NAME: ________________________

The following are the gain on sale of the following properties:

Philippines U.S.A.
Machinery 2,800,000 4,200,000
Land held as investment property, Sales price is ₱2.8M 3,500,000 1,400,000
Land used in business, Sales price is ₱1.68M 1,400,000 1,120,000
Ordinary shares of Cheesy Corporation, a domestic corporation 560,000
Ordinary shares of Breezy Corporation, a nonresident corporation 224,000
The taxpayer is in its 7th year of operation. All capital assets have more than 1 year holding period. The taxpayer
has a gross profit from sales and business expenses of ₱14,280,000, and ₱24,119,760, respectively.
Normal tax due Final Tax due
Taxpayer is an individual 53,060 294,000
Taxpayer is a domestic corporation (using OSD) 4,576,320 294,000
Taxpayer is a resident foreign corporation 508,480 261,000

Isko Wela, a business man has the following dealings in some of his properties during the current taxable year:

Residential house and lot for ₱2,100,000 with a fair value of ₱2,380,000. The house was an inheritance from her
deceased mother, Iska, that had a fair value of ₱1,260,000 at the time of her death. The same house was purchased
by Iska 10 years prior to her death at ₱1,400,000.
Assume that Isko acquired a new residential house in a nearby town, compute the following:
Tax due Basis of New Residential
House
Cost of the new residential house is ₱1,680,000. 28,560 1,008,000
Cost of the new residential house is ₱1,200,000, the
₱200,000 of which was used 2 years after sale of the old
house 74,800 800,000
Cost of the new residential house is ₱2,520,000 - 1,680,000
Cost of the new residential house is ₱2,520,000, the
₱280,000 of which was used 2 years after sale of the old
house - 1,680,000

On April 1, 2019, Isko Wela sold his vacation house and lot for ₱2,800,000 with a fair value of ₱2,940,000. The house
was bought by Isko 10 years ago for ₱420,000 when the fair value was ₱1,300,000.
Case 1 Assume the terms of the sale include the following: 10% downpayment at point of sale, with the balance in
four equal semi-annual installments.
Case 2 Assume the terms of the sale include the following: 10% downpayment at point of sale, with the balance in
four equal annual installment starting March 31, 2020.
Case 3 Assume the terms of the sale include the following: 5% downpayment at point of sale, with the balance in
ten equal semi-annual installments. The vacation house was used as a mortgage when Isko borrowed
from a bank to finance his business. The total amount borrowed amounted to ₱1,400,000, 65% paid by
Isko. The unpaid balance will be shouldered by the buyer.
Case 4 Assume the terms of the sale include the following: 10% downpayment at point of sale, with the balance in
four equal annual installments starting March 31, 2020. The vacation house was used as a mortgage when
Isko borrowed from a bank to finance his business. The total amount borrowed amounted to ₱1,400,000,
85% paid by Isko. The unpaid balance will be shouldered by the buyer.

Compute the capital gains tax due 2019 2020 2021

Case 1 - - -
Case 2 - - -
Case 3 - - -
Case 4 - - -
Three commercial lots sold at ₱1,400,000 each. The three commercial lots have fair values of ₱1,260,000,
₱1,680,000, and ₱1,330,000. These lots were used by Isko in his businesses.

Unpaid Down
Fair Value Cost mortgage payment
Unit A 1,260,000 500,000 - 15%
Unit B 1,680,000 670,000 270,000 None
Unit C 1,330,000 530,000 560,000 20%

The balance of the selling price is due in 10 equal semi-annual installments, the second installment starts in the year
next to the taxable year the sale is made.

2019 2020 2021

Compute the total gross income #DIV/0! #DIV/0! #DIV/0!

A certain taxpayer provided the following information:

2019 2020 2021 2022 2023

Gross business income 420,000 280,000 350,000 392,000 406,000
Capital gain - short term 2,520 1,680 2,100 2,352 2,436
Capital gain - long term 4,200 2,800 3,500 3,920 4,060
Capital loss - short term 1,512 2,020 1,680 2,500 2,100
Capital loss - long term 3,360 2,940 3,680 4,100 4,300
Business expense 419,160 279,720 351,750 390,040 403,970

Compute the taxable income (net

operating loss) 2019 2020 2021 2022 2023
Individual taxpayer
Corporate taxpayer

An individual taxpayer has the following stock transactions on ABC Corporations ordinary stock:

Date Description Quantity Cost per share

1/1/2019 Beginning balance 1,000 70.00
2/10/2019 Purchase 800 72.80
3/17/2019 Purchase 600 70.00
3/27/2019 Purchase 300 71.40
5/11/2019 Purchase 500 74.20

Compute the deferred and deductible loss based on the following independent sales transactions:
Date Quantity Price per share
Case 1 3/7/2019 900 67.20
Case 2 4/15/2019 1,440 64.40
Case 3 2/2/2019 1,200 68.60

Case 1 Case 2 Case 3

Deferred loss
Deductible loss