PHILIPPINE ASSOCIATION of CERTIFIED TAX TECHNICIANS

ONLINE SEMINAR
AUGUST-SEPTEMBER 2020

EPISODE 1 – ESTATE TAX

Nilson resident of Sta. Rosa City, Laguna died in a car accident. He died intestate on
October 10, 2018.
Exclusive properties:
Car P 400,000
Lot and house in Quezon City 6,000,000
Other real and personal properties 800,000
Community properties -
Receivable as prize in a raffle contest sponsored by PICPA 50,000
Receivable from an insurance company where his son, Gino was
designated in the policy as the revocable beneficiary 150,000
House and lot in Laguna, used as family home 4,000,000
Bank deposit 800,000
Other real properties 1,500,000
The following deductions were claimed:
Funeral expenses 195,000
Judicial expenses 15,000
Claims against the estate, not notarized 50,000
Claims against insolvent persons 30,000
Unpaid mortgage on lot in Quezon City (contracted before marriage) 200,000
Unpaid mortgage on house and lot in Laguna 350,000
Accrued income taxes 35,000
Income tax on income earned from Oct 11 to Dec 31(year of death) 7,500
1. The gross estate is –
A. P 7,200,000 C. P13,700,000 E. None of the above
B. 6,500,000 D. 13,730,000
2. The deductible family home is -
A. P4,000,000 C. P1,000,000 E. None of the above
B. 2,000,000 D. 8,000,000
3. The net taxable estate is -
A. P3,057,500 C. E. None of the above
B. 6,115,000 D. None
4. The estate tax due is -
A. P 183,450 C. P 3,057,500 E. None of the above
B. 135,450 D. 251,325
5. The estate tax due if the bank deposit was withdrawn prior to the filing of the estate tax
return
A. P 183,450 C. P 3,057,500 E. None of the above
B. 135,450 D. 251,325

EPISODE 2 - DONOR’S TAX

Mr. and Mrs. Alba gave the following donations:

05/03/18 Community property valued at P400,000 donated to Barbado, legitimate son
who got married January 1, 2018.
07/14/18 Exclusive property donated to Carla, legitimate daughter who got married
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June 1, 2018. Value– P500,000.
12/30/18 Community property donated to Carla. The dowry has a market value of
P800,000
02/05/19 Community property donated to Dianne, P700,000 with an unpaid mortgage of
P150,000 assumed by the donee.
Exclusive property to ABC Corporation, cash of P200,000.
Community property worth P150,000 or Personal Protective Equipment (PPE)
against Covid 19 to The Medical City Hospital, Mandaluyong City.
1. The gift tax payable of Mrs. Alba on May 3
A. P 3,000 C. P 800 E. None of the above
B. 5,600 D. None

2. The gift tax payable of Mr. Alba on July 14

A. P 21,800 C. P 30,000 E. None of the above
B. 27,000 D. 6,400

3. The gift tax payable of Mrs. Alba on Dec 30.

A. P 45,000 C. P 8,200 E. None of the above
B. 21,000 D. 15,800

4. Donor’s tax payable on Mr. Alba on Feb 5, 2019

A. P 45,000 C. P 8,200 E. None of the above
B. 9,000 D. 1,500

EPISODE 3 – SALE OF REAL PROPERTY

On August 15, 2020, Mr. Cruz sold a 500 square meter residential condo unit for
P3,000,000. The unit was acquired in 2002 for P2,000,000. On the date of sale, the fair
market value of the house as shown in the real property declaration was P2,500,000 and the
assessed value amounted to P450,000. The zonal value was P7,000 per square meter.
1. The capital gains tax –
A. P 180,000 C. P 150,000 E. None of the above
B. 120,000 D. 210,000

2. The documentary stamp tax on the sale is –

A. P 52,500 C. P 37,500 E. None of the above
B. 45,000 D. 210,000

3. The capital gains tax of Mr. Cruz if the proceeds of sale was utilized in acquiring a new
residence –
A. P 210,000 C. P 180,000 E. None of the above
B. 150,000 D. None

