Tax Test Bank Theory

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The followin following g conditions conditions shall be be observed observed when there there is a net net capital capital loss carry over: over: a. The loss loss carried carried over over is for for a holding holding period period not not exceedin exceeding g 12 months months b. The amount amount of of the loss loss should should not exceed exceed the the income income before before exempt exemptions ions in in the year year wh loss was sustained c. The taxpay taxpayer er shoul should d not not be a corpo corporat ration ion d. All of th the abo above ve

2.

Which Which of the follow following ing prizes prizes/bene /benefits fits is nontax nontaxable: able: a !rizes !rizes receiv received ed in recog recognit nition ion of of litera literary ry achie achievem vement ent b !rizes !rizes granted granted to athlete athletes s in local local competit competitions ions sanct sanctioned ioned by a nation national al sports sports associat association ion c "ocial "ocial "ecurity "ecurity benefits benefits receiv received ed by reside resident nt aliens aliens from from foreign foreign governme government nt agencies agencies d Any one of of th the ab above

#.

$n the computat computation ion of the improperly improperly accumul accumulated ated earnings earnings tax% tax% which of the followi following ng is not deduc the taxable net income& a 'ivide 'ividends nds declar declared ed and and paid paid for the taxabl taxable e year year b Net operat operating ing loss loss carr carry-o y-over ver deduct deducted ed c $ncome $ncome tax due and paid paid for for the the taxabl taxable e year year d (one of of th the ab above

).

*fter *fter filing a protest protest within within the prescribe prescribed d period% all relevan relevantt documents documents should should be submitted submitted to th within a With Within in ##- days days afte afterr fili filing ng the the pro prote test st b With Within in ))- days days afte afterr fili filing ng the the pro prote test st c With Within in 60 60 days days afte afterr fili filing ng the the pro prote test st d *nswer no not gi given

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Which Which of a b c d

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3ne of the the genera generall princip principles les of of income income taxa taxatio tion: n: a * foreign foreign corpora corporation tion engaged engaged in in business business in the the !hilippi !hilippines nes is taxabl taxable e on all income income derive derive sources within and without the !hilippines b A foreign foreign corpor corporati ation on engage engaged d in busine business ss in the Philipp Philippine ines s is taxabl taxable e on all in derived from sources within the Philippines Philippines only c * domest domestic ic corporat corporation ion is taxabl taxable e on income income derived derived from source sources s within within the !hilip !hilippines pines on d * domest domestic ic corporat corporation ion is taxabl taxable e on income income derived derived from source sources s without without the !hilip !hilippines pines o

4.

Which of the the follow following ing state statements ments is not not correc correct& t& a. 5$T is not not applicabl applicable e to nonres nonresident ident foreign foreign corporat corporations ions b. he annual annual corporate corporate income income tax tax return shall shall be filed filed within within 60 days follow following ing the cl the taxable year c. ,esident ,esident foreign foreign corporat corporations ions would would be taxed taxed on net net income income from within within the the !hilippine !hilippines s only d. (onreside (onresident nt foreign foreign corporatio corporations ns are taxed taxed on gross income income from from within within the !hilippine !hilippines s only

6.

The follow following ing incom income e are subect subect to final final tax except: except: a. ,oyalty ,oyalty income income receive received d by a domestic domestic corpora corporation tion from from a domestic domestic corpora corporation tion b. ash dividen dividends ds received received by a nonreside nonresident nt foreign foreign corporati corporation on from a domestic domestic corporat corporation ion c. !ash divide dividends nds received received by a domestic domestic corpora corporation tion from from a domestic domestic corpo corporatio ration n d. $nterest $nterest income income receiv received ed by a resident resident foreig foreign n corporatio corporation n from a !hilipp !hilippine ine ban0 ban0

the the followin following g is subec subectt to the corpor corporate ate income income tax& * nons nonstoc toc0 0 and non nonpro profit fit educ educati ationa onall instit instituti ution on !ubl !ublic ic educ educat atio ional nal inst instit itut utio ion n Priva rivate te cem cemeter eteriies ivic ivic league league or organizat organization ion not organiz organized ed for profit profit and and operated operated exclusiv exclusively ely for for the prom social welfare

