PWD and SC

Problem 1: Masagana Corporation provides 20% discount to PWDs. It recorded the following during the year:
Regular Customers PWD Total
Receipts P8,000,000 P1,000,000 P9,000,000
Cost of services 3,000,000 2,000,000 5,000,000
Other deductible 1,000,000 1,000,000 2,000,000
expenses

Question 1: The amount of gross receipts to be reported is

A. P1,000,000 B. P1,250,000 C. P9,000,000 D. P9,250,000

Question 2: The taxable net income is

A. P750,000 B. P1,000,000 C. P1,750,000 D. P2,000,000

Receipts
Regular customer 8,000,000
PWD (1M/80%) 1,250,000
Total gross receipts 9,250,000
Less:
C ost of services (5,000,000)
Other deductible expenses
(P2M + PWD discount of P250,000) (2,250,000)
Taxable net income 2,000,000

Problem 2: Masagana Corporation provides 25% discount to senior citizen. It recorded the following during the
year:
Regular Senior Citizen Total
Gross sales P8,000,000 P2,000,000 P10,000,000
Cost of sales 5,000,000 1,000,000 6,000,000
Other deductible 1,000,000 1,000,000 2,000,000
expenses

Question 1: The amount of gross sales to be reported is

A. P8,000,000 B. P9,500,000 C. P9,600,000 D. P10,000,000

Question 2: The taxable net income is

A. P1,750,000 B. P1,600,000 C. P1,800,000 D. P1,500,000

Gross sales
Regular customers 8,000,000
Senior C itizen(SC ) 2,000,000
Total gross receipts 10,000,000
C ost of sales (6,000,000)
Other deductible expenses
(P2M +SC discount of P500,000) (2,500,000)
Taxable net income 1,500,000

Problem 3: The Pizza Hut Sarap, VAT-registered issued the following official receipt to a customer who was with a
senior citizen:

Ordered by a senior citizen

Parma pizza P880
Mango basil 180 P1,060
Ordered by the non-senior citizen
House salad P420
Beef rending 590
Avocado smoothie 190 1,200
Total sales (VAT inclusive) P2,260
Question 1: How much is the VAT-exempt sale?
A. P2,017.85 B. P1,060.00 C. P946.43 D. P1,203.85

Question 2: How much is the sales discount for senior citizen?

A. P403.57 B. P212.00 C. P189.29 D. P123.88

Question 3: How much is the service charge assuming the bill is net of the 10% service charge?
A. P201.77 B. P182.85 C. P164.67 D. P212.00

Question 4: How much is the total amount due?

A. P2,260.00 B. P2,140.00 C. P2,017.85 D. P2,102.88

Que stion 1
Ordered by a senior citizen (1,060 / 1.12) 946.43

Que stion 2
946.43 20% 189.29

Que stion 3
Total sales exclusive of VAT (2,260 / 1.12) 2,017.86
Less: Senior C itizen Discount (189.29)
Based 1,828.57
Service charge 10% 10%
Service charge 182.86

Question 4:
Se nior Non-senior Total
Sales 946.43 1,071.43 2,017.86
Senior C itizen Discount (189.29) (189.29)
Net 757.14 1,071.43 1,828.57
VAT 12% 128.57 128.57
Service charge 75.71 107.14 182.86
Total 832.86 1,307.14 2,140.00

(RMC 81-2021)- The VAT exemption for sale or importation of the following shall take effect on:
a. Medicines for diabetes, high cholesterol, and hypertension beginning January 1, 2020;
b. Medicines for cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2021;
c. Drugs and vaccines prescribed and directly used for COVID-19 treatment beginning January 1, 2021
until December 31, 2023; and
d. Medical devices directly used for COVID-19 treatment beginning January 1, 2021 until December 31,
2023.

