Taxation Enhancement Exercises

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P1/0,BBB

-.

P1BB,BBB

80. If the artnershi is an or-inar( artnershi, the ta"a%&e incoe of the artnershi is6 a. P/8,BBB c. P9B,BBB %. P5B,BBB -. P/B,BBB 8/. A ta"a(er so&- his stoc4 in*estents in B1 as fo&&o!s6 1. Se&&in) rice  A Co. shares, not tra-e- in the stoc4 e"chan)eG P5BB,BBB Cost 1B,BBB Net Fain P1/B,BBB .

Se&&in) rice ? Co. shares, not tra-e- in the stoc4 e"chan)eG P8BB,BBB Cost 58B,BBB Net )ain P :B,BBB

5. Se&&in) rice C Co. shares, tra-e- in the stoc4 e"chan)eG P19B,BBB Cost 5B,BBB Net &oss P /B,BBB The tota& fina& !ithho&-in) ta" -'e on the sa&es is6 a. P1,BBB c. P1:,BBB %. P1,509 -. P1:,09B 8. A ta"a(er, arrie-, !ith fi*e inor chi&-ren, three of  the are )ainf'&&( e&o(e-, ro*i-e- the fo&&o!in) -ata6 Coensation Incoe P19B,BBB )ross of 1B SSS, 'an -e&a Cr'= transferre- his coercia& &an!ith a cost of P9BB,BBB %'t !ith a fair ar4et *a&'e of  P09B,BBB to >DC Cor. in e"chan)e of the stoc4s of the cororation !ith ar *a&'e of P1,BBB,BBB. As a res'&t of the transfer he %ecae the a+orit( stoc4ho&-er of  the cororation. As a res'&t of the transfer6 a. The reco)ni=e- )ain is the -ifference %et!een the fair ar4et *a&'e of the shares of stoc4s an- the cost of the &an-. %. The reco)ni=e- )ain is the -ifference %et!een the ar *a&'e of the stoc4s an- the fair ar4et *a&'e of  the &an-. c. No reco)ni=e- )ain %eca'se the &an- !as in e"chan)e of 're&( stoc4s an- Mr. -e&a Cr'= %ecae the a+orit( stoc4ho&-er. -. No reco)ni=e- )ain %eca'se the &an- !as in e"chan)e of stoc4s of the cororation. 91. Mr. Pa'& Herce is an A'stra&ian citi=en e&o(e- as an a'-itor in a Cana-ian$%ase- rofessiona& ser*ices fir contracte- %( the Phi&iine Fo*ernent to fin- o't

P1.502A

the e"tent of corr'tion in a s'secte- )o*ernent a)enc(. He recei*e- coensation incoe of P5:9,BBB for his ser*ices fro that Cana-ian fir for 5:9 -a(s, 9B -a(s of !hich !as sent in the Phi&iines an- the rest in In-onesia. ?ase- on these inforation !hat ao'nt of Mr. Herces coensation sho'&- %e consi-ere- as earne- !ithin the Phi&iines# a. P5:9,BBB c. P9BB,BBB %. P9B,BBB -. P1/,BBB 9. Which of the fo&&o!in) is a etho- of acco'ntin) for incoe -eterination in farin)# a. Cash %asis c. Cro %asis %. Accr'a& %asis -. A&& of the a%o*e 95. In co'tin) )ain or &oss fro sa&e or other -isosition of roert( ac2'ire- %( )ift or -onation, the %asis or cost of the -onee is6 a. 7air ar4et *a&'e, tie of -onation %. P'rchase rice &'s e"enses of ac2'isition inc&'-in) ;AT c. 7air ar4et *a&'e, !hen 'rchase-. The %asis as if it is in the han-s of the -onor 98. 1st stateent$ O*ertie an- ho&i-a( a( are inc&'-ein co'tin) the Mini' !a)e. n-  stateent$ Dea&ers of rea& roert( nee- not %e o%ser*e the 9 r'&e to 2'a&if( 'n-er insta&&ent etho-. a. Tr'e6 Tr'e c. Tr'e@ 7a&se %. 7a&se@ 7a&se -. 7a&se@ Tr'e 99. 1st stateent$ Net oeratin) &oss in the rece-in) (ear sha&& %e a--e- in the net incoe in the s'ccee-in) (ear for 'roses of co'tin) the IAET. n- stateent$ In co'tin) the net oeratin) &oss, caita& asset transactions CATG, if an( is inc&'-e-. a. Tr'e6 Tr'e c. 7a&se@ Tr'e %. 7a&se@ 7a&se -. Tr'e@ 7a&se 9:. The fo&&o!in) in-i*i-'a&s are not re2'ire- to fi&e their ITR e"cet6 a. Mini' !a)e earner !ho has %'siness an- other incoe %. One !hose on&( incoe is s'%+ect to fina& ta". c. One !hose )ross coensation incoe in one (ear -oes not e"cee- P:B, BBB -. One !hose incoe is e"et 'n-er a treat( or secia& &a!. 90. A ta" a(er ro*i-e- the fo&&o!in) -ata Sa&es net of P1M -isco'nts an- ret'rnsG P 1BM COFS P 8M Oeratin) e"enses P M Ro(a&t( incoe P 1M
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-ie- on A')'st B, BB/. ;a&'e of &an- !hen inherite- !as P1B,BBB. The &an- haa ort)a)e of P5B,BBB !hen inherite- of !hich P1B,BBB !as ai- %( H %efore he -ie-. P8BB,BBB 3an-, -onate- on 7e%r'ar( 18,BB %( his other !ho -ieon No*e%er ,B1B. ;a&'e of &an- !hen -onate- !as P9BB,BBB. :BB,BBB E"c&'si*e Proerties of W6 7ar in 3a)'na, ac2'ire%efore arria)e

