Calamba Review Center - Laguna (LCRC)

2F MMCO Building, 8000 Lakeview Ph3 Angela Street, Halang, Calamba City Laguna, Philippines
Tel No. (02) 330-8617, (049) 523-6031; (02) 330-6057
CPA REVIEW (May 2020 Batch)
Tax Wency Medina Giron, CPA

Donation tax
Donor’s tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who are living at the
time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect and whether the property is
real or personal.

Why is donation subjected to tax?

1. Donor’s tax serves to compensate for loss of income taxes to the government brought by splitting the capital resources to smaller portions.
2. To prevent the avoidance of estate tax.
3. To compensate for the limitation of income taxation.

Essential Requisites of donation:

1. Capacity of the donor
2. Intention to Donate**
3. Donative Act – actual or constructive (i.e.: execution of a public instrument) delivery
4. Acceptance by the donee
*required only in direct donation but not with indirect donation as in the case of transfer with insufficient consideration.

Kinds of Donation:
1. Inter Vivos – donation between living individuals
2. Mortis Causa – takes effect upon the death of the donor

Types of Donor:
A. Citizen or Resident Alien
Properties transferred regardless of location (i.e.: within or outside the Philippines) is taxable under Donor’s Taxation.
B. Non-resident Alien
Only properties within the Philippines are subject to Donor’s Tax.

Which Donation can be included in Gross Gift?

Alien
Citizen Resident Non-resident
Properties located in the Philippines Include Include Include
Properties located abroad Include Include Exclude

Which properties are considered located in the Philippines?

For purposes of Donor’s Taxation the following are situated in the Philippines:
1. franchises which must be exercised in the Philippines
2. share, obligations, or bonds issued by any corporation or sociedad anonima organized in the Philippines in accordance with its laws
3. share, obligations, or bonds issued by any foreign corporation 85% of the business of which is located in the Philippines
4. share, obligations, or bonds which have acquired situs in the Philippines
5. any personal property, whether tangible or intangible, located in the Philippines

Types of Recipients:
1. Relatives – includes
a. brother or sister (whether half or whole blood), spouse, ancestor or lineal descendants
b. a relative by consanguinity in the collateral line within the fourth degree of relationship
2. Stranger – other than relatives

Note to candidates:
For purposes of donor’s tax, the degree of relationship considered is up to the 4th degree of consanguinity ; for estate tax purposes, up to the
5th degree of consanguinity .

Nature of Donation:
a. There is a transfer of properties (real or personal, tangible or intangible) directly or indirectly in trust or otherwise.
b. The transfer is gratuitous (without consideration).
c. The donation is made inter-vivos.

Classification of Donor’s Tax:

a. progressive – when the tax base increases, the rate increases
b. proportional tax – fixed percentage to apply to donations to strangers
c. excise tax – being a on privilege to transfer properties
d. direct tax – paid by the statutory taxpayers without shifting
e. ad valorem tax – imposed based according to value
f. national tax – levied and collection by the national government
g. general tax – fiscal or revenue purpose, not specific

Mode of Execution of Donation:

Depending on the property involved, donation can be executed by the following:
A. Real or immovable property
Issuance of a public instrument, Deed of Donation
Note to candidates: Donation of real properties is not subject to donor’s tax but are subject to the 6% capital gains tax. It should be noted
that the 6% capital gains tax covers sale, exchange and other disposition of real properties.
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B. Personal property
a. Tangible
i. P5,000 and below in value – oral is allowed
ii. More than P5,000 in value – donation and acceptance should be in writing (for validity)
b. Intangible – execution public instrument

The following transfers, if without adequate or full consideration, are not within the scope of Donor’s Tax but within the scope of Estate Tax:
1. Revocable transfers
2. Transfers with reservation to the right to income of the property until death
3. Transfer with reservation to the right to the possession or enjoyment of the property until death
4. Transfer in contemplation of death – refers to transfers motivated by the thought of death not from motives associated with life