Problem 9: For 20x22 taxable year, determine whether the following is subject to VAT. Write “V” in the space
provided if the transaction is subject to VAT. Write “E” if the transaction is VAT Exempt

Case Transaction Answer

A Sale by a real estate dealer of residential lot with selling price of P800,000 V
B Sale by a real estate dealer of residential lot with a selling price of P3,500,000 V
C Sale by a real estate dealer of commercial lot with a selling price of P2,800,000 V
D Sale of residential lot classified as capital asset E (6% CGT)
E Sale by a real estate dealer of residential house and lot with a selling price of E (P3,199,200 Ex)
P3,000,000
F Sale by a real estate dealer of condominium unit with a selling price of P3,250,000 V
G Sale by a real estate dealer of parking lot in a condominium unit with a selling price V
of P850,000
H Sale of residential house and lot classified as capital asset with a selling price of E
P8,000,000

Problem 10: (Adapted) Instruction: Using the CREATE Law, determine the VAT-subject amount, VAT-
exempt amount and VAT payable:
 Selling price: (Date of sale Year 20x21) A B C
Condominium unit P2,500,000 P3,500,000 P5,000,000
Parking lot 1,600,000 800,000 900,000

VAT-subject P 1,600,000 P4,300,000 P5,900,000

VAT-exempt P 2,500,000
Vat payable

The following sales of real properties are exempt from VAT, namely:

Provided, That beginning January 1, 2021, the VAT exemption shall only apply to
 sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of
trade or business,
 sale of real property utilized for socialized housing as defined by Republic Act No. 7279,
 sale of house and lot, and other residential dwellings with selling price of not more than Two
million pesos (P2,000,000): Provided, further, that every three (3) years thereafter, the amount
herein stated shall be adjusted to its present value using the Consumer Price.

(RR 8-2021) As such, fairness and equity dictate that the VAT-exempt threshold under RA No. 10963, or the
Tax Reform for Acceleration and Inclusion Law (TRAIN Law), of Two Million Pesos (P2,000,000) for sale of house
and lot and other residential dwellings should be adjusted to P3,199,200 beginning January 1, 2021.

Note:
 Sale of parking lot in the sale of condominium units (RR 13-2012), is not covered by the rules on threshold
amount being a residential lot, house and lot or a residential dwellings. Thus, should be subject to
VAT regardless of amount of selling price.
 Imposition of VAT on foreclosure sales of real property characterized as ordinary asset (RR 16-2005), in
case of non-redemption of properties sold during involuntary sales, regardless of the type of proceedings
and personality of mortgagees/selling persons or entities, if the property is an ordinary asset, the VAT
shall be imposed. The VAT shall be based on whichever is higher of the consideration (bid price of the
highest bidder) or the fair market value or the zonal value.

Problem 11: Instruction: Using the TRAIN Law, determine the VAT-subject amount, VAT-exempt
amount and VAT payable from the rentals of
(a) residential and
(b) commercial units.
(a) (b)
Residential Commercial
Unit Unit
Case A-Monthly rental per unit (10 residential units and 10 commercial P 10,000 P 10,000
units)
Annual gross rentals P1,200,000 P1,200,000
Other receipts P500,000 P500,000
VAT-subject
VAT-exempt P1,700,000 P1,700,000
VAT payable

Case B -Monthly rental per unit (10 residential units and 10 commercial P 15,000 P 15,000
units)
Annual gross rentals P1,800 ,000 P1,800,000
Other receipts P1,000,000 P1,000,000
VAT-subject -
VAT-exempt P2,800,000 P2,800 ,000
VAT payable

Case C -Monthly rental per unit (10 residential units and 10 commercial P 16,000 P 16,000
units)
Annual gross rentals P1,920,000 P1,92 0,000
Other receipts P 100,000 P 100,000
VAT-subject -
 VAT-exempt P2,020,000 P2,020,000
VAT payable

Case D -Monthly rental per unit (10 residential units and 10 commercial P 14,000 P 14,000
units)
Annual gross rentals P1,68 0,000 P1,68 0,000
Other receipts P3,500,000 P2,500,000
VAT-subject P3,500,000 P4,180 ,000
VAT-exempt P1,680,000 -
VAT payable

Problem 12: (COVID -19- Prevention-Medical Grade PPE Components) AAA Corp. is a VAT-registered entity
and a holder of License to Operate issued by FDA to manufacture medical-grade PPE components such as coveralls,
gown, surgical cap, surgical mask, n-95 mask, scrub suits, goggles and face shield, double or surgical gloves,
dedicated shoes and shoe covers, for COVID-19 prevention.