4. The amount to be deposited in escrow if the proceeds of the sale shall be utilized in
acquiring a new residence –
A. P 210,000 C. P 180,000 E. None of the above
B. 150,000 D. None

5. The capital gains tax payable assuming that Mr. Cruz will utilize only P1,500,000 of the
proceeds in acquiring a new residence?
A. P 90,000 C. None E. None of the above
B. 210,000 D. P 105,000

6. How is the tax if the property sold by a real estate developer is a residential lot in a
subdivision?
A. P 150,000 C. P 175,000 E. None of the above
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B. 210,000 D. 105,000

EPISODE 4 – OTHER PERCENTAGE TAX

I. A person had the following sales during the preceding year (assume independent
situations):
Indicate whether subject to VAT, 3% Non-VAT, or Exempt from VAT/Percentage Tax in
2018:

Situation Gross receipts - PY VAT Registered Not VAT Registered

1 P 80,000
2 800,000
3 4,000,000

II. A person had the following gross receipts from rental of real property. Put a check on the
VAT column if subject to VAT, or on the 3% OPT column if subject to 3% Non-VAT.

Monthly Rent Aggregate

Situation Type of Property per unit Annual Rental VAT 3% OPT

1 Commercial Bldg P 12,000 P 2,300,000

2 Residential 14,500 2,900,000
3 Residential 16,000 2,700,000
4 Residential 15,500 3,500,000
5 Residential 14,500 3,500,000

III. Miss Sexy, an actress, had the following data for the quarter ending February 2018
(amounts are exclusive of tax):
Receipts from talent fees P4,000,000
Gross receipts from jeepneys (4 units) 1,000,000
Purchases of wardrobes used in films 1,000,000
Purchase of spare parts of jeepneys 40,000
Public relations services for image build-up as an actress 100,000
Salary of driver and assistants 60,000
Insurance premiums for jeepneys 20,000
Rent of office space used both for her occupation and jeepney
business, subject to VAT 400,000

Compute for the VAT payable by Miss Sexy.

A. P 300,000 C. P 480,000 E. None of the above
B. 309,600 D. 420,000

IV. Cea Buyo, is a businessman with transactions in the Philippines and international. His
domestic and international transactions during the period are as follows:
Overseas calls:
Outgoing -
Paid by Cea Boyo P 20,000
Paid by the call receiver 10,000
Incoming -
Paid by Cea Boyo 15,000
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Paid by the caller abroad 25,000
Local calls 2,500
Monthly bill 1,100
Assume that the amounts do not include the tax.
1. Compute the VAT payable
A. P 2,432 C. P 432 E. None of the above
B. 8,400 D. 2,832
2. Compute for the overseas communications tax
A. P 2,000 C. P 2,400 E. None of the above
B. 432 D. 2,842

V. A businessman operates two separate lines of business - Kainan, a restaurant (VAT) and
La Bamba, a Videoke Bar. In a taxable period, it had the following data, exclusive of tax:
Sale of services:
From operation of Kainan:
Cash sales P 350,000
Accounts receivable 80,000
Credit card sales 130,000
From operation of La Bamba:
Cash sales 285,000
Accounts receivable 14,000
Credit card sales 260,000

Payments for operations of Kainan (70% are to VAT taxpayers) is P500,000

1. Compute for the VAT payable

A. P 98,100 C. None E. None of the above
B. 57,600 D. P 15,600
2. Compute for the percentage tax payable
A. P 98,100 C. P 71,100 E. None of the above
B. 15,600 D. None

VI. A stockbroker who is not a dealer in securities sold 10,000 shares of stock of Bago
Corporation for P5.50 per share. The cost per share is P4.50 while the par value is P6.
1. Compute for the business tax is the shares are listed and traded in the stock exchange.
A. P 360 C. P 60 E. None of the above
B. 330 D. 270
2. How much is the capital gains tax on the sale if the shares are not listed and traded in
the stock exchange?
A. P 150 C. P 75 E. None of the above
B. 330 D. 900

VII. Narcissus owns a non-VAT registered business. His annual gross sales/receipts ranges
from P2,00,000 to P2,600,000. During the period, the gross sales/receipts amounted to
P600,000.
HOW MUCH is the business tax if the business is –
a. Beauty saloon?
b. Taxicab?
c. Videoke bar?
d. LPG dealer?
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e. Radio station?