Transfers associated with life such as the following are not transfer in contemplation of death and hence taxable under Donor’s tax:
a. to relieve the donor of the burden of management of the property
b. to save income taxes
c. to make the children financially independent
d. to settle family disputes
e. to see the children enjoy the property while the donor still lives
5. transfer under general power of appointment

Exempt Donation under Special Laws :

1. International Rice Research Institute
2. Ramon Magsaysay Award Foundation
3. National Health Insurance (R.A. 7875 – National Health Insurance Act of 1995)
4. National Commission on Indigenous People (R.A. 8371 – The Indigenous People Right Act of 1997)
5. Donations in accordance with the R.A. 9003 – Ecological Solid Waste Management Act of 2000.
6. Donations to the Pollution Adjudication Board under R.A. 8749 – The Philippine Clean Air Act of 1999.
7. Southern Philippines Development Administration
8. Philippine American Cultural Foundation
9. Integrated Bar of the Philippines
10. Development Academy of the Philippines
11. National Social Action Council
12. Museum of Philippine Costumes
13. Aqua-Culture Department of SouthEast Asia Fisheries Development Center of the Philippines
14. Intramuros Administration
15. Philippine Inventor’s Commission

Reciprocity in Donor’s Taxation

The intangible property transferred by a non-resident alien donor shall be exempt from Donor’s Tax if either one of the following is satisfied:
a. The country to which such non-resident alien donor is a citizen does not impose donor’s tax on similar transfer of intangible properties to
Filipino citizens not residing therein.
b. The country to which such non-resident alien donor is a citizen allows similar exemption to the transfer of intangible personal property of
Filipinos not residing therein.

Taxation of Gifts from Relatives

Deductions from Gross Gifts:

1. Gifts made to non-profit organization, foundation or trust:
Non-profit organization – an organization that:
a. is organized as a non-stock entity
b. pays no dividends
c. governed by trustees with no compensation
d. and devoting all income to the accomplishment of its purposes

For example: educational, charitable, religious, cultural, social welfare, philanthropic organization, research institution and accredited non-
government organization.

Provided that, not more than 30% of said gifts are used by the above entities for administrative purposes (i.e.: to be verified by BIR)

2. Dowry exemption of P10,000

Applicable only to residents (citizens or alien); provided it is made by parents to each of their legitimate, recognized natural, or adopted children
(i.e.: per child with dowry given) before celebration of marriage or one year thereafter

3. Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit

4. Other deductions:
a. Encumbrances on the property donated, if assumed by the donee
b. Those specifically provided by the donor as a diminution of the property donated

Donor’s Tax Table

Apply for gratuitous transfers by related donor and donee

Over Not Over Basic Tax Plus % Excess Over

- P 100,000 Exempt
P 100,000 200,000 P 0 2% P 100,000
200,000 500,000 2,000 4% 200,000

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 500,000 1,000,000 14,000 6% 500,000
1,000,000 3,000,000 44,000 8% 1,000,000
3,000,000 5,000,000 204,000 10% 3,000,000
5,000,000 10,000,000 404,000 12% 5,000,000
10,000,000 - 1,004,000 15% 10,000,000

Note to candidates:
The amount of gift taxable represents the net benefit accruing to the donee. Net gifts as defined herein represents the net cumulative amounts of
gift for the whole calendar year; however, the donor’s tax thereon is paid quarterly based on net cumulative gift.

Taxation of Gifts to Strangers

Donations to strangers are subject to 30% Final Tax.

Gifts involving Conjugal or Community Property or Co-owned property

Each spouse or co-owners shall file separate returns corresponding to his or her respective share in the conjugal or community or co-owned
property. Separate classification of the recipient depending on their relation or affinity with the donor is required.

