The prescriptive period started to run on March 30,
2014, hence, the 3 year period expired on April 10, 2017.
d. Yes. Since the 3-year prescriptive period started to run on
March 30, 2014, it already expired by May 20, 2017.
99. As a rule, within what period must a taxpayer elevate to the Court
of Tax Appeals a denial of his application for refund of income
tax overpayment?
a. Within 30 days from receipt of the Commissioner’s denial of
his application for refund.
b. Within 30 days from receipt of the denial which must not
exceed 2 years from payment of income tax.
c. Within 2 years from payment of the income taxes sought to be
refunded.
d. Within 30 days from receipt of the denial or within two
years from payment.
100. What is the effect on the tax liability of a taxpayer who does not
protest an assessment for deficiency taxes?
a. The taxpayer may appeal his liability to the CTA since the
assessment is a final decision of the Commissioner on the
matter.
b. The BIR could already enforce the collection of the
taxpayer's liability if it could secure authority from the
CTA.
c. The taxpayer's liability becomes fixed and subject to
collection as the assessment becomes final and collectible.
d. The taxpayer's liability remains suspended for 180 days from
the expiration of the period to protest.
101. The taxpayer seasonably filed his protest together with all the
supporting documents. It is already July 31, 2017, or 180 days
from submission of the protest but the BIR Commissioner has not
yet decided his protest. Desirous of an early resolution of his
protested assessment, the taxpayer should file his appeal to the
Court of Tax Appeals not later than
a. August 31, 2017.
b. August 30, 2017.
c. August 15, 2017.
d. August 1, 2017.
DOCUMENTARY STAMP TAX
102. A newly formed corporation issued shares of stocks to its
incorporators for P150,000. The par value of the shares issued is
P100,000. How much is the documentary stamp tax?
a. P500 c. P750
b. P1,000 d. P1,500
104. Based on number 97, but assuming the shares are without par value,
how much is the documentary stamp tax?
a. P500 c. P750
b. P1,000 d. P0.00
105. Continuing number 99, if the shares were subsequently sold for
P200,000, how much is the documentary stamp tax?
a. P750 c. P1,500
b. P187.50 d. P375
On March 30, 2012, XXX, Inc., received a notice of assessment and a letter
of demand on its April 15, 2009 final adjustment return from the BIR.
XXX, Inc., then filed a request for reinvestigation together with the
requisite supporting documents on April 25, 2012. On June 2, 2012, the
BIR issued a final assessment reducing the amount of the tax demand.
Since XXX, Inc., was satisfied with the reduction, it did not do
anything anymore. On April 15, 2017 the BIR garnished the
corporation’s bank deposits to answer the liability.
8. What is the effect of the XXX, Inc.’s failure to file a protest on its
assessed deficiency taxes?
a. The taxpayer may file a motion for reconsideration to the CIR on
the matter.
b. The taxpayer may appeal his liability to the CTA since the
assessment is a final decision of the Commissioner on the matter.
c. The taxpayer’s liability becomes fixed and subject to collection
as the assessment becomes final and collectible.
d. The BIR could already enforced the collection of the taxpayer’s
liability if it could secure authority from the CTA.
11. A joker was commissioned in a kiddy party to perform magic. The comic
was to be paid P100, 000 for his performance and the parties signed
the necessary contract. He then gratuitously assigned his rights under
the contract to his son. The son later on collected the P100,
000 talent fee of his father from the contractee. The national
internal revenue tax/es payable is/are:
a. Income tax only.
b. Donor’s tax only.
c. Both income and donor’s taxes.
d. Neither income tax nor donor’s tax.
14. The following journal entry was made in the purchases journal of a
VAT-registered taxpayer:
Purchases xxx
Cash or Accounts Payable xxx
20. Which one among the following items below is included in the gross
state?
a. Revocable transfer.
b. Transfer with reservation of certain rights.
c. Transfer under general power of appointment.
d. Transfer in contemplation of death which is onerous.
21. Which of the following statement is correct?
a. The final tax on compensation of special kind of non-resident
aliens is 25% of the gross income.
b. Interest income from a foreign currency deposit unit in the
Philippines of a non resident alien is not subject to final tax.
c. Informer’s reward is subject to final tax of 10% based on the 10%
of the value of tax assessed or P1, 000,000 whichever is higher.
d. Prizes exceeding P10,000 derived by non-resident alien not engage
in trade or business here in the Philippines is subject to a
final tax of 20%
The zonal value of the lot at the time of sale is P4, 800,000.