EPISODE 5 – VALUE-ADDED TAX

I. Offpring Corporation is a VAT Registered dealer of appliances. The following data are for the
month of October:

Sales, total invoice value P 5,800,000

Purchases, net of input taxes 2,820,000
Sales return, gross of tax 200,000
Purchases return, net of input tax 300,000
Deferred input taxes (carried over from the third quarter) 9,500

The value added tax payable for the month of October by Offpring Corporation is
A. P 320,500 C. P 80,000 E. None of the above
B. 285,500 D. 288,100

II. Gabriel Auto Repair Shop, VAT registered, had the following data in its books during the
period:
Receipts:
From auto repair P 85,620
From washing and greasing 45,425
Reimbursement by customer on payments made to machine
shops 4,350
Payments received for lubricants, oils and fluid provided by
the shop to cars undergoing repair 5,780
Disbursements:
Electric bill 3,550
Water bill 2,380
Salaries of employees 15,000
Payments made to machine shops, non-VAT 4,350
Purchase of lubricants, oils and fluids 3,000
Purchase of capital goods (life – 10 years) 24,000
1. The output tax amount to –
A. P 16,419 C. P 14,660 E. None of the above
B. 16,941 D. 15,126
2. The VAT payable is –
A. P 9,404 C. P 9,459 E. None of the above
B. 12,753 D. 6,979

III. Mildred Enterprises, a VAT registered trader had the following data during the last quarter
of the year:
Purchases Sales
October P 627,200 P 392,000
November 599,200 862,400
December 959,616 789,600

All of the amounts indicated above are inclusive of VAT.

1. The amount of VAT payable by Mildred for the month of October is-
A. P(25,200) C. P 2,000 E. None of the above
B. 16,500 D. None

2. The VAT payable for the month of November is –

A. P 203,500 C. P 3,000 E. None of the above
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B. 28,200 D. None

3. The VAT payable/excess tax for the last quarter is –

A. P(18,216) C. P 60,900 E. None of the above
B. 18,216 D. None

IV. Mr. Free ordered food in a restaurant. The price in the menu, gross of VAT, is P336.

1. How much should Mr. Free pay if he is a senior citizen?

A. P 336 C. P 240 E. None of the above
B. 300 D. 276

2. How about if he is a PWD?

A. P 336 C. P 240 E. None of the above
B. 300 D. 276

3. How about if he is a senior citizen and also a PWD?

A. P 336 C. P 240 E. None of the above
B. 300 D. 276

4. How about if he is a national athlete?

A. P 336 C. P 240 E. None of the above
B. 300 D. 276

V. May Matti purchased medicines from Mercury Drug. The regular price is P 672, gross of
VAT.

1. How much should be paid by May Matti if the medicine is a cure for diabetic patients?
A. P 672 C. P 480 E. None of the above
B. 600 D. None

2. How much should be paid by May Matti if the medicine is a cure for diabetic patient and
May Matti is a senior citizen?
A. P 672 C. P 480 E. None of the above
B. 600 D. None

EPISODE 6 – INCOME TAX (INDIVIDUAL)

Tax Table for Income Tax

Over Not over Tax Plus Of excess over
P 250,000 0
P 250,000 400,000 20% - P 250,000
400,000 800,000 P 30,000 25% 400,000
800,000 2,000,000 130,000 30% 800,000
2,000,000 8,000,000 490,000 32% 2,000,000
8,000,000 2,410,000 35% 8,000,000

