PHIL.

CPA LICENSURE EXAMINATION TAXATION

1. Mr. Bone filed 2014 income tax return on June 30, 2015. The Bureau of Internal Revenue 6. How much discount is granted to a senior citizen on his purchase of basic and prime
discovered a deficiency income tax on August 15, 2016. When the deficiency tax assessment commodities, subject to limitation?
be served? A. 5% C. 15%
A. On April 15, 2018 C. On or before June 30, 2018 B. 10% D. 20%
B. On or before April 15, 2018 D. On or before August 15, 2019
7. What is the basis of the documentary stamp tax to be imposed when one of the contracting
2. On March 5, 2015, the Bureau of Internal Revenue discovered a deficiency value added tax parties on the sale of property is the government?
for the quarter ended September 2008. The deficiency did not arise from error or fraud. A. Actual consideration
Which of the following statement is CORRECT? B. Consideration contracted to be paid for such realty
A. The BIR has no more remedies since the tax prescribed. C. Consideration contracted to be paid for such realty or on its fair market value, whichever
B. The BIR must send the assessment notice before March 5, 2018. is lower
C. The BIR must send the assessment notice before March 5, 2025 D. Consideration contracted to be paid for such realty or on its fair market value, whichever
D. The BIR must send the assessment notice before September 30, 2018. is higher

3. Which of the following statement/s is/are correct? 8. Which of the following statement/s is/are correct
Statement A. Non-resident citizens are taxable on all income derived from sources within the Statement A. DORA filed ger 2014 ITR (not fraudulent nor false) on March 20, 2015. The last
Philippines day for the BIR to collect the tax by judicial action if no assessment was made is April 15,
Statement B. Resident citizens and domestic corporation are taxable on all income derived 2018
from sources within or without the Philippines. Statement B. DADA’s 2014 ITR was filed and paid on May 8, 2015. The last day for the BIR
Statement C. Foreign corporations, whether engaged or not in trade or business in the to send an assessment is April 15, 2018.
Philippines are taxable from sources within or without the Philippines. Statement C. On July 20, 2015, DIDI filed an amended return which is substantially different
Statement D. Aliens, whether residents or not of the Philippines, are taxable only from from the 2014 ITR which she filed on April 13, 2015. The last day to send an assessment is
sources within the Philippines. April 15, 2018.
A. Statement A and D are correct C. Statements A, B and D are correct A. Only Statement A is correct C. Statement A and C are correct
B. Statements C and D are correct D. Statements B, C and D are correct B. Statement A and B are correct D. Statement B and C are correct

4. Which of the following are basic principles of a sound tax system?
A. Fiscal Deficit, Administrative Feasibility and Ability to Pay
B. Progressive Taxation, Ability to Pay, Symbiotic Relationship
C. Fiscal Adequacy, Economic Feasibility and Theoretical Justice
D. Fiscal Adequacy, Administrative Feasibility and Theoretical Justice
5. Mr. SMALL TIME’s piece of land measuring 500 sq. meters in Makati City was assessed as
commercial with a fair market value P20,000 per sq. m. How much is highest possible
amount of annual basic real property tax can be collected from him?
A. P20,000 C. P50,000
B. P40,000 D. P100,000
9. Which of the following statements is TRUE?
A. Real property taxes are payable in the local treasurer’s offices
B. A local government unit is empowered to collect documentary stamp taxes
C. For the computation of real property tax, the FMV is equal to the Assessed Value Divide
by the Assessment Level.
D. When the land is located in a commercial area but the building is residential, the
classification of land to determine the fair market value is residential and the assessment
level is commercial.