During the period of April to June 2021, the company had the following transactions:
Transactions VAT Treatment Explanation
1. Importation of raw materials (not locally available) VAT exempt Imported item is not locally
available
2. Importation of capital equipment VAT exempt Importation of capital
equipment for use in
production of PPEs is VAT
exempt
3. Importation of raw materials (locally available) Subject to VAT Subject since the imported
item is locally available
4. Sale or transfer of raw materials to an affiliate company VAT exempt Sale of PPE raw materials is
which is also a holder of License to Operate issued by the exempt from VAT
FDA

Required: Determine whether subject to VAT or VAT exempt

Problem 13 (Adapted) Instruction: Determine the VAT-subject amount, VAT-exempt amount and VAT
payable:
Husband Wife
Case A – Gross sales, trading business P3,919,500 P2,000,000
VAT-subject P3,919,500
VAT-exempt P2,000,000
VAT payable

Case B –Gross receipts, practice of profession P1,000,000 P -

Gross receipts, massage parlor 1,200,000
Gross sales, trading business 1,000,000
Gross receipts, gym business 1,500,000 -
Gross sales, RTW and bags business 1,500,000
Gross rentals, monthly rental for leased units, P10,000 1,200,000
Gross sales, pineapple, coconut and vegetables (farm produce) 300,000
Gross sales, Milk fish from own fishpond, marinated and vacuum 1,000,000
packed.
Gross receipts, poultry contract grower services 1,300,000
Total P6,919,500 P7,000,000
VAT-subject P3,500,000 P3,700,000
VAT-exempt P1,500,000 P1,300,000
VAT payable

Case C- Gross receipts practice of profession P1,000,000 1,000,000

Salaries 2,000,000 500,000
Tuition fees from family owned vocational school registered under 5,000,000 5,000,000
TESDA
Sale of own published books 1,000,000
Total 9,000,000 6,500,000
VAT-subject
VAT-exempt 9,000,000 6,500,000
VAT payable
 VAT ON SALE OF REAL PROPERTIES

Problem 1: Delama is a real estate dealer, sold three (3 lots) on November 20x8 with the following terms (net of
VAT):
Lot A Lot B Lot C
Selling price P250,000 P200,000 P300,000
Cost 150,000 130,000 175,000
Terms:
Down payment, Nov. 5 25,000 50,000 40,000
Due:
December 5, 20x8 25,000 20,000 20,000
Jan. To Dec. 20x9 200,000 130,000 240,000

Required: Determine the following:

1. VAT payable – November 20x8
2. VAT payable – December 20x8

Problem 2: A VAT registered real estate dealer sold a residential lot on September 20x8. The following information
was made available on the terms of the sale:
Gross selling price (Zonal value, P2,800,000) P3,000,000
Initial payments consisting of down payment and installments in the year of sale 900,000
Balance to be paid in equal instaliments of P700,000 starting January 20x9 2,100,000

Required: Determine the following:

1. Output tax – September 20x8
2. Output tax – January 20x9

Problem 3: (Excess mortgage payable over cost)