I. Aaron received the following income in 2019:

Gross receipts from profession P 300,000
Expenses, Profession 200,000
Compensation income 200,000
Interest on deposit with Metrobank 3,000
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Interest on dollar deposit ($1 = P50) $ 10
Winnings in lotto 20,000
Dividends from SMC, a domestic company 25,000
Sale of 2,000 ABC Corporation stocks (Cost: P20,000) 25,000

1. The income tax due if Aaron opted for itemized deduction –

A. P 11,000 C. P 16,000 E. None of the above
B. 61,200 D. None

2. The income tax due if Aaron opted for optional standard deduction –
A. P 11,000 C. P 26,000 E. None of the above
B. 36,000 D. 24,000

3. The income tax due if Aaron opted for the 8% income tax –
A. P11,000 C. P 20,000 E. None of the above
B. 36,000 D. 24,000

4. In the preceding question, how much is the percentage tax on the profession?
A. P 3,000 C. P 9,750 E. None of the above
B. 9,000 D. None

5. The total of final withholding taxes is –

A. P 3,925 C. P 7,850 E. None of the above
B. 7,925 D. 7,100

II. Mr. Empo is a government employee. He is not engaged in business nor has any other
source of income other than his employment. For 2018, Mr. Empo earned a total taxable
compensation income of ₱900,000. How much is the income tax due?
A. P 160,000 C. P 52,000 E. None of the above
B. 72,000 D. Exempt

RULE:
If at any time during a given taxable year, a taxpayer’s gross sales or receipts exceeded
₱3,000,000, he/she shall automatically be subjected to the graduated rates.

On the other hand, a non-VAT registered taxpayer who initially opted to avail of the 8% option
but has exceeded the VAT threshold during the taxable year, shall be subject to 3% Percentage Tax
on the first ₱3,000,000 of his/her gross sales without imposition of any penalty if payment is timely
made on the following month when the threshold is breached. Then, the excess of the threshold
shall be subject to VAT prospectively, and the 8% income tax previously paid shall be credited to
the Income Tax Due under the graduated rates.

III. Ms. BB signified her intention to be taxed at 8% income tax rate on gross sales in her 1st
Quarter Income Tax Return. However, her gross sales during the taxable year has
exceeded the VAT threshold.

Q1 Q2 Q3
(8% Rate) (8% Rate) (8% Rate) Q4
Total Sales ₱ 500,000 ₱ 500,000 ₱2,000,000 ₱3,500,000
Less: Cost of Sales 300,000 300,000 1,200,000 1,200,000
Gross Income 200,000 200,000 800,000 2,300,000
Less: Operating Expenses 120,000 120,000 480,000 720,000
Taxable Income 80,000 80,000 320,000 1,580,000
Income Tax due

1. How much is the income tax payable?

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A. P 195,000 C. P 1,930,000 E. None of the above
B. 500,000 D. 289,200

2. How much is the percentage tax payable?

A. P 520,000 C. P 90,000 E. None of the above
B. 279,600 D. None

Notes:
1. The gross receipts exceeded the VAT threshold of P3,000,000. Taxpayer shall be liable to
pay income tax under graduated rates.
2. Taxpayer shall be allowed an income tax credit of quarterly payments initially made under
the 8% income tax option.
3. Taxpayer is likewise liable for business tax(es), in addition to income tax. A 3% Non-
VAT shall be imposed on the first P3,000,000. The excess of the threshold shall be
subject to VAT.
4. For this purpose, the taxpayer is required to update his registration from non-VAT to VAT
taxpayer. A 3% Non-VAT shall be imposed from the beginning of the year until taxpayer
is liable to VAT. VAT shall be imposed prospectively
5. Percentage tax due on the P3,000,000 shall be collected without penalty, if timely paid on
the due date immediately following the month the threshold was breached.

IV. Ms. CC is an accountant who is engaged in public practice. Her total gross receipts
amounted to ₱4,250,000 for taxable year 2018. Her recorded cost of service and
operating expenses were ₱2,150,000 and ₱1,000,000, respectively.

