JHURZEL ANNE S.

AGUILAR BSBA MM-2105

CHAPTER 4

P4.1 (Estate)

Pedro died two (2) years ago leaving an undivided property deriving income from rentals. His heirs
were Louie and Floyd. The property is under administration through the decedent’s executor. The
following data were provided during the taxable year.

Rental income of the estate (gross of 5% tax) P800,000

Deductible operating expenses – estate 420,000

Personal income/Expenses of the heirs:

LOUIE FLOYD
Gross business income P325,000 P380,000
Deductible business expenses 117,000 105,000
Dividend from domestic 25,000 30,000
corporation
Dividend from foreign 12,000 8,250
corporation
Prize, supermarket raffle 15,000 7,500
Royalty, books 10,000 18,000

Additional information:

Louie is married with 2 dependent children while Floyd is single without dependent children.

Required: Determine the Following:

1. Income tax payable of the estate = P26,000

2. Income tax of Louie = P 0
3. Income tax payable of Floyd= P8,150

LOUIE FLOYD ESTATE

Gross Income (gross of P325,000 380,000 800,000
5% tax)
Deductible expenses (117,000) (105,000) (420,000)
Dividend from foreign 12,000 8,250
corp.
Prize, supermarket 7,500

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 raffle
TAXABLE INCOME 220,000 290,750 380,000
TAX DUE/PAYABLE 0 8,150 26,000
(TRAIN LAW)

P4.2 (Estate)

Pedro died two (2) years ago leaving an undivided property deriving income from rentals. His heirs were
Louie and Floyd. The property is under administration through the decedent’s executor. The following
data were provided during the taxable year:

Rental income of the estate P1,000,000

Deductible operating expenses (estate) 500,000
Income distributed to Louie 50,000
Income distributed to Floyd 50,000
Dividend income from domestic corporation 100,000
Interest income from US deposits 200,000
Interest income from peso deposits 100,000

Personal income/Expenses of the heirs:

LOUIE FLOYD
Gross income P325,000 P380,000
Deductible expenses 117,000 105,000
Dividend from domestic 25,000 30,000
corporation
Dividend from domestic 12,000 8,250
corporation
Prize, supermarket raffle 15,000 7,500
Royalty, books 10,000 18,000

Additional information:

Louie is married with 2 dependent children while Floyd is single without dependent children.

Required: determine the following:

1. Income tax payable of the estate= P30,000

2. Income tax payable of Louie= P4,000
3. Income tax payable of Floyd= P18,150

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 INCOME TAX PAYABLE OF THE ESTATE:

Rental income of the estate P1,000,000

Deductible operating expenses (estate) (500,000)
Income distributed to Louie (50,000)
Income distributed to Floyd (50,000)
Taxable Income 400,000
Taxable Due/Payable P30,000

INCOME TAX PAYABLE OF LOUIE & FLOYD

LOUIE FLOYD
Gross Income 325,00 380,000
Deductible expenses (117,000) (105,000)
Dividend from foreign 12,000 8,250
corporation
Prize, supermarket raffle - 7,500
Amount received from the 50,000 50,000
income of the estate
Taxable income 270,000 340,750
Income tax Payable 4,000 18,150

P4.3 (Trust)

Mr. Masigasig created a trust in favor of Pedro. A large sum of money was entrusted to BDO
(Trustee), the income of which is accumulated in favor of Pedro. The following data were provided:

Gross income of the trust P3,000,000

Deductible business expenses of the trust 1,800,000
Income distributed o Pedro during the year 200,000
Dividend income from domestic corporation 100,000
Dividend income from resident foreign 100,000
corporation
Interest income from US deposits 200,000
Interest income from peso deposits 100,000

Personal income and expenses of Pedro

Compensation income 800,000

Rental income (net) 475,000
Rental expenses 80,000
Royalty income, books 300,000

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 Other royalty income 120,000
Dividend from domestic corporation 30,000
Dividend from foreign corporation 8,250
Prize, S&R raffle 15,000
Lotto winnings 10,000,000
Tax payments (Quarter 1-3) 120,000

Required: determine the following:

1. Income tax payable of the trust = P220,000

2. Income tax payable of Pedro= P113,475

INCOME TAX PAYABLE OF THE TRUST:

Gross income of the trust P3,000,000

Deductible business expenses of the trust (1,800,000)
Income distributed to Pedro during the year (800,000)
Dividend income from resident foreign corp. 100,000
Net Taxable Income 1,100,000
Income Tax Payable P220,000

INCOME TAX PAYABLE OF PEDRO:

Compensation income of Pedro 800,000

Rental Income (gross) 500,000
Rental expenses (80,000)
Dividend from foreign corp. 8,250
Taxable Income P1,228,250
Tax Due P258,475
Tax Payments (Quarter 1-3) (120,000)
CWTx on rent (75,000)
Income Tax Payable of Pedro P113,475

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