Quiz - Donor's Tax (40 Points)

3rd Semester 2020 – 2021

1.Which of the following constitutes a taxable gift?

(1 Point)
Creditor's gratuitous discharge of a debtor's obligation
One day rent free use of another's company
A gratuitous transfer by an incompetent
An agreement to make a future transfer which is not supported by a consideration

2.Which of the following donation is required to be in a public document?

(1 Point)
Donation of personal property worth more than P 5,000
Donation of personal property
Donation of real property
Donations required to be in writing

3.For the donation to be valid, acceptance of the donation must be made

(1 Point)
During the lifetime of the donor only
During the lifetime of the donee
During the lifetime of the donor and the donee
None of the above

4.The reciprocity clause in the donor's tax law applies to:

(1 Point)
Juan dela Cruz, a non-resident citizen
Chrispa, a Korean citizen residing in the Philippines
Mrs. Pedro, a Filipino citizen residing in Malaysia
Mr. GI Joe, a non-resident American
5.When the donee is a stranger, the tax payable by the donor for donation in
2018 shall be:
(1 Point)
6% of net gift in excess of P 250,000
30% of net gifts
 6% based on net gift
6% based on total gift in excess of 250,000

6.All of the following are subject to donor's tax in case there is a transfer for less
than the adequate and full consideration, except:
(1 Point)
Real property classified as capital asset
Personal property
Intangible property
Tangible property

7.When a property is donated, the basis of the donor's tax is

(1 Point)
the cost of acquisition if acquired by purchase or the fair market value at acquisition
date, whichever is higher
the agreed value by the donor and the donee
The fair market value at the time of donation
Any of the above

8.On June 1, 2018, Pedro, a resident citizen, donated a parcel of land to a relative
in Makati and a real property located in Canada to a friend. In taking a credit for
the foreign donor's tax paid, the credit shall be against the Philippine donor's tax
on the
(1 Point)
Donation to a friend
Donation to a relative
Donation to the relative and to a friend
None of the above

9.Which of the following is not a deduction from the gross gift?

(1 Point)
Unpaid mortgage on the donated property assumed by the donee
Unpaid real estate tax on donated property assumed by the donee
Diminution on the property donated specifically provided by the donor
Unpaid donor's tax on the property assumed by the donee.
10.When a husband and wife make a donation to their legitimate child on
account of marriage during 2018 taxable year, which of the following statement is
correct?
(1 Point)
Each of them is entitled for dowry as a deduction from the gross gift
There can only be deduction for dowry if the donation was made before or one year
after the celebration of marriage
Either of them can waive his/her right to claim dowry as deduction in favor of the other
donor such that one of them may claim a total deduction of P 20,000
None of the above

11.As a general rule, all persons who may contract to dispose of their property
may donate.
(1 Point)
True
False

12.Donor's tax is imposed to all natural and artificial persons

(1 Point)
True
False

13.A donation on which the donor's tax is not paid is a valid donation.
(1 Point)
True
False

14.Minors can be a donor or a donee

(1 Point)
True
False

15.Donation between person guilty of adultery or concubinage are voidable.

(1 Point)
True
False
16.On February 2018, Mr. and Mrs. Giver donated a conjugal parcel of land to
their son who was getting married within six (6) months after the date of
donation. The fair market value of the property at the time of donation was P
5,000,000. Its fair market value at the time of marriage was P 5,500,000. The
donated property was subject to P 1M mortgage which was not assumed by the
donee. How much is the net taxable gift of Mr. Giver?
(1 Point)
P 2,740,000
P 2,250,000
P 2,500,000
P 2,490,000

Solution: 5,000,000/2 = 2,500,000 – 250,000 = 2,250,000

17.In 2018, Mr. Lester made the following donations:

June 1, 2018: To his best friend, Mr. Matin - P 1,500,000 on account of marriage
celebrated on May 1, 2017.
July 10, 2018: To Mr. Barrera, his mentor - a parcel of land worth P 1,800,000
subject to the condition that Mr. Barrera would assume the mortgage
indebtedness of Lester in the amount of P 40,000.
Sept. 30, 2018: P 1,500,000 dowry to his daughter on account of her scheduled
marriage on December 25, 2018; and another wedding gift worth P 200,000 on
Dec. 31, 2018.

How much is the total net taxable gift for the year?
(1 Point)
P 4,710,000
P 4,750,000
P 4,960,000
P 4,790,000

Solution: 1,500,000 + 1,800,000 – 40,000 + 1,500,000 + 200,000 = 4,710,000

18.On February 14, 2018, Clifford donated a property located in Manila and cash
as follows:
a. Land with a FMV of P 680,000: to a legitimate daughter on account of
marriage, subject to a mortgage of P 80,000 assumed by the daughter.
b. Cash of P 150,000: To a legitimate son, on account of marriage.

What is the correct amount of net gifts made?

(1 Point)
P 700,000
P 730,000
P 740,000
P 750,000

Solution: 680,000 – 80,000 + 150,000 = 750,000

19.Professor X, a renowed Filipino scientist made the following donations during

2018:
Feb. 29: cash of P 500,000 to Brgy. Malanday
April 1: Car to his brother on account of marriage. The car has a FMV of P
1,000,000 and is subject to mortgage of P 500,000 to be assumed by his brother.
May 31: A land worth P 5,000,000 located in Belgium to his son.