Sale by a real estate dealer
Date of sale January 2,
20x1
Consideration in the deed of sale P6,000,000
Fair market value in the assessment rolls 5,100,000
Zonal value 4,900,000
Cost to the seller 1,000,000
 Payments on the consideration:
Assumption of mortgage by buyer P2,000,000
January 2, 20x1 (date of sale) 500,000
June 2, 20x2 700,000
December 2, 20x2 2,800,000
Required: Compute the following:
1. Output tax on January 2, 20x1
2. Output tax on June 2, 20x2
3. Output tax on December 2, 20x2

Tax base (whichever is highest) 6,000,000

Value added tax (P6M x 12%) 720,000
Payment, January 2, 20x1 500,000
Excess of mortgage over cost 1,000,000
Initial payment (not exceed 25%) 1,500,000
720/6,000 x 2,500,000 300,000
720/6,000 x 700,000 84,000
720/6,000 x 2,800,000 336,000

Problem 4: (Dealer vs Non-dealer of real property) The following data are taken from sale of a real estate
dealer on January 2, 2015:
Gross selling price P10,000,000
Assessed value 15,000,000
Zonal Value 14,200,000
Appraised value 18,000,000
Down payment (January 5, 20x5) 1,000,000
Collection:
January 31, 20x5 1,000,000
January 31, 20x6 2,000,000
January 31, 20x7 2,000,000
January 31, 20x8 2,000,000
January 31, 20x9 2,000,000

Required:
A. How much is the output tax for January 31, 20x5, January 31, 20x6 and January 31, 20x7 using 12% VAT
rate?
B. Assuming the zonal value in 20x9 is P20,000,000 and the buyer is required to pay surcharges of P20,000
and P2,000,000 collection principal. How much is output tax in 20x9?
C. Assuming the down-payment is P2,000,000, how much is the output tax for January 31, 20x5, January 31,
20x6 and January 31, 20x7 using 12% VAT rate?
D. Assuming the seller is not a real estate dealer but the real property sold is used in business, how much is
the output tax for January 31, 20x5, January 31, 20x6 and January 31, 20x7 using 12% VAT rate?
E. Assuming the seller is not a real estate dealer and the real property sold is not used in business, how much
is the output tax for January 31, 20x5, January 31, 20x6 and January 31, 20x7 using 12% VAT rate?

a. How much is the output tax for January 31, 2015, January 31, 2016 and January 31, 2017 using 12% VAT
rate?
1/31/15 360,000 (2/10 x (15,000,000 x 12%)
1/31/16 360,000
1/31/17 360,000

b. P360,000 + (20M-15M+20,000)x12% = P962,400

c. Assuming the downpayment is P2,000,000, how much is the output tax for January 31, 2015, January 31,
2016 and January 31, 2017 using 12% VAT rate?
1/31/15 P1,800,000 (15,000,000 x 12%)
1/31/16 Zero
1/31/17 Zero

d. Assuming the seller is not a real estate dealer but the real property sold is used in business, how much is the
output tax for January 31, 2015, January 31, 2016 and January 31, 2017 using 12% VAT rate?
 1/31/15 360,000 (2/10 x (15,000,000 x 12%)
1/31/16 360,000
1/31/17 360,000

e. Assuming the seller is not a real estate dealer andthe real property sold is not used in business, how much is
the output tax for January 31, 2015, January 31, 2016 and January 31, 2017 using 12% VAT rate?
1/31/15 Zero
1/31/16 Zero
1/31/17 Zero

1. The A Bakers sells cakes and pastry to well known hotels in the Metro Manila area. The hotels are allowed credit
based on the track record of the hotels. The sale by the store in April 2018 was P224,000 including the VAT.
75% of the sales are normally on account. How much is the output tax for the month of April 2018?
A. P22,000 B. P20,000 C. P16,500 D. P24,000

Sales 224,000
Multiply by: 12/112
Output Tax 24,000

2. A, trader, made the following sales of goods during the month of June 2018, exclusive of VAT:
Cash sales P200,000
Open account sales 100,000
Installment sales 100,000
Note: receipt from installment sales 40,000
Consignment made (net of VAT)
June 15, 2018 100,000
May 15, 2018 100,000
April 15, 2018 100,000

