For items No. 1 and No.

2 (for 5 points each, provide your computation)

Jin (the WWH) of Super Tuna Corporation, resident citizen with 4 dependent children,
has the following data (in ₱) for the current taxable year:

Gross income from business, Philippines ₱ 2,350,000

Gross income from business, Korea 3,200,000
Business expenses, Philippines 1,000,000
Business expenses, Korea 750,000
Interest income from ₱ deposit in BPI (Manila) 150,000
Interest income from $ bank deposit in BPI (Manila) 25,000
Interest income from $ deposit in BankAmerica (New York) 55,000
Dividend income from Jollibee Foods Corporation 65,000
Dividend income from HYBE Corporation in Korea 83,000
PCSO Lotto winnings 1,500,000
Net winnings in New York Lottery 1,000,000
Prize won in ABS-CBN contest 4,500
Prize won in GMA 7 contest 30,000
Prize won in raffle contest in Korea 12,000
Gain on sale of domestic shares not traded in the stock exchange 2,870,000
Price = ₱3,000,000
Cost = ₱ 130,000
Gain on sale of domestic shares traded in the stock exchange 180,000
Price = ₱230,000
Cost = ₱ 50,000
Capital gain on sale of idle land in the Philippines 3,250,000
Price = ₱4.0 M Zonal value = ₱5.0 M
Cost = ₱750,000
Capital gain on sale of condominium unit in Korea 119,000
Price = ₱325,000
Cost = ₱206,000

1. What is the net taxable income of this taxpayer in his ITR of the current taxable year?
a) ₱9,073,500 c) ₱5,073,500
b) ₱6,073,500 d) None of the above.

2. What are his total final taxes withheld in the current taxable year?
a) ₱1,078,130 c) ₱1,051,130
b) ₱783,459 d) None of the above.
3. Anabelle Gilas, a 25-year old Filipina model residing in Paco, Manila vacationed in
Vienna, Austria in 2019. While in Vienna, she was awarded a cash prize worth $1.0
Million for being voted by the Ministry of Tourism as the prettiest tourist in Vienna in
2019. She opened a bank account with Citibank (Vienna). Which among the following
shall be included in her income tax return?
a) Only the interest income from her bank account in Vienna.
b) Only the cash prize won in Vienna.
d) Both.
e) None.

4. Sabrina Castro, Filipino, resident of Makati, working as an accountant in SGV in

Makati, was granted a scholarship to study in Stanford University in the United States.
She left the Philippines on September 1, 2018, lived in Palo Alto, California, USA until
she graduated on May 15, 2020. She originally wanted to return to the Philippines after
graduation, but was immediately hired by KPMG in New York. She began working in
New York on May 16, 2020. For tax purposes, Sabrina in 2020 is classified as a:
a) Resident citizen
b) Non-resident citizen
c) Dual citizen
d) OFW
d) None of the above.

5. Which is subject to creditable withholding taxes?

a) Rent income
b) Dividends from domestic corporations
c) Winnings from PCSO
d) Interest income from long-term deposits by corporations

6. Andromeda, a non-resident alien not engaged, rendered professional services to

Philippine company, a domestic corporation. The total consultancy fees agreed were
P1,000,000. How much should Philippine company withhold?
a) P100,000 b) P200,000 c) P250,000 d) P 0

7. Interest income from foreign currency deposits made abroad by a resident citizen is
subject to
a. 20% final tax b. 15% final tax c. 7.5% final tax d. regular tax

8. Which of the following is not subject to 20% final tax?

a. Interest income on long-term deposit of domestic corporation
b. Interest income on foreign loans
c. Interest income from money market placements or trust funds
d. Informer’s reward
9. Which is subject to final tax?
a. Share of the distribute net income of a general professional partnership
b. Winnings not exceeding P10,000
c. Prizes not exceeding P10,000
d. Interest income from foreign bank deposits

10. Any royalty earned abroad by a non-resident corporation is

a. always subject to final tax. c. subject to either final tax or regular tax.
b. always subject to regular tax. d. not subject to Philippine income tax.

11. The winnings of a resident alien from abroad is

a. subject to regular tax. c. not subject to Philippine income tax.
b. subject to final tax. d. subject to either final or regular tax.

12. Royalty income of a domestic corporation from abroad is

a. subject to regular tax. c. subject to either final tax or regular tax.
b. subject to final tax. d. not subject to Philippine income tax.

13. Royalty income of a domestic corporation from the Philippines is

a. subject to regular tax. c. subject to either final tax or regular tax.
b. subject to final tax. d. not subject to Philippine income tax.

