ASSESSEMNT TASK 8:

8-1. TRUE OR FALSE

1. Rank and file employees may be subject to fringe benefit tax.
2. Fringe benefits are always subject to fringe benefit tax.
3. The personal expenses of employees shouldered by the employer are fringe benefits.
4. Managerial or supervisory employees are subject to fringe benefit tax.
5. The tax base of the fringe benefit tax is the grossed-up monetary value of the fringe
benefit.
6. The fringe benefit tax is a creditable withholding tax presumed to have been withheld
at source by the employer from the fringe benefits of supervisory or managerial
employees.
7. The taxable fringe benefit subject to the fringe benefit tax is the excess of the de
minimis benefits over P90,000.
8. Half of the benefits that are necessary to the trade of the employer's business are
subject to fringe benefit tax.
9. Benefits in the form of properties transferred to the name of the employee are subject
to fringe benefit tax in full.
10. Benefits provided by the employer for his convenience are exempt from fringe
benefit tax.
11. The annual depreciation value of a real property is presumed to be 10% of the value
of the property.
12. The monetary value of benefits given in cash is the cash paid.
13. The monetary value of benefits given in kind is 100% of the value of the property
given.
14. The monetary value of fringe benefits in the form of free usage of property is 50% of
the rental or depreciation value of the property.
15. Employee benefits are employee expense by nature that are paid by the employer.
16. The annual depreciation value of a movable property is 20% of the value of the
property.
17. When title over property is transferred, the monetary value is the fair value of the
property given.
18. When the employer leases a house and lot as the usual residence of the
supervisory or managerial employee, the monetary value of the benefit is 50% of the
rental payments.

19. Educational assistance to the employee is exempt from fringe benefit tax if there is
an employee bond and the study is related to the trade or business of the taxpayer.
20. Aircraft including helicopters are considered for business use and not subject to
fringe benefit tax.
21. The monetary value of benefit from loans at less than market rate shall be the
difference between 12% and the actual rate charged.
22. Lodging costs on foreign travel is a taxable fringe benefit regardless of amount.
23. 30% of first-class tickets in foreign travel is a taxable fringe benefit.
24. The expenses of family members of the employee shouldered by the employer
constitute taxable fringe benefit in full.
25. An employee expense receipted in the name of the employer is considered a
business expense of the employer.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
5. TRUE
6. FALSE
7. FALSE
8. FALSE
9. TRUE
10. TRUE
11. FALSE
12. TRUE
13. FALSE*
14. TRUE
15. TRUE*
16. TRUE
17. TRUE
18. TRUE
19. TRUE
20. TRUE
21. TRUE
22. FALSE*
 23. TRUE
24. TRUE
25. FALSE
1. Which is subject to fringe benefits tax?
a. Premiums of employee group insurance
b. Expenses of business travels
c. Housing for an employee to ensure his immediate availability
d. Housing for the family members of an employee
2. The de minimis benefits not exceeding their thresholds are
a. exempt from income tax.
b. subject to fringe benefit tax.
c. subject to regular tax.
d. deductions from gross income.
3. Select the answer which more accurately completes the statement. The taxable
fringe benefit of a supervisory employee is
a. subject to fringe benefit tax.
b. subject to regular income tax as compensation income.
c. the total of 13th month pay and other benefits not exceeding P90,000.
d. the total of 13th month pay and other benefits exceeding P90,000.
4. Who is subject to the fringe benefit tax?
a. An employer of rank and file employees
b. Managerial or supervisory employees
c. An employer of managerial or supervisory employees
d. Rank and file employees
5. An employer transferred title over property to the employee. What percentage of the
benefit is considered for purposes of the fringe benefit tax?
a. 100% b. 20% c. 50% d. 5%
6. For purposes of computing the annual value of benefits involving the free use of
movable properties, what percentage of the value of property is used?
a. 100% b. 20% c. 50% d. 5%
7. For purposes of computing the annual value of benefits involving the free use of
immovable properties, what percentage of the value of property is used?
a. 100% b. 20% c. 50% d. 5%
8. Which is not a characteristic of the fringe benefit tax?
a. final tax c. Payable by the employer
b. An income tax d. Imposed upon the monetary value of benefits
9. Which is correct with respect to the fringe benefit tax?
a. it is due monthly and quarterly.
b. It is a tax upon the compensation income of employee.
c. It is a tax upon the fringe benefit of any employee.
d. Employees do not need to file income tax returns to report the fringe benefit.