Output tax is
A. P50,000 B. P34,000 C. P60,000 D. P72,000

C ash Sale 200,000

Open account sales 100,000
Installment sales 100,000
C onsignment:
June 15,2018 100,000
Total 500,000
Multiply by: 12%
Output Tax 60,000

3. Which of the following lessors of residential units is/are subject to VAT?

A B C D
No. of apartment units 100 20 16 18
Monthly rent/unit P14,800 P15,000 P15,400 P15,100
A. B and D
B. C and D
C. B, C and D
 D. D only

A - Exempt because the monthly rent is not more than 15,000 D

B - Exempt because the monthly rent is not more than 15,000, its just exact 15,000. Monthly Rent 15,100
C - does not exceed 3M to be subject to VAT. No. of units 18
Monthly Rent 15,400 Rent for every unit 271,800
No. of units 16 No. of Months in a yr 12
Rent for every unit 246,400 Amount 3,261,600 *exceed 3M - Subject to VAT.
No. of Months in a yr 12
Amount 2,956,800
Use the following data for the next three (3) questions

The following information were from the estate of a married citizen decedent who died on January 2021:
Properties:
Family home P12,000,000
Domestic shares inherited 6 years ago during marriage 6,000,000
Bank deposit, representing dividend earned during marriage 1,000,000
Jewelry received as gift 8 years ago during marriage 1,000,000
Expenses:
Claims against the estate 4,000,000
Funeral expenses 1,000,000
Judicial expenses 500,000

100. Under conjugal partnership of gains, gross conjugal property is

A. P13,000,000
B. P12,000,000
C. P8,000,000
D. P6,000,000

101. The ½ share of the surviving spouse is

A. P6,000,000
B. P4,500,000
C. P5,000,000
D. P3,000,000

102. The net taxable estate of the decedent is

A. P600,000
B. P575,000
C. P500,000
D. P475,000

Use the following data for the next four (4) questions:

Mr. Pim Musay, Filipino and married, died in 2019, leaving this estate in favor of his surviving spouse. The following
information were made available:

Real property in Quezon City, acquired during marriage. Said property is supported by a barangay certification that
the spouses resided in this property at the time of Mr. Musay’s death. The fair market value of this property as per
latest tax declaration is P15,000,000 while the zonal valuation as of the time death is P20,000,000. Said real property
was held as a mortgage in a loan applied by the spouses. As of the time of death, the outstanding balance of the
mortgage payable amounted to P5,000,000.

Real property in Batangas, inherited by Mr. Musay during marriage, two and half years ago from his late father. The
fair market value per tax declaration as of his death is P8,000,000 while the zonal valuation is P12,000,000. Said
property was previously taxed at a value of P10,000,000 when Mr. Musay inherited the property from his father.

Real property in Cavite, donated to Mrs. Mahusay, 10 years ago (before marriage) by his parents-in-law. The fair
market value as per latest tax declaration as of the time of Mr. Musay’s death is P3,000,000 while the zonal valuation
is P4,000,000.

Other exclusive properties of Mr. Musay P1,000,000; Other properties of Mr. and Mrs. Musay P3,000,000. Funeral
expenses incurred by the estate during the wake and burial of Mr. Musay amounted to P1,900,000.
 Required:
103. Compute item 34 (Gross Estate) of BIR from no. 1801
A. P28,500,000 B. P32,500,000 C. P30,000,000 D. P40,000,000

