Statement 1: For purposes of computing the distributive share of the partners of a general professional

partnership, the net income of the partnership shall be computed in the same manner as a corporation.
Statement 2: Partners of a taxable partnership are considered as shareholders and profits distributed to
them by the partnership are considered as dividends.

a. Statements 1 & 2 are false

b. Statement 1 is true but statement 2 is false

c. Statement 1 is false but statement 2 is true

d. Statements 1 and 2 are true

• Answer: D

Statement 1: The share of the partner in the gross income of the GPP is added to his own gross income.

Statement 2: The share of the partner in the net income of a GPP is also considered passive income.

a. Statements 1 & 2 are false

b. Statement 1 is true but statement 2 is false

c. Statement 1. is false but statement 2 is true

d. Statements 1 and 2 are true

• Answer: B

• Share in income of a GPP is treated as ordinary income subject to basic tax. Share in income of a GP is

treated as a dividend income, a passive money subject to a final withholding tax.

Statement 1: Co-ownership and partnership are similar as to taxability, Statement 2: Corporations and
ordinary partnerships are similar as to taxability.

a. Statements 1 & 2 are false

b. Statement 1 is true but statement 2 is false

c. Statement 1 is false but statement 2 is true

d. Statements 1 and 2 are true

• Answer: C

Statement 1 is false. Co-ownership is non-taxable while a partnership is generally taxable as

corporation. Statement 2 is correct. Ordinary partnership or general partnership, for income taxation
purposes, is taxable as a corporation. Statement 1: Under RA10963, an individual partner of a GPP
applying optional standard deduction is not allowed for any deduction on his distributive shares.
Statement 2: Under RA10963, an individual partner of a GPP may avail of 8% tax on his distributive
share, in lieu of graduated tax rate.

a. Only statement 1 is correct

b. Only statement 2 is correct

c. Both statements are correct

d. Both statements are incorrect

• Answer: A

Statement 1: GPP's may claim the 40% OSD in the determination of distributable income. Statement 2: A
GPP is subject to income tax.

a. Only statement 1 is correct

b. Only statement 2 is correct

c. Both statements are correct

d. Both statements are incorrect

• Answer: A