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CPA REVIEW CENTER

TAX00 – Donor’s Tax

Theories
1. Donations that do not conform to legal formalities are
a. Taxable under Donor’s tax notwithstanding absence for formalities
b. Exempt from Donor’s tax
c. Subject to Estate tax
d. Subject to income tax

2. Acceptance is essential for a valid donation to be subject to donor’s tax, except transfers
a. in trust by the donor in favour of a beneficiary
b. of business interest by the donor in favour of an stranger
c. for less than adequate consideration
d. by Filipino residents to non-resident aliens

3. The donation of an immovable property shall be made


a. In writing c. Either A or B
b. In a public instrument d. Orally

4. Using the preceding number, acceptance by the donee may be made


a. In the same deed of donation c. Either A or B
b. In a separate document d. Neither A nor B

5. The donation of a movable property may be made


a. Orally b. In writing c. Either A or B d. Neither A nor B

6. Using the preceding number, the donation and acceptance should be in writing if the value of the
property donated is
a. Less than P5,000 b. P5,000 or less c. P5,000 or more d. More than P5,000

7. A donation which takes effect upon the death of the donor


a. Donation mortis causa
b. Partakes of the nature of a testamentary disposition
c. Shall be governed by the law on succession
d. A, B and C

8. A donation which is intended by the donor to take effect during his lifetime
a. Shall be subject to donor’s tax using the tax table for donation
b. Shall be in writing if the value exceeds P5,000
c. Donation inter-vivos
d. A, B and C

9. Which is incorrect concerning donation?


a. Real property is transferred by donation only if made under a public instrument
b. Donation of intangible personal property should be in writing
c. Personal property amounting to more than P5,000 should be in writing
d. No one can be forced to accept the generosity of another

10. Which is correct regarding transfer inter-vivos involving personal properties for less than an adequate
and full consideration?
a. The whole value of the property will be included in gross gift
b. The difference in fair value and consideration is a gift subject to donor’s tax
c. The whole value of the property will be included in gross estate
d. The difference in fair value and consideration is part of gross estate

11. Contracts without the essential element of consideration is considered as


a. Void c. Unenforceable
b. Donation d. Rescissible

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12. All elements of donor’s tax must always concur for the donation to be valid. Except
a. Acceptance c. Capacity
b. Delivery d. Intent

13. Donor’s tax rate is at


a. 6% c. 2 – 15%
b. 30% d. 5% - 20%

14. Donor’s tax applies to gifts


a. In excess of P250,000 c. In excess of P100,000
b. In excess of P200,000 d. All gifts

15. Dowries valued P10,000 made on account of marriage by parents to their children is subject to
a. Donor’s tax c. Estate tax
b. Exemption d. Income tax

16. Donor’s tax should be paid by the?


a. Donor c. Administrator
b. Donee d. Executor

17. This are considered void donations, except


a. Between husband and wife
b. Made to public officer or his/her family on account of his/her office
c. Any physician, health officer, priest who took care or extended spiritual care to the donor during his
last illness
d. Donation to an unborn child

18. Jerwin, a surviving spouse, renounced his share in the conjugal partnership
a. Renunciation is subject to donor’s tax
b. Renunciation is subject to estate tax
c. Renunciation is exempt from donor’s tax
d. Renunciation is void

19. Sonly renounced his inheritance in the estate


a. Renunciation is subject to donor’s tax
b. Renunciation is subject to estate tax
c. Renunciation is exempt from donor’s tax
d. Renunciation is void

20. Statement 1: Corporations are allowed to donate inter-vivos


Statement 2: Corporations are allowed to donate mortis-causa
a. Both are correct c. Only 1 is correct
b. Both are incorrect d. Only 2 is correct

21. The following transfers are taxable under donor’s tax, except?
a. Transfers made by the donor to relieve himself of the burden of management of his properties
b. Transfers made by the donor to settle family disputes
c. Transfers made by a parent to see his children enjoy his properties while he still lives
d. Transfers under power of general appointment

