TRUE OR FALSE 1

1. A vacant and unused lot is an ordinary asset to a real estate

dealer.
2. For taxpayers not engaged in business, assets shall cease to be
ordinary assets when they are discontinued from active use for more
than two years.
3. Real and other properties acquired are ordinary assets to banks
even if they are not engaged in the realty business.
4. Capital assets will not become ordinary assets to banks even if
they are not engaged in the realty business.
5. An ordinary asset becomes automatically become a capital asset when
it is withdrawn from active use.
6. The sale of real property capital assets will never be subject to
regular income tax.
7. Donated assets become ordinary assets even if the done do not employ
the same in business.
8. An ordinary asset continues to be an ordinary asset even if idled
for more than two years if the taxpayer is engaged in realty
business.
9. The real properties used by exempt corporations in their exempt
operations are capital assets.
10. Dealers in realties are subject to the regular tax on their sale of
properties.
11. Capital gains from assets other than domestic stocks and real
properties are subject to regular income tax.
12. Dealers in securities are not subject to the stock transaction tax
but are subject to the regular income tax on gains realized upon
the sale of stocks through the Philippine Stock Exchange.
13. Unit of participations in golf, polo, and similar clubs are
considered domestic stock.
14. The excess premium on the re-issuance of treasury stock is subject
to capital gains tax.
15. The issuance of shares of stock for property is subject to capital
gains tax.
16. The sale of foreign stocks directly to a buyer is subject to capital
gains tax.
17. The two-tiered final tax cannot apply unless and until there is a
gain on the sale, exchange, and other disposition of stocks directly
to a buyer.
18. The stock transaction tax on the sale of stocks through the PSE
cannot apply unless there is a gain on the transaction.
19. The 6% capital gain tax cannot apply unless there is a gain on the
sale of real property.
20. The sale of real properties located abroad is subject to the 6%
capital gains tax.

TRUE OR FALSE 2
1. The annual capital gains tax return is simultaneously due with the
annual regular income tax return.
2. The basis of properties received by way of inheritance is the basis
in the hands of the last owner who did not acquire the same by
donation.
3. When specific identification is impossible, the cost of the stocks
sold is determined by the weighted average method.
4. The basis of the stocks received in tax-free exchanges is the basis
of the shares given.
5. The transactional capital gains tax return is required to be filed
within 30 days from the date of sale.
6. The gain on the sale of stocks for stocks pursuant to a plan of
merger and consolidation is exempt if it is resulted in the
transferor acquiring corporate control over the absorbed
corporation.
7. Installment payment of capital gains is allowed if the ratio of
downpayment over the selling price of the sale does not exceed 25%.
8. The spelling price is used to determine the propriety of using the
installment method but the contract price is used to determine the
capital gains tax payable in installment.
9. The excess of mortage over the basis assumed by the buyer
constitutes an indirect receipt which is part of the initial payment
and the selling price.
10. Wash sales occurs when there is a repurchase of shares within 30
days before and 30 days after the date of disposal of securities at
a loss.
11. Control means more than 50% ownership in the voting power of a
corporation.
12. The sale of delisted stock is subject to stock transaction tax and
not to capital received.
13. Gain and loss in a share-for-share swap pursuant to a plan of
merger or consolidation shall be recognized up to the extent of the
cash and other properties received.
14. The sale by the National Housing Authority of commercial lots is
subject to capital gains tax.
15. If the assesor’s fair value is lower than the selling price, then
the fair value of the property is the zonal value.
16. Title to a property shall not be registered by the Registry of
Deeds unless the Commissioner or his representatives has certified
that the tax on the transfer has been paid.
17. Domestic corporations are exempt from the capital gains tax on the
sale, exchange, and other disposition of real properties.
18. The sale of land pursuant to the Agrarian Reform Program is exempt
from capital gains tax.
19. Foreign corporations are required to pay capital gains tax on the
sale of domestic stocks and on the sale of property capital assets.
20. The alternative taxation on an expropriation sale is not applicable
to corporate taxpayers.

