FRIA MAE A.

ABELLANO
BSMAC 4
STM MIDTERM EXAM

1. Pedro is a successful proprietor engaged in the business of Restaurant. He has several real
properties classified as follows: Idle land he purchased with the intention to build his dream house
with an area of 2 hectares: valued per Tax Declaration including improvements composed of fruit
trees. P10 million. The zonal value is P600/square meters. Mr. Pogi is willing to buy the whole
land at P8 million. Questions: If Pedro sold the above properties at the offered price, you are asked
by Mr. Pedro what kind of taxes he must pay and how much if sold based on the offer. -20%

ANSWER: Pedro will pay capital gains tax on the sale of real property. The tax to be paid is
Php600,000.00 based on the value per tax declaration because it is higher than the sold value.
Computation: Php10,000,000 x 6% = Php600,000

2. Pedro is a successful proprietor engaged in the business of Restaurant. He has several real
properties classified as follows: A land being leased for commercial purposes with an area of 4
hectares. The Tax declaration Value is P40 million. The zonal value is P1,500/square meter. The
Lessee is willing to buy it at 50 million. Questions: If Pedro sold the above properties at the offered
price, you are asked by Mr. Pedro what kind of taxes he must pay and how much if sold based on
the offer. 20%

ANSWER: Pedro will pay capital gains tax. The tax to be paid is Php300,000.00 based on the
selling price.
Computation: Php50,000,000 x 6% = Php300,000

3. Pedro is a successful proprietor engaged in the business of Restaurant. He has several real
properties classified as follows: Idle land intended to be sed to build his dream house and a big
tract of land being leased for commercial purposes. Mr. Pedro has intended to sell all those
properties. To avoid penalty and ensure smooth transfer of the property, how will you advise Mr.
Pedro on the strategic tax management best practices. -20%
 ANSWER: When sale of real properties is done, they will need to close the transaction by means
of a Deed of Absolute Sale and they also need to secure a certificate of authorizing registration
(CAR). Mr. Pedro, as the seller, need to pay capital gains tax and documentary stamp tax before
getting CAR. The capital gains tax must be paid within 30 days to avoid any penalty. As for the
Documentary stamp, it must be filed within 5 days after the taxable document is made. He must
pay all transfer taxes at the LGU. If these steps are followed, them a smooth transfer will be done.

4. Mr. Kulas, and old widower have several properties located in Legazpi City and he intends to
donate the following properties to the listed heirs. A. Residential Land to his son effective
immediately. Per Tax declaration -P800,000. Zonal value P1 million. The land is mortgaged to
the bank for P150,000.00 B. To his niece a land with tax declaration value of P700,000 and zonal
value of P650,000 effective upon his death. Mr. Kulas sought your advice as a professional
Strategic Tax Management Consultant on: A.-20% (1) what kind of tax/es he must pay? (2) how
much? and (3) when is/are the tax/es due for payment.? B. -20% (1) what kind of tax/es he must
pay? (2) how much? and (3) when is/are the tax/es due for payment?

ANSWER:
1. Mr. Kulas must pay the donors tax for the donation of properties. The rate of tax is 6% based
on the total donations more than 250,000 pesos.

2. Donors Tax
To son Php1,000,000.00
Less: Exempt Amount 250,000.00
Taxable Gift 750,000.00
x 6%
Donors Tax 45,000.00

If the mortgage is assumed by the done, the computation would be:

Donors Tax
To son Php1,000,000.00
Less: Exempt Amount 250,000.00
Taxable Gift 750,000.00
Allowable deductions 150,000.00
 Taxable Gift 600,000.00
x 6%
Donors Tax 36,000.00

To niece Php650,000.00
Less: Exempt Amount 250,000.00
Taxable Gift 400,000.00
x 6%
Donors Tax 24,000.00

3. The donors tax return must be filed within 30 days after the date of donation. In the case of
the son, it should be immediately and on the case of the niece after his death, the donors tax
must be paid at the time the return is filed.