Tax Credit for donor’s tax paid to a foreign country

- Can be claimed only by donors those whose gift are taxable even if made outside the Philippines:
a. resident citizens
b. non-resident citizens
c. resident aliens
- The allowed creditable donor’s tax paid to a foreign country shall be subject to limit similar to the limitations in foreign tax credit in income
taxation and estate tax.

Filing of Return and Payment of Tax

 Donor’s tax return shall be filed within 30 days from the date of gift. The tax due thereon is to be paid at the time of filing the return.
 For gifts made to related parties, gifts made on the same day will be filed in a singe Donor’s Tax Return.
 For donations made by husbands and wife out of their common property, the donation is deemed made by each; hence, both shall prepare
separate Donor’s Tax Return and claim separate deductions. For dowry exemptions, each of the spouses is entitled to P10,000 each for each
gifts made to children on account of marriage.
 The Return shall be filed to the same receiving entities as enumerated in income and estate taxation.

Filing Requirements:
A return under oath in duplicate which shall set forth the following:
a. each gift made during the calendar year which is to be included in computing net gifts
b. the deductions claimed and allowable
c. any previous net gifts made during the same calendar year
d. the name of the donee; and
e. such further information as may be required by rules and regulations made pursuant to law
DRILL PROBLEMS
1. Donations that do not conform to legal formalities are
a. Taxable under Donor’s tax notwithstanding absence for formalities
b. Exempt from Donor’s tax
c. Subject to Estate tax
d. Subject to income tax

2. Acceptance is essential for a valid donation to be subject to donor’s tax, except transfers
a. in trust by the donor in favour of a beneficiary
b. of business interest by the donor in favour of an stranger
c. for less than adequate consideration
d. by Filipino residents to non-resident aliens

3. The donation of an immovable property shall be made

a. In writing c. Either A or B
b. In a public instrument d. Orally

4. Using the preceding number, acceptance by the donee may be made

a. In the same deed of donation c. Either A or B
b. In a separate document d. Neither A nor B

5. The donation of a movable property may be made

a. Orally b. In writing c. Either A or B d. Neither A nor B

6. Using the preceding number, the donation and acceptance should be in writing if the value of the property donated is
a. Less than P5,000 c. P5,000 or more
b. P5,000 or less d. More than P5,000

7. A donation which takes effect upon the death of the donor

a. Donation mortis causa
b. Partakes of the nature of a testamentary disposition
c. Shall be governed by the law on succession
d. A, B and C

8. A donation which is intended by the donor to take effect during his lifetime
a. Shall be subject to donor’s tax using the tax table for donation
b. Shall be in writing if the value exceeds P5,000

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 c. Donation inter-vivos
d. A, B and C

9. Which is incorrect concerning donation?

a. Real property is transferred by donation only if made under a public instrument
b. Donation of intangible personal property should be in writing
c. Personal property amounting to more than P5,000 should be in writing
d. No one can be forced to accept the generosity of another

10. Which is correct regarding transfer inter-vivos involving personal properties for less than an adequate and full consideration?
a. The whole value of the property will be included in gross gift
b. The difference in fair value and consideration is a gift subject to donor’s tax
c. The whole value of the property will be included in gross estate
d. The difference in fair value and consideration is part of gross estate