10. The actual value of benefits realized by the managerial or supervisory employee is
referred to as the
a. monetary value. c. grossed-up monetary value.
b. fair value. d. annual depreciation value.
11. Which is not an exempt housing benefit?
a. Housing within 50 meters from the perimeter of the employer's business
b. Housing benefit for four months
c. Military sleeping quarters
d. Temporary housing
12. Which is not subject to fringe benefit tax?
a. Personal expenses receipted in the name of the employee paid by the employer
b. Employee personal expense receipted in the name of the employer paid by the
employer
c. Expenses of employees considered in furtherance of the employer's business
d. Personal expense receipted in the name of the employee reimbursed by the
employer
13. ABC Company designated a residential property for the use of its managerial
employee. The lot has zonal value of P3,500,000 and P2,000,000 value per tax
declaration. The assessed value on the improvement on the lot was P1,500,000 . The
lot was purchased at a cost of P2,000,000.
Compute the monetary value to be reported in the quarterly fringe benefit tax return.
a. P250,000 b. P 62,500 c. P125,000 d. P31,250
14. Kalibo Company purchased a residential unit for P3,000,000 and transferred
ownership to its supervisory employee. The property has a zonal value of P3,500,000.
Compute the monetary value.
a. P 3,000,000 b. P3,500,000 c. P 1,750,000 d. P 175,000
15. Celebes, Inc. owns a residential property it acquired for P 2,000,000. It transferred
ownership thereto to its managerial employee for P1,200,000 when its fair value was P
3,000,000. What is the monetary value of the benefit?
a. P 3,000,000 b. P 2,000,000 c. P 1,800,000 d. P 800,000
16. Danao bought a car worth P800,000 and registered it in the name supervisory
employee. It was agreed that the same will be used partially for the business of Danao.
Compute the monetary value.
a. P 400,000 b. P 80,000 c. P800,000 d. P 0
17. In the immediately preceding problem, what is the fringe benefit tax assuming the
employee is a non-resident alien?
a. P376,471 b . P 188,235 c. P266,667 d. P 133,333
18. In July 2019, Naga purchased a P 1,200,000 car for the use of its managerial
employee.
Compute the monetary value to be reported respectively for the calendar quarters
ending
September and December 2019.
a. P 1,200,000; P 120,000 b. P240,000; P 120,000
c. P120,000; P120,000 d. P 30,000; P 30,000
19. Compute the fringe benefit tax if the employee is a resident citizen.
177
a. P 564,706; P 56,471 b. P 16,154; P 16,154
c. P 112,941; P 56,471 d. P 56,471; P 56,471
20. Maasin Carbon Plant acquired a PI,000,000-motor vehicle for the use of its field
engineer, a plant supervisor, assigned to a very remote facility from town. Compute the
monetary value of benefits subject to tax.
a. P 1,000,000 b. P 100,000 c. P200,000 d. P0
21. Dexter acquired a car for and transferred ownership to its supervisory employee for
P400,000.
The car shall be used partly in the employer's business. Compute the monetary value.
a. P 80,000 b. P 800,000 c. P 240,000 d. 1,200,000
22. As part of its employee benefits plan, Zarraga Realty Corporation acquired a piece
of residential lot worth P2,000,000 for its Director of Finance and constructed upon it a
house at a cost of P4,000,000. Ownership of the house and lot was turned over to the
director upon completion of the construction. 40% of the value of the house and lot will
be deducted from the director's salary over a period of five years.
What is the monetary value of the fringe benefit?