1. HOW MUCH is the income tax due on Ms. CC?

A. P 320,000 C. P 220,000 E. None of the above
B. 88,000 D. 68,000

2. What business tax is due on her?

A. Value-added tax C. Occupation tax E. None of the above
B. Percentage tax D. Professional tax

3. How much is the tax due if she availed of the Optional Standard Deduction?
A. P 666,000 C. P 320,000 E. None of the above
B. 220,000 D. None

Notes:
1. The individual taxpayer elected OSD in the computation of her income tax and the election
is irrevocable for the taxable year for which the return was made.

2. Taxpayer is not required to submit his financial statements with his tax return.

3. The gross receipts exceeded the VAT threshold of ₱3,000,000, thus, the taxpayer is subject
under the graduated income tax rates and liable for business tax, in addition to income tax.

RULE:
Taxpayers who are subject to Other Percentage Taxes (amusement tax, franchise tax, common
carrier’s tax, etc.) except those subject to 3% non-VAT, have no option to avail of the 8% income
tax rate.
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V. In 2019, Mama Sang owns a videoke bar with gross receipts of ₱2,500,000. Her cost of
sales and operating expenses were ₱1,000,000 and ₱600,000, respectively, and with non-
operating income of ₱100,000.
1. How much is the income tax due on Mama Sang?
A. P 180,000 C. P 450,000 E. None of the above
B. 190,000 D. None

2. How about the business tax due?

A. P 120,000 C. P 450,000 E. None of the above
B. 108,000 D. 468,000

Notes:
1. The taxpayer has no option to avail of the
8% income tax rate on his income from business since his business income is subject to Other
Percentage Tax under Section 125 of the Tax Code.
2. Aside from income tax, taxpayer is liable
to pay the prescribed business tax, which in this case is percentage tax of 18% on the gross
receipts as prescribed under Sec. 125 of the Tax Code.

VI. In 2018, Dean Maestro, professor of accounting in one university, earned annual
compensation of ₱900,000, inclusive of 13th month and other benefits in the amount of
₱120,000 but net of mandatory contributions to SSS, Philhealth and Pag-Ibig. Aside from
employment income, he practices his profession as a CPA with gross receipts of
₱2,200,000. His cost of services and other operating expenses amounted to ₱600,000 and
250,000, respectively, and with non-operating income of ₱100,000.
1. Total income tax due if he opted to be taxed at 8%.
A. P 248,000 C. P 317,000 E. None of the above
B. 228,000 D. 240,800

Note: The amount of ₱250,000 allowed as deduction under the law for taxpayers earning
solely from self-employment/practice of profession, is not applicable for mixed income
earner under the 8% income tax rate option.

2. Total income tax due if he opted to be taxed at the graduated

rates.
A. P 573,200 C. P 563,600 E. None of the above
B. 317,000 D. 493,200

Notes:
1. The taxable income from both compensation and business shall be combined for
purposes of computing the income tax due if the taxpayer chose to be subject under the
graduated income tax rates.
2. In addition to the income tax, he is likewise liable to pay percentage tax of ₱66,000,
which is 3% of ₱2,200,000.

3. Business tax on the profession.

A. P 66,000 C. P 40,500 E. None of the above
B. 69,000 D. 43,500
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4. Based on the information above, which option is preferable,
graduated rates or 8%?
A. 8% option because the tax payable is P383,000.
B. 8% option because the tax payable is P317,000.
C. Graduated tax rates because the total tax payable is lower.
D. Graduated tax rates because the business tax payable is p 66,000 only.
E. None of the above

VII. In 2018. Mr. Boquiren, is earning an annual compensation of ₱ 400,000, inclusive of 13th
month pay and other benefits in the amount of ₱120,000. Aside from employment
income, he owns a fruit and vegetable farm with gross sales of ₱3,500,000. His cost of
sales and operating expenses are ₱1,000,000 and ₱600,000, respectively, and with non-
operating income of ₱100,000.
The total of income tax and business tax due is
A. P 589,200 C. P 357,000 E. None of the above
B. 312,800 D. 829,200

Note: The taxpayer has no option to avail of the 8% income tax rate on his income from business
since his gross sales exceeds the VAT threshold. However, he is still not subject to business
tax since the nature of his business transactions is VAT exempt.