For Nos. 11 through 19: Indicate whether covered by Donor’s Tax, Estate Tax or Income Tax:
11. A person transferred properties in trust in favor of another and the trust is irrevocably designated. ___________
12. A person transferred properties in trust in favor of another and the trust is designated as revocable. ___________
13. A person transferred properties in trust in favor of another and the trust is designated as revocable which the transferor failed to revoke by
the time of his or her death. ___________
14. A person transferred personal properties to another during his lifetime for less than adequate consideration. The transfer is to take effect
upon the death of the transferor ____________
15. A person transferred personal properties to another during his lifetime for less than adequate consideration. The transfer is to take effect
immediately ___________
16. A person transferred a real property classified as capital asset during his lifetime for less than adequate consideration. The transfer is to take
effect upon death ___________
17. A person transferred a real property classified as capital asset during his lifetime for less than adequate consideration. The transfer is to take
effect immediately ___________
18. A person transferred properties to another during his lifetime for an adequate consideration. __________
19. The following transfers are taxable under donor’s tax, except?
a. Transfers made by the donor to relieve himself of the burden of management of his properties
b. Transfers made by the donor to settle family disputes
c. Transfers made by a parent to see his children enjoy his properties while he still lives
d. Transfers under power of general appointment
20. Which is incorrect?
a. Donations of non-resident aliens involving properties located abroad to residents of the Philippines is exempt from donor’s tax
b. Renunciation of inheritance by an heir to another is not subject to donor’s tax
c. Donation by a non-resident citizen to a non-resident alien is exempt from donor’s tax
d. Gifts are reckoned on an annual basis; the tax is determined for the whole gift throughout the year; hence, a computation is made every
time a donation is made

21. Which of the following donation may be exempt?

a. Donation of a resident alien of its properties located abroad to a non-resident alien
b. Donation of a non-resident alien of real properties located in the Philippines to a resident alien
c. Donation of non-resident alien of intangible properties located in the Philippines to a non-resident alien
d. Donation of a intangible properties located in the Philippines by resident aliens

22. Which of the following is not included in gross gift?

a. Transfers to non-profit non-stock charitable institution
b. The portion of the fair value of a property transferred adequately paid for in transfer for less than an adequate consideration
c. The portion of the donation representing dowry exemption
d. Donation to the government for public use

23. Donation to the following entities is exempt from Donor’s taxation, except
a. Accredited national professional organization of certified public accountant (PICPA)
b. Integrated Bar of the Philippines
c. International Rice Research Institute
d. Ramon Magsaysay Award Foundation

24. I. Dowries or gifts made on account of family celebration, on or before its celebration, or within one year thereafter, by parents to each of
their legitimate, recognized natural or adopted children, to the extent of the first P10,000 shall be exempt from the donor’s tax

II. Donations in favour of an educational and or charitable, religious, cultural or social welfare corporation, institution, accredited non –
government organization, trust or philanthropic organization or research institution or organization provided that no amount of said gifts
shall be used by the donee for administration purposes shall be exempt from donor’s tax
a. True, true b. True, False c. False, True d. False, False

25. A. If the value of the movable property donated is P5,000 or more the donation and the acceptance shall be made in writing, otherwise the
donation shall be void
B. Regardless of the value of the immovable property donated, the donation and the acceptance shall be made in writing, otherwise the
donation shall be void.
a. True, True b. True, False c. False, True d. False, False

26. I. The gift is perfected from the moment the donor effects the delivery either actually or constructively of the property donated
II. Donor’s tax is a property tax imposed on the property transferred by the way of gift inter-vivos
a. True, True b. True, False c. False, True d. False, False

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27. I. Where property is transferred during lifetime for less than adequate and full consideration in money or money’s worth, then the amount by
which the value of the property exceeded the value of the consideration shall for the purpose of the donor’s tax, be deemed a gift
II. Gifts of conjugal property made by both spouses shall be considered as having been made one – half by the husband and the other half by
the wife and is taxable ½ to each donor spouse
a. True, True b. True, False c. False, True d. False, False

28. I. For purpose of the donor’s tax, second degree cousins are strangers to each other.
II. Encumbrance on the property donated, if assumed by the donor is deductible for donor’s tax purposes.
a. True, True b. True, False c. False, True d. False, False

29. I. As a rule, donation between husband and wife during the marriage is void.
II. Donation can be made to conceived or unborn children.
a. True, True b. True, False c. False, True d. False, False

30. 1st Statement: When the donee is a stranger, the tax payable by the donor shall be 30% of the net gifts.
2nd Statement: When the donee is a relative the tax payable by the donor shall be based on the scheduler rates of donor’s tax provided in
Section 99 of the Tax Code.
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

