INCOME TAXATION

(TAX 101)

TH Quiz No.3

Name
SCORE
Student No.

Drill No.1 TRUE OR FALSE.

Supply your answers on the blanks. Write "T" if the statement is absolutely true, otherwise write "F".

1 The proceeds of life insurance received by the heirs of the heirs of the insured upon
his death is excluded in gross income.

2 The amount received in excess of the premium paid in an insurance contract

constitutes an item of gross income.

3 Donated income is included in the gross income of the donee.

4 Compensation for injuries and sickness constitutes profit; hence an inclusion in gross
income.

5 It is sufficient that the employee rendered more than 10 years of service for his
retirement benefit to be exempt.

6
An employee can secure retirement benefit exemption only once in a lifetime.

7 It is a must that the employer maintains reasonable pension benefit plan for the
retirement benefit to be exempt.

8 An employee must have rendered more than 10 years of service before claiming
exemption for his termination benefits.

9 The income of the Philippine Government from essential public functions is exempt
from any income tax.

10
Prizes paid to corporations are an inclusion in gross income subject to final tax.

11 Only the mandatory portion of GSIS, SSS, Philhealth, and union dues can be excuded
in gross compensation income.

12 Social security benefits, retirement gratuities, and other benefits from foreign
governments are excluded in gross income.

13 Social security benefits, retirement gratuities, and other benefits from foreign
governments are included in gross income.

14 The gain from the redemption of shares in mutual fund is an exclusion in gross income
subject to regular taax because it is an inclusion in gross income subject to capital
gains tax.
 15 13th month pay and other benefits are taxable only up to Php 90,000.00.

16 GSIS and SSS benefits are included in gross income to the extent they exceeded Php
90,000.00

17 Prizes awarded upon the condition that the recipient shall render specified futute
services is an item of gross income.

18 The income of government-owned and controlled operations is an item of gross

income.

19 Benefits of veterans of war or retired US army personnel are excluded in gross

income.

20 The employer's share to SSS, Philhealth and Pag-Ibig contributions are an exclusion in
gross income of an individual.

Drill No.2 Multiple Choice - Theory

Supply the blanks with the letter pertaining to your answer.

1 The proceeds of an insurance policy received by the corporation as beneficiary on

the life insurance of its officer is

a. a gift c. an inheritance
b. a taxable income d. exempt from income tax

2 Mr. Bugay was insured in a life insurance with daugther Yvone, as the irrevocable
beneficiary. Yvone was paid the entire proceeds when Mr. Bugay died. The
proceeds constitute

a. a taxable inheritance c. a taxable income

b. a taxable gift d. an exclusion from gross income

3 A policy holder who outlived the policy received a cash surrender value in the excess
of premiums paid is exempt upon

a. the amount representing a return of premiums

b. the entire amount received
c. the excess of the amount received over the premiums paid
d. non of these

4 The assignment of an insurance policy at an amount in excess of the premiums paid

on the policy is subject to

a. donor's tax c. estate tax

b. income tax d. any of these

5 A widow who collected the life insurance proceeds of her deceased husband is

a. exempt to the entire amount of the proceeds.

b. taxable to the excess of the proceeds over the premiums paid
c. exempt the amount representing a return of premiums
d. non of these
6 The policyholder of a life insurance contract outlived his insurance policy. He was
paid Php 300,000.00 upon maturity of the policy. He paid Php 250,000.00 total
premium. What is the inclusion in gross income?

a. Php 300,000.00 c. Php 50,000.00

b. Php 250,000.00 d. -nil-

7 Which is not a requisite of exemption of a retirement benefit plan?

a. 10 years of employment
b. The employer maintains a reasonable pension benefit plan
c. The retiree must be a senior citizen
d. First time availment of retirement exemption

8 Termination benefits are exempt from income tax provided that the reason for
termination is

a. beyond employee's control

b. within the employer's control
c. within the employee's control
d. beyond employer's control

9 Which is not an item of exclusion from gross income?

a. SSS benefits
b. Income of the government and its political subdivisions
c. Income of the government-owned and controlled corporation
d. Income from foreign governments

10 Which of the following is not an exclusion from gross income?

a. Income of government properties

b. Income taxes collected by the Bureau of Internal Revenue
c. Dividend income payable to a foreign government
d. Social Security benefits