OCTOBER 2019 Page 1 of 9

PHIL. CPA LICENSURE EXAMINATION TAXATION

10. If a taxpayer believes in good faith that the assessment against him is doubtful but the same 16. The President of the Philippines and the Prime Minister of Japan entered into an executive
has become final and unappealable, what is the best available remedy for him? agreement on a loan facility to the Philippines from Japan whereby it was stipulated that
A. Protest the assessment interest on loans granted by private Japanese financial institutions in the Philippines shall not
B. File an injunction with the CTA be subject to Philippine income tax laws. What basic characteristics of taxation has been
C. Ask for the interest to be waived violated by this agreement?
D. Apply for a compromise of his tax liability A. Constitutional limitation C. Legislative in character
B. Inherent limitation D. Theoretical justice
11. The concept of “situs of taxation” is based on which limitation of taxation?
A. Exemption of the government C. Public purpose 17. The refusal of the taxpayer to submit books of accounts and records relating to the pending
B. International comity D. Territoriality tax investigation by the offices of the Bureau of Internal Revenue shall allow the BIR to _____
A. Issue a final assessment based only of the financial statements submitted by the
12. Which of the following statement is/are CORRECT? taxpayer
I. The power to license includes the power to tax B. Allow the BIR to enter the premises of the taxpayer to obtain any available records
II. The power to tax may not include the power to destroy. relating to the tax investigation
III. The power to tax includes the power to exempt C. File an action with the Court of Tax Appeals or the regular courts to compel the taxpayer
A. I only C. I and II to present the necessary documentation
B. III only D. II and III D. Authorize the issuance of a subpoena duces tecum against the taxpayer to submit the
pertinent records to the office of the BIR
13. The following, EXCEPT ONE, are establishments which grant sales discount to senior
citizens on their sale of goods and/or services. 18. Which of the following is a FALSE statement?
Which is the EXCEPTION? A. Every person legally authorized to practice his profession shall pay professional tax
A. Cinema houses C. Optical clinics anywhere in the Philippines, regardless of where he practices his profession or his
B. Funeral parlors D. Residential unit lessor principal office location
B. The province may levy an annual professional tax on each person engaged in the
14. PETRON INC. installed underground tanks in its depot for the storage of its oil and petroleum exercise or practice of his profession requiring government examination at such amount
products. The City of Cebu assessed Petron for real property tax on land and on the storage and reasonable classification
tanks. C. Every person legally authorized to practice his profession shall pay the professional tax
A. Petron is not taxable to the province where he practices his profession or where he maintains his principal
B. Petron is taxable on the land only office if he practices in several places
C. Petron is taxable on the storage tanks D. Every person legally authorized to practice his profession shall be entitled to practice his
D. Petron is taxable both to the land and storage tanks profession in any art of the Philippines without being subjected to any other national or
local tax for the practice of such profession.
15. Which of the following tax cases may NOT be compromised?
A. Collection cases filed in courts
B. Civil tax cases being disputed before courts
C. Delinquent accounts with duly approved schedule of installment payments
D. Criminal violations, other than those already filed in court or those involving criminal tax
fraud
OCTOBER 2019 Page 2 of 9
PHIL. CPA LICENSURE EXAMINATION TAXATION

