Name: Rogelio O. Bernaldez Jr. Instructor: Lorna C.

Caballero

BSOA-4C October 16, 2021

CHAPTER 2: INCOME TAX FOR INDIVIDUALS

TAXATION

Assessment: Compute the following.

1. Peter Dela Vega is an employee of Central State University. His taxable income for the
year 2020 was P320, 000. Determine the income tax due of Peter Dela Vega for year
2020.
Answer:
Ᵽ320, 000
- Ᵽ 250, 000
Ᵽ70, 000

First Ᵽ250, 000 0

In excess of Ᵽ250, 000; (Ᵽ70, 000 x 20%) Ᵽ14, 000
Income Tax Due Ᵽ 14, 000

2. Mr. James Bond an individual taxpayer provided the following information for 2020:

Gross business income P10, 000, 000

Business expenses 3, 000,000

Required: Determine the following:

a.) Taxable income
Answer:
Gross business income Ᵽ 10, 000, 000
Business expenses (3, 000, 000)
Taxable Income Ᵽ 7,000, 000
b.) Taxable due for 2020
Answers:
Over Ᵽ2, 000, 000 but not over Ᵽ8, 000, 000 Income (Ᵽ490, 000 + 32% in excess of Ᵽ2, 000, 000)

First Ᵽ2, 000, 000 Ᵽ 490, 000

In excess of Ᵽ2, 000 000 (Ᵽ5, 000, 000 x 32%) 1, 600, 000
Income Tax Due/ Taxable Due for 2020 Ᵽ2, 090, 000
 3. Mr. James Reid provided the following information for 2020:

Gross business income, Philippines P10, 000, 000

Gross business income, New York 15, 000, 000
Gross business income, Dubai 8, 000, 000
Business expenses, Philippines 5, 000, 000
Business expenses, New York 7, 000, 000
Business expenses, Dubai 3, 000, 000

Required: Determine the taxable income of Mr. James Reid as:

a.) Resident citizen

Answer:
Gross business income, Philippines Ᵽ10, 000, 000
Gross business income, New York 15, 000, 000
Gross business income, Dubai 8, 000, 000
Business expenses, Philippines (5, 000, 000)
Business expenses, New York (7, 000, 000)
Business expenses, Dubai (3, 000, 000)
Taxable Income Ᵽ 18, 000, 000

b.) Non-resident citizen

Answer:
Gross business income, Philippines Ᵽ 10, 000, 000
Business expenses, Philippines (5, 000, 000)
Taxable Income Ᵽ5, 000, 000
c.) Resident alien
Answer:
Gross business income, Philippines Ᵽ 10, 000, 000
Business expenses, Philippines (5, 000, 000)
Taxable Income Ᵽ5, 000, 000

d.) Non-resident alien engaged in trade or business

Answer:
Gross business income, Philippines Ᵽ 10, 000, 000
Business expenses, Philippines (5, 000, 000)
Taxable Income Ᵽ5, 000, 000