ASSIGNMENT NO.

1
INCOME TAXATION

1. Benjie, single, had the following income and expenses for 2023.
Income:
Compensation Income as Chief accountant P 240,000
Professional Fees 400,000
Gross income from business 360,000
Expenses:
Practice of profession 280,000
Business connected to expenses 200,000
Personal and living expenses 190,000
Other income:
Interest on bank time deposit 15,000
Dividend received from a domestic corp. 10,000
How much is the taxable income of Benjie?

Item 2-6: Kareen, single had the following date during the taxable year:
Philippines USA
Gross income from business P 800,000 P 400,000
Business Expenses 500,000 200,000
Rental Income, gross of WT 200,000 100,000
Interest Income on bank deposit 100,000 20,000
Royalty Income 50,000 40,000
Dividend from domestic corp 50,000 30,000
2. If Kareen is a resident citizen how much is her taxable income?
3. How much is the income subject to final tax?
4. How much is the final tax due?
5. If Kareen is a non-resident citizen, how much is her taxable income?
6. If the taxpayer is a non-resident alien ETB without reciprocity, how much is her taxable income?

Item 7-8: Mr. Sam is employed in AB Company, a local company in the Philippines, as rank and file
employee. For the year end 2021, the following are his benefits:
a. Unused vacation leaves of 15 days which is convertible in cash at ₱ 1,000.00 per day.
b. Medical Cash allowance to dependents of ₱ 10,000.00
c. Rice Subsidy of ₱ 2,500.00 per month
d. Uniform allowance of ₱ 10,000.00
e. Actual Medical Assistance of ₱ 10,000.00
f. Laundry Allowance of ₱ 500.00 per month
g. Employee award in the form of tangible asset worth ₱10,000.00
h. Christmas gift of ₱7,000.00
In addition, he also received 13th month pay of ₱20,000.00 for the year.
7. How much is the total non-taxable benefits?
8. How much is taxable income?
9. The company operates different branches in key cities of the country. The managers being assigned in
the branch offices usually come from the main office in Manila. Because of this practice, they usually
lease residential houses for their branch managers. In 2023, they pay monthly rental of P 9,520 for the
residential houses in Cebu City. How much is the monthly fringe benefit tax?

10. The company owns a residential condominium unit which was allowed to be used by the manager.
The zonal value is P 3,264,000 while the assessed value is P 2,500,000. How much is the monthly fringe
benefit tax?

11. The company purchased a residential house in installment at P 3,699,200 and allowed the branch
manager to use it as his residence. How much is the fringe benefit tax per month?

12. The company purchased a residential house for P 3,000,000 when its FMV was P 3,400,000 and
transferred ownership thereof in the name of the manager. How much is the fringe benefit tax?

13. The company purchased a residential condo unit for P 2,500,000 and transferred title to for use as
residence by the manager for P 1,800,000. The commissioner’s value is P 2,820,000 while the value per
City Assessor is P 2,150,000. How much is the fringe benefit tax?

14. The employer owns a house which was assigned to be occupied by the manager for residential
purposes. The cost of the house is P 1.5M with a useful life of 20 years. Zonal value is P 1.2M. How much
is the fringe benefit tax?