The output VAT for the installment received on April 30, 2017, is:
a. P43,200
b. P86,400
c. P115,200
d. P129,600
Output Tax (4,800,000 x 12%) = 576,000
25. Counting No. 24, the output VAT on April 30, 2020, is:
a. P132, 000
b. P144,000
c. P156,000
d. P228,000
26. Assuming that the real property in No. 24 is the residential lot sold
for cash of P1, 750,000 (VAT not separately blend in the sales
document) on April 30, 2016. Zonal value of the lot at the time of
sale is P1, 900,000. The output VAT on the sale is:
a. P187,500
b. P210, 000
c. P228,000
d. None, as it is exempt the VAT.
a. No to I and II
b. Yes to I and II
c. Yes to I only
d. Yes to II only
28. Ayala Land, Inc. (ALI) bought a parcel of land in 2014 for P7 million
as part of its inventory of real properties. In 2016, it sold the land
for P12 million which was its zonal valuation. In the same year, it
suffered a loss of P6 million for selling another parcel of land from
its inventory. These were the only transactions ALI had in its real
estate business. Which of the following is the applicable tax
treatment?
a. ALI shall be subject to a tax of 6% of P12 million.
b. ALI’s gain of P5 million shall be subject to holding period.
c. ALI could deduct its P6 million loss from its P5 million gain.
d. ALI’s P6 million loss could not be deducted from its P5 million
gain.
31. Containing the preceding number, except that after paying the
equivalent of ten years premium, X transferred the policy to Y for
P1.5 million and Y continued paying the monthly premium as they
mature. After 10 years, X died. Which of the following is correct?
a. The proceeds will be part of X’s gross estate.
b. The proceeds received by Y is part of his taxable income.
c. The amount received by X from Y is part of X’s taxable income.
d. The amount received by the X from Y and the proceeds received by Y
are partly taxable income and partly exempt.
The property received as inheritance was part of the gross estate of the
prior decedent at a fair market value of P1,100,000. At the time of
inheritance, it was mortgage for P300,000. Dina was able to pay P100,000
before she passed away.
SOLUTION:
Separate Common Total
2,000,000 4,000,000
300,000
200,000
Gross Estate 2,000,000 4,500,000 6,500,000
Funeral Expenses:
Actual 300,000
Limit (6.5 x 5%) 325,000
Threshold 200,000
Whichever is lower (200,000)
Judicial Expenses (80,000)
Indebtedness (200,000) (40,000)
Vanishing Deductions* (736,000)
Net Estate After
Ordinary Deductions 1,064,000 4,180,000 5,244,000
Family Home (1,000,000)
Standard Deductions (1,000,000)
Share of Surviving Spouse 1/2 x 4,180,000 (2,090,000)
Taxable NE 1,154,000
*Vanishing Deduction:
Lower FMV 1,100,000
Mortgage Assumed and Paid (100,000)
Initial Basis 1,000,000
Pro Rated Deductions:
1,000,000/6,500,000 x 520,000 (80,000)
Final Basis 920,000
Vanishing Rate _ 80%__
Vanishing Deductions 736,000
42. Going back to the original problem, except that the marriage of
Dina Cabangon to her spouse was under the system of conjugal
partnership of gains. The taxable net estate would be:
a. P3,206,032 c. P1,206,032
b. P2,206,033 d. P1,154,000
Separate Common Total
2,000,000 4,000,000
300,000
Gross Estate 2,300,000 4,000,000 6,300,000
Funeral Expenses:
Actual 300,000
Limit (6.5M x 5%) 325,000
Threshold 200,000
Whichever is lower (200,000)
Judicial Expenses (80,000)
Indebtedness (200,000) (40,000)
Vanishing Deductions** (733,968)
Net Estate After
Ordinary Deductions 1,366,032 3,680,000 5,046,032
Family Home (1,000,000)
Standard Deductions (1,000,000)
Share of Surviving Spouse 1/2 x 4,180,000 (1,840,000)
Taxable NE 1,206,302
**Vanishing Deduction:
Lower FMV 1,100,000
Mortgage Assumed and Paid (100,000)
Initial Basis 1,000,000
Pro Rated Deductions:
1,000,000/6,300,000 x 520,000 (82,540)
Final Basis 917,460
Vanishing Rate 80%
Vanishing Deductions 733,968
a. Imelda may carry over and deduct her 2016 loss only from her 2017
gain.
b. Imelda may deduct her 2016 loss from both her 2017 professional
income.
c. Imelda may not deduct her 2016 loss from both her 2017 professional
income and her gain.
d. Imelda may carry over and deduct her 2016 loss from her 2017
professional income as well as from her gain.
