Name: Dennis E. Sabalberino Jr.

Program: Accounting Information System 2

P6.1 (GROSS GIFTS)
A donor made the following donations during the year.
•To Abel, a car worth P800,000
•To Jen, condominium unit worth P3,000,000 in Macau
•To Gore, GJ Company shares (domestic corp.) amounting to P250,000
•To Alexa, P100,000 worth of shares of stock of a resident foreign corporation where 90% of
its operation is in the Philippines.
•To Earl, a building in Singapore valued at for P2,000,000 assumed by the donee P5,000,000
mortgaged
•To Hananiah, parcel of land in Isabela, P1,500,000
•To Chen, P100,000 bank deposit in BPI.
•To Kristine, P100,000 bank deposit in Metrobank, U.S. Branch
•To Gavrie, P500,000 cash
The donor also made the following transfer of properties within the year:

Property Consideration Received Fair Market Value at the

time of Transfer
Land 1 – Q.C P 2,000,000 P 3,000,000
Land 2 – Taguig 3,000,000 2,000,000
Land 3 – USA 5,000,000 10,000,000
Car – Manila 800,000 1,000, 000

REQUIRED:
Determine the amount of gross gifts subject to donor's tax assuming the donor is
a) Resident citizen
b) Nonresident citizen
c) Resident alien
d) Nonresident alien with reciprocity
e) Nonresident alien without reciprocity

ANSWERS:
 TO A B C D E
Abel P800,000 P800,000 P800,000 P800,000 P800,000
Jen 3,000,000 3,000,000 3,000,000
Gore 250,000 250,000 250,000 250,000
Alexa 100,000 100,000 100,000 - 100,000
Earl 5,000,000 5,000,000 5,000,000
Hananiah 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
Chen 100,000 100,000 100,000 - 100,000
Kristine 100,000 100,000 100,000 -
Gavrie 500,000 500,000 500,000 500,000 500,000
Land 1 -
Land 2 -
Land 3 5,000,000 5,000,000 5,000,000 -
Car 200,000 200,000 200,000 200,000 200,000
GROSS P16,550,000 P16,550,000 P16,550,00 P3,000,000 P3,450,000
GIFTS

P6.4. (GROSS GIFTS-Insufficient Consideration-sale of shares)

Pedro sold to Ana, his shares of stock in Makabayan Corporation (a closely held domestic
corporation) for P400,000 when its fair market value was P850,000. The shares were
purchased by Pedro five years ago for P500,000.
REQUIRED:
Determine the following:
a.) Donor’s Tax Due
b.) Assuming the shares were sold in the ordinary course of business, at arm’s length
transaction, without donative intent, how much is the donor’s tax due?
ANSWERS:
(a) Donor’s Tax (P850,000-400,000)-250.000) 6%= P12,000
(b) CGT= P0 the shares were sold at a loss
(c) Donor’s Tax = P0 : exempt from donor’s tax under the TRAIN Low
(d) CGT= P0 : the shares were sold at a loss

P6.5. (CUMULATIVE GIFTS)

A resident citizen made the following donations:
• On March 1, P200,000 to his son, on account of marriage celebrated on January 1, 2023.
• On May 30, a parcel of land worth P500,000 to his brother, subject to the condition that the
donee would assume the mortgage indebtedness in the amount of P100,000.
•On June 30, P300,000 to an ailing friend On July 31, P200,000 cash to Bantay Bata
• On September 30, a house and lot worth P3,000,000 to his daughter and son in law, on
account of their scheduled marriage on December 25, 2023. A mortgage of P600,000 will be
assumed by the donees.
Required: Determine the tax payable on:
a.) March 1
b.) May 30
c.) June 30
d.) July 31
e.) September 30
ANSWERS:
a. March 1 = Exempt
b. May 30 = P21,000
c. June 30 = P90,000
d. July 31= P0; Exempt
e. September 31= P447,200
Solutions:

Gross Gifts – March 1 P200,000

Less: Tax Exempt Gift (250,000)
Net Taxable Gift P–
Donor’s Tax due/Payable Exempt
March – 1

Gross Gifts – May 30 P600,000

Less: Mortgage assumed by (100,000)
the donee
Add: Prior Gift 200,000
Total Gifts as of May 30 600,000
Less: Tax exempt Gift (250,000)
Taxable Gift May 30 P350,000
x 6%
Donor’ s Tax Due 21,000
Less: Tax Paid —
Donor’s Tax Payable- P21,000
May 30

Gross Gift - June 30 P300,000

Add: Prior Period Gift 600,000
Total Gifts as of June 30 900,000
Less: Tax Exempt Gift (250,000)
Taxable Gift - June 30 P650,000
x 6%
Donor’ s Tax Due P39,000
 Less: Tax paid as of May 30 (21,000)
Donor’s tax Payable-June P18,000
30

Gross Gift – Sept.30 P 3,000,000

Lesss: Mortgage assumed by (600,000)
by the donee
Add: Prior Net Gift 900,000
Total Gift as of June 30 P3,300,000
Less: Tax Exempt Gift (250,000)
Taxable Gift -Sept.30 P3,050,000
x 6%
Donor’s tax Due P183,000
Less: Tax paid as of June 30 (39,000)
Donor’s Tax Payable – P 144,000
Sept.30

P6.7. (CUMULATIVE GIFTS, DONATIONS BY HUSBAND & WIFE)

Mr. and Mrs. Galante, citizen and residents of the Philippines, made the following donations
during 2023 calendar year:
June 6, 2023
• To their legitimate son on account of marriage, cash amounting to P4,600,000;
• To Bea (daughter), property valued at 2,000,000 with a mortgage of P400,000 assumed by
Bea.
October 8, 2023
•To Robert, a legitimate son of the wife by a prior marriage, P600,000
November 4, 2023
•To a charitable organization (25% of donations made were used for administrative
purposes), P1,000,000
•To Cindy, a family friend, P 400,000
REQUIRED: Determine the donor’s tax payable of the spouses on:
a.) June 6, 2023
b.) October 8, 2023
c.) November 4, 2023
ANSWERS:
a.) June 6, 2023 = P0; Exempt
b.) October 8, 2023= P2,160
c.) November 4, 2023= P 240
SOLUTIONS:
June 6, 2023

Husband Wife Total

Gross Gift (420K + P240,000 P240,000
20K)/2
Mortgage assumed (2,000) (2,000)
Net Gift P238,000 P238,000
Less: Tax Exempt (250,000) (250,000)
Gift
Net Taxable Gifts – (P12,000) (P12,000)
June 6
Donor’s Tax P0 P0 P0
Payable

October 8,2023

Husband Wife Total

Gross Gift P30,000 P30,000
Dowry - -
Prior Net Gift 238,000 238,000
Total Net Gifts P268,000 P268,000
Less: Tax Exempt (250,000) (250,000)
Gift
P18,000 P18,000
×6% ×6%
Donor’s Tax Due P1,080 P1,080
Tax paid – June 6 - -
Donor’s Tax P1,080 P1,080 P2,160
Payable

November 4,2023

Husband Wife Total

Gross Gift P- P-
( Charitable org :
exempt)
To a family friend 2,000 2,000
Prior Net Gifts 268,000 268,000
Tax exempt Gifts (250,000) (250,000)
Taxable Gift P20,000 P20,000
×6% ×6%
Donor’s Tax Due P1,200 P1,200
Less: Donor’s tax (1,080) (1,080)
paid
 Donor’s Tax P 120 P120 P240
Payable

TRUE OR FALSE
1.T
2.T
3.F
4.T
5.F
6.T
7.F
8.F
9.F
10.F
11.T
12.T
13.T
15.F
16.F
17.T
18.T
19.F
20.F
21.F
22.T
23.T
24.T
25.T
26.T