5.

If Jernell will avail the retirement benefits under the

NAME : Company’s retirement plan effective January 1, 2022? The
DATE : possible tax exposure if Nicanor will receive P1,000,000
is?
TAXATION A. P0 C. P180,000
B. P175,000 D. P190,000
For items 1 and 2:
Bonbon, an amateur boxer, represented the Philippine team 6. With regard to deduction for premiums on hospitalization
in Beijing Olympics. He received the following income: and health insurance, which of the following statements is
P200,000 cash prize from the Olympic association; P500,000 wrong?
cash award donated by Rubberworld Philippines; P400,000 A. Allowed as deduction even if income is from
talent fee as model of Nike Shoes and P1,000,000, compensation only
professional fee as an actor. B. Allowed as deduction even if income is from
business or practice of Profession
On the other, Pacu, a professional boxer won in a non-titled C. Allowed as deduction even if mixed income
bout between him and El Terrible held at Mandalya Bay, Las D. Allowed as deduction only if the taxpayer is taking
Vegas, Nevada. Pacu received the following: P25,000,000 as itemized deductions from gross income.
cash prize in the fight; P30,000,000 from pay per view;
P12,000,000 talent fee as commercial of San Miguel Beer. 7. All of the following statements are correct, except one.
Which is the exception?
1. How much is gross income inclusion to Bonbon? A. The source of interest income is the country where
A. P2,100,000 C. P42,000,000 the debtor resides
B. P1,400,000 D. P12,000,000 B. The source of dividend income is the country where
the corporation was incorporated
2. How much is gross income inclusion to Pacu? C. Rents are considered derived from the country
A. P42,000,000 C. P67,000,000 where the property is located
B. P1,400,000 D. P12,000,000 D. Income from personal services is considered derived
from the country where the services were rendered.
For items 3 to 5:
Jernell, a forty-four-year-old loveless, is employed by ABC 8. Statement 1: A gain from sale of shares of a domestic
Corp. for the past thirty years. Below are the compensation corporation shall be considered derived from the
and other benefits he received from the company the year Philippines regardless of where the shares were sold.
2021. Statement 2: A gain from sale of shares of a foreign
13th Month Pay 100,000 corporation shall be considered derived from the country
De Minimis benefits 30,000 where the corporation was created or organized.
Statutory contributions (SSS, PHIC, etc) 20,000 A. Both statements are true
Basic Salary per month 100,000 B. Statement 1 is true while Statement 2 is false
Monthly Representation Allowance 50,000 C. Statement 1 is false while statement 2 is true
Monthly Transportation Allowance 50,000 D. Both statements are false
Cost of Living Allowance 50,000
Fixed Housing Allowance 50,000 9. Which is not a creditable withholding income tax?
Commission 100,000 A. Expanded withholding income tax
Profit-Sharing 100,000 B. Withholding income tax on passive income
Hazard Pay 50,000 C. Withholding income tax at source
Overtime Pay 100,000 D. Withholding income tax on compensation income

In 2022, ABC Corp. suffered serious business reverses. The 10. As a rule, this is not part of taxable income
Company, to temper losses, offered retirement or separation A. Profit sharing C. Overtime pay
benefits to employees. B. Hazard pay D. 13th month pay

3. How much is the total exclusions from gross income? 11. Which of the following is taxable income?
A. P150,000 C. P110,000 A. Prizes and awards as an awardee of Ramon
B. P140,000 D. P90,000 Magsaysay Award Foundation
B. Damages awarded as a consequence of a libel and
4. How much is the total taxable compensation? slander suits
A. P1,750,000 C. P1,770,000 C. Interest on Philippine lotto winnings
B. P1,760,000 D. P1,780,000 D. Amounts received as returns of premiums

12. One of the following is included in the gross income
A. Gifts, bequests and devices
B. Amounts received as rewards for giving information
instrumental in the discovery of violation of the Tax
Code and seizure of smuggled goods
C. Proceeds from life insurance
D. Separation pay received by an employee due to a
cause beyond his control
13. As a rule, the following are taxable income, except
A. Cash dividend C. Property dividend
B. Scrip dividend D. Stock dividend
14. The following items are exclusions from gross income,
except
A. Labor union dues
B. SSS/GSIS premiums contributions
C. IOU’s
D. Pag-ibig premiums contributions
15. Which of the following is part of gross income?
A. PCSO & Phil Lotto winnings
B. Bank interest on long-term deposit
C. Proceeds of life insurance
D. Raffle prize not exceeding P10,000
16. If refunded, this is taxable
A. Estate tax C. Special assessment
B. Donor’s tax D. Fringe benefit tax
17. Income tax payments to a foreign country, in the case of a
resident citizen may be claimed as
A. Tax credit and deduction from gross income
B. Tax credit only
C. Tax credit or deduction from gross income
D. Deduction from gross income only
18. Dividends paid by a domestic corporation maybe taxable
but subject to final tax, except
A. if received by a resident citizen
B. if received by a resident alien
C. if received by a non-resident corporation
D. if received by another domestic corporation
19. X works as a secretary in an advertising firm in Manila.
During the year, she received P10,000 a month as salary
or a total of P120,000. In addition she also received 13 th
month pay, Christmas bonus, productivity bonus, midyear
bonus and 14thmonth pay amounting to P40,000. The total
deductions for her SSS premiums, Medicare, Pag-ibig, and
Union dues contributions amounted to P5,000. X’s taxable
income, if single is
A. P90,000 C. P105,000
B. P 75,000 D. P100,000
20. Which of the following statements is not correct?
A. Proceeds of life insurance policies paid to beneficiaries
upon the death of the insured are excluded from gross
income regardless of whether the proceeds are
received as a single sum or in installments.
B. In case of transfer for a valuable consideration by
assignment or otherwise of a life insurance,
endowment or annuity contract or any interest
therein, only the actual value of such consideration
and the amount of the premium and the sums
subsequently paid by the transferee are exempt from
income tax.
C. Marriage fees, baptismal offerings, sums paid for
saying masses for the dead and other contributions
received by a clergyman, evangelist or religious worker
for services rendered is taxable income.
D. Monetization of leave credits of employees who were
unable to go on leave due to exigencies of the service
constitute taxable income.
21. - PCSO and Phil lotto winnings are excluded from gross
income because they are subject to final tax.
- Prizes, awards and winnings are excluded from gross
income because they are subject to final tax.
A. Both are true C. Both are False
B. True; False D. False; True
22. Which statements is correct?
A. Incomes from illegal activities are taxable.
B. Tax refunds constitute taxable income to the
taxpayer.
C. Recovery of bad debts previously written off is part
of taxable income
D. As a rule, contest awards and prizes are subject to
20% final tax if they amount to P10,00 or more,
otherwise they will be exempt from income tax.
23. Gain realized from the sale or exchange or retirement of
bonds, debentures or other certificate of indebtedness is
excluded from gross income if with a maturity of
A. 5 years or more C. More than 8 years
B. More than 7 years D. More than 10 years
24. Gross benefits received by officials and employees of
public and private entities as 13th month pay and other
benefits such as productivity bonus, service incentive pay
and Christmas bonus shall be excluded from taxable
income
A. P20,000 C. P40,000
B. P30,000 D. P50,000
25. Exclusions from gross income, except:
A. Interest on the price of the land covered by the
Presidential Decree on land reform.
B. Interest payments on proceeds of life insurance held
by the insurer
C. GSIS/SSS, Philhealth and Pag-ibig contributions and
Union dues of individuals
D. Gains realized by an investor upon redemption of
shares of stock in a mutual fund company.
---Nothing Follows---