SITUATIONAL Assume further that the market values of the real property of XYZ Corporation as follow:
Book Value MV per TD* Zonal Value Appraised Value
Situation 1 – (TRAIN LAW) Land A P2,000,000 P2,500,000 P5,000,000 P6,000,000
Mr. and Mrs. JBL had the following conjugal transfers during the year 2018: Land B 2,000,000 2,200,000 4,000,000 3,500,000
• January 26 Donated a parcel of land to their son, on account of their marriage. Their son’s Building A 1,000,000 2,400,000 3,000,000
wedding is on July 31, 2018. The fair market value of the land at the time of donation was Building B 500,000 2,000,000 1,950,000
P500,000. The fair market value of the land at the time of marriage was P550,000. The *MV per TD – Market value per tax declaration
donated property subject to P100,000 mortgage which was assumed by their son.
• October 29 Donated P300,000 to the sister of Mr. JBL who was diagnosed with cancer. They 23. How much is the capital gains tax due on the sale of Mr. X’s shares of stock?
donated the amount for the medication of Mr. JBL’s sister. A. P495,000 C. P1,046,250
• December 20 Sold 300,000 shares of stocks from ABC Corporation to their daughter for B. P750,000 D. P1,087,500
P300,000. The book value per shares as per latest audited financial statement of ABC
Corporation is P1.50 per share. The shares of stocks were acquired two years ago for 24. How much is the documentary stamp tax due on the sale of Mr. X’s Shares of Stock?
P200,000 A. P18,750 C. P75,000
B. P37,500 D. P91,875
19. How much is the donor’s tax still due of Mr. JBL on the January 26 transfer?
A. P11,400 C. P16,500 25. How much is the donor’s tax due if any?
B. P12,000 D. P24,000 A. P90,000 C. P120,000
B. P103,500 D. None
20. How much is the donor’s tax due of Mrs. JBL on the October 29 transfer
A. P9,000 C. P45,000 26. Assuming that Mr. X donated the 5,000 shares of stocks of XYZ Corporation, instead of being
B. P21,000 D. P57,000 sold, how much is the donor’s tax due on the said donation?
A. P435,000 C. P703,000
21. How much is the capital gains tax due of Mr. JBL on the December 20 transfer? B. P585,000 D. P720,000
A. P7,500 C. P22,500
B. P15,000 D. P41,250 Situation 3 – (TRAIN LAW)
Mr. SMB single and non-resident alien, died of a heart attack in 2018, leaving the following
22. How much is the donor’s tax still due of Mr. JBL on the December 20 transfer? properties in favor of his heirs:
A. P4,500 C. P25,500 Gross estate within the Philippines P30,000,000
B. P9,000 D. None Gross estate outside the Philippines 20,000,000
Funeral expense 500,000
Situation 2 – (TRAIN LAW) Judicial and administrative expense 2,000,000
Mr. X sold on April 30, 2018, 5,000 shares of stock of XYZ Corporation for P10,000,000. Said Claims against the estate 5,000,000
shares of stock were acquired 3 years ago at par value. XYZ Corporation has 10,000 outstanding His gross estate includes family home valued at P8,000,000
shares with par value of P1,000 per share. The total assets and liabilities of XYZ Corporation in its
latest audited financial statements are P20,000,000 and P5,000,000, respectively. Assuming that 27. How much is the gross taxable estate of Mr. SMB’s estate?
the book value of all its assets and liabilities is also the market value with the exception of its real A. P30,000,000 C. P45,000,000
property. B. P35,000,000 D. P50,000,000
OCTOBER 2019 Page 3 of 9
PHIL. CPA LICENSURE EXAMINATION TAXATION

28. How much is the deductible ordinary deductions of Mr. SMB’s estate? Less: Interest from bank P 24,000
A. P3,000,000 C. P4, 320,000 Gain on sale of land 500,000 (524,000)
B. P4,200,000 D. P5,000,000 Net taxable income P1,500,000
Multiply by: Corporate income Tax rate 30%
29. How much is the deductible special deduction of Mr. SMB’s estate? Income tax expense P450,000
A. P500,000 C. P5,500,000
B. P1,000,000 D. P8,500,000 After a detailed examination of the Corporation’s book, you have noted the following:
* Balance sheet as of December 31, 2016 showed an outstanding balances of deferred rent
30. How much is the estate tax due of Mr. SMB’s estate income amounting to P200,000
A. P1,110,000 C. P1,518,000 * Interest from bank is net of 20% final withholding tax
B. P1,510,000 D. P1,590,000 * Gain on sale of land, represent gain on sale of residential lot with selling price, amounting to
P2,000,000
Situation 4 * Taxes and licenses in the notes to financial statements showed the following breakdown:
Minalas Corporation, a real estate dealer and lessor, on its first year of operation, has been issued Withholding tax on sale of land P120,000
a letter of Authority by the BIR. As a revenue officer, you were assigned to audit the Corporation’s Documentary stamp tax on sale of land 30,000
income tax for taxable year 2016. The audited financial statements show the corporation’s income Surcharge and penalties on late payment of tax 10,000
statement as follows: Permit and licenses 20,000
* Interest expense includes interest on late payment of tax amounting to P5,000
Revenues:
Rental income P2,800,000 31. How much should reflected as net sales and revenues in the annual income tax return of the
Interest from Bank 24,000 Corporation?
Gain on sale of land 500,000 A. P3,300,000 C. P4,800,000
Total P3,324,000 B. P3,500,000 D. P5,000,000