104. Compute Schedule V (Ordinary deductions) of BIR Form No. 1801

A. P5,000,000 B. P10,250,000 C. P12,000,000 D. P8,500,000

105. Compute item 40 (Net Taxable Estate) of BIR Form no. 1801
A. P3,750,000 B. P13,750,000 C. P29,750,000 D. P0

106. Compute item 20 (Estate Tax Payable) of BIR form no. 1801
A. P225,000 B. P825,000 C. P1,785,000 D. P0

107. Bonifacio, head of family died on January 15, 2021, leaving the following properties and obligations:
Cash in bank, 50%, donated mortis causa to National Government; 50% to Q.C. P3,000,000
Government
House and lot in Makati, F. Home 15,000,000
Personal properties 15,000,000
Farm lot 8,250,000
Claim against an insolvent debtor 2,250,000
Transfer in contemplation of death (gratuitous) 15,000,000
Transfer passing under special power of appointment 750,000

Deductions Claimed:
Funeral expenses 5,750,000
Judicial expenses 675,000
Donation mortis causa to Quezon City Government 1,500,000
Unpaid mortgage on the farm lot 750,000
Medical expenses (included in the funeral expense incurred within the 1 year 2,250,000
period with receipts)

The farm lot was inherited 5 ½ years by the decedent before his death with a value then of P5,750,000 and a
mortgage indebtedness of P1,500,000. The taxable net estate is:
A. P26,720,000
B. P37,500,000
C. P41,500,000
D. P50,500,000

Use the following data for the next four (4) questions:

Sarah, a resident of China and Chine citizen died last July 4, 2021 leaving the following properties:
Land in Davao P20,000,000
Rest house in China 10,000,000
Jewelries received from a friend a week before her death 5,000,000
Family Home 15,000,000
Vehicles 8,000,000

The descendants of Sarah claimed the following deductions:

Funeral expenses P3,000,000
Claims against insolvent persons 5,000,000
Losses 1,000,000
Medical expenses 2,000,000
Family home 15,000,000
Standard deduction 5,000,000

108. The gross estate is

A. P48,000,000
B. P53,000,000
C. P58,000,000
D. P63,000,000

109. Total LITe to be deducted from the gross estate

A. P3,000,000
B. P6,049,110
 C. P5,047,619
D. P8,000,000

110. Deductible vanishing deduction shall be

A. P0
B. P3,352,050
C. P4,523,810
D. P5,452,050

111. Net taxable estate is

A. P18,547,950
B. P20,498,840
C. P40,000,000
D. P42,928,571

Use the following data for the next three (3) questions:

Kano, a non-resident American, died on May 1, 2021 leaving the following:

Exclusive properties, Philippines P5,600,000
Conjugal properties, Philippines 4,200,000
Conjugal properties, Abroad 18,200,000
Claims against insolvent persons 1,000,000
Funeral expenses 200,000
Judicial expenses 850,000
Claims against the estate 1,500,000
Losses: occurring 8 months after death due to fire 1,700,000
Donation mortis causa to Makati City Hall 1,800,000
Family Home (include above), located abroad 10,000,000
Standard deduction 10,000,000

112. The taxable net estate is

A. P5,165,000
B. P4,665,000
C. P4,981,250
D. P21,000,000

1. Pedro, single, donated the following properties on September 21, 2021:

Value Property Donee
P100,000 Cash Juan, brother, on account of marriage
400,000 Jewelries Kat, girlfriend residing in Korea
1,500,000 House and Lot Parents, silver wedding anniversary gift
75,000 Land Barangay Mapayapa, for use of barangay hall
300,000 Car Fe, sister, donation is revocable
50,000 Cash International Rice Research Institute
100,000 Cas Guillermo, father of the father of his mother
70,000 Motorcycle Kay, niece, donation is embodied in the will

The total donor’s tax payable should be

A. P111,000 B. P126,000 C. P160,000 D. P220,000
DONOR’S TAX CREDIT

2. Donor’s tax credit is not allowed to a donor who is a:

A. Resident citizen
B. Non-resident citizen
C. Resident alien
D. Non-resident alien

The next two (2) questions are based on the following data:

Patrick resident alien, made the following donations for the year 2021:
April 15:
 To Hayley (legally adopted child): Car worth P700,000 in the Philippines
 To Rebekah (daughter): Car in Canada worth P300,000. The donor’s tax paid in Canada was $200 ($1=P45)

July 20:
 To Sophie (niece in Manila): P200,000 worth of personal property.
 To Davina (legitimate daughter on account of marriage, July 18, 2017): Car in Manila, worth P400,000 but
mortgaged for P200,000, ½ of which was assumed by the donee.