VIII. EE operates a sari-sari store while she is engaged in tax practice. In 2018, her gross
sales amounted to ₱1,800,000, in addition to her gross receipts from tax practice of
₱400,000. Her recorded cost of goods sold and operating expenses were ₱1,325,000 and
P320,000, respectively.

COMPUTE for the income tax due on EE if –

1. She availed of Optional Standard Deduction.

A. P 156,000 C. P 176,000 E. None of the above
B. 286,000 D. 98,400

Notes:
a. The taxpayer elected OSD in the computation of her taxable income. Thus, the graduated
income tax rate shall be applied.
b. The election of OSD is irrevocable for the taxable year for which the return is made.
c. Taxpayer is not required to submit his financial statements with her tax return.
d. Taxpayer is liable for business tax, in addition to income tax.

2. If she signifies her intention to be taxed at 8% income tax rate in her 1st Quarter
return
A. P 156,000 C. P 176,000 E. None of the above
B. 286,000 D. 98,400

Notes:
a. The gross sales and receipts did not exceed the VAT threshold of ₱3,000,000.
b. Taxpayer opted to be taxed at 8% income tax rate.
c. Taxpayer is not liable for percentage tax (3% Non-VAT).

EPISODE 7 – INCOME TAX (PARTNERSHIP / CORPORATION)

RULE:
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GPP is not subject to income tax. However, the partners shall be liable to pay income tax
on their separate and individual capacities for their respective distributive share in the net
income of the GPP.

The GPP is not a taxable entity for income tax purposes since it is only acting as a “pass-
through” entity where its income is ultimately taxed to the partners comprising it.
“For purposes of computing the distributive share of the partners, the net income of the GPP
shall be computed in the same manner as a corporation.” As such, a GPP may claim either the
itemized deductions or in lieu thereof, it can opt to avail of the OSD allowed to corporations in
claiming the deductions in an amount not exceeding forty percent (40%) of its gross income.
In computing taxable income, the following may be allowed as deductions:
a. Optional Standard Deduction; OR
b. Itemized expenses which are ordinary and necessary, incurred or paid for the practice of
profession.
The net income determined by either claiming the itemized deduction or OSD from the
GPP’s gross income is the distributable net income from which the share of each partner is to be
determined. Each partner shall report the net income as taxable income, actually or
constructively received, in the net income of the partnership. The partners comprising the GPP
can no longer claim further deduction from their distributive share in the net income of the GPP.

If the partner also derives other income from trade, business or practice of profession apart
and distinct from his share in the net income of the GPP, the deduction that he can claim from
his other income would either be OSD or itemized deductions.

I. Max, Jess and Company, a partnership of civil engineers, had a gross income of P220,000
and expenses of P85,000 during the year:
Max Jess
Share in profit and loss ratio 75% 25%
Income from other business P 125,000 P 325,000
Expenses 80,000 190,000
Amount withdrawn from partnership 30,000 12,500
Filing status Married Unmarried
Dependent children None 2
1. The income tax payable by the partnership is –

A. P 72,600 C. P 44,550 E. None of the above

B. None D. 45,900

2. The taxable income of Max and Jess is –

A. P 69,250 and P 0, respectively
B. 114,250 and 127,750, respectively
C. 101,250 and 33,750, respectively
D. 96,250 and 68,750, respectively
E. None of the above

