PAHITAMOS, JUDE ANGELO N.

INCOME TAXATION
20210111367 5/3/2022

Exercise 9 – 1: True or False Questions

1. The Philippine Airlines is classified as an international carrier because it travels from

Philippines to other countries in Asia and America. FALSE
2. The bank deposit under the expanded foreign currency deposit system is protected by the
Law on Secrecy of Bank of Deposits. TRUE
3. A non-resident foreign corporation which sells not listed and traded shares of stock is subject
also to the same tax rate and tax base as a domestic corporation. TRUE
4. The improperly accumulated earnings of tax is not applicable anymore on corporations.
TRUE
5. A resident foreign corporation is not covered by the application of the MCIT. FALSE
6. A resident foreign corporation may also avail of the 40% optional standard deduction. TRUE
7. Interest on peso bank deposit accounts are not included in the gross income in computing the
40% optional standard deduction. TRUE
8. A proprietary educational institution is subject to an income tax rate of 1% while a non-stock
non-profit school is exempt from income tax. TRUE
9. A private educational institution may deduct as expense the cost of constructing the school-
building in the year of its completion instead of capitalizing it. TRUE
10. The Philippine Amusement and Gaming Corporation (PAGCOR) is subject to income tax.
TRUE
11. In income taxation, a business partnership is taxable as a corporation. TRUE
12. The applicable tax rate on nonresident foreign corporations is generally the same with the tax
rate on domestic corporations. TRUE
13. A corporation is generally subject to an income tax rate of 25% of taxable income but if it
suffers losses, it may instead be subject to a rate of 1% of gross income. TRUE
14. A corporation which has been registered with the Bureau of Internal Revenue in 2017 shall
be covered by the application of minimum corporate income tax (MCIT) effective January
2022. FALSE
15. Proprietary hospitals are exempt from the coverage of the minimum corporate income tax.
TRUE
Exercise 10 – 1: True or False Questions

1. The income of a business partnership is subject to income tax, while the income of a general
professional partnership is not taxable. TRUE
2. A business partnership which is not registered with the Securities and Exchange Commission
is not subject to income tax” FALSE
3. The share of partner in the distributable net income of a taxable partnership is not returnable
to the partner in his income tax return. TRUE
4. The share of a partner in the distributable net income of a general professional partnership is
not returnable to the partner in his income tax return. FALSE
5. The share of a partner in the net income of a general professional partnership is taxable to the
partner even if not distributed to him. TRUE
6. The share of a partner in the distributable net income of a taxable partnership is taxable to the
partner whether distributed or otherwise. TRUE
7. A business partnership is subject to the rule on minimum corporate income tax. TRUE
8. A taxable partnership is subject to the improperly accumulated earnings tax. FALSE
9. The partners of a general professional partnership are liable for income tax only in their
separate or individual capacities. TRUE
10. If a general professional partnership avails of itemized deductions in computing its net
income, the partners may avail of optional standard deduction. FALSE
11. If the general professional partnership avails of optional standard deduction in computing its
net income, the partners can only avail of optional standard deduction in computing his
taxable income. FALSE
12. A business partnership may avail of optional standard deductions in computing its taxable
income. TRUE
13. The distributable net income of a general professional partnership means taxable income less
the income tax thereon. FALSE
14. A co-ownership including the shares of the co-owners in its net income are not subject to
income tax. FALSE
15. The mere sharing of gross returns establishes a partnership if the persons sharing them have a
joint interest in a partnership from which the returns are divided. FALSE