44. Taxation could be exercise by the following except one. Which one?
a. Judiciary
b. Legislative
c. Local government unit
d. President of the Philippines, in certain cases.
110,500/68% 162,500
162,500 x 32% 52,000
49. Continuing number 48, the income tax payable by Mistah is:
a. P13,200 old law
b. P27,760
c. P29,200
d. P43,360
53. The actual input taxes attributable to the domestic sales to the
government is:
a. P25,000
b. P30,000
c. P55,000
d. P65,000
54. The value-added tax payable on the domestic sales to the government
which was withheld as final withholding VAT is:
a. P5,000
b. P25,000
c. P30,000
d. P35,000
55. The journal entry to take up the domestic sales to the government
is:
a. Cash/AR 560,000
Sales 560,000
b. Cash/AR 560,000
Sales 500,000
Output tax 60,000
c. Cash/AR 535,000
Final withholding VAT 25,000
Sales 500,000
Output tax 60,000
d. Cash/AR 530,000
Final withholding VAT 25,000
Creditable withholding tax 5,000
Sales 500,000
Output tax 60,000
Private Entities
VAT 0% VAT Government
OT 500,000 x 12% 60,000 60,000
500,000 x 0% -0-
IT (30,000) (20,000)
500,000 x 7% (35,000)
56. The journal entry to reflect the excess of actual input VAT-over
the statutorily allowed input tax on the domestic sales to the
government is:
a. Output tax 60,000
Revenue and expense summary 20,000
Input tax 55,000
Final withholding VAT 25,000
b. Output tax 60,000
Input tax 15,000
Final withholding VAT 25,000
Revenue and expense summary 20,000
c. Output tax 60,000
Input tax 55,000
Revenue and expense summary 5,000
d. Output tax 60,000
Revenue and expense summary 20,000
Input tax 55,000
Cash/AP 25,000
60. A closely held corporation has initially offered its shares in the
Philippine stock exchange (PSE). The following data pertain to the
initial public offering (IPO):
62. Malakas and Maganda were legally separated. They have six minor
children, all qualified to be claimed as additional exemptions for
income tax purposes. The court awarded custody of two of the
children to Malakas and three to Maganda, with Malakas directed
provide full financial support for them as well. The court awarded
the sixth child to Malakas’ parents with Malakas also providing
full financial support. Assuming that only Malakas is
gainfully earning while Maganda is not, for how many children could
Malakas claim as additional exemptions when he files his annual
income tax return?
a. Two children c. Five Children
b. Three children d. Six children
65. Continuing number 64, how much would be the total deductions from
gross income which may be claimed by the employer?
a. P1,100,000 c. P1,440,000
b. P1,280,000 d. P1,600,000
66. Going back to the number 64, the employer shall file a remittance
return of the final tax on fringe benefit and pay the tax withheld
within:
a. 5 days from the close of each month.
b. 10 days from the close of each month.
c. 10 days from the close of each fiscal quarter.
d. 10 days from the close of each calendar quarter.
67. Kalansay, a native of Negros, died leaving a property acquired by
purchase from Naty Gok who died 3 ½ years ago. The property is now
a Kalansay’s gross estate. The estate’s vanishing deduction rate
is:
a. 0%
b. 20%
c. 40%
d. 60%
Property is not gratuitously acquired by the present Estate
68. A lessor of residential units has the following gross receipts for
2016:
Monthly Number
Rent per unit of units Total
P 9,000 5 P 540,000
10,000 5 600,000
11,000 5 660,000
12,000 5 720,000
69. Using the same facts in number 68, only that the lessor is a VAT-
registered person, the OPT tax due is:
a. P0 c. P67,500
b. P57,585 d. P75,600
OPT Exempt also
71. The following are among the constitutional limitation on the power
of taxation. Which one is not?