Expenses: 32. How much should be the deductible taxes and licenses?
Depreciation P800,000 A. P20,000 C. P50,000
Salaries and wages 200,000 B. P30,000 D. P180,000
Taxes and licenses 180,000
Entertainment and representation 40,000 33. How much is the deductible entertainment and representation expense?
Interest expense 60,000 A. P33,333 C. P38,000
Office supplies 20,000 B. P34,000 D. P40,000
Total P1,300,000
Net income before income tax P2,024,000 34. How much is the basic deficiency income tax due?
Income tax expense (450,000) A. P103,800 C. P135,300
Net income P1,574,000 B. P133,800 D. P253,800

Income tax due for the year is computed as follow:

Net income before income tax P2,024,000
OCTOBER 2019 Page 4 of 9
PHIL. CPA LICENSURE EXAMINATION TAXATION

Situation – 5 Situation – 6 (TRAIN LAW)

Mr. The Pokna, Filipino and married, died in 2017, leaving his estate in favor of his surviving Kiko Macha, a non-VAT registered lessor of residential and commercial units, had the following
spouse. The following information were made available: data for the 1st and 2nd Quarters of 2018
• Real property in Manila, acquired during marriage. Said property is supported by a barangay 1st Quarter 2nd Quarter
certification that the spouses resided in this property at the time of Mr. Pokna’s death. The fair Gross receipts
market value of this property as per latest tax declaration is P1,200,000, while the zonal With monthly rental of P13,000 per unit P2,500,000 P2,300,000
valuation as of the time of death is P1,500,000. Said real property was held as a mortgage in a With monthly rental of P18,000 per unit 1,000,000 1,200,000
loan applied by the spouses. As of the time of death, the outstanding balance of the mortgage Gross receipts from lease of commercial units 2,300,000 2,400,000
payable amounted to P500,000 Input tax paid from VAT suppliers 150,000 120,000
• Real property in Laguna, inherited by Mr. Pokna during marriage, two and half years ago, from
his late father. The fair market value as per latest tax declaration as of the time of his death is 39. How much is the business tax due for the 1st Quarter 2018 of Mr. Macha?
P1,000,000 while the zonal valuation is P800,000. Said property was previously taxed at a A. P99,000 C. P246,000
value of P900,000 when Mr. Pokna inherited the property from his father B. P174,000 D. P396,000
• Real property in Cavite, donated to Mrs. Pokna, 10 years ago (before marriage) by his
parents-in-law. The fair market value as per latest tax declaration as of the time of Mr. Pokna’s 40. How much is the business tax due for the 2nd Quarter 2018 of Mr. Macha?
death is P300,000 while the zonal valuation is P400,000. A. P108,000 C. P432,000
• Cash supported by a bank certification. Balance as of the time of death: savings account in the B. P312,000 D. P708,000
name of Mr. Pokna - P200,000; and saving account in the name of Mr. and Mrs. Pokna -
P300,000 41. How much is the business tax due for the 2nd quarter 2018 of Mr. Macha. Assuming he
• Funeral expenses incurred by the estate during the wake and burial of Mr. Pokna amounted registered as VAT taxpayer at the start of the 2nd quarter 2018?
P150,000 A. P312,000 D. P588,000
B. P432,000 C. P708,000
35. Compute item 21C of BIR Form No. 1801
A. P2,850,000 C. P3,250,000 42. Assuming Mr. Macha is VAT registered taxpayer instead of non-VAT registered taxpayer,
B. P3,000,000 D. P3,400,000 how much is the business tax due of Mr. Macha for the 1st Quarter of 2018?
A. P246,000 C. P546,000
36. Compute item 22C of BIR Form No. 1801 B. P396,000 D. P696,000
A. P670,000 C. P1,103,588
B. P1,055,442 D. P1,151,765 Situation – 7 (TRAIN LAW)
HUMILITY Corporation, is a domestic corporation engaged in the business of manufacturing
37. Compute item 24 of BIR Form No. 1801 textiles. For the fiscal year end June 30, 2019, its profit and loss statement reported the following:
A. P750,000 C. P1,500,000 Sales: P100,000,000
B. P1,000,000 D. None Cost of goods manufactured and sold (60,000,000)
Gross income from operations P 40,000,000
38. Compute item 29 of BIR Form No. 1801 Other income 5,000,000
A. P675,000 C. P865,000 Total gross income P 45,000,000
B. P793,750 D. P1,200,000 Operating expenses (15,000,000)
Finance cost (5,000,000)
OCTOBER 2019 Page 5 of 9
PHIL. CPA LICENSURE EXAMINATION TAXATION