Master your semester with Scribd  7. Which Which of of the the follo followi wing ng is is not not corre correct& ct& Read Free Foron 30this Days Sign up to vote title  a. $ncome $ncome from from ille illegal gal act activi ivitie ties s are taxa taxable ble & The New York Times Useful Not useful b. "efund "efund of income income tax expense expense constit constitutes utes taxable tax able income income  to the the taxpayer taxpayer Cancel anytime.

c.$4.99/month. ,ecovery ,ecovery of of bad debts debts previo previously usly writte written n off is part part of the the taxable taxable income income Special offer for students: Only d.

*s a rule% rule% contest contest awards awards and prizes prizes of !1-%--!1-%--- or more more are subect subect to to final tax tax otherwise otherwise th

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When it involves a gain from sale of shares of stoc0 held as capital assets and traded thro local stoc0 exchange When it involves sale of shares of stoc0 directly to the buyer held as capital asset When the sale involves a real property considered as principal residence When the sale involves a real property held as ordinary asset 3nly a and b b. $nly a and c

c. 3nly b and c

d. 3nly c

1#. Which among the following dependents% age is not considered to 9ualify a taxpayer as head of the fam a. Parents b. hildren c. "iblings d. "enior itizen

1). 5arvin is employed as a security guard of 8ianas "upermar0et% $nc. =e lives in a room with compoundof 8ianas but he us not charged any rent. The rental value of the room is !#%--- a month rental on the part of the taxpayer is: a. b.

"ubect to income tax "ubect to fringe benefits tax

c. %xempt &ncome d. (one of the above

1. Which of the following taxes is/are deductible a. ustoms 'uties b. ommunity Taxes c. 8ocal Taxes d. $ncome Taxes a. 1.

a#b and c only

b. a%b%c and d

c. a and b only

d. b and c only

Which of the following losses is deductible over the threeyear period a. Net operating loss c. (et ordinary loss b. (et capital loss d. b and c only

14. Which of the following losses is deductible in the year of incurrence c. Net ordinary loss a. (et operating loss b. (et capital loss d. (one of the above

16. or individuals with gross income of !--%---% the following may be deducted% except: You're Reading a Preview a. !ersonal exemptions c.'ealth('ospitali)ation &nsurance Premium b. *llowed business expenses d. *ll of the above Unlock full access with a free trial. 17. Which of the following best exemplifies the tax benefit rule applicable to bad debts recovery& a. $f in the year of deduction% a tax benefit resulted to the taxpayer% then the bad debts reco taxable in the year recovered Download With Free Trial b. $f no such benefits resulted in favor of the taxpayer in the year of deduction% then the bad recovery is not taxable c. The bad debts recovery is taxable whether or not the deduction benefitted the taxpayer d. *oth a and b 2-. The following withholding taxes are included in the tax credit except: a. Withholding tax on compensation income b. reditable withholding taxes c. +inal withholding taxes d. Withholding tax on practice of profession 21. Which is deductible in the measurement of net income from business or profession& a. "alaries of personal security guard of a managerial employee b. Personal exemption c. Tuition fees of the taxpayer>s brother Read Free Foron 30this Days Sign up to vote title d. $nterest expense on borrowings from family members

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22. * repair expense is deductible in the period paid or incurred unless it Special offer for students: Only $4.99/month. a.