3. The gift tax payable on April 15 should be:

A. P45,600
B. P30,000
C. P44,000
D. P36,000

4. The gift tax payable on July 20 should be:

A. P40,000
B. P30,000
C. P84,000
D. P80,000

5. Julio made the following gifts to his relatives:

Philippines USA UK Italy
Gross Gift P750,000 P500,000 P250,000 P500,000
Deductions 250,000 200,000 150,000 150,000
Tax paid - 25,000 12,000 10,000

The donor’s tax payable after tax credit is:

A. P26,000
B. P30,800
C. P33,250
D. P60,000

6. Any person making a donation (whether direct or indirect), unless the donation is specifically exempt under the
Tax code or other special laws, is required, for every donation, to accomplish under oath a donor’s tax return.
The return shall set forth:
I. Each gift made during the calendar year which is to be included in gifts.
II. The deductions claimed and allowable
III. Any previous net gits made during the calendar year
IV. Name of the done

A. I and II only
B. I, II and III only
C. I, II and IV only
D. All of the above

7. The donor’s tax return shall be filed within:

A. Six (6) months after the date the gift is made or completed.
B. Two (2) months after the date the gift is made or completed.
C. Thirty (30) days after the date the gift is made or completed.
D. One year after the date the gift is made or completed.

8. Unless the Commissioner otherwise permits, the donor’s tax return shall be filed and the tax paid to the:
I. Authorized agent bank (AAB) under the jurisdiction of the RDO where the donor is domiciled at the time of
the transfer.
II. Revenue District Officer or Revenue Collection of Officer having jurisdiction over the place where the donor
is domiciled at the time of the transfer.
III. Office of the Commissioner if the donor has no legal residence in the Philippines.
IV. Philippine Embassy or Consulate in the country where the donor is domiciled at the time of the transfer or
directly to the office of the Commissioner, in the case of gifts made by a nonresident.

A. I and II only
B. I, II and III only
C. I, II and IV only
D. All of the above
9. Manolo, a resident of Dagupan City donated to Arturo a property in Laoag City. The donor’s tax is P40,000. The
deed of donation was signed in the residence of Arturo in Baguio City. The donor’s tax return must be filed in
A. Dagupan City
B. Laoag City
C. Baguio City
D. Quezon City

10. Statement 1: Only one return shall be filed for several gifts (donations) by a donor to the different donees on
the same date.

Statement 2: If the donation involves conjugal/community property, each spouse shall file separate return
corresponding to his/her respective share in the conjugal/community property.
A. True, False
B. False, True
C. True, True
D. False, False

11. Statement 1: If on any one date, there is a donation by one donor to his relative and another one to a stranger,
there will be two (2) separate donor’s tax return to be filed.

Statement 2: In donor’s tax, no extension of time for filing the donor’s tax return is allowed.
A. Statement 1 is correct, while Statement 2 is wrong
B. Statement 1 is wrong, while Statement 2 is correct
C. Both Statements are correct
D. Both Statements are wrong

12. Statement 1: A donation can be both a part of the gross gift of the donor and a taxable income to the donee.

Statement 2: A donation may be exempt from donor’s tax but not necessarily a deduction from the donor’s gross
income.
A. Only statement 1 is true.
B. Only statement 2 is true.
C. Both statements are true.
D. Both statements are false.

13. When the donor has no legal residence in the Philippines, the donor’s tax return shall be filed 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.