Net income before income tax P 25,000,000 Situation 8

Income tax expense (4,500,000) BASTA LANG CORPORATION, is a registered enterprise with the board of investment and was
Net income after income tax P 20,500,000 granted an Income Tax Holiday (ITH) Incentives for the first 4 years of operation as a non-pioneer
firm. The Corporation has not applied for an extension of its ITH incentives on its 5th year. On its 5th
Additional information were made available for tax reconciliation purposes: year of operations, it reported the following:
• Withholding tax credit from sale of textile (supported by BIR Form No. 2307) - P600,000 Sales P120,000,000
• Other income broken down as follow: Cost of goods manufacture and sold 70,000,000
- Interest income for savings deposit (net of final withholding tax) - 200,000 Operating expense 20,000,000
- Gain from sale of investment property (the property was not used in the primary activity of
the corporation but held for lease) - P4,000,000 (gross of withholding tax amounting to Additional information were made available as follows:
P900,000) • All sales during the year are export sales
- Rental income from investment property – P800,000 (gross of withholding tax) • Cost of goods manufactured and sold include, imported raw materials with dutiable value of
• Operating expenses includes allowance for bad debts expense amounting to P500,000 P1,400,000. Pre-computed customs duties and other charges as follow:
• During the year, the Corporation has written-off bad debts which are certainly uncollectible (a) Customs duties P200,000
amounting P300,000 (b) Insurance 10,000
• Finance cost is broken down as follows: (c) Arrastre charges 5,000
- Interest expense on loan from various financial institution – P3,000,000. (d) Wharfage dues 7,000
- Interest expense on loans from a majority stockholder – P2,000,000 • Included under operating expenses are expenses incurred on the importation of the said
• Income tax expense, represent quarterly income tax paid equipment as follow:
(a) Facilitation fee - P100,000
43. Compute page 4, Schedule V, Item 4 of BIR Form No. 1702-RT (net income per books should (b) Delivery expense to warehouse after release from customs – P11,200 (VAT
refer to net income before income tax) inclusive)
A. P500,000 C. P2,500,000 • Cost of goods manufactured and sold included direct labor for skilled and unskilled workers
B. P582,400 D. P2,582,400 amounting to P10,000,000 and P20,000,000, respectively. The project meets the prescribed
ration of capital equipment to number of workers set by the BOI
44. Compute page 4, Schedule V, Item 9 of BIR Form No. 1702-RT. • The Company incurred an accumulated net operating loss on its first 4 years of operation as
A. P200,000 C. P500,000 follow:
B. P300,000 D. P4,500,000 (a) 1st year - P2,000,000;
(b) 2nd year – P1,600,000;
45. Compute page 2, Item 55 of BIR Form No, 1702-RT (c) 3rd year – P800,000;
A. P600,000 C. P5,140,000 (d) 4th year – P400,000
B. P5,100,000 D. P6,040,000
47. How much is the VAT due on the importation of raw materials?
A. P168,000 C. P207,840
46. How much withholding tax should HUMILITY Corporation remit on its loan interest payment
B. P194,640 D. None
assuming the Corporation is including in the BIR list of top withholding agents?
A. P100,000 C. P460,000 48. How much is the deductible direct labor cost?
B. P360,000 D. P750,000 A. P30,000,000 C. P40,000,000
B. P35,000,000 D. P45,000,000
OCTOBER 2019 Page 6 of 9
PHIL. CPA LICENSURE EXAMINATION TAXATION