a. P6,000,000 b. P2,400,000 c. P3,600,000 d. P1,600,000
8-2. MULTIPLE CHOICE
1. D
2. A
3. A
4. B
5. A
6. B
7. D
8. B*D
9. A*D
10. A
11. B
12. C
13. D
3,500,000-2,000,000= 1,500,000/4=
14. B
15. C
16. C
17. C
400,000/75%X25%
18. D
1,200,000/5X50%
19. B*C 120,000/65%X35%
20. D 1,000,000/5X50%
21. A*B 400,000/5
22. C 4,000,000X60%
 ASSESSMENT TASK 9:
1. TRUE
2. TRUE
3. TRUE
4. TRUE
5. TRUE
6. TRUE
7. TRUE
8. TRUE
9. FALSE (REDUCTION)
10. FALSE* (15%)
11. FALSE (MAY BE PAID IN INSTALLMENTS)
12. FALSE* (FIRST THREE QUARTERS)
13. TRUE
14. FALSE (CAPITAL ASSET)
15. FALSE (NOT BE INCLUDED)
16. TRUE
17. FALSE (DOES NOT EXCEED)
18. FALSE (NOT CLASSIFIED)
19. FALSE (SELLING PRICE)
20. FALSE (PREFERENTIAL ANG SA CAPITAL ASSET)

MULTIPLE CHOICE
1. C
2. D*
3. D
4. D
5. A*
6. D
7. E
8. E
9. E
10. A
11. D
12. B
13. D
14. B
15. D*
16. A
FALSE 1. Rank and file employees may be subject to fringe benefit tax.
FALSE 2. Fringe benefits are always subject to fringe benefit tax.
TRUE 3. The personal expenses of employees shouldered by the employer are
fringe benefits.
TRUE 4. Managerial or supervisory employees are subject to fringe benefit tax.
TRUE 5. The tax base of the fringe benefit tax is the grossed-up monetary value of
the fringe benefit.
FALSE 6. The fringe benefit tax is a creditable withholding tax presumed to have
been withheld at source by the employer from the fringe benefits of supervisory or
managerial employees.
FALSE 7. The taxable fringe benefit subject to the fringe benefit tax is the excess of
the de minimis benefits over P90,000.
FALSE 8. Half of the benefits that are necessary to the trade of the employer's
business are subject to fringe benefit tax.
TRUE 9. Benefits in the form of properties transferred to the name of the employee
are subject to fringe benefit tax in full.
TRUE 10. Benefits provided by the employer for his convenience are exempt from
fringe benefit tax.
FALSE 11. The annual depreciation value of a real property is presumed to be 10%
of the value of the property.
TRUE 12. The monetary value of benefits given in cash is the cash paid.
TRUE 13. The monetary value of benefits given in kind is 100% of the value of the
property given.
TRUE 14. The monetary value of fringe benefits in the form of free usage of property
is 50% of the rental or depreciation value of the property.
FALSE 15. Employee benefits are employee expense by nature that are paid by the
employer.
TRUE 16. The annual depreciation value of a movable property is 20% of the value
of the property.
TRUE 17. When title over property is transferred, the monetary value is the fair value
of the property given.
TRUE 18. When the employer leases a house and lot as the usual residence of the
supervisory or managerial employee, the monetary value of the benefit is 50% of the
rental payments.
TRUE 19. Educational assistance to the employee is exempt from fringe benefit tax
if there is an employee bond and the study is related to the trade or business of the
taxpayer.
TRUE 20. Aircraft including helicopters are considered for business use and not
subject to fringe benefit tax.
TRUE 21. The monetary value of benefit from loans at less than market rate shall be
the difference between 12% and the actual rate charged.
FALSE 22. Lodging costs on foreign travel is a taxable fringe benefit regardless of
amount.
TRUE 23. 30% of first-class tickets in foreign travel is a taxable fringe benefit.
TRUE 24. The expenses of family members of the employee shouldered by the
employer constitute taxable fringe benefit in full.
FALSE 25. An employee expense receipted in the name of the employer is
considered a business expense of the employer.

AT 8-2 Multiple Choice

1. Which is subject to fringe benefits tax?
a. Premiums of employee group insurance
b. Expenses of business travels
c. Housing for an employee to ensure his immediate availability
d. Housing for the family members of an employee
2. The de minimis benefits not exceeding their thresholds are
a. exempt from income tax.
b. subject to fringe benefit tax.
c. subject to regular tax.
d. deductions from gross income.
3. Select the answer which more accurately completes the statement. The taxable
fringe benefit of a supervisory employee is
a. subject to fringe benefit tax.
b. subject to regular income tax as compensation income.
c. the total of 13th month pay and other benefits not exceeding P90,000.
d. the total of 13th month pay and other benefits exceeding P90,000.
