QUIZ

Income Taxation
Stephanie Gallarte

1.

Under section I, Art. III of the Philippine Constitution, a Filipino Citizen is

one who is/has:

I. Born (by birth) with father and/or mother as filipino citizens.

II. Born before January 17, 1973 of Filipino mother who elects Philippine
citizenship upon reaching the age of majority; or
III. Acquired Philippine citizenship after birth (naturalized) in accordance
with Philippine laws.
answer choices

I and II only
I and III only
II and III only
I, II and III

2.
Use the following data for the next 5 questions: A taxpayer, married
without qualified dependent child, had the following data for taxable year
2020:
Gross income, Philippines P800,000
Gross income, USA P600,000
Expenses, Philippines P400,000
Expenses, USA P300,000

If the taxpayer is a resident citizen, married, his taxable income is P ___,___

answer choices

P400,000
P350,000
P700,000
P650,000
3. Multiple-choice

A taxpayer, married without qualified dependent child, had the following

data for taxable year 2020:
Gross income, Philippines P800,000
Gross income, USA P600,000
Expenses, Philippines P400,000
Expenses, USA P300,000

If the taxpayer is a non-resident citizen, married, his taxable income is P

___,___
answer choices

P400,000
P350,000
P700,000
P650,000

4. Multiple-choice
 

If the taxpayer is resident alien, married, his taxable income is P ___,___

answer choices

P400,000
P350,000
P700,000
P650,000
5. Multiple-choice

If the taxpayer is non-resident alien engage in trade or business in the

Philippines, married and his country grants P40,000 as a personal
exemption for married individuals, his taxableincome is P ___,___
answer choices

P400,000
P360,000
P700,000
P660,000
6. Multiple-choice

If the taxpayer is non-resident alien not engage in trade or business in the

Philippines, married and his country grants P40,000 as a personal
exemption for married individuals, his taxable income is P ___,___
answer choices

P800,000
P400,000
P360,000
P350,000

7. Multiple-choice
 

Mr. George Hames is a Syrian and a resident of Damascus, Syria. He

requested you to file his Philippine income tax return for 2020. The
following information were forwarded to you:

Gross Income from Philippines:

Interest income from BPI Bank deposits -- P3, 000, 000 Dividend income
from domestic corporations -- 500, 000
Less: Expenses -- (300, 000)
Net income in the Philippines -- 3, 200, 000
Add: Net income in Syria (Peso equivalent) --- 5, 000, 000 Total net income --
8, 200, 000

Taxable income you will report is:

answer choices

₱3, 000, 000

₱3, 200,000
₱3, 500, 000
₱0
8. Multiple-choice

Which of the following received by an individual taxpayer is not subject to

final tax but subject to tax under Section 24 A of the Tax Code?
answer choices

Cash dividend from domestic corporation.

Property dividend from regional operating headquarters of multinationals.
Share in the distributive net income after tax of taxable partnership in the
Philippines.
Cash dividend from a foreign corporation with Philippine branch.

9. Multiple-choice
 

Which of the following is an income subject to the basic tax?

answer choices

Dividends received from domestic corporation

Prizes from USA lotto
Interest income from BDO
Share in the net income of ordinary partnership
10. Multiple-choice

Individual taxpayers not subject to tax under Section 24 (A)

answer choices

Resident citizens on their net income within and without the Philippines
Resident citizens and resident aliens on their net income within the
Philippines
Non-resident aliens engaged in trade or business
Non-resident aliens not engaged in trade or business on their gross income
within the Philippines
11. Multiple-choice

Statement 1: Passive incomes are subject to separate and final tax rates.

Statement 2: Passive incomes are included in the computation of taxable

income from compensation or business/professional income.
answer choices

Statements 1 & 2 are false

Statement 1 is true but statement 2 is false
Statement 1 is false but statement 2 is true
Statement 1 and 2 are true

12. Multiple-choice
 

45 seconds

Q. 

Final tax is generally withheld On passive income --From Philippine Sources

answer choices

Yes - Yes
No - No
Yes - No
No - Yes
13. Multiple-choice

45 seconds

Q. 

Binay, a Filipino overseas contract worker and his spouse, a resident of the
Philippines, have a joint US dollar account at PS Bank, Makati to US $4,000.

Which of the following statement is correct?

answer choices

The interest income shall be treated as tax exempt because Binay is non-
resident citezen
The interest income shall be in full because Binay and his spouse are both
Filipino citizens
Fifty percent (50%) of the interest income shall be treated as exempt while
the other fifty percent (50%) shall be subhected to the graduated rates
Fifty percent (50%) of the interest income shall be treated as exempt while
the other fifty percent (50%) shall be subhected to a final withholding tax
15%
14. Multiple-choice

 
30 seconds

Q. 

Cash and/or property dividends shall be to 10% final withholding tax if

actually or constructively received from:

I. Domestic companies or from joint stock companies.

II. Insurance or mutual fund companies.
III. Regional operating headquarters of multinationals.
IV. Philippine branch of a foreign corporation
answer choices

I only
I and II only
IV only
I, II, and III only
15. Multiple-choice

45 seconds

Q. 