How much is the donor's tax payable on April 1?

(1 Point)
P0
P 15,000
P 300,000
P 315,000

Solution: 1,000,000 – 500,000 – 250,000 = 250,000 x 6% = 15,000

20.Professor X, a renowed Filipino scientist made the following donations during

2018:
Feb. 29: cash of P 500,000 to Brgy. Malanday
April 1: Car to his brother on account of marriage. The car has a FMV of P
1,000,000 and is subject to mortgage of P 500,000 to be assumed by his brother.
May 31: A land worth P 5,000,000 located in Belgium to his son.

How much is the donor's tax payable on May 31?

(1 Point)
P 300,000
P 330,000
P 450,000
P 464,000

Solution:
April 1, net gift 500,000
May 31, net gift 5,000,000
Total 5,500,000
Exemption (250,000)
Taxable net gift 5,250,000
Donor’s tax 315,000
Tax paid (15,000)
Still due 300,000

21.ABC Corporation donated P 100,000 to the barangay for the purpose of

cementing a barangay road where its factory is located.

Statement 1: The donation is exempt from donor's tax

Statement 2: The corporation may claim full deduction for income tax purposes.
(1 Point)
Statement 1 and 2 are false
Statement 1 is true and statement 2 is false
Statement 1 is false and statement 2 is true
Statements 1 and 2 are true

22.A person making a donation is required to file a tax return to BIR at

(1 Point)
the residence of the donee within 30 days from the date of the donation
 The residence of the donor within 30 days from the date of donation
The residence of the donor at the end of the year
The residence of the donee at the end of the month when the donation is made

23.Since a donation to a charitable institution has a deduction without any

ceiling.
Statement 1: The net gift will be zero, so that in computing the donor's tax, the
donation may be omitted in gross gifts as it is likewise omitted in the deductions.

Statement 2: The gross gifts should be reported, and the deduction shall be
claimed.
(1 Point)
Statement 1 and 2 are false
Statement 1 is false and statement 2 is true
Statement 1 is true and statement 2 is false
Statements 1 and 2 are true

24.A donor gave the following donation during 2018:

Jan. 24 - Land located in the Philippines valued at P 2M to her uncle subject to
the condition that the latter will pay the donor's tax due and unpaid mortgage
amounting to P 500,000.
Nov. 30 - Building in US valued at P 4,500,000 to her sister. Donor's tax paid in US
was P 400,000.

The donor's tax payable on the Jan. 24 donation shall be:

(1 Point)
P0
P 75,000
P 90,000
P 120,000

Solution: 2,000,000 - 500,000 = 1,500,000 -250,000 = 1,250,000 x 6% = 75,000

25.Based on the preceding number, donor's tax payable on the Nov. 30 donation
shall be:
(1 Point)
 P0
P 11,250
P 248,750
P 345,000

Solution:
Prior net gift 1,500,000
Present net gift 4,500,000
Total net gift 6,000,000
Exemption (250,000)
Taxable net gift 5,750,000
Donor’s tax 345,000
Tax paid (75,000)
Tax credit (258,750)
Still due 11,250

Limitation:
4,500,000/6,000,000 x 345,000 = 258,750

26.For questions 26 - 28:

Mr. and Mrs. de Guzman, resident citizens, made the following donations out of
their conjugal properties:

Date Amount Donee

Mar. 1, 2018 P 500,000 Adel, legitimate daughter
May 1, 2018 P 400,000 Belle, legitimate daughter, on account of marriage
on 6/1/18
July 1, 2018 P 200,000 Cindy, legitimate daughter

How much is the donor's tax payable of Mr. de Guzman on his first donation?
(1 Point)
P0
P 15,000
P 30,000
P 60,000
Solution: 500,000/2 – 250,000 = 0

27.How much is the donor's tax of Mrs. de Guzman from the second donation?
(1 Point)
P0
P 12,000
P 24,000
P 27,000

Solution: 200,000 + 250,000 = 450,000 – 250,000 = 200,000 x 6% = 12,000

28.How much was the total donor's tax of Mr. and Mrs. de Guzman on all
donations
(1 Point)
P 36,000
P 33,000
P 65,400
P 66,000

Solution: 1,100,000/2 = 550,000 – 250,000 = 300,000 x 6% = 18,000 x 2 = 36,000

29.Statement 1: When the donee is tax exempt, the donation of a taxable

individual is also tax exempt.
Statement 2: Donor's tax shall be paid within 30 days after the donation is made.
(1 Point)
Statement 1 and 2 are false
Statement 1 is false and statement 2 is true
Statement 1 is true and statement 2 is false
Statement 1 and 2 are true

30.A donation of husband to his wife during the marriage shall be governed by
(1 Point)
Donation mortis causa
Donation inter vivos
Donation by reason of marriage
None of the choices
31.Chris made the following donation during 2020:
April:
• To his son Reden who is living in Singapore, a land located also in Singapore
valued at P 500,000 on account of marriage on Feb. 4, 2020. •
To Princess, his daughter, a farm located in Batangas valued at P 600,000 with
unpaid mortgage of P 100,000 which Princess assumed.

