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1902789 Statement 1- A CPA and a Dentist may form a GPP or an ordinary partnership
Statement 2- Partnership and Corporations have separate juridical personalities distinct from the owners, as
such partners and stockholders are not liable to creditors of business
A. True, true C. False, true
B. False, false D. True, false

8. Statement-1 The share of the partner in the net income of an OP is added on his own gross income.
Statement-2 The share of the partner in the net income in GPP is also considered as passive Income.
A. True, true C. False, true
B. False, false D. True, false

9. As regards a general professional partnership, which of the following statements is correct?

A. Treated like a corporation, hence it is subject to the corporate income tax
B. It is exempt from income tax, hence it need not file an ITR
C. Partners’ share are subject to final tax
D. Partners’ share will be included in their respective ITRs whether distributed or not

10. As regards an ordinary partnership, which of the following statements is correct?

A. Partners’ share are subject to final tax, hence it not file an ITR
B. Subject to improperly accumulated earnings tax
C. Treated like corporations, hence partners have limited liability
D. Partner’s share even if distributed will not be included in their ITR

11. Which of the following statements is correct?

A.Estates and trusts are allowed a personal exemption of P32,000 if the executor or trustee is
married.
B.The income tax rates for corporate taxpayers apply to taxable estates and trusts.
C.The taxable year of estates and trusts maybe calendar or fiscal year
D.For a trust to be taxable, it must be irrevocable, both as to corpus (principal) and income

12. The property, rights and obligations of a person which are not extinguished by his death and those which
accrued thereto since the opening of succession.
A. Assets B. Capital
C. Estate D. Income

13. The term applied to the person whose property is transmitted through succession, whether or not he left a will
A. Decedent B. Transferor
C. Transferee D. Grantor

14. The term applied to the answer in No. 3 if he left a will

A. Transferor B. Grantor
C. Donor D. Testator

15. The person called to the succession either by the provision of a will or by operation of law
A. Heir B. Devisee
C. Legatee D. Trustor

16. The person to whom the gift of personal property is given by virtue of a will
A. Heir B. Devisee
C. Legatee D. Trustor
17. The person for whose benefit the trust has been created
A. Legatee B. Heir
C. Beneficiary D. Trustee

18. For income tax purposes, any person or corporation that holds in trust an estate of another person or
persons
A. Beneficiary B. Fiduciary
C. Legatee D. Devisee

19. Which of the following statements is true?

A. Payments which constitutes bribes, kickbacks, and others of similar nature which are necessary to realize
the profit are allowed as deduction from gross income
B. The taxes which are deductible from gross income include the taxes, interest and penalties incident to
tax delinquency
C. Deductions are amounts allowed by the Tax Code to be deducted from gross income to arrive at the
income tax liability of a taxpayer.
D. Losses from wagering transactions shall be allowed only up to the extent of the gains from such
transactions.

20. This is not deductible from gross income

A.Transportation expenses from the main office to the branch
B. Transportation expenses from home to the office and from the office back to home
C. Travel expenses on business trips
D. Travel expenses while away from home in the pursuit of trade, business or profession

21. No deductions shall be allowed where the transaction is between “related taxpayers” for
1. Losses from sales or exchanges of property
2. Interest expense
3. Bad debts

A. 1 and 2 only C. 1 and 3 only

B. 2 and 3 only D. 1, 2 and 3

22. The phrase “related taxpayers” will apply to the following, except:
A. Between members of a family
B. Between the grantor and a fiduciary of any trust
C. Between a fiduciary of a trust and a beneficiary of such trust
D. Between an individual and a corporation more than 50% in value of the outstanding stock of
which is owned, directly or indirectly for such individual, in case of distributions in liquidation.

23. Interest expense incurred to acquire property used in trade or business or exercise of a profession is
A.Not allowed as a deduction against gross income
B. Required to be treated as a capital expenditure to form part of the cost of the asset
C. Allowed as a deduction or treated as a capital expenditure at the option of the taxpayer
D.Allowed as a deduction or treated as a capital expenditure at the option of the government

24. May be deducted from gross income

A. Philippine income tax C. Estate or donor’s tax
B. Foreign income tax D. Special assessment

25. The operating loss, which had not been previously offset as deduction from gross income shall be carried
over as deduction from gross income for the next
A. 2 consecutive taxable years immediately following such loss.
B. 3 consecutive taxable years immediately following such loss.
 C. 4 consecutive taxable years immediately following such loss.
D. taxable year immediately following such loss.

26. Examples of taxes that are deductible except

A. Occupation tax C. Documentary stamp tax
B. Privilege tax D. Philippine income tax

27. For individuals with gross compensation income, the following maybe deducted, except:
A. Personal exemptions
B. Additional Exemptions
C. Optional standard deduction
D. Premium payments on health and/or hospitalization insurance

28. For individuals with gross income from business or practice of profession, the following may be deducted
1. Optional standard deduction
2. Itemized deduction
3. Personal exemptions
4. Additional exemptions
5. Premium payments on health and / a hospitalization insurance
A. 1, 2, 3 and 4 C. 3, 4 and 5 and either 1 or 2
B. 2, 3 and 4 D. 1, 2, 3, 4 and 5

29. Any amount subsequently received on account of a bad debt previously charged off and allowed as a
deduction from gross income in prior years must be included in gross income in the taxable year in which
received. This is
A. Severance test C. Destination of income test
B. Life-blood theory D. Equitable doctrine of tax benefit

30. May consider capital expenditures as revenue expenditures

A. Resident citizen C. Private educational institutions
B. Domestic corporation D. Resident alien

31. The following may be allowed to claim optional standard deduction, except
A. Resident citizen C. Resident alien
B. Non-resident citizen D. Non-resident alien

32. The following may elect optional standard deduction or itemized deduction, except
A. Taxable estates and trusts C. General professional partnership
B. Domestic corporation D. Foreign corporation

42. If the partnership is a GPP, the taxable income of A subject to 5-32% is

A. P276, 000 C. P250,000
B. P180, 000 D. P320, 000

43. And the taxable income of B subject to 5- 32% is

A. P435, 000 C. P420,000
B. P270, 000 D. P 470, 000

44. If the partnership is an OP, its tax due is

A. P144, 000 /135,000 C. P153, 000
B. P148, 000 D. P108, 000

45. Contrast GPP vs GPT (6 points)

a. As to type/Activity
b. how treated for tax
c. withholding tax