Q3 Capital Assets

1. The term "capital assets” includes

a. Stock in trade or other property included in the taxpayer's inventory.
b. Real property not used in the trade or business of the taxpayer.
C. Real property primarily use for sale to customers in the ordinary course of trade or business.
d. Property used in the trade or business of the taxpayer and subject to depreciation.
2. Lots being rented when subsequently sold are classified as
a. Capital assets
b. Liquid assets
c Ordinary assets
d Fixed assets
3. Which is an ordinary asset for a realty developer?
a. Accounts receivables
b. Construction machineries
c. Real property held for development and subsequent sale
d. Head office building of the developer
4. Which of the following accounting assets is not an ordinary asset?
a. Investment property
b. Inventory
C. Property, plant and equipment
d. Trading securities by a stock brokerage firm
5. On July 1, 2009, Crislyn Riego sold shares of stock for P200,000. The shares which were acquired
for P140,000 acquire on June 1, 2007, have a par value of P150,000, were held as investment, and
were sold to a buyer under the following terms:
Downpayment, July 1, 2009 P 20,000
Installment due, October 10, 2009 30,000
Installment due, October 10, 2010 75,000
Installment due, October 10, 2011 75,000
How much was the capital gains tax due in 2009?
a. P 500.00 b. P450.00
c. P625.00 c. P750.00
6. How touch was the documental stamp tax due?
a. P 600.50
b. P 525.25
C. P 562.50
d. P 612.50
7. To facilitate the disposal of his shares, Freddie sold his shares for P360,000 at 10% discount from
its fair value. Even at discounted pace, Freddie reports a gain of P160,000. Compute the capital gains
tax on the transaction
a. P 21,000
b. P 11,000
C. P 16,000
d. P 15,000
8. Which of the following is not a requisite of installment payment of capital gains tax in installment
involving the sale of personal property?
a. Downpayment must not exceed 25%
b. Selling price must exceed P1,000
c. The item sold is not inventoriable
d. Initial payment must not exceed 25%
9. Abdul Rhamanam Abrnin, a non-resident alien disposed his stock investments in a domestic
corporation to Juan dela Cruz, a non-resident citizen, at a gain of P300,000. Which statement is
correct?
a. The sale is not subject to capital gains tax since the property involved is a personal property is
deemed located abroad
b. The sale is not subject to capital gains tax as Juan dela Cruz, the buyer, is a non-resident individual
C. The sale is subject to capital gains tax even if the sale occurred outside the Philippines,
d. None of these.
10. Meiko Acebo is a stock broker and holds 10,000 ordinary stock of San Miguel Corporation, a
domestic corporation, acquired at P100 per sbare. His valuation for San Miguel Corporation indicates
that San Miguel's stocks will dechne in the near future. If Meiko sells his stock investment directly to
a buyer, Zeus Milan, at P115 per share, how much is the capital gains tax payable on the transaction?
a. P5,000
b. P10,000
c. P5,750
d. P 0
11. Mr. Acebo, a non-security broker or dealer, made the following dispositions directly to buyer
Date Domestic securities
DATE DOMESTIC SECURITIES GAIN/LOSS
2/4/8 Abacus ordinary shares P150,000
5/8/8 PLDT bonds 150,000
7/15/8 Globe Preferred shares (80,000)
9/20/8 Globe common shares 50,000
11/15/8 Metrobank ordinary shares 80,000
Compute the amount of capital gains tax payable (refundable) of Mr. Acebo for the year 2008.
a. (P1,500)
b. P15,000
с. Р 0
d. P38,000
12. 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 P11,000
b. P6,000
c. P5,500
d. P 0
13. Kidapawan, Inc., a domestic service company, has the following transactions on the sale of
another domestic corporation:
TRANSACTION QUANTITY NET PRICE
Purchase 20,000 P 40,000
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. P 500
b. P 480
c. P400
d. P 0
14. Assuming the moving average method, compute the capital gains tax on the sale
a. P500
b. P480
c. P400
d. P 0
15. La Trinidad, a trading company, made the following transactions during the year involving the
stocks of Carmen, domestic corporation:
DATE TRANSACTION SHARES NET PRICE
6/15/2015 Buy 10,000 P 30
9/30/2015 Sell 8,000 28
10/3/2015 Buy 15,000 25
12/7/2015 Sell 10,000 32
La Trinidad uses the FIFO method in costing the Carmen stocks.
Compute the deductible loss on the September 30 sale.
a. P20,000
b. P16,000
c. P12,800
d. P 0
16. Compute the taxable gain on the December 7 sale.
a. P64,118
b. P60,000
c. P51,467
d. P44,000
17. Which of the following entities is not exempt to the final capital gains tax imposed on the sale,
exchange and other disposition of real property?
a. Banks on their sale real and other assets acquired in the Philippines
b. Resident corporations on their land not used in business in the Philippines
c. Real estate developer or dealer on their sale of condo units
d. Resident citizen on his sale of one of his residence under foreclosure sale
18. The actual capital gain derived by an individual taxpayer may be included to all income subject to
progressive income tax when
a. It involves sales of real property to non-residents
b. It involves sales of real property to the government
C. It involves sales of personal property to non-residents
d. It involves sale of domestic stocks directly to taxpayer
19. Ms. Janet Ranillo, a real estate dealer, sold a real property for P200.000 on October 29, 2007 in
installment. The cost of the property was P150,000. The terms of the sale agreed upon by Ms.
Ranillo and the buyer were:
Downpayment P 40,000
Balance, payable in monthly installments of P10,000
beginning November 29, 2007 until fully paid 160,000
How much income will be reported in 2007?
a. P12,500 b. P15,000 c. P50,000 d. P75,000
20. Ms. Lyn Rosales, a real estate dealer, sold a real estate for P2,000,000 on November 29, 2007.
The cost of the property was P1,500,000. The terms of the sale were as follows:
Downpayment P 400,000
Balance, payable in monthly installments of P100,000
beginning December 29, 2007 until fully paid 1,600,000
How much was the income to be reported in 2007?
a. P100,000 b. P112,000 c. P125,000 d. P140,000
21. Compute the capital gains tax in the above case.
a. P 30,000 b. P 40,000 c. P120,000 d. P 0
22. Puerto Princesa Company sold its parking lot for P2,000,000. The lot has a zonal value of
P2,500,000 and appraisal value of P1,800,000. The capital gains tax on the sale of the lot is
a. P 0 c. P 120,000
b. P108,000 d. P 150,000
23. On August 15, 2011, 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 assessed 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. P210,000
24. 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. P 0 c. P750,000
b. P660,000 d. P780,000