MULTIPLE CHOICE-THEORY: PART 1

1. Which is an ordinary asset?
a. Personal car c. Principal residence of the taxpayer
b. Delivery truck d. Wedding ring of the tax payer
2. Which is not an ordinary asset?
a. Personal laptop of the taxpayer c. Real property held for sale
b. Machineries and equipment d. leasehold improvements

3. Which is a capital asset to a realty developer?

a. Constructive equipment
b. Domestic stocks
c. Vacant lot held for the future development
d. Head office building of the developer
4. Which is an ordinary asset?
a. Home appliances c. Personal cellphone
b. Personal car d. Office supplies

5. Which is the following assets, if not used in business, is subject

to a regular tax?
a. Real property c. Domestic stock option
b. Domestic stock rights d. Taxpayer’s personal car

6. Domestic is a capital asset for a security dealer?

a. Domestic stocks
b. Domestic bonds
c. Real property held for speculation
d. Office equipment

7. Which is subject to the 5%-10% capital gains tax?

a. Sale of domestic stocks to a buyer within or outside the
Philippines
b. Sale of domestic bonds directly to a buyer within the Philippines
c. Sale of domestic stocks through the Philippines Stock Exchange
d. All of the above

8. Who is not subject to capital gains tax on the sale of domestic

stocks directly to a buyer?
a. Dealer of cars c. Dealer of securities
b. Real property developer d. Realty dealer

9. Which of the following, when sold, is not subject to capital gains

tax?
a. Boarding house c. Dealer of securities
b. Warehouse d. Reality dealer

10. Which is not subject to the 6% capital gains tax?

a. Donation property
b. Foreclosure of a mortgaged property
c. Exportation of one’s property in favor of the government
d. Sale of property for an insufficient consideration

11. Statement 1: capital gains may arises from sale, exchange, and
other disposition of movable properties used in business.
Statement 2: ordinary gains may arises from sale, exchange, and
other disposition of real properties not used in business.

Which is true?
a. Statement 1 is correct
b. Statement 2 is correct
c. Both statements are false
d. Both statements are correct

12. Statement 1: The gain on sale of domestic stocks directly to a

buyer is presumed.
Statement 2: The gain on sale of real properties is presumed.

Which of the following correct?

a. Both statements are true
b. Both statements are false
 c. Only statement 1 is true
d. Only statement 2 is true

13. Which of the following properties when sold may be subject to

capital gains tax?
a. Domestic stock c. Patent
b. Foreign stock d. Office Buildings

14. Statement 1: Only depreciable assets of business qualifies as

ordinary assets.
Statement 2: Land used in business is a capital asset since it is
not subject to depreciation.

Which of the following correct?

a. Statement 1 is false
b. Statement 2 is false
c. Both statements are false
d. A, B and C

15. Statement 1: Ordinary gains may arises from sale, exchange, and
other dispositions of real properties in business.
Statement 2: Capital gain may arise from sale, exchange, and other
dispositions of real properties not used in business.

Which is false?
a. Statement 1 is correct
b. Statement 2 is correct
c. Both statements are false
d. Both statements are correct

MULTIPLE CHOICE- THEORY: PART 2

1. Which is the following properties, when sold, may be covered by

regular income tax?
a. Share options c. Share warrants
b. Preferred stocks d. Promissory notes

2. Which is the following assets may be subject to capital gain tax

upon disposal?
a. Parking lot c. Farm lot
b. Dormitory d. Office Supplies

3. The sale of an office building will be subject to

a. 60% of 1% percentage tax.
b. 6% capital gains tax.
c. 15% capital gains tax
b. Regular tax.