October:
• To his son Reden, also on account of marriage, shares of stock of a nonresident
foreign corporation valued at P 400,000.
• To City of Makati, of land located in Makati valued at P 1,000,000. The land will
be used for school site.

All properties donated come from the exclusive properties of Chris.

How much is the tax due on April donation?

(1 Point)
P 51,000
P 66,000
P 45,000
P 60,000

Solution: 500,000 + 600,000 – 100,000 = 1,000,000 – 250,000 = 750,000 x 6% = 45,000

32.Chris made the following donation during 2020:

April:
• To his son Reden who is living in Singapore, a land located also in Singapore
valued at P 500,000 on account of marriage on Feb. 4, 2020. •
To Princess, his daughter, a farm located in Batangas valued at P 600,000 with
unpaid mortgage of P 100,000 which Princess assumed.

October:
• To his son Reden, also on account of marriage, shares of stock of a nonresident
foreign corporation valued at P 400,000.
• To City of Makati, of land located in Makati valued at P 1,000,000. The land will
be used for school site.

All properties donated come from the exclusive properties of Chris.

How much is the donor’s tax payable on October donation?

(1 Point)
P 75,000
P 24,000
P 9,000
P 15,000

Solution: 400,000 + 1,000,000 = 1,400,000 – 250,000 = 1,150,000 x 6% = 69,000 –

45,000 = 24,000

33.Chris donated his rest house in Pangasinan worth P 1,500,000 to his wife
during the marriage. The said property has unpaid mortgage of P 100,000. How
much is the donor’s tax to be paid by Chris?
(1 Point)
P 75,000
P 90,000
P0
P 84,000

Donation between husband and wife during the marriage shall be governed by
testamentary succession.

34.Chris sold his vacant lot located in Bulacan to his friend on Feb. 5, 2020. The
selling price of the property is P 3,000,000 with FMV at the time of sale of P
3,200,000 and P 3,500,000 at the time of death of Chris. Chris acquired the
property 5 years ago amounted to P 1,500,000. How much is the donor’s tax of
Chris?
(1 Point)
P 15,000
P 195,000
 P 192,000
Zero

No donor’s tax because this is subject to CGT.

35.Chris sold his vacant lot located in Bulacan to his friend on Feb. 5, 2020. The
selling price of the property is P 3,000,000 with FMV at the time of sale of P
3,200,000 and P 3,500,000 at the time of death of Chris. Chris acquired the
property 5 years ago amounted to P 1,500,000. How much is the applicable tax of
Chris?
(1 Point)
P 15,000
P 195,000
P 192,000
Zero

Solution: 3,200,000 x 6% = 192,000

36.Chris and Christina, husband and wife agreed to donate land located in Japan
to their beloved son who graduated cumlaude from Harvard University on March
20, 2020, with value of 5,000,000. The Deed of donation (signed and accepted by
the son) was executed on Feb. 25,2020 with a value of P 5,500,000. How much is
the donor’s tax of Mr. Chris?
(1 Point)
P 135,000
P 315,000
P 150,000
P 285,000

Solution: 5,500,000/2 = 2,750,000 – 250,000 = 2,500,000 x 6% = 150,000

37.Chris had a lot of properties but no family to lean on. He felt lonely and sad,
so he decided to donate almost of his properties to all his close friends and
relatives. One night, Chris was drunk and while driving he met an accident. In the
hospital, he met a person who introduced himself as his son from a woman he
met somewhere in Batangas. Can the property donated by Chris be returned to
him? Which of the following statement is false?
(1 Point)
Chris can revoke the property within 4 years from the time he discovered that he has
son.
Chris cannot donate when no properties left for his living.
Chris cannot revoke the donation because it was already donated.
No answer in the choices.

38.Chris donated the following properties:

Land, located in US P 1,500,000, tax paid in US P 90,000

Land, located in the Philippines P 3,500,000

The land in the Philippines, part of it was donated to government for public
purposes. The amount of donation is P 500,000. How much is the donor’s tax
payable of Chris?
(1 Point)
P 199,500
P 170,000
P 165,000
P 200,000

Land, US 1,500,000
Land Philippines 3,000,000
Exemption (250,000)
Taxable net gift 4,250,000
Donor’s tax 255,000
Tax credit 85,000
Still due 170,000

Limitation: 1.5M/4.5M x 255,000 = 85,000

39.Mr. Chris donated his land worth P 1M to his best friend through private
instrument. What is the status of donation?
(1 Point)
Valid
Voidable
Void
Unenforceable

40.On February 5, 2020, Chris wrote a letter to Manuel donating his laptop worth
P 75,000. The letter was received by Manuel on February 10, 2020 who
immediately accepted the donation. The letter of acceptance was received by
Chris on February 14, 2020. The donor’s tax was paid until February 25, 2020. The
donation was perfected on:
(1 Point)
February 5
February 10
February 14
February 25