Determine what items are taxable by the Philippines in 2020:

1. Thrall, a German, underwent naturalization in 2019. He left the Philippines in February 2020 and
returned in May 2020. In 2020 he earned the following:
a. ₱50,000 in interest from bank deposits in PNB
b. ₱100,000 in interest from a loan he extended to Jaina, a Filipino residing in the United States
c. ₱60,000 in dividends from San Miguel Corporation
d. ₱150,000 in dividends from Apple Corporation. The income for the past three years is as
follows:

2017 2018 2019

Inside Outside Inside Outside Inside Outside
Apple ₱150,000 ₱220,000 ₱280,000 ₱280,000 ₱120,000 ₱200,000

e. ₱140,000 as a gain on sale of stocks of Coca-Cola Philippines, a Philippine incorporated

subsidiary of the US registered Coca-Cola
f. ₱160,000 in rent on a house in the United States. The amount was paid in 2019.
g. ₱50,000 in rent on a house in Makati was received in December 2020. The balance of
₱60,000 covering the period of December 2020 will be paid next year.
h. On the house in Makati, a payment of ₱125,000 was received in November 2020. The
payment is to be used to cover any damage to the property during the lease term, after
which the balance will be returned to the lessee.
i. ₱120,000 in leasehold improvements made by his lessee on the house in the United States,
completed on January 1, 2020. The leasehold has a useful life of 8 years, with the lease
expiring 3 years from January 1, 2020. Thrall opts to spread-out the income.
2. Arthas, a person born in the United States with German and British parents, arrived in the
Philippines on January 1, 2020 after having resided in the US all his life, intending to immigrate.
He earned the following during 2020:
a. ₱550,000 in rent from his old house in the United States. The amount was received in 2020.
b. ₱150,000 in interest from bank deposits in JPMorgan Chase, situated in New York
c. ₱20,000 on gains in sales of stock of Facebook Inc. , traded on the Philippine Stock Exchange
d. ₱65,000 on gains in sales of stock of Tesla Inc, traded on the New York Stock Exchange
e. ₱120,000 on dividends from the ABS-CBN corporation. The income for the past three years
is as follows:

2017 2018 2019

Inside Outside Inside Outside Inside Outside
ABS-CBN ₱3,100,000 ₱600,000 ₱2,980,000 ₱530,000 ₱2,750,000 ₱279,000

f. ₱10,000 in dividends from Lordaeron Incorporated, incorporated in the United Kingdom.

Lordaeron has no physical establishments in the Philippines. The income for the past three
years is as follows:

2017 2018 2019

Inside Outside Inside Outside Inside Outside
Lordaeron ₱231,000 ₱168,500 ₱150,000 ₱315,000 ₱340,000 ₱300,000
 g. ₱15,000 in dividends from the Kirin Tor, incorporated in Germany with a branch selling
merchandise in Manila. The income for the past three years is as follows:

2017 2018 2019

Inside Outside Inside Outside Inside Outside
Kirin Tor ₱1,820,000 ₱744,000 ₱1,336,000 ₱1,043,128 ₱2,066,772 ₱982,100

3. The following are different taxpayers:

a. Jaina, a car dealer. She sold a car in the Philippines for ₱500,000 in 2018. Each year, she
collects a total of ₱100,000 from the buyer. The gross profit on the sale is 30% of the selling
price.

b. Tyrande, a real estate dealer. She sold a piece of land in the Philippines for ₱3,500,000 on
January 1, 2020. The terms of the car require a downpayment of ₱500,000 in 2020, with the
balance payable in 8 equal annual installments starting December 31, 2020. The gross profit
on the sale is ₱1,200,000.

c. Furion, who is not engaged in any trade or business. He sold his house and lot for ₱6,000,000
on January 1, 2020. The terms require that as part of the consideration the buyer assume the
₱1,000,000 mortgage on the property. A ₱500,000 downpayment is made at the time of sale,
then ₱450,000 made every December 31.