4. The term "other disposition" covers

a. Foreclosure sales
b. Auction sale
c. Expropriation by the government
d. Any of these

5. Which of the following sales of domestic stocks is subject to

capital gains tax?
a. Sale of domestic stocks through the PSE
 b. Issue of domestic stocks to subscribers
C. Sale of domestic stocks directly to a buyer
d. Exchange of stocks for stocks in a corporate merger

6. The sale of listed shares will never be subjected to be

a. 6% capital gains tax only
b. 60% of 1% percentage tax
c. 15%capital gains tax
d. Any of these

7. The sale of non-listed shares may be subjected to

a. 6% capital gains tax only.
b. 60% of 1% percentage tax only.
c. 15% capital gains tax only.
d. Any of these

8. Which of the following when sold may be exempted from the 6% capital
gains tax?
a. Unused land to the government
b. Residential lot
c. Developed residential properties for sale
d. Principal residence

9. Statement 1: The sale or exchange must result to an actual gain

before the 15% capital gains tax is imposed.
Statement 2: The sale or exchange must result to an actual gain
before the 6% capital gains tax is imposed.
a. Both statements are correct c. Only statement 1 is correct
b. Both statements are incorrect d. Only statement 2 is correct

10. When the annualized capital gains tax exceeds the transactional
capital gains tax, the excess is a
a. Tax credit c. Tax refundable
b. Tax payable d. A or B

11. 1st statement: Properties acquired by real estate dealers are

ordinary assets.
2nd statement: Properties of real estate dealers continue to be
classified as ordinary assets even if they change the nature of
their business.
a. First statement is correct
b. Second statement is correct
c. Neither statement is correct
d. Both statements are correct

12. 1st statement: When realty businesses discontinue use of assets for
more than two years, the same shall be reclassified as capital
assets.
2nd statement: When realty businesses discontinue use of assets for
more than two years, the same shall be reclassified as capital
assets.
a. First statement is correct c. Neither statement is correct
b. Second statement is correct d. Both statements are correct
13. Which is an incorrect statement?
a. The capital gains tax on the disposition of capital stock
presumes the existence of gain on the sales transaction.
b. The buyer of real property capital asset shall with hold the tax
at source and remit the same to the government.
c. Capital gains tax is identified under the NIRC as a form of final
tax.
d. The capital gains tax on the disposition of real property
presumes the existence of gain on the sales transaction.

14. Which of these shall pay the two-tiered capital gains tax?
a. A real property developer
b. A dealer in stocks
c. A merchandiser or trader of goods
d. A or B

15. The sale of real properties which would otherwise be subject to

the 6% capital gains tax may nevertheless be subject to regular
income tax if all of the following conditions are met, except one.
Which is the exception?
a. the seller must be an individual taxpayer
b. the sale involves the principal residence of the taxpayer
c. the buyer is the government
d. the taxpayer opted to be subjected to regular tax

16. Which of these pay the 6% capital gains tax?

a. Security dealer c. Real property dealer
b. Real property developer d. d. None of these

17. The sale of a principal residence is exempt from the capital gains
tax if all of the following conditions are met, except
a. The proceeds is fully utilized in acquiring a new principal
residence.
b. The reacquisition must be by purchase.
c. The reacquisition must have been made within 18 months from the
date of the sale.
d. The capital gains tax must be deposited in escrow.

MULTIPLE CHOICE - THEORY: PART 3

1. The transactional 15% capital gains tax is to be paid

a. Within 30 days from the date of sale or exchange.
b. Within 30 days from the end of month of sale.
c. On the 15th day of the fourth month following the close of the
quarter when the sale was made.
d. On the 15th day of the fourth month following the taxpayer's
year-end.

2. The annual 15% capital gains tax return is due

a. Within 30 days from the end of the month of sale.
b. Within 30 days from the date of sale or exchange.
c. On or before the 15th day of the fourth month following the
taxpayer's year-end.
d. on or before the 15th day of the fourth month following the close
of the quarter when the sale was made
3. Capital gains tax that is not payable on installment basis is due
a. within 30 days from the date of sale or exchange.
b. within 30 days from the end of month of sale.
c. on or before the 15th day of the fourth month following the close
of the quarter when the sale was made.
d. on or before the 15th day of the fourth month following the
taxpayer's year- end.

4. Installment payments of the 6% capital gains tax is due

a. Within 10 days from the date of each installment payment.
b. Within 30 days from the date of each installment payment.
c. Within 15 days from the date of each installment payment.
d. Within 20 days from the date of each installment payment.