49 How much is the deductible net operating loss carry over? Situation – 10
A. P400,000 C. P4,800,000 X Corporation, a VAT registered Company engaged in the lease of residential properties. During
B. P2,800,000 D. None the first quarter of 2017, the following information were made available (all amounts are exclusive
of VAT):
50. How much is the income tax due of the Company for the year • Rental income with monthly rental of P15,000 per unit – P800,000
A. P1,750,000 C. P4,500,000 • Rental income with monthly rental of P13,000 per unit – P600,000
B. P1,869,000 D. P4,530,000 • Rental income with monthly rental of P10,000 per unit – P400,000
• Receivable from tenants as of December 31, 2016, (60% is VAT Exempt) – P200,000
Situation – 9 (TRAIN LAW) • Receivables from tenants as of March 31, 2017, (40% is VAT Exempt) – P300,000
IWASH Corporation, a VAT-registered Company is engaged in the laundry business. During the • Deferred rent income as of December 31, 2016, (60% is VAT Exempt) – P200,000
first quarter of 2018, the following information were made available: • Deferred rent income as of March 31, 2017, (40% is VAT Exempt) – P250,000
Net revenue, 1st quarter 2018 P1,000,000
• Input tax credit on purchases of goods and services for the 1st quarter of 2017 – P80,000
Receivables from customer, January 1, 2018 224,000
Receivables from customer, March 31, 2018 336,000
55. How much is the output tax due for the 1st quarter of 2017?
Creditable VAT withheld, 1st quarter 2018 5,000
A. P92,400 C. P171,600
VAT purchases, other than capital goods, 1st quarter 2018 300,000
B. P164,400 D. None
VAT purchases, capital goods, 1st quarter 2018 (all in January 2018) 1,200,000
56. How much is the creditable input tax credit for the 1st quarter of 2017?
Receivable balances are all income related and are inclusive of Value-added tax. Revenue and
A. P35,200 D. P62,629
purchases are VAT exclusive. Capital goods are estimated to have a useful life of 10 years.
B. P61,838 C. P80,000
51. Compute item 19B of BIR Form No. 2650Q.
57. Assuming that on April 5, 2017, X Corporation sold a residential house and lot for P3,000,000
A. P106,500 C. P120,000
(VAT exclusive). How much is the output tax due on its sale of real property, Assuming the
B. P108,000 D. P132,000
zonal value of the property sold is P3,248,000?
A. P348,000 C. P389,760
52. Compute item 22 of BIR Form No. 2550Q.
B. P360,000 D. None
A. P36,000 C. P180,000
B. P43,200 D. P185,000
58. When is the deadline for filing of first month of the quarter VAT return?
A. On the 20th day after the close of the taxable month
53. Compute the deferred input tax as of March 31, 2018:
B. On the 25th day after the close of the taxable month
A. P136,800 C. P141,600
C. On the 20th day after the close of the taxable quarter
B. P140,400 D. None
D. On the 25th day after the close of the taxable quarter
54. Compute item 23C of BIR Form No. 2550Q.
A. P2,200 closed to income C. P11,000 closed to expense
B. P2,680 closed to income D. P13,000 closed to expense

OCTOBER 2019 Page 7 of 9

PHIL. CPA LICENSURE EXAMINATION TAXATION

Situation – 11 (TRAIN LAW) Situation – 12 (TRAIN LAW)