5erely maintains the value of the property

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2. Which is not a re9uisite of a deductible loss& a. $t must be sustained by the taxpayer in the current year b. $t must be reported to the +$, within ) days from the occurrence of the loss c. &t must be compensated by insurance or indemnity contracts d. $t must pertain to a property connected to the trade% business% or profession of the taxpayer

24. Which of the following income is not from a related trade% business or activity of a domestic prop educational institution a. &ncome from rent of available office spaces in one of the school buildings b. $ncome from hospital where medical graduates are trained for residency c. $ncome from the canteen situated within the school campus d. $ncome from boo0store situated within the school campus

26. $f an individual performs services for a creditor who in consideration thereof cancels the deb cancellation of indebtedness may amount to: a. a gift c. donation inter vivos b. a capital transaction d. payment of income 27. Which of the following is taxable& a. Pri)e won in an essay writing contest b. The (oble peace prize c. !rize won as member of the !+* mythical team d. *ward for being a model employee #-. Which of the following is a taxable income& a. $ncome from 9ualified pension plan b. ompensation for personal inuries c. 5oral damages d. &nterest on moral damages

#1. or an individual on the cash basis of accounting% prepaid interest pn business indebtedness is deduct a. $n the year that the interest is prepaid b. &n the year that the principal is paid c. or the portion expired corresponding to the current accounting period You're Reading a Preview d. *s time goes by

#2. Which of the following statements Unlock are true& full access with a free trial. a. ,esident ilipino citizens with income from foreign sources only are allowed pers additional exemptions b. (onresident aliens not engaged in trade/business in the !hilippines are not allowed any pe Download With Free Trial exemptions c. (onresident aliens engaged in trade/business in the !hilippines are allowed personal exem based on reciprocity d. All of the above ##. Which of the following corporations is subect to the minimum corporate income tax& a. !roprietary educational institutions subect to tax at 1-A of their taxable income b. (onprofit hospitals subect to tax at 1-A of their taxable income c. ,omestic airline companies operating within the Philippines d. 'epository ban0s under the expanded foreign currency deposit system #). The following cases may not be compromised: a. riminal tax fraud cases b. Withholding tax cases c. 'elin9uent accounts with duly approved schedule of payment Read Free Foron 30this Days Sign up to vote title d. All of the above

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#. ash received from a domestic corporation are subect to final tax of 1-A if received by: Special offer for students: Onlydividends $4.99/month. a.

*nother domestic corporation

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#6. Which of the following are (3T exempt from income tax& a. !hilippine =ealth $nsurance orporation !hilippine (ational 3il ompany Bniversity of the !hilippines !*@3, b and d #7. The following fringe benefits are not taxable% except: a. b. c. d. e.

ringe benefits which are authorized and exempted from tax under special laws. ontributions of the employer for the benefit of the employee to retirement% insura hospitalization benefits. embership fees# dues and other expenses borne by the employer in social or athletic or other similar organi)ations. +enefits given to ran0 and file employees% whether granted under a collective ba agreement or not. 'e minimis benefits.

)-. Which of the following statements is false& a. Non-resident aliens engaged in trade or business are liable to pay 0/ dividend tax b. (onresident aliens not engaged in trade or business are liable to pay 2A dividend tax c. ,esident citizens are liable to pay 1-A dividend tax d. ,esident foreign corporations are exempt from the payament of dividend tax )1. @ross income means all income derived from whatever source% including the following items except: a. !ensions b. !rizes and winnings c. ,ents d. toc1 dividends )2. ?xclusions from gross income under the Tax ode include the following except: a. Ceterans benefits b. ompensation for inuries and sic0ness c. @ifts% be9uests% and devises You'reofReading a Preview d. 2ains from redemption of shares stoc1 )#. ringe benefit tax shall be paid byUnlock the employer because: full access with a free trial. a. The employee received the benefit net of tax b. The Tax ode expressly so states c. The employer relieves the employee of the With burden to pay the tax Download Free Trial d. he employer is the agent of the employee for the payment thereof. )). *llowable deductions are distinguished from personal exemptions in that: a. b. c. d.

The former may be availed of only by corporate taxpayers% whereas the latter may ap individual taxpayers. he former applies to corporate and individual taxpayers engaged in business o practicing their profession# whereas the latter covers only natural persons. The former may be found in "ection #)% while the latter is granted under "ection #. The former is a privilege while the latter is a matter of right.