5. The installment payment of capital gains tax is applicable to the

a. 15% capital gains tax only
b. 6% capital gains tax only
c. Both A and B
d. Neither A nor B

6. The installment payment of capital gains tax is applicable to

a. Individual taxpayers only c. Dealers in properties only
b. Corporate taxpayers only d. A or B

7. Which of these capital gains is subject to capital gains tax?

a. Gain on the sale of stock rights
b. Gain on sale of interest in a professional partnership
c. Gain on the sale of derivative financial instruments linked to
commodity prices
d. Gain on sale of bonds

8. Paulo indicated in his return his intent to avail of the exemption

from the 6% capital gains tax. Under what condition will he be
exempted?
a. When the proceeds of the sale exceeds the cost basis of the
property sold
b. When the proceeds of the sale exceeds the acquisition price of
the new residence
c. When the cost basis of the property sold exceeds its selling
price
d. When the acquisition price of the new property exceeds the
proceeds of the old property sold

9. Partial taxation under the 6% capital gains tax will result when
a. The proceeds from the sale of the old property exceeds both its
cost and the acquisition price of the new property.
b. The proceeds of the sale exceeds its zonal value and Assessor's
fair value.
c. The proceeds of the old property exceeds the acquisition price
of the new property regardless of the tax basis, zonal value, and
Assessor's fair value of the old property.
d. The zonal value is greater than the sales proceeds of the old
property

10. The transactional capital gains tax on domestic stocks is

a. not a final tax.
b. included in the income tax return
 c. creditable to the regular income tax
d. creditable to the annual capital gains tax due.

11. The 15% capital gains tax does not apply to

a. Resident citizen dealers of stocks
b. Non-resident citizen dealers of cars
c. Resident alien dealers of computer parts
d. Domestic corporations dealing in real properties

12. The documentary stamp tax on the sale of domestic stocks directly
to a buyer is based on
a. Selling price c. Par value
b. Fair Value d. Cost

13. The documentary stamp tax on the sale of property is based on

a. Selling price
b. Fair value
c. Cost
d. A or B, whichever is higher

14. The 6% capital gains tax does not apply to

a. Domestic corporations c. Non-resident citizens
b. Resident aliens d. Foreign corporations

15. Who shall file the capital gains tax return for the sale,
exchange, and other disposition of real property?
a. Seller c. Transfer agent
b. Buyer d. The registry of deeds

Multiple Choice – Problem: Part 1

1. Mr. Dionisio sold domestic stocks directly to a buyer at a mark-up

on cost of P200,000. He paid P5,000 broker’s commission and P8,000
documentary stamp tax on the sale. Compute the capital gains tax.
a. P28,050 c. P14,200
b. P14,500 d. P13,700

2. Mr. Abdul, a non-resident alien, sold domestic stocks directly to

a buyer at a net gain of P70,000. Compute the capital gains tax.
a. P10,500 c. P4,000
b. P6,000 d. P3,500

3. Mr. Panay, a non-resident citizen, sold domestic stock rights

directly to a buyer at a net gain of P320,000. Compute the capital
gains tax.
a. P30,000 c. P27,000
b. P25,000 d. P48,000

4. Mr. Digos sold shares of a resident foreign corporation directly to

a buyer. The shares were purchased for P100,000 and were sold at a
net selling price of P210,000. Compute the capital gains tax.
a. P15,000 c. P5,500
b. P11,000 d. P0

5. Grace sold domestic shares directly to buyer. The following relates

to the sale:
 Fair market value of shares P400,000
Selling price 300,000
Cost 150,000

Compute the capital gains tax.

a. P7,500 c. P15,000
b. P9,925 d. P22,500

6. Texas Inc. exchanged its investments representing domestic shares

for a piece of land owned by Eagle, Inc.