A resident citizen received a price of P50,000. Which of the following

statements is correct in connection with the imposition of final tax on the
prize?
answer choices

The first P10,000 is subject to Section 24 (A), the remaining P30,000 is

subject to 20% final tax
The first P10,000 is exempt from tax, the remaining P30,000 is subject to
20% final tax
The first P10,000 is exempt from tax, the remaining P30,000 is subject to
20% final tax.
The whole amount shall be subject to 25% final tax
16. Multiple-choice
 

30 seconds

Q. 

Which of the following passive income is exempt from tax when received by
resident citizen and non-resident aliens engaged in trade or business in the
Philippines, but subject to 25% final tax when received by nonresident
aliens not engaged in trade or business?
answer choices

Prices of more than 10,000 pesos

Interest income from long-term deposit or instrument evidenced by
certificates prescribed by the Bangko Sentral ng Pilipinas
Yield or any other monetary benefit from trust fonts and similar
arrangements
Other winnings
17. Multiple-choice

30 seconds

Q. 

A resident citizen received a raffle prize of 40,000 pesos from NBA while
watching a basketball game between LA Lakers and Boston Celtics in LA
California, USA. Which of the following statement is correct?
answer choices

The whole amount of 40,000 pesos is part of his taxable income

The first 10,000 pesos is part of his taxable income while the remaining
30,000 pesos is subject to 20% final tax
The whole amount of 40,000 pesos shall be subject to 20% final tax
The first 10,000 pesos shall be exempt from tax while the remaining 30,000
pesos is subject to 20% final tax
18. Multiple-choice
 

45 seconds

Q. 

Which of the following income is taxable in the Philippines?

answer choices

Interest income in the philippines earned by a non-resident alien

Cash dividend received by a nonresident citizen from a foreign corporation
Salary received for working abroad by a nonresident citizen
Business income earned in USA by an American citizens residing in Palawan
19. Multiple-choice

30 seconds

Q. 

Use the following data for the next 2 questions: Pedro, a resident citizen,
received the following during 2020:

Proceeds from copyright royalty, net of tax -- P11,250

Proceeds from mineral claim royalty, net of tax -- P12,000
Share from trading partnership, net of withholding tax -- P270,000

How much is the total final tax on Pedro's Income?

answer choices

P50,000
P34,250
P31,250
0
20. Multiple-choice

30 seconds
Q. 

How much is the income tax still due and payable of Pedro in 2020?
answer choices

P50,000
P34,250
P31,25
0
21. Multiple-choice

30 seconds

Q. 

Use the following for No. 21 and 22 A taxpayer received in 2018 the
following passive income within the Philippines, net of applicable tax, if any:

Interest on bank deposit under FCDU - P212,500

Royalty on Books - 94,500
Dividend income from a domestic corp. - 144,000

If taxpayer is a resident alien, the final tax on the above passive

income would amount to:
answer choices

P4 1 , 1 9 4
P4 1 , 1 9 4
P6 4 , 5 0 0
P8 4 , 0 0 0
22. Multiple-choice

30 seconds

Q. 
Use the following for No. 21 and 22 A taxpayer received in 2018 the
following passive income within the Philippines, net of applicable tax, if any:

Interest on bank deposit under FCDU - P212,500

Royalty on Books - 94,500
Dividend income from a domestic corp. - 144,000

if taxpayer is a non-resident alien engaged in business, the final tax on

the above passive income would amount to:
answer choices

P4 1 , 1 9 4
P46,500
P6 4 , 5 0 0
P8 4 , 0 0 0
23. Multiple-choice

30 seconds

Q. 

Statement 1: There is capital gain tax on shares of stock only if the

shares are those of a domestic corporation held as capital asset and
not listed and traded in a local stock exchange.

Statement 2: The capital gain tax on shares of stock is paid within

thirty days from the date of sale.
answer choices

A. Statements 1 & 2 are false

B. Statement 1 is true but statement 2 is false
C. Statement 1 is false but statement 2 is true
D. Statements 1 and 2 are true
24. Multiple-choice

 
45 seconds

Q. 

Which of the following transactions is exempt from capital gains tax?

Case 1- Sale of the principal residence of the taxpayer where the entire
proceeds is used to purchase a vacation lot in tagaytay.

Case 2- Sale of a beach lot of the taxpayer where the entire proceeds is
used to construct his principal residence.

Case 3- The sale of the principal residence of the taxpayer availing tax
exemption for the second time in ten (10) years to purchase another
principal residence.
answer choices

A. Case 1, 2, 3 are Yes

B. Case 1, 2 are Yes and Case 3 is No
C. Case 1, 2 are No and Case 3 is Yes
D. Case 1, 2, 3 are No
25. Multiple-choice

45 seconds

Q. 

For nos. 25-26

Pedro inherited from his parents a large parcel of undeveloped land

acquired by them years ago with total cost of P2,500,00. Pedro now
sells all of these parcels for P25,000,000.