a. Due process clause
b. Non-impairment clause
c. Equal protection clause
d. No imprisonment for non-payment of tax
72. Pacmom filed her income tax from return for 2015 on May 16, 2016
and paid the tax of P50,000. Upon audit by the BIR an assessment
notice was issued on April 30, 2019, requiring Pacmom to pay a
deficiency tax of P 75,000 not later than July 30, 2019. Pacmom
will:
a. False prescription as defense
b. Request for an extension of time to pay the deficiency income tax.
c. Go to the court of tax appeals to appeal the assessment made by the
BIR.
d. Ignore the assessment as the date of collection is already way
beyond three years, covering taxable year 2015.
74. Using the same facts in number 73, only that instead of going to
the CTA, a request for reconsideration was filed with the BIR on
May 7, 2016. Date decision of denial of the request for
reconsideration was received on June 2, 2016. The last day to
appeal to the CTA is on:
a. June 7, 2016 c. June 23, 2016
b. June 21, 2016 d. July 2, 2016
76. Statement 1. The Bureau of Internal Revenue (BIR) has as its powers
and duties the assessment and collection of the national internal
revenue taxes, fees, and changes and the enforcement of all
fortitudes, penalties, and fines connected therewith.
Statement 2. The Bureau of Customs (BOC) has its powers and duties
the assessment and collection of awful revenues from imported and
exported articles and all other dues, fees, charges, fines, and
penalties accruing under the tariff and customs laws.
a. Both statements are correct.
b. Both statements are wrong.
c. Statement 1 is correct but statement 2 is wrong.
d. Statement 2 is correct but statement 1 is wrong.
77. A customs duty that imposes both advance and specific customs
duties on imported or exported articles is:
a. Anti-dumping duty.
b. Countervailing duty.
c. Discriminating duty.
d. Compound customs duty.
ITEMIZED DEDUCTIONS DC RC
Passive Income 40,000 40,000
OPTIONAL DEDUCTION DC RC
Passive Income 40,000 40,000
Net Sales 1,030,000
Business Gross Income 550,000
Total Gross Income/
Gross Receipt & Net Sales 590,000 1,070,000
40% OSD (236,000) (428,000)
Personal Exemption -0- (50,000)
Taxable Income 354,000 592,000
7. Abigail sold through the local stock exchange, 10,000 PLDT shares that
she bought 2 years ago. Abigail sold the shares for P2 million and
realized a net gain of P200,000. The transactions is
a. Subject to regular income tax rates for individuals but only 50%
shall be recognized because it is a long-term capital gain.
b. Subject to capital gains tax amounting to P15,000.
c. Subject to percentage tax amounting to P10,000.
d. Subject to regular income tax rates for individual under Section
24 (A).
8. Proceeds of life insurance to the extent of the amount receivable by
the estate of the deceased, his executor or administrator under
policies taken out by the dependent upon his own life shall be
I. Part of the gross estate irrespective of whether or
not the insured retained the power of revocation.
II. Not part of the gross estate if the beneficiary is
irrevocable.
III. Part of the gross income if the designation of the
beneficiary is revocable.
IV. Not part of the gross income irrespective of whether
or not the insured retained the power of revocation.
a. I and II
b. I and III
c. I and IV
d. only I
11. Z is a Filipino immigrant living in the United States for more than 10
years. He is retired and he came back to the Philippines as a
balikbayan. Every time he comes to the Philippines, he stays here for
about a month. He regularly receives a pension from his former
employer in the United States, amounting to USD1,000 a month. While in
the Philippines, with his pension pay from his former employer, he
purchased 3 condominium units in Makati, which he is renting out for
P15,000 a month each. Does the USD1,000 pension become taxable because
he is now in the Philippines?
a. Yes. Income received in the Philippines by non-resident citizens
is taxable.
b. Yes. Income received in the Philippines or abroad by non-
resident citizens is taxable.
c. No. Income earned abroad by non-resident citizens is no longer
taxable in the Philippines.
d. No, the pension is exempt from taxation being one of the
exclusions from gross income.