4. Who is subject to the fringe benefit tax?
a. An employer of rank and file employees
b. Managerial or supervisory employees
c. An employer of managerial or supervisory employees
d. Rank and file employees
5. An employer transferred title over property to the employee. What percentage of
the benefit is considered for purposes of the fringe benefit tax?
a. 100% b. 20% c. 50% d. 5%
6. For purposes of computing the annual value of benefits involving the free use of
movable properties, what percentage of the value of property is used? (1-14)
a. 100% b. 20% c. 50% d. 5%
7. For purposes of computing the annual value of benefits involving the free use of
immovable properties, what percentage of the value of property is used? (1-15)
a. 100% b. 20% c. 50% d. 5%
8. Which is not a characteristic of the fringe benefit tax?
a. final tax c. Payable by the employer
b. An income tax d. Imposed upon the monetary value of benefits
9. Which is correct with respect to the fringe benefit tax?
a. it is due monthly and quarterly.
b. It is a tax upon the compensation income of employee.
c. It is a tax upon the fringe benefit of any employee.
d. Employees do not need to file income tax returns to report the fringe benefit.
10. The actual value of benefits realized by the managerial or supervisory employee
is referred to as the
a. monetary value. c. grossed-up monetary value.
b. fair value. d. annual depreciation value.
11. Which is not an exempt housing benefit?
a. Housing within 50 meters from the perimeter of the employer's business
b. Housing benefit for four months
c. Military sleeping quarters
d. Temporary housing
12. Which is not subject to fringe benefit tax?
a. Personal expenses receipted in the name of the employee paid by the employer
b. Employee personal expense receipted in the name of the employer paid by the
employer
c. Expenses of employees considered in furtherance of the employer's business
d. Personal expense receipted in the name of the employee reimbursed by the
employer
13. ABC Company designated a residential property for the use of its managerial
employee. The lot has zonal value of P3,500,000 and P2,000,000 value per tax
declaration. The assessed value on the improvement on the lot was P1,500,000 .
The lot was purchased at a cost of P2,000,000. Compute the monetary value to be
reported in the quarterly fringe benefit tax return.
a. P250,000 b. P 62,500 c. P125,000 d. P31,250
14. Kalibo Company purchased a residential unit for P3,000,000 and transferred
ownership to its supervisory employee. The property has a zonal value of
P3,500,000. Compute the monetary value.
a. P 3,000,000 b. P3,500,000 c. P 1,750,000 d. P 175,000
15. Celebes, Inc. owns a residential property it acquired for P 2,000,000. It
transferred ownership thereto to its managerial employee for P1,200,000 when its
fair value was P 3,000,000. What is the monetary value of the benefit?
a. P 3,000,000 b. P 2,000,000 c. P 1,800,000 d. P 800,000
16. Danao bought a car worth P800,000 and registered it in the name supervisory
employee. It was agreed that the same will be used partially for the business of
Danao. Compute the monetary value.
a. P 400,000 b. P 80,000 c. P800,000 d. P 0
17. In the immediately preceding problem, what is the fringe benefit tax assuming
the employee is a non-resident alien?
a. P376,471 b . P 188,235 c. P266,667 d. P 133,333
 18. In July 2019, Naga purchased a P 1,200,000 car for the use of its managerial
employee. Compute the monetary value to be reported respectively for the calendar
quarters ending September and December 2019.
a. P 1,200,000; P 120,000 b. P240,000; P 120,000
c. P120,000; P120,000 d. P 30,000; P 30,000
19. Compute the fringe benefit tax if the employee is a resident citizen.
a. P 564,706; P 56,471 b. P 16,154; P 16,154
c. P 112,941; P 56,471 d. P 56,471; P 56,471
20. Maasin Carbon Plant acquired a PI,000,000-motor vehicle for the use of its field
engineer, a plant supervisor, assigned to a very remote facility from town. Compute
the monetary value of benefits subject to tax. (2-8)
a. P 1,000,000 b. P 100,000 c. P200,000 d. P0
21. Dexter acquired a car for and transferred ownership to its supervisory employee
for P400,000. The car shall be used partly in the employer's business. Compute the
monetary value. (2-9)
a. P 80,000 b. P 800,000 c. P 240,000 d. 1,200,000
22. As part of its employee benefits plan, Zarraga Realty Corporation acquired a
piece of residential lot worth P2,000,000 for its Director of Finance and constructed
upon it a house at a cost of P4,000,000. Ownership of the house and lot was turned
over to the director upon completion of the construction. 40% of the value of the
house and lot will be deducted from the director's salary over a period of five years.