Fair market value of shares P400,000

Fair market value of land 500,000
Par value of shares 300,000
Cost of shares 350,000

Compute the capital gains tax.

a. P22,163 c. P11,000
b. P15,000 d. P9,988

7. Digong Inc. exchanged its share investment from Bee Inc., as payment
of its P350,000 long outstanding loan from the latter. Digong
acquired the shares for P300,000. Ignoring documentary stamp tax,
compute the capital gains tax on the transaction.
a. P0 c. P5,000
b. P7,500 d. P2,500

8. On January 5, 2020, Mercy, a stock dealer, diposed the following

shares directly to a buyer:

Shares Selling Price Cost

Stock rights P200,000 P170,000
Common stocks 100,000 110,000

Ignoring the documentary stamp tax, the capital gains tax payable
on the sale is
a. P0 c. P1,500
b. P1,000 d. P3,000

9. Kidapawan, Inc., a domestic service company, has the following

transactions on the sale of another domestic corporation:

Transaction Quantity Net price

Purchase 20,000 P40,000
Purchase 30,000 63,000
Sale 40,000 92,000

Assuming the first-in, first-out method, compute the capital gains

tax on the sale.
a. P0 c. P500
b. P480 d. P4,650

10. Assuming the moving method, compute the capita; gains on tax on
the sale.
a. P0 c. P500
b. P400 d. P1,440
11. Koron Company, a trading company, made the following transactions
during the year involving the stocks of Xurpas, a domestic
corporation:

Date Transaction Shares Net price

6/15/2020 Purchase 10,000 P30
9/30/2020 Sale 8,000 28
10/3/2020 Purchase 15,000 25
12/7/2020 Sale 10,000 32

Koron uses the FIFO method in costing the Xurpas stocks.

Compute the deductible loss on the September 30 sale.

a. P20,000 c. P12,800
b. P16,000 d. P0

12. Compute the taxable gain on the December 7 sale.

a. P64,118 c. P51,467
b. P60,000 d. P44,000

13. Mr. Trinidad has the following transactions during the year on the
common stocks of Philippine Pines, a domestic non-listed company:

Date Transaction Gain (Loss)

5/8/2020 Sale P120,000
8/5/2020 Sale (10,000)
9/8/2020 Sale 250,000

Compute the annual capital gains tax due for 2020.

a. P54,000 c. P22,000
b. P29,000 d. P3,000

14. Mr. Kalibo shows the following transactions on the shares of Aklan
Corporation, a closely held corporation:

Date Transaction Quantity Price

2/8/2020 Buy 10,000 P120,000
4/5/2020 Sell 10,000 100,000
5/1/2020 Buy 20,000 240,000

What is the tax basis of the shares acquired on May 1,2020?

a. P300,000 c. P240,000
b. P260,000 d. P220,000

15. Mrs. Aurora, a resident citizen, purchased 100,000 shares of

PhilHotdogs, a domestic listed company. The shares were acquired
at P200,000. She disposed the shares through the Philippine Stock
Exchange at a fair value of P250,000.

Compute the capital gains tax.

a. P0 c. P7,500
b. P2,500 d. P10,000

16. Mr. Bosun disposed various stocks at a total consideration of

P400,000 and paid thereon stock transactions tax of P2,000.
 Aggregate gains realized totaled P98,000 after the stock
transaction tax. What is the capital gains tax?
a. P0 c. P9,800
b. P4,900 d. P14,700

Multiple Choice – Problems: Part 2

1. A certain taxpayer shows the following over-the-counter

transactions in the shares of a domestic corporation:

Date Transaction Quantity Net price

2/8/2020 Purchase 10,000 P112,000
4/5/2020 Sale 10,000 110,000
5/1/2020 Purchase 8,000 80,000
6/7/2020 Sale 5,000 60,000

Compute the capital gain on June 7,2020 that is subject to capital

gains tax.
a. P4,000 c. P10,000
b. P5,000 d. P12,000

2. An investor sold domestic stocks directly to a buyer on October

1,2019 under the following terms:

Selling price P 500,000

Cost 200,000
Downpayment 10%
Installment in 2019 50,000

Compute the total capital gains tax in 2019.

a. P45,000 c. P9,000
b. P25,000 d. P6,250

3. ABC realized the following gains or losses in selling various

securities:

Gain on sale of domestic stocks P300,000

Par value of domestic stocks sold 200,000
Gain on the sale of interest in a partnership 200,000
Gain on the sale of stocks of foreign corporations 150,000

