Dealer's

Passion Incre
6146
B Professionaltan
Employment Infor

othrt.to

Tax on Other Items of GI

J. Tamayao
 Inclusions on Gross Income
(1) Compensation income;
(2) Gross income derived from the conduct of trade or business or the exercise of a
profession;
B Prof Incm
(3) Gains derived from dealings in property;
(4) Interests; P1 FT T ealms
(5) Rents;
(6) Royalties; PI FT
(7) Dividends; PI FT
(8) Annuities; 01
(9) Prizes and winnings;
FD
(10) Pensions; and EIKH
(11) Partner’s distributive share from the net income of the general professional
partnership.
01 Pta 61
fists
 Rental
Collections xxx
+ Advance Rentals xxx
+ Obligations Assumed by the Lessee xxx
+ Leasehold Improvements xxx
TOTAL Rental IIncome xxx

outriont am y n g
LI
y
2 method
2H Vane
Depreciated

Spread outmethod
Remaining 4am the end
the base
outright of thelife of t
on th IT outover the
spread
II Ii
 Example: Rental Income
Naruto leases its lot to Sasuke for a term of 3 years with an annual rental of
P50,000.00. As of January of the first year, Sasuke completed the constructed of an
improvement on the lot with a value of P1,500,000.00 with an estimated life of 5
years. The leasehold contract stipulates that the improvement will belong to Naruto
after the term of the lease.
EE
1. Spread Out Method
2. Outright method
A
Compute for the annual rental income for three years using:
spread out m
iiiii
outright
for 0k
y
50k 50K
IE EKY.fm
4 totalk 2904
7

Def
4

I
I
IE IT
175040
no
 0

Annuities
• installment payments received for life insurance sold by insurance
companies. IPC.tn tnswEEsmtp 61 of the IC RIT
• there is a contract with insurance company that promises the owner
to be paid of a regular income or payment
Infinite Value Items
In relation with the
concept of return No Return of Capital Issuer Fined
of capital: 1. Life
2. Health
3. Reputation
XPN on Life:
1. Excess of amounts received over premiums paid
2. Gain realized by the insured from the assignment or sale of his policy
3. Interest income from the unpaid balance of the proceeds of the policy
 Partner’s Distributive Share
For purposes of taxation, we have two kinds of partnerships:
a. General Professional Partnership
b. General Partnership in Trade or General Co- Partnership
Taxation of the Partnership: Share of the Partner:
GPP EXEMPT Added to the GI of the partner. Subject
Partnership to CWT.
Others Treated as a Subject to Final Tax as dividends.
corporation.
Share Grossfromfrom operator
include the share from

61 fromoperations
 GPP:
GPP
PARTNERSHIP PARTNER’S SHARE
ØNot subject to income ØAdded to Gross Income
taxation. ØThe share of a partner shall
ØExempt. be subject to a CWT:
o10% <=P720,000.00
o15% > P720,000.00.
30
70

Separate Incont
 Other’s (Business Partnership)

PARTNERSHIP PARTNER’S SHARE

ØSubject to income taxation ØDistributable share is net
like a corporation, at 25%. of income tax.
ØShare is treated as a
I 2
D dividend, Subject to 10%
Final Tax, even if not
actually received.
bDividend
 Example:
Naruto and Sasuke are partners in Konoha. Konoha earned an
income before tax of P1,200,000. The partner’s share income
respectively at 70% and 30%. Naruto has a separate income of
400,000 and Sasuke has a separate income of 650,000.
Business tartarsh

i
as a corp

net
summon
0inch share 672k 288k
840k 26
44
i
A
 6 Hook 650k

Shore
no more in iron
offth

Other Items of 61
outright d
And come

Rental
if iii
Fini
Annuities FÉ no dep
excise or
thepremiums paid
Shareinthe 6th Plane
Exempt
jan
ofpator CWI
shore Ito on
I 75 TP

i and aadhi
IiS none

Legal co ownership trust.by stele

preferential to
1128