What is the monetary value of the fringe benefit? (1-10)
a. P6,000,000 b. P2,400,000 c. P3,600,000 d. P1,600,000

ASSESSMENT TASK 9
TRUE 1. Capital gain is the gain derived from the sale or exchange of capital assets
while capital loss is the loss incurred from the sale or exchange of capital assets.
TRUE 2. In no case shall capital gains tax on stock transaction be allowed as deduction
against income or credited against income tax or any other taxes.
TRUE 3. The Register of Deeds is prohibited from registering any document transferring
real property unless the Commissioner of Internal Revenue or his duly authorized
representative has certified that such transfer has been reported and the tax imposed, if
any, has been paid.
TRUE 4. When a natural person disposes of his principal residence, he is exempt from
the payment of the capital gains tax due on the sale if the proceeds from the sale or
disposition of the principal residence are fully utilized in acquiring or constructing a new
principal residence within 18 months from the date of the sale or disposition.
TRUE 5. Sales, exchange, or disposition of lands and/or building by domestic
corporations which are not actually used in the corporate business and are treated as
capital assets is subject to 6% capital gains tax.
TRUE 6. Ordinary loss is the excess of expenses and losses over the income of the
taxpayer excluding capital gains and capital losses, or the loss incurred from the sale or
exchange of an ordinary asset.
TRUE 7. The Revenue District Officer (RDO) of the revenue district where the property
being transferred is located issues the corresponding Tax Clearance (TCL) or
Certificate Authorizing Registration (CAR) or the real property in favor of the transferee.
TRUE 8. Holding period is the duration for which the taxpayer held the capital asset.
FALSE 9. Expenses of disposition such as agent’s commission and other selling
expenses are additions to the selling price.
FALSE 10. Under the TRAIN LAW, Capital gains realized during each taxable year by
individuals or corporations from sale, exchange or disposition of shares of stock in any
domestic corporation not traded through a local stock exchange are subject to final tax
of 5% for the first P100,000 and 10% for amount in excess of P100,000
TRUE 11. The final capital gains tax shall be composed on the basis of the entire
amount of gain realized from the sale or disposition of shares of stock and the tax so
computed shall be paid one time.
FALSE 12. A final consolidated return or an adjustment return covering all the stock
transactions for the last quarter of the taxable year shall be filed on or before April 15 of
the following taxable year.
TRUE 13. Sales, exchanges or other dispositions of real property classified as capital
assets, including pacto de retro sales and other forms of conditional sale, by individuals,
including estates, and trusts, are taxed at 6% based on the gross selling price or current
fair market value as determined by the Commissioner, whichever is higher.
FALSE 14. Capital assets include all properties held by the taxpayer whether or not
connected in trade or business including those enumerated as ordinary assets.
FALSE 15. The net capital gains realized on stock transactions shall be included in the
gross income of the seller in computing his normal income tax liability.
TRUE 16. As a general rule, the entire amount of gain or loss arising from sale or
exchange of real or personal property shall be recognized such that a gain is taxable
while a loss is deductible.
FALSE 17. An individual is qualified to account for his gain on installment basis if the
initial payment exceeds 25% of the selling price.
FALSE 18. Stocks held by dealers in securities are classified as capital assets.
TRUE 19. If the cost or value of the property cannot be convincingly shown by the
taxpayer, then the fair market value shall be considered the gain.
FALSE 20. When disposing of a property, the nature of the same, i.e., a capital asset or
an ordinary asset, does not matter because capital and ordinary assets are given the
same tax treatment.

1. On capital gain tax on real property, which of the following statements is not true?
a. The tax may be paid in installment if the initial payment do not exceed 25% of the
selling price.
b. The installment payment of the tax should be made within 30 days from receipt of
each installment payment on the selling price.
c. The tax should be paid, if in one lump sum, within 30 days from the date of sale.
d. The term “initial payment” is synonymous to “down payment”.