Compute the capital gains tax.

a. P45,000 c. P35,000
b. P44,775 d. P25,000

4. Compute the documentary stamp tax in the preceding problem.

a. P1,500 c. P562.50
b. P1,125 d. P750

5. A wash sale of domestic shares wherein 20,000 shares where disposed

at a loss of P40,000 were subsequently covered up within the 30-
day period by a purchased of 15,000 shares for P12/share.
 The deductible loss against capital gain on the wash sale is
a. P0 c. P10,000
b. P13,333 d. P20,000

6. What is the cost of 15,000 shares acquired in the preceding problem?

a. P150,000 c. P180,000
b. P160,000 d. P190,000

7. Isidro sold 1,500 shares of stocks of Achievers Corporation directly

to a buyer. The share’s par value per shares was P85. Isidro
purchased the shares for P90 each. On the date of sale, the shares
had a selling price of P120 per share.

What is the capital gains tax on the sale?

a. P2,625 c. P6,607
b. P2,250 d. P11,375

8. Mr. Palangdon purchased domestic stocks which were priced at 150%

above their par values. After two years, he sold the stocks when
their fair value doubled. He paid, P7,500.00 documentary stamp and
P10,000 in commission expenses on the sale.

Compute the selling price of the stocks.

a. P3,000,000 c. P1,500,000
b. P2,500,000 d. P1,000,000

9. Compute the capital gains tax.

a. P143,625 c. P153,725
b. P152,750 d. P222,375

10. On June 20,2019, Mr. Lito filed the capital gains tax return
involving the sale of domestic stocks on February 20, 2019. The
net gain was P140,000. Compute the total amount due including
penalties except compromise penalty.
a. P26,880 c. P11,700
b. P21,500 d. P12,250

Multiple Choice – Problem: Part 3

1. A taxpayer purchased a building to be used as a future plant site.

The building remained unused for 3 years due to a significant
decline in customer’s demand in product of the taxpayer. The
taxpayer eventually disposed the property. What is the
classification of the property?
a. Ordinary asset c. Either A or B at the discretion of
the BIR
b. Capital asset d. Either A or B depending on the
intent of the buyer

2. Assuming the same data in the preceding number except that the
property was not disposed of but the same was used as a sales after
which it became vacant for more than two years. What is the
classification of the property?
c. Ordinary asset, regardless of the taxpayer
 d. Capital asset, regardless of the taxpayer
e. Ordinary asset, if taxpayer is not engage in real estate
business
f. Capital asset, if the taxpayer is not engaged in real estate
business

3. Anderson disposes a vacant lot for P3,000,000. The lot has an

Assessor’s fair value of P2,800,000, a zonal value of P3,200,000,
and an appraisal value P3,500,000.
What is the capital gains tax?
a. P0 c. P192,000
b. P180,000 d. P210,000

4. Puerto Princesa Company sold
lot has a zonal value of
P1,800,000. The capital gains
a. P0
b. P108,000
its parking lot for P2,000,000. The
P2,500,000 and appraisal value of
tax on the sale of the lot is
c. P120,000
d. P150,000

5. Mr. Antonio disposed his principal residence for P2,000,000 and

immediately acquired a new one for P1,800,000. The old residence
cost Mr. Antonio of P1,000,000 and had a fair market value of
P2,500,000 on the date of sale.

Compute the capital gains tax to be deposited in escrow.

a. P0 c. P120,000
b. P60,000 d. P150,000

6. What would be the tax basis of Mr. Antonio’s new residence?

a. P1,800,000 c. P900,000
b. P1,000,000 d. P800,000

7. How much is the capital gains tax will be released to the taxpayer?
a. P150,000 c. P120,000
b. P135,000 d. P15,000
8. On August 15,2020, Ms. Mones sold a 500-square meter residential
house and lot for P3,000,000. The house was acquired in 2005 at
P2,000,000. The Assessor’s fair market values of the house and lot,
respectively, were P1,500,000 and P1,000,000. The zonal value of
the lot was P5,000 per square meter.