). 'etermine which of the following items are taxable: a. $ncome from ueteng b. @ain arising from expropriation of property c. Taxes paid and subse9uently refunded d. ,ecovery of bad debts previously charged off e. All of the above


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). 'etermine which of the following is DareE included in the preparation of annual income tax returns:

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)6. GHI olleges is a nonstoc0% nonprofit educational institution run by the *rchdiocese of +! ity. the following itemDsE is included in its $ncome Tax ,eturn& a. Tuition fees b. 8aboratory fees c. "entals from canteen concessionaires d. $nterest from moneymar0et placements of the tuition fees e. 'onation of a lot and building by school alumni )7. Which of the following are excluded from the gross estate& a. proceeds of life insurance policy payable to an irrevocable beneficiary b. revocable transfers c. transfer in contemplation of death d. claims against insolvent persons -. Who among the following are (3T re9uired to file an income tax return& a. b. c. d.

ilipino citizen with business income from the !hilippines. ,esident alien on income derived within the !hilippines. (onresident alien engaged in trade or business An individual whose sole income has been sub3ected to final withholding tax.

1. "hirley was allowed to deduct !2--%--- bad debts written off in 2--#% where she had a net incom bad debts of !16-%--- and a net loss of !2-%---. $( 2--)% she was able to recover the bad debts writ in full. The bad debts recovery is: a. Taxable to the extent of !16-%--b. Taxable to the extent of !2-%--c. axable to the extent of P400#000 d. (ot taxable

2. 'ividends from a domestic corporation and/or share in the net income of a taxable partnership receiv a citizen during the year 2-1 is subect to a final tax a. Iero c. 2-A b. #-A d. 50/

You're Reading a Preview #. * deductible interest expense a. $nterest on loan between members of a family b. $nterest on loan that wasUnlock used tofull finance construction accessthe with a free trial. of the taxpayer>s residence c. &nterest on tax delinuency d. $nterest on indebtedness to finance a petroleum operations Download With Free Trial

). $n 2-1 Tuguegarao ?ducational $nstitute% a proprietary educational institution registered with the " =?' constructed a new school building at a total cost of !6%---%---. or income tax purpose construction cost may be: a. b. c. d. .

laimed entirely as deduction from its 2-1 gross income lassified as an asset or expensed outright at the option of the government !lassified as an asset or expensed outright at the option of the taxpayer lassified as an asset and claim an annual depreciation over the life of the building

$f the gross income from unrelated activities exceeds -A of the total gross income derived b private educational institution% the tax rate shall be #-A based on the entire taxable income. principle is 0nown as a. onstructive receipt c. end result doctrine b. Tax benefit rule d. predominance test

Master your semester with Scribd  Read Free Foron 30this Days Sign up to vote title  Which ofTimes the following statements is true& 'ividends received by a & The New. York Useful Not useful   a. domestic corporation from a resident foreign corporation are subect to final withholding ta Cancel anytime.

Special offer for students: Only b.$4.99/month. resident foreign corporation from another resident foreign corporation are subect to sc income tax in the !hilippines

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7. Which of the following is true& !roceeds of life insurance policy a. is exempt from income tax upon the death of the insured if the beneficiary is not th executor or the administrator b. is not subect to income tax if ta0en by a person other than the insured such as the employer c. is not subect to income tax in its entirety if the insured outlives the policy regardless of the a of premiums paid by the insured d. is exempt from income tax upon the death of the insured because the reuire irrevocability and appointment of beneficiary other than the estate# exec administrator are applicable only on estate tax and not to income tax

-. Which a. b. c. d.

of the following statements is wrong about fringe benefits& The fringe benefit tax does not apply to ran0andfile employees he rule on de minimis benefit does not apply to rand-and-file employees The monetary value received by an official or employee is presumed to be net of fringe bene $f the recipient of a fringe benefit is a nonresident alien not engaged in trade or busine monetary value shall be divided by 4A in order to arrive at the grossedup monetary value

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