2. A feature of ordinary gains as distinguished from capital gains
a. No holding period
b. Sources are capital assets
c. May or may not be taxable in full
d. Gains from sales of assets not included as inventory
3. Under Section 34 (b) of the Tax Code, how much shall be taken into account in
computing the net income, if a gain is realized by an individual taxpayer from the sale or
exchange of capital assets (other than real properties and shares of stocks) held for
more than twelve months?
a. P5,000
b. P50,000
c. 5% of the capital assets sold
d. 50% of the net capital gain
4. Holding period is the duration for which the taxpayer held the capital asset. A capital
asset held by the taxpayer for more than 12 months is said to be
a. No-term
b. Short-term.
c. Medium-term
d. Long-term
5. Mr. Juan dela Cruz transferred his commercial land with a cost of P500,000 but with
a fair market value of P750,000 to JDC Corporation in exchange of the stock of the
corporation with par value of P1,000,000. Hence, he became the major stockholder of
the corporation. As a result of the transfer,
a. The recognized gain is the difference between the fair market value of the shares of
stocks and the cost of the land.
b. No recognized gain because the land was in exchange of purely stocks and Mr. Dela
Cruz became the majority stockholder .
c. The recognized gain is the difference between the par value of the stocks and the
fair market value of the land.
d. No recognized gain because the land was in exchange of stocks of the corporation.
6. Losses on sale or disposition of stocks traded through the local stock exchange and
held as capital assets, to be deductible must conform with which of the following rules?
a. Net capital loss for a quarter is deductible in the same taxable year only.
b. Capital losses when the transaction is deemed a wash sale are not deductible.
c. There is no holding period hence the entire amount of capital gains and losses are
considered.
d. All of the above.
7. Which is true when natural person disposes of his principal residence?
a. The seller is exempt from the payment of the capital gains tax if the proceeds from
the sale are fully utilized in acquiring a new principal residence within 18 months
from the date of disposition.
b. The basis of the seller’s new principal residence shall be the basis of her old
principal residence if the proceeds are fully utilized in constructing a new principal
residence within 18 months from the date of the sale.
c. If there is no full utilization, the portion of the gain presumed to have been realized
shall be subject to capital gains tax.
d. If there is no utilization at all, the full capital gains tax is imposed.
e. All of the above.
8. Where the taxpayer is a corporation, the following rules as to recognition of capital
gains or losses from the disposition of property classified as capital assets shall apply.
Which is not?
a. Net capital loss carry-over is not applicable.
b. Capital losses are deductible only to the extent of capital gains.
c. The holding period does not apply to corporations, hence, capital gains and losses
are recognized 100%
d. Ordinary losses are deductible from capital gains but net capital loss cannot be
deducted from ordinary gain.
e. None of the above.
9. The following rules as to recognition of capital gains or losses from the disposition of
personal property classified as capital asset apply where the taxpayer is an individual.
Which does not?
a. Capital losses are deductible only to the extent of the capital gains, hence the net
capital loss is not deductible.
b. Ordinary losses are deductible from capital gains but net capital loss cannot be
deducted from ordinary gain.
c. Net capital loss in a taxable year does not exceed the net income before exemptions
for such year.
d. Depending on the holding period, the percentage of gain or loss is 100% if the
capital asset has been held for 12 months or less: and 50% if the capital asset has
been held for more than 12 months.
e. None of the above
10. The term “capital assets” includes
a. Real property not used in the trade or business of taxpayer.
b. Stock in trade or other property included in the taxpayer’s inventory.
c. Property primarily for sale to customers in the ordinary course of his trade or
business.
d. Property used in the trade or business of the taxpayer and subject to depreciation.
11. Anderson disposes a vacant lot for P3,000,000. The lot has an Assessor's fair value
of P2,800,000, a zonal value of P3,200,000 and an appraisal value of P3,500,000.
What is the capital gains tax? ( ZONAL VALUE 3,200,000 X 6%)
a. P-0- b. P 192,000 c. P180,000 d. P 210,000
12. Puerto Princesa Company sold its parking lot for P2,000,000. The lot has a zonal
value of P 2,500,000 and appraisal value of P1,800,000. The capital gains tax on the
sale of the lot is
a. P 120,000 b. P 150,000 c. P108,000 d. P-0-
13. Mr. Antonio disposed his principal residence for P2,000,000 and immediately
acquired a new one for P1,800,000. The old residence cost Mr. Antonio P1,000,000 and
had a fair market value of P2,500,000 on the date of sale. Compute the capital gains tax
to be deposited in escrow. (FMV 2,500,000 X 6%)
a. P-0- b. P120,000 c. P60,000 d. P150,000
14. What would be the tax basis of Mr. Antonio's new residence?
a. P 800,000 b. P 900,000 c. P1,000,000 d. P 1,800,000
15. How much of the capital gains tax will be released to the taxpayer? {150,000 given
above - [(SP 2,000,000 – 1,800,000 NEW) x FMV 2,500,000 X 6%]}
a. P150,000 b. P120,000 c. P135,000 d. P15,000
16. On August 15, 2020, 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 assessor’s 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?