What is the capital gains tax?

a. P180,000 c. P150,000
b. P120,000 d. P240,000

9. Manny, a resident Filipino citizen, sold his principal residence

(house and lot) at its original purchase price of P11,000,000. The
property had a P13,000,000 fair value at that time.

If the proceeds of the sale were not invested in the new principal
residence but, instead, new funds of P15,000,000 were used to
construct it, the capital gains tax is
a. P0 c. P750,000
b. P660,000 d. P780,000

Numbers 10 through 12 are based on the following information:

Mr. Pepito sold his residential land in Manila with fair market value of
P12,000,000 for P10,000,000.

10. If Mr. Pepito utilized all of the P10,000,000 in buying a house

and lot to be used as his new principal residence, the final tax
due from him is
a. P720,000 c. P120,000
b. P600,000 d. P0

11. If Mr. Pepito utilized only P7,000,000 from the proceeds of the
sale in acquiring a new residence, the final tax due from him is
a. P720,000 c. P180,000
b. P216,000 d. P0

12. The documentary stamp tax due on the sale is

a. P179,895 c. P149,985
b. P180,000 d. P150,000

Multiple Choice – Part: 4

1. Mr. Quirino exchanged his stock investment in Carmen Corporation

for the shares of stock of Dingalan Corporation. The stocks acquired
by Mr. Quirino represent 60% of the stocks of Dingalan Corporation.

Basis of the stocks given P3,000,000

Fair market value of stocks given 5,000,000
Fair market value of stocks received 4,500,000

What is the capital gains tax?

a. P0 c. P145,000
b. P45,000 d. P225,000

2. In the immediately preceding problem, what is the basis of the

stocks received by Mr. Quirino?
a. P0 c. P4,500,000
b. P3,000,000 d. P5,000,000

3. Mr. Eller exchanged his DEF shares for the shares of EFG pursuant
to a plan of merger. Mr. Eller bought his shares for P1,000,000.
The shares had a fair value of P1,500,000 on the date of exchange.
Mr. Eller received EFG shares with a fair value of P1,300,000 plus
cash of P200,000.

Compute the capital gains tax.

a. P0 c. P30,000
b. P15,000 d. P45,000

4. What is the basis of the shares received be Mr. Eller?

a. P0 c. P1,200,000
b. P1,000,000 d. P1,300,000

5. What is the basis of the DEF shares received be EFG Company?

a. P0 c. P1,200,000
b. P1,000,000 d. P1,300,000
6. Raymund exchanged his A Company shares pursuant to a plan of
consolidation where A Company will be integrated with B Company.
The following relates to the exchange.

Basis of A Company shares given P1,200,000

Fair value of A Company shares given 1,300,000
Fair value of B Company shares received 1,100,000
Fair value of other properties received 250,000

Compute the capital gains tax.

a. P0 c. P20,000
b. P10,000 d. P22,000

7. What is the tax basis of the B Company received by Raymund?

a. P0 c. P1,200,000
b. P1,100,000 d. P1,350,000

8. What is the basis of the “boot” or the other properties received by

Raymund?
a. P0 c. P250,000
b. P150,000 d. P400,000

9. What is the basis of the A Company shares received by B Company?

a. P0 c. P1,200,000
b. P1,100,000 d. P1,350,000

10. Mrs. Joson sold a residential lot in June 1,2019 for P2,000,000.
The property had a zonal value of P2,500,000 and a Assessor’s
market value of P1,000,000.

On July 1, 2020, Mrs. Joson was compelled to pay the capital gains
upon the request of the buyer. The compromise penalty was
determined to be P20,000.

Compute the total tax due.

a. P150,000 c. P217,500
b. P180,000 d. P237,500

11. Basic Company paid P9,000 documentary stamp tax on the sale of a
real property capital asset. Compute the capital gains tax on the
sale.
a. P9,000 c. P36,000
b. P16,000 d. P42,000

12. Mr. Bassit Unay sold a residential land P4,000,000. The land had
a fair value of P3,500,000 and an Assessor’s fair value of
P2,000,000. What is the total income tax and documentary stamp tax
due?
a. P0 c. P400,000
b. P300,000 d. P450,000