31. For purposes of donor’s tax, a “stranger: is a person who is not a:

I – brother, sister (whether by whole of half blood), spouse, ancestor, and lineal descendant; or
II – relative by consanguinity in the collateral line within the fifth degree of relationship
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

32. 1st Statement – A legally adopted child is entitled to all the rights and obligations provided by law to legitimate children, and therefore,
donation to him shall not be considered as donation made to stranger
2nd Statement – Donation made between business organization and those made between an individual and a business organization shall be
considered as donation made to a stranger
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

33. 1st Statement – Any contributions in cash or in kind to any candidate, political party or coalition of parties for campaign purposes, shall be
governed by the Election Code, as amended
2nd Statement – Any provision of law to the contrary notwithstanding, any contribution in cash or in kind to any candidate or political party or
coalition of parties for campaign purposes duly reported to the COMELEC shall not be subject to the payment of any gift tax
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

34. The donor’s tax is a

a. Property tax on the property transferred
b. Personal tax on the person who transferred the property
c. Tax imposed on the transfer of property by way of gift inter vivos
d. Tax imposed on the transfer of property by way of gift mortis causa

35. 1st Statement – The donor’s tax shall not apply unless and until there is a completed gift.
2nd Statement – The law in force at the time of the perfection/completion of the donation shall govern the imposition of the donor’s tax

a. Both statements are correct c. Only the first statement is correct

b. Both statements are incorrect d. Only the second statement is correct

36. When is the donation perfected?

a. The moment the donor knows of the acceptance by the donee
b. The moment the donated property is delivered, either actually or constructively, to the donee
c. Upon payment of the donor’s tax
d. Upon execution of the deed of donation

37. When is the donation completed?

a. The moment the donor knows of the acceptance by the donee
b. The moment the donated property is delivered, either actually or constructively, to the donee
c. Upon payment of the donor’s tax
d. Upon execution of the deed of donation

38. A gift that is incomplete because of reserved powers, becomes complete when either:
I – the donor renounces the power; or
II – the right to exercise the reserved power ceases because of the happening of some event or contingency or the fulfillment of some
condition, other than because of the donor’s death
a. True in both I and II c. True in I only
b. Not true in both I and II d. True in II only

39. Which of the following renunciations shall be subject to donor’s tax?

I – Renunciation by the surviving spouse of his/her share in the conjugal partnership or absolute community after the dissolution of the
marriage in favor of the heirs of the deceased spouse or any other person/s
II – General renunciation by an heir, including the surviving spouse, of his/her share in the hereditary estate left by the decedent;
III – Renunciation by an heir, including the surviving spouse of his/her share in the hereditary estate left by the decedent categorically in
favor of identified heir/s to the exclusion or disadvantage of the other co – heirs;
a. I, II and III b. I and II only c. I and III only d. I only
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40. 1st Statement – Where property, other than a real property that has been subjected to final capital gains tax, is transferred for less than an
adequate and full consideration in money or money’s worth, then the amount by which the fair market value of the property at the time of the
execution of the Contract to Sell or execution of the Deed of Sale which is not preceded by a Contract to Sell exceeded the value of the
agreed or actual consideration or selling price shall be deemed a gift, and shall be included in computing the amount of gifts made during the
calendar year

2nd – The law in force at the time of the completion of the donation shall govern the imposition of donor’s tax
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

41. 1st Statement – Husband and wife are considered separate and distinct taxpayers for purposes of the donor’s tax
2nd Statement – If what was donated is a conjugal or community property and only the husband signed the deed of donation, there is only one
donor for donor’s tax purposes, without prejudice to the right of the wife to question the validity of the donation without her consent
pursuant to the pertinent provisions of the Civil Code of the Philippines and the Family Code of the Philippines
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
42. 1st Statement – Any person making a donation (whether direct or indirect), unless the donation is specifically exempted under the Tax Code
or other special laws, is required, for every donation, to accomplish under oath a donor’s tax return
2nd Statement – The computation of the donor’s tax is on a cumulative basis over a period of one calendar year.
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct

