INCOME TAX (BALLADA)
Chapter I 1.Tax 1.Tax law, in general, is composed of three elements, except excep t A. The Co Code B. Decisions Decisions of of various various courts courts that hear hear tax tax cases. cases. C. Regulat Regulation ionss and ruling rulingss D. Ordi Ordina nanc nces es
. !ources of tax laws" 1. . $. (.
Cons Consttituti tution on !tatut !tatutes es and and #res #reside identi ntial al Decr Decrees ees Revenue Revenue Regul Regulati ations ons %& the the Departm Department ent of 'ina 'inance nce Rulings Rulings issued issued %& the Commiss Commissioner ioner of Interna Internall Revenue and and )pinions )pinions %& the !ecretar& of *ustice +. Decisions Decisions of the !upreme !upreme court court and the the Court of Tax Tax Appeals Appeals . #rovincial, #rovincial, cit& cit& , municipal, municipal, and %aranga& %aranga& ordinances ordinances su%-ect su%-ect to limitatio limitations ns set forth forth in the ocal /overnment Code 0. Treaties Treaties or or internationa internationall agreements agreements the purpose purpose of which which is to avoid or minimie minimie dou%le taxation.
A. 1, 1 , , + 2 B. 1, , $, ( 2 +
C. 1, 1, , $, (, + and D. 1, 2, 3, 3, 4, 5, 6 & 7
$. 3ational taxes includes" 1. Income taxes . 4state and donor5s taxes $. 6alue7added tax (. )ther )ther percent percentage age tax A. 1, 2, 3, 4, 5 and 6 C. 1, , $, +, and 8
+. . 0. 8.
4xcise tax Documentar& stamp tax Re Real propert& tax #rofes #rofessi sional onal tax
C. 1, , $, +, , 0 2 8 D. 1, 1, , $, (, +, 2 0
(.ocal taxes include" 1. Real propert& tax . Business taxes fees and charges $. #rofes #rofessio sional nal tax A. 1, 2, 3, 4 & 5 B. 1, , $ 2 ( +.I.
(. Communit& tax +. Tax on %an9s and other financial instit instituti utions ons C. , $, ( 2 + D. 1, , $ 2 (
Revenue law is a law passed for the purpose of authoriing the lev& and collection of taxes in some form to raise revenue. II7 Internal revenue laws are either political or penal in nature although there are penalties in case of violations. A. True: rue: True rue B. 'alse: True
C. True ; False
D. 'alse: 'alse
.I. 'or married individuals, the the hus%and and wife shall compute separatel& separatel& the tax due on their respective taxa%le income. II. If an& income cannot %e definitel& definitel& attri%uted attri%uted to or identified identified as income exclusivel& earned or realied %& either spouses, the same shall %e divided in an& ratio %etween the spouses for the purpose of determining their respective taxa%le income. A. True: rue: True rue B. 'alse: True
C. True ; False
D. 'alse: 'alse
0.I. In computing for the taxa%le income, fraction fraction of a peso is disregarded. II. 'or the tax tax due, a fraction amounting to fift& centavos or more is rounded off to a peso, while a fraction amounting to less than fift& centavos is disregarded. A. True; True B. 'alse: True
C. True : 'alse 'alse D. 'alse: 'alse
8.I. Total famil& income income includes primar& income and other income from sources received %& all mem%ers of the nuclear famil&. famil&. II. A single person living living alone is considered as a nuclear famil&. famil&. III. 'or married taxpa&ers, taxpa&ers, %oth spouse are entitled to to claim for additional additional exemption. A. True; True; False B. 'alse: True: True
C. True : 'alse: True D. 'alse: 'alse: True
8.Allowa%le deductions from %usiness income includes" 1. Basic Basic person personal al and ;or addi additio tional nal exempt exemption ions. s. . #remium #remium pa&ments pa&ments on on health health and;or and;or hospitali hospitaliation ation insurance insurance $. Itemi Itemied ed deduct deduction ionss under under the the Tax Tax Code Code (. )ption )ptional al !tanda !tandard rd Deduct Deduction ion.. C. 1, $ 2 ( D. 1, 2 (
A. 1, 2, 2, 3, 3, & 4
C. 1, 2 $