22. Which is incorrect?


a. Donations of non-resident aliens involving properties located abroad to residents of the Philippines
is exempt from donor’s tax
b. Renunciation of inheritance by an heir to another is not subject to donor’s tax
c. Donation by a non-resident citizen to a non-resident alien is exempt from donor’s tax
d. Gifts are reckoned on an annual basis; the tax is determined for the whole gift throughout the year;
hence, a computation is made every time a donation is made

23. Which of the following donation may be exempt?


a. Donation of a resident alien of its properties located abroad to a non-resident alien
b. Donation of a non-resident alien of real properties located in the Philippines to a resident alien
c. Donation of non-resident alien of intangible properties located in the Philippines to a non-resident
alien
d. Donation of a intangible properties located in the Philippines by resident aliens

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24. Which of the following is not included in gross gift?
a. Transfers to non-profit non-stock charitable institution
b. The portion of the fair value of a property transferred adequately paid for in transfer for less than an
adequate consideration
c. The portion of the donation representing dowry exemption
d. Donation to the government for public use

25. Donation to the following entities is exempt from Donor’s taxation, except
a. Accredited national professional organization of certified public accountant (PICPA)
b. Integrated Bar of the Philippines
c. International Rice Research Institute
d. Ramon Magsaysay Award Foundation

26. I. Dowries or gifts made on account of family celebration, on or before its celebration, or within one year
thereafter, by parents to each of their legitimate, recognized natural or adopted children, to the extent of
the first P10,000 shall be exempt from the donor’s tax

II. Donations in favour of an educational and or charitable, religious, cultural or social welfare
corporation, institution, accredited non – government organization, trust or philanthropic organization or
research institution or organization provided that no amount of said gifts shall be used by the donee for
administration purposes shall be exempt from donor’s tax
a. True, true b. True, False c. False, True d. False, False

27. A. If the value of the movable property donated is P5,000 or more the donation and the acceptance shall
be made in writing, otherwise the donation shall be void
B. Regardless of the value of the immovable property donated, the donation and the acceptance shall be
made in writing, otherwise the donation shall be void.
a. True, True b. True, False c. False, True d. False, False

28. I. The gift is perfected from the moment the donor effects the delivery either actually or constructively of
the property donated
II. Donor’s tax is a property tax imposed on the property transferred by the way of gift inter-vivos
a. True, True b. True, False c. False, True d. False, False

29. I. Where property is transferred during lifetime for less than adequate and full consideration in money or
money’s worth, then the amount by which the value of the property exceeded the value of the
consideration shall for the purpose of the donor’s tax, be deemed a gift
II. 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 ½ to each donor spouse
a. True, True b. True, False c. False, True d. False, False

30. I. For purpose of the donor’s tax, second degree cousins are strangers to each other.
II. Encumbrance on the property donated, if assumed by the donor is deductible for donor’s tax
purposes.
a. True, True b. True, False c. False, True d. False, False

31. I. As a rule, donation between husband and wife during the marriage is void.
II. Donation can be made to conceived or unborn children.
a. True, True b. True, False c. False, True d. False, False

32. 1st Statement: When the donee is a stranger, the tax payable by the donor shall be 30% of the net gifts.
2nd Statement: When the donee is a relative the tax payable by the donor shall be based on the scheduler
rates of donor’s tax provided in Section 99 of the Tax Code.
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

33. For purposes of donor’s tax, a “stranger: is a person who is not a:


I – brother, sister (whether by whole of half blood), spouse, ancestor, and lineal descendant; or
II – relative by consanguinity in the collateral line within the fifth degree of relationship
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

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34. 1st Statement – A legally adopted child is entitled to all the rights and obligations provided by law to
legitimate children, and therefore, donation to him shall not be considered as donation made to stranger
2nd Statement – Donation made between business organization and those made between an individual
and a business organization shall be considered as donation made to a stranger
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

35. 1st Statement – Any contributions in cash or in kind to any candidate, political party or coalition of parties
for campaign purposes, shall be governed by the Election Code, as amended
2nd Statement – Any provision of law to the contrary notwithstanding, any contribution in cash or in kind
to any candidate or political party or coalition of parties for campaign purposes duly reported to the
COMELEC shall not be subject to the payment of any gift tax
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