How much of the gains should Pedro report in his income tax return
for the year?
answer choices
a. None, because the properties are capital assets and the transaction
is subject to capital gain tax and not basic tax.
b. P22,500,00 because although the properties are capital assets and
the transaction is subject to capital gain tax, such tax is still
considered income tax. Thus, the gain shall also be reported in Pedro's
income tax return.
c. Pedro has the option to report an income of P25,000,000 subject to
basic tax or exclude the income rom his income tax return and pay 6%
capital gains tax.
d. Any of the choices above.
26. Multiple-choice

45 seconds

Q. 

For nos. 25-26

Pedro inherited from his prents a large parcel of undeveloped land
acquired by them years ago with total cost of P2,500,00. Pedro now
sells all of these parcels for P25,000,000.

Supposed that when Pedro inherited these parcel of land, they were
already developed real estate subdivisions with small lots being sold
on installment basis. He sold the property for P25,000,000. How much
of the gains should Pedro report in his income tax return for the year?
answer choices

a. None, because the properties are capital assets and the transaction
is subject to capital gain tax and not basic tax.
b. P22,5000,000 because the properties are classified as ordinary
assets. Thus, the gain shall also be reported in Pedro's income tax
return.
c. Pedro has the option to report an income of P25,000,000 subject to
basic tax or exclude the income from his income tax return ad pay 6%
capital gains tax.
d. Any of the choices above.
27. Multiple-choice

45 seconds

Q. 

27. If the proceeds are from the disposition of principal residence and
fully utilized in acquiring or constructing a new principal residence,
the capital gain is not subject to tax if the __________.
answer choices

a. Acquisition or construction of the new principal residence is within

18 calendar months from the date of disposition.
b. The historical cost or adjusted basis of the real property sold or
disposed shall be carried over to the new principal residence built or
acquired.
c. The Commisions shall have been duly notified by the taxpayer
within 30 days from the date of slae or disposition through a
prescribed return of his intention to avail of the tax exemption.
d. All of the above.
28. Multiple-choice

45 seconds

Q. 

Juan is a resident of QC. He sold his family home for P 4,000,000 which
was previously acquired for P 2,000,000. Juan complied all BIR
requirements to avail of tax exemption and spent P2,500,000 in
acquiring new family home. How much is the capital gains tax to be
paid by Juan?
answer choices

a. P0
b. P90,000
c. P150,000
d. P240,000
29. Multiple-choice

30 seconds

Q. 

Which of the following income is required to be filed in a quarterly

income tax return?
answer choices

a. Compensation Income
b. Passive Income
c. Business Income
d. Capital Gains
30. Multiple-choice

30 seconds

Q. 

The following are the require for substituted filing of income tax
return, except:
answer choices

a. He had one employer only.

b. His income was purely compensation income.
c. Income tax withheld by the employer is correct.
d. He had consecutively filed his income tax return for the past five
years.
31. Multiple-choice

 
30 seconds

Q. 

Statement 1: If an employee had multiple employers within the year,

an income tax return must be filed at the end of the year.

Statement 2: If an employee had three employers, on succession, for

each of the past three years, substituted filing of tax return is not
allowed.
answer choices

a. Statement 1 & 2 are false.

b. Statement 1 is true but statement 2 is false.
c. Statement 1 is false but statement 2 is true.
d. Statement 1 & 2 are true.
32. Multiple-choice

1 minute

Q. 

Who of the following individual tax payers may avail of substituted

filling of income tax return (ITR)?

Rianne:
Deriving compensation income from company, his only employer for the
taxable year ] The correct amount of tax was withheld by ABC company
- [ ] He also derive interest in his peso bank deposit in BPI and the sale of
his shares in DEF corporation (a closely held donestic corporation) to Brian
resulted to a gain P100,000

Leomar:

- [ ] Deriving purely compensation income from XYZ corporation, his only

employer from taxable year:
- [ ] The correct amount of tax was withheld by XYZ
- [ ] Leomar’s spouse is engage in business

choose below the answer example: image 1 is letter A.

answer choices

33. Multiple-choice

45 seconds

Q. 

1st statement:  Taxable income from self-employment (business and

profession) is reported on a quarterly and annual basis.

2nd statement: The quarterly income tax return shall be filed and the
tax paid as follows:

1st Q-not later than April 15, 2nd Q- not later than August 15, 3rd Q-
not later than September 15.
answer choices

a. Statements 1 and 2 are false

b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true
34. Multiple-choice

30 seconds
Q. 

Pedro's income tax due for the year amounted to ₱80, 000. He may
elect to pay the tax due in installment as follows:
answer choices

a. In two equal installments

b. 1st installment is payable upon filling the annual income tax return.
c. 2nd installment is payable on or before October 15 following the
close of the calendar year.
d. All of the above
35. Multiple-choice

45 seconds

Q. 

1st installment: If any installment payment income tax is not paid on

or before the date fixed for its payment, the whole amount of the
unpaid tax becomes due and payable together with the delinquency
penalties to be reckoned from on the original date when the tax is
required to be paid.

2nd statement: Installment payment of income is not allowed to self-

employed and/or professional who are availing the 8% income tax
rate.
answer choices

a. Statements 1 and 2 are false

b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true