<.I7 If the emplo&ee should have additional dependents during the taxa%le &ear, he ma& claim not claim the corresponding additional exemption in full for such &ear. II 7 If the taxpa&er dies during the the taxa%le &ear, &ear, his death shall affect the amount of personal and additional exemptions his estate ma& claim. III = If the spouse dies or an& dependents dies or if an& such dependent marries, marries, %ecomes twent&7one &ears of age, or gets gainfull& emplo&ed during the taxa%le &ear, the taxpa&er ma& still claim the same exemption as if the change occurred at the end of the &ear. A. True: True: True: True: 'alse B. 'als 'alse: e: Tru True: e: Tru Truee
C. True True : 'alse: 'alse: True True D. False; False; True
1>. #assive income includes the following 1. Interests . Ro&alt Ro&alties ies $. #ries #ries and other winnings winnings
(. Ca Cash and;or propert& dividends +. !ale !ale of real real proper propert& t& . !ale of shares shares of stoc9 not traded in stoc9 exchange exchange
A. 1, 2, 2, 3 & 4 B. 1, , $, + 2
C. 1, , $, (, + 2 D. 1, , $, ( 2
11. I 7 All individual taxpa&ers are su%-ect > ? final tax on interests interests from from an& currenc& currenc& %an9 deposit and &ield or an& other o ther monetar& %enefit from deposit su%stitutes and from trust funds and similar arrangements. II 7 All individual taxpa&ers are su%-ect to >? final on ro&alties, in general and 1>? final tax on %oo9s, literar& wor9s and musical composition. III = All individual taxpa&ers are su%-ect to >? final tax on pries pries and winnings, winnings, in general.
A. True: True: True: True: 'alse B. 'als 'alse: e: Tru True: e: Tru Truee
C. True True : 'alse: 'alse: True True D. False; False; False
1. I 7 4ver& corporation shall file file in duplicate duplicate a @uarterl& @uarterl& summar& declaration of its gross gross income and deductions on a cumulative %asis for the preceding @uarter or @uarters upon which the income tax shall %e levied, collected and paid. II 7 The income tax computed decreased %& the amount of tax previousl& paid or assessed during the preceding @uarters shall %e paid pa id and the return filed not later than thirt& $> da&s from the close of each of the first three $ @uarters of the taxa%le &ear, whether calendar or fiscal. III 7 A return return showing the cumulative income and deductions shall not %e filed even if the operations for the @uarter and the preceding @uarters &ielded no tax due. A. True: True: True: True: 'alse B. True: rue: True True:: Tru Truee
C. True True : 'alse: 'alse: True True D. True; False; False
1$. I 7 The minimum corporate income tax CIT shall appl& to to all domestic corporations su%-ect to normal corporate income tax. II = The minimum corporate income tax CIT shall appl& to all resident foreign corporations su%-ect to normal corporate income tax. III = The 1>? Improperl& Accumulated 4arnings Tax IA4T is imposed on improperl& improperl& accumulated taxa%le income earned starting *an 1, 1<<8 %& all domestic corporations and which are classified as closel&7held corporations. A. True; True; False B. 'alse: True: True
C. True : 'alse: True D. 'a 'alse: 'alse: 'alse
1(. If the sum of the @uarterl& tax pa&ments made during the said taxa%le taxa% le &ear is not e@ual to the total tax due on the entire taxa%le income of that &ear, the corporation shall either" 1. #a& the %alance %alance of tax still still due . Carr Carr& & over over the the exces excesss cred credit it $. Be credite credited d or refunded refunded with with the the excess excess amount amount paid. A. 1, 2 & 3 B. 1 2 $
C. 12 D. none of the a%ove
1+. Improperl& Accumulated Taxa%le Taxa%le Income means taxa%le income ad-usted %& 1. Incom Incomee exe exempt mpt from from tax tax
. $. (. +. .
Income Income exclude excluded d from from gros grosss incom incomee Incom Incomee su%su%-ect ect to fin final al tax tax The amount amount of net operati operating ng loss loss carr&7over carr&7over 3)C) 3)C) deducted deducted Income Income tax tax paid; paid; pa&a%l pa&a%lee for the the taxa%l taxa%lee &ear Dividends Dividends actuall& actuall& or construct constructivel& ivel& paid;iss paid;issued ued from the the applica%le applica%le &ear5s &ear5s taxa%le taxa%le income 0. Amount reserve reserved d for the reasona% reasona%le le needs of of the %usiness %usiness emanatin emanating g from the the covered &ear5s taxa%le income.
