(CPA REVIEW SCHOOL OF THE PHILIPPINES Manila DONOR’S TAX ‘Dela Craz/ De Vers / Lopez / Liamado 1. For donor's tax purposes before the efesivity of the TRAIN, who among the following ire strager(s) to you? L The grandson ofthe daughter of your grandson IL | The grandfather of the mother of your grandimotber UL |The brother ofthe father of your grandfather 1V.| The grandson ofthe sister of your mother a. Vand ».llland IV ©. Woaly 4. 1Vonly} 2. A. The gifts perfected from the moment the donor effects the delivery either actuslly or constructively of the property donated. B, Donor’stax isa property tax imposed on the property transferred by way of gift inter-vivos. True, tre ’, Tr, fase ©. False,tue False false 3. A. For purposes of the donor's tx before the effectivity of the TRAIN, second degree cousins are strangers to each other. BB. Encumbrance on the property donated, if assumed by the donor is deductible for donor's tax purposes. a Tre, te 1b. True, false False,true False false 4. A. Ingenera, where ral property is transfered during lifetime for less than adequate and full ‘consideration in money of money's worth, then the amount by which the value ofthe property ‘exceeds the value of the consideration shall, forthe purpose of the donor’ tax, be deemed a gift B. Gifs of conjugal property made by both spouses shal be considered as having been made one- half by the husband and the other half by the wie, and is taxable to each donor spouse a True, tue b. True, false False, tue . Falae, false 5. A. Ifthe value of the movable property donated is PS,000 of more, the donation and the ‘acceptance shall be made in writing, etbervise the donation shall be void, B. Regardless ofthe value ofthe immovable property donated, the donation and the acceptance shal be made in writing, otherwise the donation shall be void. a. Tne, te ‘True false «False, true False, false 6. The donation ofa movable property may be made @ Onlly ‘. Inwriting ¢. Fither A or B 4, Neither A nor B 7, Using the preceding number, the donation and acceptance should be in writing if the value of the property donated is fa. Less than PS,000 —b, P5,000 rless . P5,000,000 ormore . More than P5,000 8 A donation which takes effect upon the deat ofthe donor ‘Donation mortis causa i. Partakes ofthe nature ofa testamentary disposition Shall be governed by the law on succession @ ABandc 9. A donation which i intended by the donor to take effect during his lifetime ‘2 Shall be subject tothe 6% donors tax if more than ¥250,000 Shall be in writing ifthe value excoeds P5,000 Donation intervivos i @ ABandC i?10. The donation ofan immovable property shall be made a Inviting . Either A or B , Inapublic instrument. Orally i 11, Using the preceding number, acceptance by the donee may be made 4. Inthe same donee of dosaton . Ina separate document ©. Either or B Neither A nor B 12.1, Beginning January 1, 2018, dowries or gifts made on account of marriage, on or before its ‘celebration, or within one year thereafer, by parents to each of their legitimate, recognized natural ‘or adopted chikéren, tothe extent of the first P10,000, shall be exempt from donor’ tax IL Donations in favour of a educational and or chantablo, religious, cultural or social welfare ‘corporations, institutions, accredited non-government organizations, trust or philanthropic ‘organizations or research institutions or organizations, provided that no amount of said gifts shall, bbetused by the donee for administration purposes, shall be exempt fom donor's tx. True, ue True, false Fae, tue 4. False, false 13. A Asarule, donation between husband and wife during the marriage is void. BB Donation can be made to cancsived or unbom children, & Thue, tne b. True false ¢. False, rue 4. False, false 14. H made a donation of property with a FMV of PI,000,000 to his legitimate daughter I and to J on February 8, 2016 on account of 's marrage to J celebrated on February 14, 2015, Determine the donor's tax due Answer: 15. Mr. And Mrs. K, made the following donations of conjugal funds and properties in 2018 (unless stated otherwise), as follows: ‘8 February 14: To L, a legitimate son, a piece of and with a FMV of P400,000 on account of L's ‘graduation from college b, May 14: To M, a legitimate daughter on account of M's marrage to be celebrated on December 25,2018, house and lot with FMV of P1,000,000 © June 14: To N, brother of Mes. K, P200,000 4 September 14: To O, the efficent and beautiful secretary of Mr. K for taking care of Mr. K while ‘Mas K was 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. 