UNIVERSITY OF NEGROS OCCIDENTAL RECOLETOS SCHOOL OF LAW

Course Outline in Taxation II

Lorebette G. Grandea
2nd Semester, SY 2019-20
References:
The Law on Income Taxation by Benjamin D. Teodoro and Hector S. De Leon
The National Internal Revenue Code Annotated by de Leon, Sr. & de Leon, Jr.
Compendium of Tax Laws and Jurisprudence by Jose Vitug

I. INCOME TAXATION

A.General Principles of Income Taxation, Sec. 23

B. Concept of Income, taxable income
1. Definition, nature, kinds

a. Definition of income, taxable income

Sec. 31
CIR v. British Overseas Airway Corp., 149 SCRA 395 (1987)
Madrigal v. Rafferty, 38 Phil. 414 (1918)
Limpan Investment Corp. v. CIR, 17 SCRA 703 (1966)
Republic v. de la Rama, G.R. No. L-21108, 29 Nov. (1966)

b. Sources of Income

CIR v. Japan Airlines, 202 SCRA 450 (1991)

CIR v. BOAC, supra

c. Nature, distinguished from other taxes

Income tax v. property tax

Western Minolco Corp. v. CIR & CTA, G.R. No. L-61632, 16 Aug. 1983

d. Kinds: ordinary, capital

Sec. 22 (Z), 39 A

e. Periods and Methods of accounting for income and expenses

Calendar year, fiscal year

Sec. 22 (P,Q,R)
Chapter VIII, Sec. 43-47, 50

2. Computation of Taxable Compensation Income and Net Income

a. Items of gross income, Sec. 32 (A)

Compensation, CIR v. Henderson, 1 SCRA 649 (1961)

Gross income derived from the conduct of trade or business, Sec. 22
Gains derived from dealings in property, Rodriguez v. CIR, 28 SCRA 1119,
(1969)
Interests, royalties, prizes and winnings, Sec. 24 (B)
Rents/leases, Limpa v. CIR, supra.
Dividends, Republic v. de la Rama, supra.
CIR v. Manning, Simmons & CTA, G.R. No. L-28398, 6 Aug. 1975
Annuities, Art. 2021 NCC
Income from whatever source derived, CIR v. Javier, 199 SCRA 824 (1991)
Special items: recovery of accounts previously written off tax refunds

b. Allowable Deductions, Sec. 34 (A)

LGG/UNO-R Law 1