36. The donor’s tax is a


a. Property tax on the property transferred
b. Personal tax on the person who transferred the property
c. Tax imposed on the transfer of property by way of gift inter vivos
d. Tax imposed on the transfer of property by way of gift mortis causa

37. 1st Statement – The donor’s tax shall not apply unless and until there is a completed gift.
2nd Statement – The law in force at the time of the perfection/completion of the donation shall govern
the imposition of the donor’s tax
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

38. When is the donation perfected?


a. The moment the donor knows of the acceptance by the donee
b. The moment the donated property is delivered, either actually or constructively, to the donee
c. Upon payment of the donor’s tax
d. Upon execution of the deed of donation

39. When is the donation completed?


a. The moment the donor knows of the acceptance by the donee
b. The moment the donated property is delivered, either actually or constructively, to the donee
c. Upon payment of the donor’s tax
d. Upon execution of the deed of donation

40. A gift that is incomplete because of reserved powers, becomes complete when either:
I – the donor renounces the power; or
II – the right to exercise the reserved power ceases because of the happening of some event or
contingency or the fulfillment of some condition, other than because of the donor’s death
a. True in both I and II c. True in I only
b. Not true in both I and II d. True in II only

41. Which of the following renunciations shall be subject to donor’s tax?


I – Renunciation by the surviving spouse of his/her share in the conjugal partnership or absolute
community after the dissolution of the marriage in favor of the heirs of the deceased spouse or any other
person/s
II – General renunciation by an heir, including the surviving spouse, of his/her share in the hereditary
estate left by the decedent;
III – Renunciation by an heir, including the surviving spouse of his/her share in the hereditary estate left
by the decedent categorically in favor of identified heir/s to the exclusion or disadvantage of the other co
– heirs;
a. I, II and III c. I and III only
b. I and II only d. I only

42. 1st Statement – Where property, other than a real property that has been subjected to final capital gains
tax, is transferred for less than an adequate and full consideration in money or money’s worth, then the
amount by which the fair market value of the property at the time of the execution of the Contract to Sell
or execution of the Deed of Sale which is not preceded by a Contract to Sell exceeded the value of the
agreed or actual consideration or selling price shall be deemed a gift, and shall be included in computing
the amount of gifts made during the calendar year

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2nd – The law in force at the time of the completion of the donation shall govern the imposition of
donor’s tax
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

43. The following donations were made by Don Lopot during the taxable year:
Donation to TESDA- priority project P900,000
Revocable donation of car to his son 800,000
Inadequate consideration of real property sold to his friend 700,000
Donation to his wife 300,000
Donation to his unborn grandchild 200,000

How much is the amount of donation subject to donor’s tax?


a. P2,000,000 b. P1,800,000 c. P900,000 d. P200,000

44. How much is the amount of gift subject to donor’s tax if X, a Filpino citizen, made a general
renunciation of his P2,000,000 inheritance in favor of his siblings and the inheritance was taken from the
conjugal property of the parents?
a. P -0- b. P500,000 c. P1,000,000 d. P2,000,000

45. Ma, Ru, Nong and Daw are brothers and sisters. Their parents died leaving a total gross estate of
P11,000,000. Ma, being very rich, renounced his inheritance in favor of Daw.

How is the donor’s tax to be paid by Ma?


a. P -0- b. P 159,700 c. P 167,600 d. P 254,000

46. How much is the amount of the net gifts of each donor of a conjugal real property donation (costing
P2,000,000 but with fair market value of P3,500,000 at the time of donation) if such gift is given on
account of the donor’s child’s marriage within a year but with attached mortgage loan amounting to
P1,000,000 assumed by the child?
a. P1,250,000 b. P1,240,000 c. P500,000 d. P490,000

47. A resident alien, made the following gifts, during the year:
Wedding gift to her son given during the celebration held in the P500,000
Philippines
A car given to her daughter here in the Philippines 500,000