II. Super B Corporation which started with its operations in 2000 has the following records in
2019:
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
Gross income P 500,000 P850,000 P800,000 P770,000
Expenses 400,000 770,000 640,000 575,000
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Dividend-domestic company 15,000 15,000 20,000 20,000
Interest-peso bank deposit 3,000 5,000 3,750 2,250
Income tax withheld 5,000 7,000 8,000 6,750
Rent income, gross of 5% WT 36,000 36,000 48,000 48,000
The company had an excess payment of P12,500 in 2018 from which it had decided to
claim tax credit on the excess.
1. The income tax payable at the end of first quarter is –
A. P 40,800 C. P 28,300 E. None of the above
B. 36,720 D. 21,500

2. The income tax payable at the end of the second quarter is

A. P 26,000 C. P 31,800 E. None of the above
B. 28,320 D. 75,600

3. The income tax payable at the end of the third quarter is –

A. P 52,000 C. P 12,640 E. None of the above
B. 62,400 D. None

4. The income tax payable/refund at the end of the year is –

A. P 25,090 C. P 75,900 E. None of the above
B. 63,750 D. 68,610

III. Meldy Corporation had the following items of income and expenses during the year:
Gross receipts P 1,000,000
Cost of services 450,000
Dividends from a domestic company 35,000
General and administrative expenses 120,000

The income tax due on Meldy Corporation is –

A. P 20,000 C. P 9,000 E. None of the above
B. 11,000 D. 600

EPISODE 8 – FRINGE BENEFITS TAX

I. In 2018, the Company gave fringe benefit to its employees. The amount of benefit received
by employee France is P32,500. The total amounts given to the rank-and file employees
amounted to P40,000.
1. How much is the fringe benefit tax if France is a supervisory employee?
A. P 25,375 C. P 39,039 E. None of the above
B. 17,500 D. 11,375

2. How much is the deductible expense on the company?

A. P 72,500 C. P 90,000 E. None of the above
B. 50,000 D. 111,539

3. How much is the fringe benefit tax if France is a rank-and-file employee?

A. P 17,500 C. P 25,375 E. None of the above
B. 72,500 D. None

II. After working for 30 years. Rita retired from employment in December 2018 as an
accountant of Nail Corporation. As a consequence of her retirement due to old age, she
received the following from his employer:
Monthly salary (until December 15) P 30,000
13th month pay 30,000
Cash gift 5,000
Retirement pay 750,000
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Terminal leave pay 120,000
Longevity pay 30,000
Rice allowance per month 2,500
Clothing allowance 8,000
Loyalty award 20,000
How much is the taxable compensation income of Rita in 2018?
A. P 348,000 C. P 440,500 E. None of the above
B. 438,000 D. 363,000

EPISODE 9 – REAL PROPERTY TAX

I. A vacant commercial land located in a city measuring 2,000 square meters has a market
value of P1,100 in the tax declaration and a zonal value of P800. The city has maximized
the assessment level and the tax rate to that allowed by law.
COMPUTE for the following:
1. The total real property tax payable per year.
A. P 33,000 C. P 13,200 E. None of the above
B. 22,000 D. 8,800

2. The maximum amount of discount that will be allowed as deduction from his tax due if
the taxpayer paid in advance.
A. P 4,400 C. P 4,400 E. None of the above
B. 2,200 D. 6,600

3. The total amount payable if the taxpayer pays his real property tax after twelve (12)
months of delinquency.
A. P 27,280 C. P 26,400 E. None of the above
B. 40,920 D. 36,960

II. A tax declaration contains the following data:

Actual use of property - Residential
Market value Assessment level
Land P 500,000 15%
Improvement 800,000 20%

COMPUTE for the following –

1. The taxable value on the land and improvement.
2. A. P 260,000 C. P 235,000 E. None of the above
B. 4,700 D. 1,300,000

2. The basic real property tax on the land and improvement if the tax rate is 1%.
A. P 2,350 C. P 3,525 E. None of the above
B. 4,700 D. None

3. The total real property tax assessable on the properties.

A. P 2,350 C. P 3,525 E. None of the above
B. 4,700 D. None

END
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