12. Which of the following income earners is required to file income tax
return?
a. Minimum wage earners
b. Non-resident alien not engaged in business
c. An individual with respect to pure compensation income deriving
from such sources within the Philippines, the income tax on
which has been correctly withheld and that an individual
deriving compensation from one employer at any time during the
taxable year
d. General professional partnership
13. Which of the following fringe benefit is not subject to fringe benefit
tax?
a. a. Housing benefit c. De minimis benefit
b. b. Expense account d. Vehicle benefit
14. In the case of a taxpayer, only the following percentages of the gain
or loss recognized upon the sale or exchange of a capital asset shall
be taken into account in computing net capital gain, net capital loss
and net income.
I. Statement 1 One hundred percent (100%) if the capital asset
has been held for not more than twelve (12) months by a
taxpayer.
II. Statement 2 Fifty percent (50%) if the capital asset has been
held for more than twelve (12) months by a taxpayer.
a. True, true c. False, false
b. True, false d. False, true
15. 15.A, worked for a manufacturing firm but due to business reverses,
the firm offered a voluntary redundancy program in order to reduce
overhead expenses. Under the program, an employee who offered to
resign would be given separation pay equivalent to his 3 months basic
salary for every year of service. A accepted the offer and received
P800,000 as separation pay under the program. After all employees who
accepted the offer were paid, the firm found its overhead still
excessive. Hence, it adopted another program, where various
unprofitable departments were closed. As a result, B was separated
from the service. B also received P800,000 as separation pay. At the
time of separation both A and B have rendered at least 10 years of
service but A was 55 years old while B was only 45 years old. As a
result,
a. Both amounts are exempt from income tax
b. Both amounts are subject to income tax
c. Only Mr. A is subject to income tax
d. Only Mr. B is subject to income tax
16. The following shall not be subject to estate tax
a. The merger of usufruct in the owner of naked title
b. The transmission or delivery of inheritance or legacy by the
fiduciary heir or legatee to fideicommissary
c. The transmission from the first heir, legatee, or donee in favor
of another beneficiary in accordance with the desire of the
predecessor
d. All bequest, devises, legacies or transfers in social welfare,
cultural and charitable institutions
19. Which of the following shall be allowed as a deduction from the gross
income?
a. Depreciation for vehicle for land transport used for personal
purposes the value of which does not exceed P2,400,000.
b. Depreciation for vehicle for land transport used in the business
the value of which exceeds P2,400,000.
c. Depreciation for land vehicles the value of which exceeds
P2,400,000 where the taxpayer’s main line of business is
transport operations or lease of transportation equipment and
the vehicles purchased are used in said operations.
d. Depreciation for airplanes and/or aircraft the value of which
exceeds P2,400,000 where the taxpayer’s main line of business is
sale of goods or properties and the vehicles purchased are used
in said operations.
25. The actual residential home of the decedent and his family at the time
of his death, as certified by the Barangay Captain of the locality
where the family home is situated has a fair market value of
P1,500,000. The family home is part of the common property of the
spouses. How much is the family home deduction?
a. a. P1,500,000 c. P750,000
b. b. P1,000,000 d. P500,000
26. Who makes revenue regulations?
a. Secretary of Finance c. Board of Accountancy
b. Commissioner of BIR d. House of Reperesentatives
28. George and Pearl were legally separated. They had six minor children,
all qualified to be claimed as additional exemptions for income tax
purposes. The court awarded custody of two of the children to George
and three to Pearl, with George directed to provide full financial
support for them as well. The court awarded the 6th child to George’s
father with George also providing full financial support. Assuming
that only George is gainfully employed while Pearl is not, how much
could George claim as additional exemptions when he files his income
tax return?
a. a. P100,000 c. P50,000
b. b. P75,000 d. None
29. Construction by XYZ Construction Co. of concrete barrier for the Asian
Development Bank in Ortigas Center to prevent car bombs from ramming
the ADB gates along ADB Avenue in Mandaluyong City is subject to what
business tax?
a. a. 12% VAT c. Exemption from VAT
b. b. 0% VAT d. None of the above
30. ______________ a number of inquiries from shareholders, James Hong has
issued a formal announcement that his company is doing well.
a. Following b. Beside c. Against d. Toward
What amount can Martin Brian deduct from his gross income?
a. P1,440,000
b. P1,400,000
c. P1,150,000
d. P40,000
38. The head priest of the religious sect Tres Personas Solo Dios as the
corporation sole, rented out 5,000 sq.m. lot registered in its name
for use as school site of a school organized for profit. The sect used
the rentals for the support and upkeep of its priests. The rented lot
is
a. Not exempt from real property taxes because the user is
organized for profit.
b. Exempt from real property taxes since it is actually, directly
and exclusively used for religious purposes.
c. Not exempt from real property taxes since it is the rents not
the land that it used for religious purposes.
d. Exempt from real property taxes since it is actually, directly
and exclusively used for educational purposes.