14. The tax informer’s reward may be granted to

a. Officials of the BIR
b. Close relatives of public government employees
c. Public officials or employees
d. Relatives of gov’t employees beyond 6th degree of consanguinity

15. A taxpayer had the following income:

Yield from deposit substitute P10,000

Interest income from bonds of a domestic corporation 23,000
Property dividend declared by a foreign corporation 40,000
Stock dividend declared by a domestic corporation 50,000
Compensation income, net of P10,000 withholding tax 80,000
Prize on “Search for Mr. Sexy Body” 15,000
Royalties from books 24,000
Interest income on personal loans granted to a friend 8,000
Salaries from a general professional partnership 30,000
Salaries from a business partnership 20,000

Compute the amount of income subject to final tax.

a. P89,000 b. P99,000 c. P49,000 d. P69,000
16. The taxpayer received the following passive income during the year:
Interest on Peso bank deposit P 90,000
Royalties 36,000
Dividends 63,000
Determine the total amount of income tax withheld.
b. P47,250 b. P37,800 c. P31,500 d. P38,500

17. The term “capital assets” includes

a. Stock in trade or other property included in the taxpayer’s inventory.
b. Real property not used in the trade or business of the taxpayer.
c. Real property primarily used for sale to customers in the ordinary course of trade
or business.
d. Property used in the trade or business of the taxpayer and subject to depreciation .

18. On July 1, 2019, Crislyn Riego sold shares of stock for P200,000. The shares which
were acquired for P140,000 acquire on June 1, 2017, have a par value of P150,000,
were held as investment, and were sold to a buyer who assumed the documentary
stamp tax under the following terms:

Downpayment, July 1, 2019 P 20,000

Installment due, October 10, 2019 30,000
Installment due, October 10, 2020 75,000
Installment due, October 10, 2021 75,000

How much was the documentary stamp tax due?

a. P 1,201.00 c. P 562.50
b. P 1,125.00 d. P 612.50

19. In relation to no. 18, How much was the capital gains tax due in 2019?
a. P 9,000.00 c. P2,250.00
b. P 8,831.25 d. P2,207.81

20. Shim Jaeyun, a non-resident alien disposed his stock investments in a domestic
corporation to Lee Heesung, a non-resident citizen, at a gain of P300,000. Which
statement is correct?
a. The sale is not subject to capital gains tax since the property involved is a
personal property is deemed located abroad.
b. The sale is not subject to capital gains tax as Juan dela Cruz, the buyer, is a non-
resident individual.
c. The sale is subject to capital gains tax even if the sale occurred outside the
Philippines.
d. None of these.
21. Hitman Bang is a security dealer. He had 10,000 ordinary stock of BigHit
Corporation, a domestic corporation, which he acquired at P100 per share. Bang sold
his stock investment to Park Jinyoung on April 30, 2018 at P115 per share, how much
is the capital gains tax payable on the transaction?
a. P5,000 c. P5,750
b. P10,000 d. P0

Use the following information for items 22-24

On January 1, 2020, JK invested P1,000,000 to RCBC Commercial Bank’s 5-year,
tax-free time deposit. The long-term deposit pays 15% annual interest every January
1. In need of cash, JK pre-terminated her investment on July 1, 2023.

22. How much is the final tax due and the proceeds of JK’s investment?
a. P9,000; P1,066,000 c. P18,750; P1,056,250
b. P63,000; P1,012,000 d. P30,000; P1,345,000

23. How much final tax is withheld in the interest income paid by the bank on January 1,
2021?
a. P0 b. P18,000 c. P30,000 d. P7,500

24. Assuming the same information in the problem above, except that the investment was
made by a domestic corporation, how much final tax is withheld in the year of pre-
termination and the proceeds to the corporation?
a. P15,000; P1,060,000 c. P18,750; P1,056,250
b. P45,000; P1,030,000 d. P30,000; P1,345,000

25. Mr. Taehyung, made the following dispositions directly to buyer:

Date Domestic securities Gain/(Loss)

2/4/18 Abacus ordinary shares P 150,000
5/8/18 PLDT bonds 150,000
7/15/18 Globe preferred shares (80,000)
9/20/18 Globe common shares 50,000
11/15/18 Metrobank ordinary shares 80,000
12/17/19 LPZ common shares 50,000

Compute the amount of capital gains due of Mr. Taehyung for the year 2018.
a. (P1,500) c. P 0
b. P15,000 d. P30,000
26. The following relates to capital gains and losses sustained in disposition of several
domestic stocks:

January 17, 2018 P 20,000 gain

July 14, 2018 40,000 loss
August 15, 2018 20,000 gain

The foregoing transactions results in

a. P1,500 tax refundable c. P4,500 tax refundable
b. P3,000 tax refundable d. P1,500 tax payable

Items 27-30:
Raff Escuela sold his principal residence for P5,000,000. His principal residence was
acquired at P2,000,000 and has a fair market value of P6,000,000 at the date of sale.
Within 18 months, Raff reconstructed his new principal residence for P4,500,000.

27. Compute the capital gains tax to be deposited in escrow.

a. P270,000 b. P300,000 c. P360,000 d. P0

28. The cost basis of the new residence is

a. P1,800,000 b. P1,500,000 c. P3,750,000 d. P4,500,000

29. The amount of capital gains tax to be released to Raff is

a. P240,000 b. P270,000 c. P300,000 d. P324,000

30. Compute the cost basis of the new residence if it was acquired for P5,200,000.
a. P2,000,000 b. P2,200,000 c. P1,733,333 d. P4,333,333