43. Which of the following information shall be set forth in the donor’s tax return?
I – Each gift made during the calendar year which is to be included in computing net gifts;
II – The deductions claimed and allowable
III – Any previous net gifts made during the same calendar year;
IV – The name of the donee;
V – Relation of the donor to the donee
VI – Such further information as the Commissioner require
a. All of the above c. I, II, III, and IV only
b. None of the above d. I, II and III only

44. The donor’s tax return shall be filed within

a. six (6) months after the date the gift is made
b. two (2) months after the date the gift is made or completed
c. thirty (30) days after the date the gift is made
d. thirty (30) days after the date the gift is made or completed

45. Unless the Commissioner otherwise permits, the donor’s tax return shall be filed and the tax paid to the following where the donor was
domiciled at the time of the transfer
I – Authorized Agent Bank
II – Revenue District Officer
III – Revenue Collection Officer
IV – Duly authorized Treasurer of the city or municipality
a. I, II, III and IV c. I and II only
b. I, II, III only d. I only

46. When the donor has no legal residence in the Philippines, the donor’s tax return shall be file with
a. Authorized Agent Bank
b. Revenue District Officer where the donor is domiciled
c. Revenue Collection Officer where the donee is domiciled
d. Office of the Commissioner

47. In order to be exempt from donor’s tax and to claim full deduction of the donation given to qualified donee – institutions duly accredited by
the Philippine Council for NOG Certification, Inc. (PCNC):
I – The donor engaged in business shall give notice of donation on every donation worth at least P50,000 to the RDO which has jurisdiction
over his place of business;
II – The notice shall be given within thirty (30) days after the receipt of the qualified donee – institution’s duly issued Certificate of Donation,
which shall be attached to the said Notice of Donation, stating that not more than thirty percent (30%) of the said donations/ gifts for the
taxable year shall be used by such donee – institution for administration purposes
a. Yes to I and II c. Yes to I only
b. No to I and II d. Yes to II only

48 – 50 are based on the following: The following donations during the calendar year 2006 are made to relatives:
January 30, 2006 P2,000,000
March 30, 2006 1,000,000
August 15, 2006 500,000

48. How much is the tax due on the gift made on January30, 2006?
a. P204,000b. P124,000 c. P80,000 d. P50,000

49. How much is the tax due on the gift made on March 30, 2006?
a. P204,000b. P124,000 c. P80,000 d. P50,000

50. How much is the tax due on the gift made on August 15, 2006
a. P204,000b. P124,000 c. P80,000 d. P50,000

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51. On January 5, 2005, Daisy gave a piece of land to her brother – in – law who is getting married on February 14, 2005. The assessed value and
zonal value of the land were P750,000 and P1,000,000 respectively. The land had an unpaid mortgage of P200,000, which was not assumed by
the donee and an unpaid realty tax of P10,000 which was assumed by the donee. The brother – in – law agreed to pay the donor’s tax on the
donation which was roughly P297,000. How much was the donor’s tax due?
a. P297,000 b. P237,000 c. P43,400 d. P31,400

52 to 54 based on the following: Mr. Jose San Jose made the following cash donations to his legitimate son, 18 years old, who got married on
January 5, 2006:
Date of donation Amount
December 23, 2005 P5,000
January 5, 2006 3,000
January 5, 2007 10,000

52. How much was the exempt dowry on the gift made on December 23, 2005?
a. P10,000 b. P8,000 c. P5,000 d. None

53. How much was the exempt dowry on the gift made on January 5, 2006?
a. P10,000 b. P8,000 c. P5,000 d. P3,000

54. How much was the exempt dowry on the gift made on January 5, 2007?
a. P10,000 b. P8,000 c. P5,000 d. P2,000

55. Mr. Oscar Azucar donated the following cash donations to his legally adopted daughter, 30 years old, who got married on June 10, 2006:

Date of Donation Amount

June 10, 2006 P 6,000
August 11, 2006 4,000
October 10, 2006 5,000
How much was the exempt dowry on the gift made on October 10, 2006?