40. Which principle of sound tax system suggests that the sources of
revenue should be sufficient to meet the requirements of the
government expenditures?
a. Fiscal adequacy c. Theoretical justice
b. Administrative feasibility d. Uniformity of taxes
41. The following are the powers of the Bureau of Internal Revenue,
except:
a. The assessment and collection of all national internal revenue
taxes.
b. The execution of all judgments in all cases decided in its favor
by CTA and the ordinary courts.
c. The enforcement of all forfeitures, penalties, and fines
connected with national revenue taxes.
d. The assessment and collection of customs duties and tariffs.
45. This shall be considered a livelihood activity only and shall not be
considered doing business, if the gross sales or receipts in one year
does not exceed
a. P100,000 c. P200,000
b. P550,000 d. P60,000
46. Antoine Bee is the operator of Globe Bee Coliseum. During the month,
it had the following gross receipts from various activities, to wit:
I. Concert by April Boy Ireneo P85,000
II. Professional Basketball game 120,000
III. Amateur basketball games 36,700
IV. Billiards 45,000
The percentage tax payable by Antoine Bee on the Coliseum is:
a. P18,000 c. P24,750
b. P23,505 d. P43,005
120,000 x 15% = 18,000
47. As franchise. Ms. L.A. Young had the following data on revenues and
receivables, taxes not included:
Revenue A/R, beginning A/R, ending
From operations:
Covered by franchise P2,000,000 P300,000 P400,000
Not covered by the franchise 600,000 50,000
Real Properties:
Family lot acquired by the decedent before marriage, FMV P 500,000
Personal Properties:
Bank deposit under the name of the decedent
representing salary earned before marriage P2,150,000
Jon Asty, single resident citizen (who got married during the year 2016),
has the following dependents for the taxable year 2016.
Leo, adopted child, 25 years old, person with disability, dies during the
year
Efren, born December 31, 2016 (taxpayer and his wife’s first born child)
The following information pertain to his income and expenses in the year
2016:
Salary, gross of P8,500, withholding tax P220,000
Rent expense, apartment house 36,000
Health insurance premium paid (P500/month starting August) 2,500
Gross sales from trading business 150,000
Cost of sales 120,000
Itemized business expenses 10,000
56. The taxable net income using optional standard deduction is:
a. P164,000 c. P189,000
b. P160,000 d. P89,000
Items 57 - 61 are based on the following information:
Joefrey Ochoa Manufacturing Corp. is a VAT-registered enterprise which is
also engaged in VAT-exempt transactions. It has the following data taken
from its books of accounts for the first quarter of the fiscal year (May 1,
2016 – April 30, 2017)
60. When shall the VAT return be filed for the first fiscal quarter?
a. August 15, 2016 c. August 25, 2016
b. August 20, 2016 d. September 29, 2016
61. When shall the income tax return be filed for the first fiscal
quarter?
a. August 25, 2016 c. September 30, 2016
b. September 29, 2016 d. None of the choices
63. How much is the total itemized deductions including the special
itemized deductions?
a. a. P4,480,000 c. P4,175,000
b. b. P4,435,000 d. Answer not given
65. The proceeds received under a life insurance endowment contract is not
considered part of the gross income
a. If it is so stated in the life insurance endowment policy
b. If the price for the endowment policy was not fully paid
c. Where payment is made as a result of the death of the insured
d. Where the beneficiary was not the one who took out the endowment
contract
68. Which of the following may not raise money for the government?
a. Power of taxation c. Power of eminent domain
b. Police power d. Privatization of government’s
capital assets
69. Riyadh Motors has succeeded _____ generating positive publicity for
its new line of ecologically friendly automobiles.
a. On
b. In
c. At
d. Of
70. The auditor has _____________ to warrant a full blown forensic audit.
a. Much evidence
b. b. Many evidence
c. c. Much evidences
d. d. Many evidences