For the above gifts, the total Philippine donor’s tax would be
a. P43,400 b. P44,000 c. P270,000 d. P300,000

48. Mr. and Mrs. Asiong Salonga, spouses and citizens of the Philippines donated to their legitimate daughter
on account of marriage the following properties at fair market values:
Vacation house (conjugal property) in Hong Kong P500,000
Car in the Philippines (conjugal property) 240,000
Jewelry (exclusive property of Mrs. Salonga) 20,000

The donation was made within one year of their daughter’s marriage. What would be the donor’s tax of
Mr. and Mrs. Salonga?
a. P8,400 and P9,200, respectively
b. P4,800 and P9,600, respectively
c. P5,200 and P9,200, respectively
d. P5,600 and P8,800, respectively

49. Mr. A and Miss B are sweethearts. If A gave to B, P250,000 worth of diamond ring, how much is the
amount subject to donor’s tax?
a. P-0- b. P125,000 c. P150,000 d. P250,000

50. Rom and Mea are not married but living together as husband and wife. On account of Mea’s love to
Rom, she gave him a house and lot with a fair value of P10,000,000. The house, is subject to a mortgage
loan of P2,000,000.

How much is the donor’s tax?


a. P-0- b. P404,000 c. P764,000 d. P1,004,000

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51. Mr. A, a resident alien gave a diamond ring worth P200,000 to his wife on account of their anniversary.
How much is the taxable donation?
a. P200,000 b. P100,000 c. P50,000 d. P-0-

52. How much should be the net taxable gift for a wedding gift of P110,000 to a son given by the resident
alien on the wedding day.
a. P 120,000 b. P110,000 c. P100,000 d. P-0-

Mrs. Catherine Castro donated the following gifts to her recognized natural daughter on account of marriage
to be held on January 5, 200B:

Date of Donation Donated Property FMV of Donation


December 29, 200A Cash P 6,000
January 1, 200B House and Lot 300,000

53. How much is the donor’s tax in year 200B?


a. P None b. P6,000 c. P5,600 d. P5,840

54. For a net gift of P 150, 000 to a younger sister, the donor’s tax is
a. P45,000 b. P30,000 c. P1,000 d. Exempt

55. How much is the donor’s tax for a P 200, 000 donation made to the Filipino donor’s 2nd cousin?
a. P-0- b. P2,000 c. P30,000 d. P60,000

Vangie, a widow, has three (3) sons: Jimmy, 27 years old, Joseph, 25 years old; and James, 23 years old. On
August 15, 200A, she donated two (2) lots, each with FMV of P 150, 000, one (1) each to her sons Jimmy and
Joseph. On November 15, 200A, she gave cash of P 150, 000 to her son James as dowry on account of James
forthcoming marriage on December 22, 200A.

56. The donor’s tax due for the donation made on August 15, 200A is
a. Exempt b. P5,200 c. P6,000 d. P12,000

57. The donor’s tax due for the donation made on November 15, 200A is
a. P11,600 b. P6,000 c. P9,600 d. P5,600

58. If Mr. B, a non-resident Filipino, donated P 100, 000 each to his son and daughter-in-law, how much is
the donor’s tax?
a. P-0- b. P10,000 c. P30,000 d. P60,000

59. San Miguel Corporation donated the following properties to its sister-company, Ginebra San Miguel:
Land P5,000,000
Investment in stocks 2,000,000
Cash 1,000,000
`
How much is the donor’s tax?
a. P-0- b. P764,000 c. P404,000 d. P2,400,000

60. During the calendar year, Mr. Masagana paid a total donor’s tax amounting to P 38, 000 to his two
legitimate children on account of marriage. On his first donation during the year, he paid a donor’s tax
amounting to P 13, 600.

The amount of gross gifts made on the first and second donation would be
First Donation Second Donation
a. P 600,000 P 500, 000
b. P 550,000 P 550, 000
c. P 500,000 P 450, 000
d. P 500,000 P 420, 000

--- End of Quizzer ---

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