A. 1, , $ 2 ( B. 1, , $, + 2
C. 1, 2, 3, 3, 4, 5, 6 & 7
D. 1, , $, ( 2
1. I. In general, the situs situs of the income whether within within or without the the #hilippines, is determined %& the place where the service is rendered. II. !ource of income is either within the #hilippines, without the #hilippines or partl& within and partl& without the #hilippines. A. Tr True: 'alse C. 'alse: 'alse B. D. 'alse: True True; True 10. I7 Remuneration for services performed performed outside the #hilippines #hilippines %& a resident citien for for a domestic or resident foreign corporation or partnership, or for a nonresident corporation or partnership, or for a non7resident individual not engag ed in trade ore %usiness in trade %usiness in the #hilippines shall %e treated as compensation which is su%-ect su%-ect to tax. II 7 Remuneration for services as emplo&ee of a nonresident alien individual, foreign partnership or foreign corporation constitute compensation onl& if such emplo&er is engaged in trade or %usiness %u siness within the #hilippines. A. True; False C. 'alse: 'alse B. True: True D. 'alse: True 18. I 7 3et operating loss means the excess of allowa%le deduction over gross income of the %usiness in a taxa%le &ear. &ear. II7 osses of propert& arising from fire, storms, shipwrec9, or other casualties, ro%%er&, ro%%er&, theft or em%element, and other losses, if incurred in connection with trade, %usiness or profession actuall& sustained during the taxa%le &ear and compensated for %& insurance or other forms of indemnit&, indemnit&, shall %e allowed as deductions. A. B.
True; False
True: True
C. 'alse: 'alse D. 'alse: True
1<. I 7 If the propert& sold is su%-ect to a mortgage which is assumed %& the %u&er, %u&er, and the mortgage exceeds the %asis of the propert& sold, the excess shall form part of the initial pa&ments in which case, the contract price is e@ual to selling price less mortgage assumed plus the excess of the mortgage over the %asis of the propert& sold. II7 Initial pa&ment means the pa&ment which the seller receives %efore or upon execution of the instrument of sale plus other pa&ments which he expects or is scheduled to receive in cash or propert& during the taxa%le &ear of sale or disposition. A. B.
Tr True: 'alse True; True
C. D.
'alse: 'alse 'alse: True
>. I = The gross7up gross7up monetar& value of the fringe fringe %enefit shall %e determined determined %& dividing the monetar& value of the fringe %enefit %& $?, $$?, and $(? depending on the applica%le &ear. II =The monetar& value of the fringe %enefit is alwa&s e@ual to the actual amount received %& the emplo&ee when the fringe %enefit is %eneficial to %oth the emplo&ee and the emplo&er. A.
True: 'alse
C.
False; False
B.
True: True
D.
'alse: True
1. I 7 /enerall&, /enerall&, the amount of taxa%le fringe %enefit and the fringe %enefit tax constitute constitute allowa%le deductions from the gross income of the emplo&ee. II7 Contri%utions of the emplo&er for the %enefit of the emplo&ee to retirement, insurance and hospitaliation %enefit plans are su%-ect to the fringe %enefit tax. A. B.
True: 'alse True: True
C.
False; False
D.
'alse: True
. I 7 In accounting for for gross income income of farmers under the accrual %asis %asis in contrast contrast to cash %asis, %eginning and ending inventories of livestoc9 and farm products raised and purchased are considered. II7 Income derived from illegal sources, such as gam%ling, extortion, theft, %ri%es, em%element, and smuggling are taxa%le. A. Tr True: 'alse C. 'alse: 'alse B. D. 'alse: True True; True $. I 7 Thirteenth month pa& and other %enefits received %& officials and emplo&ees of pu%lic and private entities are exempt provided, however, h owever, that the total exclusion shall not exceed #>,>>>. II7 /!I!, !!!, edicare and #ag7i%ig contri%utions, and union dues of individuals are not exempt from income tax. C. False; False A. True: 'alse B. True: True D. 'alse: True (. I 7 olida& pa& and haard pa& are not exempt from income tax. II7 Tips or gratuities paid directl& to an emplo&ee %& a customer of the emplo&er which are not accounted for %& the emplo&ee to the emplo&er are considered as taxa%le income. A. Tr True: 'alse C. 'alse: 'alse B. D. 'alse: True True; True +. I = If services are paid for in a medium other than mone&, mone&, it is not to %e included as compensation. II 7 #assive income su%-ect su%-ect to final tax shall not form part of the gross income for for purposes of computing the normal income tax lia%ilit& of individuals and corporations. A. B.
Tr True: 'alse True: True
C.
'alse: 'alse
D.
False; True