56. Mr. Paolo Sao Paolo donated P50,000 cash to his favorite grandson who is getting married on June 16, 2007. For donor’s tax purposes the
exempt dowry shall be:
a. P50,000 b. P10,000 c. P5,000 d. None

57. Mr. Pantaleon de Leon donated a piece of land to his best friend , German La Germania. The land had an assessed value of P800,000 and
zonal value of P1,000,000 at the time of donation. It is also encumbered with an unpaid mortgage of P300,000 which shall be assumed by the
donee. In addition, the donee agreed to pay the applicable donor’s tax of P210,000. For donor’s tax purposes, how much shall be the total
deductions?
a. P510,000b. P300,000 c. P210,000 d. None

58. Mr. Nguyen Gandaipen, non – resident alien, donated a brand new car valued at P1,200,000 to his legitimate son who is getting married in the
Philippines. The son agreed to pay unpaid tax of P120,000 on the car. For Philippine donor’s tax of P210,000. For donor’s tax purposes, how
much shall be the total deductions?
a. P130,000b. 120,000 c. 10,000 d. None

59. Mr. George Jorge donated P500,000 to the City of Manila and P100,000 to his best friend who graduated summa cum laude. For donor’s tax
purposes how much shall be the:
Gross gifts Deductions
a. P600,000 P500,000
b. P500,000 P500,000
c. P600,000 P100,000
d. P500,000 P100,000

60. Ms. Josie Pruitt makes the following gifts in the year 2007:
• June 6, 2007 – P50,000 to Jaimee, acknowledge natural daughter on account of her marriage celebrated on June 8, 2006
• August 11, 2007 – A piece of jewelry purchased by Ms. Pruitt for P100,000 (but with a fair market value of P150,000 at the time of
donation) given to her husband
• October 12, 2007 – P50,000 to Maritz, her legitimate daughter, on account of her marriage on December 25, 2006
• December 25, 2007 – P20,000 cash donation to a non- profit philanthropic organization

The total taxable net gifts of Ms. Pruitt as of December 25, 2007 are:
a. P200,000b. P140,000 c. P90,000 d. P80,000

61. In 2007, Jose made the following gifts:

1. On June 1, 2007, P150,000 to Anton, his son, on account of his marriage celebrated May 1, 2006
2. On July 10, 2007, a parcel of land worth P180,000 to his father, subject to the condition, that his father would assume the mortgage
indebtedness of Jose in the amount of P40,000
3. On September 30, 2007, P150,000 dowry to his daughter Dana, on account of her scheduled marriage on October 25, 2007, and another
wedding gift worth P20,000 on November 23, 2007

How much is the total net gifts?

a. P500,000b. P460,000 c. P450,000 d. P430,000

62. On January 5, 2004, Emma Crema, resident donor, made the following donations:
• To Crispina, recognized natural child, on account of forthcoming marriage, land in the Philippines valued at P310,000
• To Francisco, legitimate son, car in San Diego, California, USA valued at P500,000 (donor’s tax paid in USA, P20,000)

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 For Philippine donor’s tax purposes, the donor’s tax due shall be:
a. P32,000 b. P20,000 c. P12,000 d. None

63. Mr. James Jayme, non – resident citizen donor, made the following donations on July 15, 2007:
• To Charles, a legally adopted child, on account of marriage on July 31, 2007, property in Indonesia (donor’s tax paid in Indonesia,
P70,000), fair market value, P510,000
• To Adjanto, best friend in the Philippines, a property with an unpaid mortgage of P30,000 assumed by the donee, fair market value,
P230,000

For Philippine donor’s tax purposes the allowable tax credit is

a. P74,000 b. P70,000 c. P52,857 d. None

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