2 diamond ring worth PS90,000, December 14: To Q, the daughter of O on account of Q's birthday, pieces of jewelry inherited by Me. K during mariage, with a FMV of P600,000 8 December 25: To R, a legitimate son, a residensal house and lot with FMV of P1,200,000 but subject to the condition that R would assume the mortgage indebtedness in the amount of 400,000 Determine the total donor's tax payable on each date of donation * 16. Mr. A, a Filipino citizen made the following ptt to his children forthe year 2018: Pil, USA Canada Australia Net gift (before 350,000 500,000 100,000 (the ¥250,000 exemption) Donor's tax paid 15,000 10,000 5,000 ‘Required: Compute the donor's tax sll due aftr tax eredit Answer:1. 18. With regard to campaign contributions, which ofthe following is nt coret? ‘8 Unutlized or excess campaign funds shall be considered as subject to donor's tax '. Campaign contibutions, tobe considered as exempt fom income tax, must have beca utiliza to ‘cover a candidate's expenditure for his electoral campaign. ‘& Any winning candidate, who fails to file with the COMELEC the appropriate Statement of ‘Expenditures required under the Omnibus Election Code, sball be automatically precluded from claiming such expenditures as deductions from his campaign contributions. 4 Camptign contributions, net of a candidate's campaign expeoditures must be included in the candidate's taxable income a stated in hs TTR filed fr the subject taxable yea, In January 2, 2017, Nadine (ot dealer in seurtes) bought 100 sbares of stock in ¥ Corportion, & privately-owned domestic corporation, forPS00 per shar. She old on November 19,2018 the same 100 shares of stock in ¥ Corporation o her best friend, Kathryn, for P1000 per share, ‘Atthe time of sale, the book value as well asthe eurent market values ofthe Y Corporation's assets ‘nd liabilities areas follows: EMY For Real Property Assets Book Value FMV “Assessor's Zonal Independent per ks. Value Value Appraiser Current Assets 14,500,000 13,000,000 Fined ASSetS ame em Land 1 2,000,000" 2,500,000 7,000,000 6,000,000 Land 2 2,000,000 2,200,000 4,000,000 4,500,000 Building 1 1,000,000 4,900,000 3,000,000 Building 2 500,000 2,000,000 2,300,000 Curent Liabilities (2,500,000) (3,000,000) Long-Term Liabilities __(2,500,000) (2,200,000) Net Equity 15,000,000 ‘Atte tims of sale, the corporation had total outstanding shares of 10,000 shares. Wat are the tax ‘consequeaces of such sle? ‘The net gain of 50,000 from the sale shall be subject to the 15% CGT. 'b. The difference of P156,000 between the FMV of the shazes and the 100,000 received as ‘consideration shall be deemed a donation. ©. Both a) and (). None ofthe above. (19) A domestic corporation received « donation from its affliate abroad. The BIR assessed and ‘demanded from the donee payment ofthe donor's tax relative to this donation. The BIR reasoned that since the donor is loceted abroad while the donee is in the Philippines, it is more practical, ‘convenient, end expedient to collet the donor's tax from the dance, Should the donee be liable to pay the donor's tax? (@) Yes. The parties cannot escape the donor's tax by the mere expedient of locating the donor abroad (&)No. The person or enti Vable to pay the donor's taxis the donor (©) Yes, iby agreement among the pats, it isthe donee that shall hve the burden of paying the once’ tax. Tax86-12(@) None ofthe above. (20) To comply with the decision ofthe cour in their annulment ease, former spouses Allan and Bessy submited & Compromise Agreement involving the partition of their real properties. Shall the partion and eventual transfer of the real properties based on sueh Compromise Agreement be subject to the donor's tax? (@) Yes. The Compromise Agreement gives rise to the transfer of properties during the lifetime of the spouses . (®) No. The said adjudication, transfer, or distribution is not subject to the donor’s tax since there is ‘no donative intent on the prt ofthe parties. (©) Alllof the above, (@) Nove of the above. ‘The Eodttt Twx8622