Jose and Maria inherited a commercial lot and building from their parents 2 years ago. In 2018 IT’S EASY CORPORATION is engaged in the business of PHARMACY. The following data were
(current year), the inherited property realized rental income of P300,000 per month, in which both made available for the first quarter 2019
shared the revenue equally. The co-ownership remained unregistered with the securities and Revenues P10,000,000
exchange commission. In addition, Jose and Maria reported their following personal income and Cost of service 6,000,000
expenses: Operating expenses 1,500,000
• Jose, gross compensation income (inclusive of 13th month and other benefits amounting to Receivables, beginning 200,000
P100,000) – P1,300,000 Receivables, ending 150,000
• Maria, net income from her laundry service business (net of cost and expenses of P600,000) – Additional information were as follows:
P200,000 • All sales for the quarter were cash and credit card sales.
• Receivables at the beginning and ending of quarter are outstanding receivables from credit
59. How much final withholding income tax should the co-ownership remit representing the card companies. Amounts are VAT inclusive
revenue distribution to the co-owners? • All sales form senior citizens are cash sales
A. P180,000 C. P540,000 • Sales is net of senior citizens discount amounting to P200,000
B. P360,000 D. None • Sale is inclusive of sales of medicines prescribed for diabetes, high cholesterol and
hypertension to non-senior citizens amounting to P300,000
60. How much is the income tax due of Jose in his annual income tax return, assuming optional • Input tax credit from purchase of goods and services for the quarter amounts to P300,000
standard deduction is used in determining his expenses? • Included in the operating expense is entertainment, amusement and recreation expense
A. P253,000 C. P582,800 amounting to P150,000
B. P431,800 D. P611,600
63. How much is the output tax due for the first quarter of 2019?
61. How much is the income tax due of Jose in his annual income tax return, assuming optional A. P1,044,000 C. P1,080,000
standard deduction is used in determining his expense? B. P1,068,000 D. P1,104,000
A. P22,000 C. P322,000
B. P250,000 D. None 64. How much is the deductible creditable input tax for the 1st quarter of 2019?
A. P255,172 C. P266,667
62. When is the deadline for filing of the annual income tax return of the co-ownership for the B. P256,180 D. P300,000
taxable year 2018?
A. April 15, 2018 C. May 15, 2019 65. How much is the income tax due for the 1st quarter of 2019, assuming itemized deduction
B. April 15, 2019 D. Not applicable was used?
A. P750,000 C. P779,700
B. P765,000 D. P780,000

66. How much is the income tax due for the 1st quarter of 2019, assuming the optional standard
deduction was used?
A. P618,000 C. P1,770,000
B. P656,400 D. P1,808,400

OCTOBER 2019 Page 8 of 9

PHIL. CPA LICENSURE EXAMINATION TAXATION

Situation – 13 (TRAIN LAW) D. He should register under the non-VAT system, because professional practice as a lawyer
Lucky Go, is a practicing lawyer, who is engaged in providing legal services to his clients. He is is a non-VAT transaction, and that his revenue from his real estate business does not
also a licensed real estate broker. Both businesses were registered with the BIR and had the exceed the VAT threshold.
following data made available for year 2018 (amounts are gross of withholding tax):
• Revenue from his profession as a lawyer amounting to P3,000,000;
• Commission received as a real estate broker amounted to P600,000;
• Cost of services and business related expenses amounted to P700,000 and P400,000,
respectively;
• Gain on sale of real property held for investment amounts to P500,000 (Selling price is
P2,000,000);
• Wagering gain amounting to P50,000 (net of wagering losses of P100,000);
• Royalties from books published and sold amounting to P150,000;
• Interest income from banks amounting to P30,000.

67. Compute 22A, Page 1 of BIR Form No. 1701, assuming Mr. Go opted to use itemized
deduction in computing his income tax.
A. P666,000 C. P810,000
B. P698,000 D. P826,000

68. Compute 17A, Page 2 of BIR Form No. 1710, assuming Mr. Go opted to use optional
standard deduction in computing his income tax.
A. P1,440,000 C. P2,240,000
B. P1,500,000 D. P2,300,000

69. How much is the final withholding income tax of Mr. Go, assuming 2/3 of interest income from
banks were realized from time deposit with maturity of 5 years
A. P17,000 C. P47,000
B. P21,000 D. P137,000

70. Under what system should Mr. Go registered his businesses?

A. He should register his professional practice as a lawyer under VAT-system and his real
estate business under the non-VAT system
B. He would register his business under VAT system, since his aggregate revenues / sales
form all his business exceed the VAT threshold.
C. He should register his business under the non-VAT system, since revenue / sales from
each business does not exceed the VAT threshold.

OCTOBER 2019 Page 9 of 9