Transfer and Business Taxation

1. When a property is donated, the basis of the donor’s tax is

a. The cost of acquisition, if acquired by purchase or the fair market value at acquisition date,
whichever is higher.
b. The agreed upon value by the donor and the done
c. The fair market value at the time of donation
d. Any of the above

Answer: C

2. When a marriage settlement agreed upon was void and the marriage was contracted before August 3,
1988, the marriage settlement shall be
a. Absolute community
b. Conjugal partnership of gains
c. Complete separation of property
d. Any other regime

Answer: B

3. Laruan Inc., a VAT-registered dealer of gadgets, has the following data for the month of October:
Sales, total invoice value P5,800,000
Purchases, net of input taxes 2,820,000
Sales return 200,000
Purchases return, net of input taxes 300,000
Deferred input taxes (carried over from 3rd quarter) 9,500

The value added tax payable for the month of October is

a. P320,500 b. P285,500 c. P80,000 d. P288,100

Answer: D

4. If the estate consists of registrable property, such as real property, motor vehicle, share of stock or
other similar property from which a clearance from the BIR is required as a condition for the transfer
of ownership, an estate tax return should be filed under oath
a. If the gross estate exceeds P200,000
b. If the gross estate exceeds P500,000
c. If the gross estate exceeds P1,000,000
d. Regardless of the value of the gross estate

Answer: D

5. Pah Tay, a Chinese billionaire and a Canadian resident, died and left assets in China valued at P80
billion and in the Philippines assets valued at P20 billion. For Philippine estate tax purposes the
allowable deduction for expenses, losses, indebtedness, and taxes, property previously taxed,
transfers for public use, and the share of surviving spouse in their conjugal partnership amounted to
P15 billion. Pah Tay’s gross estate for Philippine estate tax purposes is
a. P 20 billion b. P5 billion c. P100 billion d. P85 billion

Answer: A

6. An example of funeral expense which is not deductible

a. Cost of coffin assumed by a family friend
b. Funeral services paid out the decedent’s estate
c. Mourning clothing of decedent’s unmarried minor children and surviving spouse
d. Cost of tombstone

Answer: A

7. Donor’s tax shall be filed within

a. 30 days after the gift has been made
b. 6 months after giving the gift
c. 25 days after giving the gift
d. 30 days after the end of every quarter
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 Answer: A

8. One of the following is not a transaction deemed sale

a. Transfer, use or consumption not in the ordinary course of business of goods or properties
originally intended for sale or for use in the course of business
b. Distribution or transfer to shareholders or investors of goods or properties as share in the
profits of a VAT-registered person or to creditors in payment of debt
c. Retirement from or cessation of business, with respect to inventories of taxable goods on
hand as of the date of retirement or cessation
d. Consignment of goods if actual sale is made within 60 days following the date such goods
were consigned

Answer: D

9. Don Dedo died leaving a family home composed of the following:

House, conjugal property worth P800,000, and the land in which he exclusively owned valued
at P400,000. He also owns a vacation house in Baguio worth P700,000.

The deductible amount of family home is –

a. P 800,000 c. P1,900,000
b. P1,200,000 d. P1,000,000

Answer: A

10. Kristal, a pawnshop owner, is a non-VAT taxpayer. For the month of April, she has gross receipts from
Interests amounting to Php 25,000. The pawnshop also conducted an auction sale that month. The
pawnshop has gain from it worth Php 13,850. How much is her percentage tax for the month of April?
a. P 6,993.00 c. P 1,942.50
b. P 1,165.50 d. P 4,662.00

Answer: C

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