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

a. Individual taxpayers only
b. Corporate taxpayers only
C. Dealers in properties only
d. A or B
26. Mrs. Joson sold a residential lot on June 1, 2013 for P2,000,000. The property had a zonal value
of P2,500,000 and an assessed value of P1,000,000. On July 1, 2014, Mrs. Joson was compelled to
pay the capital gams upon the request of the buyer. The compromise penalty was determined to be
P20,000. Compute the total tax due.
a. P 150,000 c. P 217,500
b. P 180,000 d. P 237.500
27. 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. P 9,000 c. P 36,000
b. P 16,000 d. P 42,000
28. Mr Bassit Unay sold a residential land for P4,000,000. The land had a fair value of P3,500,000 and
an assessed vahe of P2,000,000. What is the total income tax and documentary stamp tax due?
a. P 0 c. P400,000
b. P 300,000 d. P450,000
The following problems relates to numbers 17 through 20:
29. Ralf Escuela sold his principal residence for P5,000,000. His principal residence was acquired at
P2,000,000 and has a fair market value of P6,000,000 at the date of sale. Within 18 months, Raff
reconstructed his new principal residence for P4,500,000
Compute the capital gains tax to be deposited in escrow.
a. P 270,000 b. P 300,000 c. P360,000 d. P 0
30. The cost basis of the new residence is
a. P1,800,000 b. P1,500,000 c. P3,750,000 d. P4,500,000
31. The amount of capital gains tax to be released to Raff is
a. P240,000
b. P270,000
c. P300,000
d. P324,000
32. Compute the cost basis of the new residence if it was acquired for P5,200,000.
a. P2,000,000 c. P1,733,333
b. P2,200,000 d. P4,333,333
33. Which is not a requisite of the wash sales rule of securities?
a. The sale or other disposition of securities resulted to a loss
b. There was an acquisition or contract or option for acquisition of stock or securities within 30 days
before the sale or after the sale.
c. The stock or securities sold were substantially the same as those acquired within the 61-day
period.
d. The seller must be a dealer in securities in a short sale transaction
34. The following are not substantially identical securities, except one
a. Common stock and preferred stock
b. Voting and non-voting common stock
c. Bonds with different interest rates or secured and unsecured bonds
d. Similar bonds with different maturity dates
35. To which of the following is the capital gains tax required to be filed? (Select the exception)
a. Authorized Agent Bank under the jurisdiction of the RDO where the seller is required to register
b. Revenue collection officer
c. Duly authorized City or Municipal Treasurer of the RDO where the seller is required to register
d. Office of the Commissioner of Internal Revenue