[(Zonal P2,500 x 500) + assessor’s FMV 1,500,000] X 6%%
a. P180,000 b. P120,000 c. P150,000 d. 240,000

1. Who is not required to file income tax return?

a. individual deriving compensation concurrently from two or more employers at any
time during the taxable year
b. Individual receiving, a combination of compensation and business income (mixed
income)
c. Employee whose total compensation income, regardless of the amount, the income
tax of
which has not been withheld correctly
d. All of the above
e. None of the above
2. Who among the following individuals are exempt from filing their income tax return?
a. An individual whose sole income has been subjected to final withholding tax
b. An individual who is exempt from income tax
c. All of the above
d. None of the above
3. Generally, the following individuals are required to file an income tax return. Who is
not?
a. Every Filipino citizen residing in the Philippines
b. Every Filipino citizen residing outside the Philippines, on his income from sources
within
c. Every alien residing in the Philippines on income derived from sources within the
d. Every non-resident alien engaged in trade or business or in the exercise of profession
in the
Philippines
e. All of the above
f. None of the above
4. Who among the following is not required to file an income tax return?
a. an individual whose compensation income from his sole employer does not exceed
P250,000
b. an individual whose income tax has been correctly withheld by his lone
c. a minimum wage earner who worked for just one employer.
d. all of the above
e. none of the above
5. The following taxpayers are mandated to use the EFPS in filing their tax returns,
except
a. National Government Agencies
b. Government-Owned or Controlled Corporations
c. Government Bidders;
d. Insurance companies and stock brokers.

FALSE 1. Willful filing of a false or fraudulent return makes the taxpayer liable to 25%
penalty based on the tax or on the deficiency tax.
TRUE 2. Failure to report sales, receipts or income in an amount exceeding 50% of that
declared per return, and a claim of deduction in amount exceeding 50% of actual
deductions shall render the taxpayer liable for substantial under declaration or
overstatement, as the case may be.
FALSE 3. On any unpaid amount of tax, an interest at the rate of 25% per annum shall
be assessed and collected, from the date prescribed for payment until the amount is
fully paid.
TRUE 4. The 20% interest rate may apply to deficiency interest computed on the
deficiency tax.
TRUE 5. Substantial under under-declaration of sales, receipts or income and
substantial overstatement of deductions constitute prima facie evidence of a false or
fraudulent return.
TRUE 6. The 20% interest rate may apply to delinquency interest imposed in case of
failure to pay the deficiency tax, or any surcharge or interest thereon on the due date
appearing in the notice and demand of the Commissioner.
TRUE 7. Willful neglect on the part of the taxpayer is presumed when he was unable to
file his return after a considerable length of time.
FALSE 8. When there is willful neglect to file the return on the date prescribed, a
penalty of 25% of the tax or of the deficiency tax is imposed.
TRUE 9. The penalty added to the tax shall be collected at the same time, in the same
manner and as part of the subject tax.
FALSE 10. A 50% penalty is imposed due to failure to pay on the date prescribed the
full amount of tax due for which no return is required to be filed.
TRUE 11. The fines to be imposed for any violation of the Code shall not be lower than
P30,000 or twice the amount of taxes, interest, and surcharges due from the taxpayer,
whichever is higher.
TRUE 12. A penalty of 25% is imposed due to failure to pay the deficiency tax within the
time prescribed in the notice of assessment.
TRUE 13. The addition to the tax or deficiency tax shall apply to all taxes, fees and
charges imposed under the NIRC.
FALSE 14. When there is failure to file the return and pay the tax on the date
prescribed, a penalty of 20% is imposed.
FALSE 15. An individual whose sole income has been subjected to final withholding tax
is still required to file an income tax return.
TRUE 16. An individual deriving compensation income from two or more employers
within the taxable year is not qualified for substituted filing.
TRUE 17. Individuals engaged in business or practice of profession, regardless of
amount of sales/receipts, are required to file income tax returns for four quarters and an
annual income tax return.
TRUE 18. When the tax due is in excess of P2,000 the individual may elect to pay it in
two (2) equal installments.
FALSE 19. The deficiency and delinquency interest can be imposed simultaneously
under the TRAIN law.
FALSE 20. Substituted filing of tax returns are allowed only to minimum wage earners