14. Statement 1: Husband and wife are considered as separate and distinct taxpayers for purposes of the donor’s
tax.

Statement 2: 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. Statement 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

FORMAL REQUISITES OF A DONATION

Formal Requisites of a Donation
 FORMAL REQUISITES
PERSONAL PROPERTY REAL PROPERTY
Amount of P5,000 or less More than Regardless of amount
donation P5,000
Form of Oral, in writing In writing In public instrument
donation or in tacit otherwise VOID otherwise VOID

The acceptance may be

made in the same
instrument (deed of
donation) or in a separate
public instrument.

If the acceptance is made in

a separate instrument, the
donor shall be notified in
authentic form.

A public instrument is
one which is
acknowledged before a
notary public or any
official authorized to
administer oath, by the
person who executed the same.

Additional Oral donation None None

Requirement requires
simultaneous
delivery

FORMS
Movables Immovables
Less than P5,000 – oral simultaneously delivery Public instrument – deed of donation
More than P5,000 – in writing Public instrument – deed of acceptance

DEED OF DONATION

KNOW ALL MEN BY THESE PRESENTS:

This DEED OF DONATION executed by and between __________________ of legal age, Filipino, married to
__________________, and a resident of Brgy. Upper Sepaka, Surallah, South Cotabato, hereinafter called the DONOR, and
 __________________________________, likewise of legal age, Filipino, and residing at Davao City, hereinafter called
the DONEE, witnesseth:

That the DONOR is registered owner of a Parcel of land more particularly described as follows:
TRANSFER CERTIFICATE OF TITLE P-____________
__________________________

“A Parcel of _____________________________________________________

That FOR AND IN CONSIDERATION OF LOVE AND AFFECTION the DONOR HEREBY voluntarily GIVES, TRANSFER,
and CONVEYS by way of DONATION UNTO THE DONEE, his heirs assigns, and successors in interest portion of the above
described property containing an area of TWO HUNDRED (200) SQ. Meters, more or less, for the purpose of Construction
of Mosque, together with all the improvements found thereon free from all liens, encumbrances and charges of whatever kind;

That the DONOR affirms that this DONATION is not made with intent to defraud his creditors and that his sufficient
funds and property reserved for himself and his obligations;

That the DONEE hereby accepts and received this DONATION made in favor of
_____________________________________________________________, hereby manifests gratefulness for the
generosity and liberality of the DONOR.

IN WITNESS WHEREOF, both parties have hereunto subscribed their names on __________ at
______________________.

__________________________
DONOR
With my Marital Consent:
___________________
Accepted by:
__________________

_____________________
DONEE

SIGNED IN THE PRESENCE OF;

REPUBLIC OF THE PHILIPPINES)

IN THE CITY OF ________________ ) S.c
X---------------------------------------- X

BEFORE ME, this on _____________ at _________________, personally appeared

___________________________, with CTC No. ______________ issued on ______________________ at
___________________________________________, known to me and to me known to be the same person who executed
the foregoing instrument and acknowledged to me that the same is his free and voluntary act and deed.

WITNESS MY HAND AND NOTARIAL SEAL.

VOID DONATION
Void Donations

Void donations are invalid donations. Void donations include those prohibited by law and those with defects in
their execution. Void donations are not objects of taxation.

Prohibited donation under the Civil Code:

1. Donation between spouses, except minor gifts
2. Donation between persons who were guilty of adultery or concubinage at the time of donation.

Criminal conviction for adultery or concubinage is not material to the disqualification of the donee. Hence,
a donation to a common-law wife as beneficiary in the life insurance policy of a legally married man is
held void (The Life Assurance Company vs. Ebrado, G.R. L-44059 October, 28, 1977)

3. Donations between persons found guilty of the same criminal offense, in consideration thereof
4. Donation to a public officer or his wife, descendants or ascendants by reason of his office
 5. Donations to incapacitated persons
6. Donations of future property

Donation with defects at execution

1. Donation by a person who has no legal title to the property
2. Oral or written donation of real property or intangible personal property
3. Donation refused by the donee