I. In 2018, MM, the CFO of the Mainn Co. earned a compensation income of P5,000,500.

This amount is inclusive of his 13 th month

pay and other benefits of P340,000, but net of the mandatory contributions to SSS and Philhealth. Aside from his employment, he
also owns a bakery. In 2018, the bakery had gross sales of P1,000,000, cost of sales of P200,000 and operating expenses of
P500,000. It also had non-operating income of P600,000. Compute his income tax due for 2018, if he avails of the 8% income tax
rate option.

2. QR received the following income for 2018

a. rent, phils. P10,000

b. rent, Hongkong, P20,000
c. Interest , peso deposit, BDO P10,000
d. Interest, US $deposit , BDO ($1,000 x P5) P5,000
e. Interest, deposit in Hongkong (HK$1,000 x P5) P5,000
f. Prize (cash) won in a local contest,P 8,000
g. Prize (TV) won in a local lottery valued at P15,000
h. Prize won in contest in US P30,000
i. Lotto winning in US, P10,000
j. Dividend, domestic company, P60,000

3. Mr. & Mrs. Juan , with 2 dependent children had the following income and expenses for 2018:
Mr. Juan: Mrs. Juan: Income of properties
Rental of separate property, net of Salary, net of WT of P120,000 and SSS owned in common:
withholding tax of 5%P4,750,000 premium of P30,000 – P1,050,000 Rent from conjugal
Expenses of rental business, P1,000,000 Commission as real estate broker, net of property, net of WT of
Per diems received as a corporate WT of 10% - P5,400,000 5% - P1,368,000
director, P100,000 Royalty received as a textbook author, Expenses connected
Prize won in a raffle, net of WT of 20%, net of WT of 10%-P540,000 with rental income,
P800,000 P600,000
Compute the tax payable ( in the income tax return) by the spouses.

4. Rettern, an MWE works for McDo. He has no other source of income other than his employment. For the taxable year, he
received a total compensation income of P136,000. During the year, he received P80,000 for overtime pay; P30,000 for night shift
differential pay; P15,000 hazard pay and P20,000 for holiday pay. He also received 13 th month
Equivalent to P12,000 , and contributed to SSS, Philhealth and Pag-ibig a a total amount of P4,000.

Compute for his income tax liability

5. Mr. and Mrs. Pedro , residents of Manila support 6 minor children. They have the following income and expense transactions in
2018.
Mr. Pedro Mrs. Pedro Sale of conjugal assets:
Gross receipts from business as a Gross sales, store , P10,000,000 a) Selling price (SP) of Co. A shares, traded P50,000;
contractor, net of WT of 1% - Cost of goods sold, store, P2,000,000 Cost, P60,000
P495,000 Business expenses, store, P5,000,000 b) SP of Co. B shares, not traded P3M, cost ,P500,000
Business expenses, P150,000 Share in the net income of a joint c) SP of vacant lot, net of WT of 6%, P1,410,000, cost
Dividend from X Co., domestic venture engaged in transportation, P100,000
,net of WT of 10%, P45,000 net of WT of 10%, P90,000 d) SP of apartment house (bus. Prop.)
Rent Income from property in US, Rental of real property, (WT was not P2M; book value, PP1.5M
100,000 withheld by the payor), P50,000 e) SP of residential house (sold June 5, 2018; Cost
Share in net income of Pedro & Amount received as beneficiary of P1.5M (bought 2010)
Associates, a GPP net of WT of the estate of her late father, net of Commissioner’ zonal value P2.5M
10%, P45,000 WT of 15%, P34,000 Proceeds of sale invested in new house (Dec. 10,
2018) P2.5M

Required : 1. Compute for the final capital gains taxes on the sale of assets.
2. Compute final taxes on passive incomes.
3. Determine the net income tax payable by the spouses in the ITR.
Corporation

1. A corporation has the following income for 2018

a. interest on bank deposit, BDO, Manila, gross of WT, P100,000
b. Interest, US dollar deposit, BDO Manila, gross of WT, 50,000
c. Royalty, Phils. 600,000
d. Royalty, US 200,000
Compute for final withholding tax if the taxpayer is
a. domestic corporation b. resident foreign corporation c. non-resident foreign corporation

2. A corporation has the following income, expense, and transactions in 2018

Gross income, Phils. P800,000
Expenses 480,000
Gross income, US 500,000
Expenses 300,000
Sale of assets
a. sold shares traded at the stock exchange for P800,000 (Cost- P900,000)
b. sold shares not traded at the stock exchange for P500,000 (cost- P600,000)
c. Sold vacant lot (not used for business) located in the Phils. for P3M (cost- P1M)
d. Sold land located in US for P5M (cost –P2M)

Compute the final tax on the sale of assets, income tax payable if the taxpayer is a:
a. domestic corporation b. resident foreign corporation c. non-resident foreign corporation

3. The records of High Airways, a foreign airline doing business in the Phils., show the following data-
Gross receipts from passengers on –
a. Tickets (Manila to Hongkong) sold in the Phils. to passengers originating from the Phils. P5M
b. Tickets (Manila to Hongkong) sold outside the Phils. to passengers originating from the Phils. P3M
c. Tickets (Hongkong to Manila ) sold in the Phils. to passengers originating outside the Phils. P2M
d. Tickets (Manila to Hongkong) sold in the Phils. to passengers who were indorsed to another airline which airlifted them
from Manila, P500,000
e. Tickets (Manila to New York) sold in the Phils. to passengers transshipped in Japan on another airline to New York,
P4.5M
Flight from Manila to Japan – 4 hours
Flight from Japan to New York – 8 hours
Expenses in connection with uplifts originating in the Phils. P6M

Determine the 2/1/2 Gross Phil. Billings

4. The records of MC Co. , organized 2007, show the following

Year RCIT MCIT Year RCIT MCIT
2014 P50,000 120,000 2017 10,000 7,000
2015 25,000 22,000 2018 40,000 35,000
2016 15,000 12,000
Compute income tax payable each year from 2014-2018

5. IC Co. ‘s computed RCIT and MCIT , creditable income taxes withheld from the 1 st to 4th quarters, and the excess MCIT and excess
withholding taxes from prior years are as follows:

Quarte RCIT MCIT Tax Withheld Quarte RCIT MCIT Tax Withheld
r r
1 P100,000 80,000 20,000 3 250,000 100,000 40,000
2 120,000 250,000 30,000 4 200,000 100,000 35,000
Excess MCIT ( prior year) P30,000
Excess withholding tax (prior year) P10,000
Compute for quarterly income tax payable.