,BBB,BBB

De-'ctions c&aie-6 7'nera& e"enses 9B,BBB 7ire &oss of aartent occ'rre- 8 onths after -eathG /B,BBB ?a- -e%t reresents 'nai- recei*a%&e fro ?ert, an inso&*entG 1BB,BBB Mort)a)e on inherite- &an5B,BBB ;anishin) -e-'ction on inherite- &an8B,BBB ;anishin) -e-'ction on -onate- &anB,BBB Stan-ar- -e-'ction ,BBB,BBB Death %enefits R.A 810G 19B,BBB The )ross estate of H is6 a. P8,BB,BBB %. P9,BBB,BBB

c. P:,BB,BBB -. P8,9BB,BBB

:B. The tota& con+')a& an- secia& -e-'ction is6 a. P1,9:8,BBB c. P1,5/B,BBB %. P1,95B,BBB -. P85B,BBB :1. The tota& -e-'ction e"c&'si*e -e-'ction is6 a. P00,:BB c. P05,:BB %. P5,:BB -. P/B,BBB :. A resi-ent -ece-ent arrie- an- 'n-er a%so&'te co'nit( of roerties, -ie- on >an'ar( 19, B1. He &eft the fo&&o!in) roerties, e"enses an- o%&i)ations6 Co'nit( roerties, Phi&iines inc&'-in) fai&( Hoe *a&'e- at P5, BBB, BBBG P9,BBB,BBB Co'nit( roerties, >aan ,9BB,BBB E"c&'si*e roerties, Phi&iines ,BBB,BBB Act'a& f'nera& e"enses 5BB,BBB >'-icia& e"enses BB,BBB Me-ica& e"enses -oc'ente- !Kin 1(r. %efore -eathG :BB,BBB Transfer for '%&ic 'rose Nationa& Fo*tG 9B,BBB 3e)ac( to 3oca& Fo*tG 0B,BBB Death %enefits recei*e fro e&o(er inc&'-e- a%o*eG 9BB,BBB The ta"a%&e net estate is6 a. P,:/B,BBB c. P1, 85B, BBB %. P5,:/B,BBB -. P8, 5/B, BBB :5. Which of the fo&&o!in) is incorrect6 a. The a&&o!a%&e -e-'ction for f'nera& e"enses can ne*er %e ore than the act'a& f'nera& e"enses ai-. %. ;anishin) -e-'ction -iinishes the estate h(sica&&( c. Ta"es in or-er to %e -e-'cti%&e 'st accr'e %efore the -ece-ents -eath -. C&ais a)ainst the estate e*en for e2'ita%&e reasons is not a&&o!e- as -e-'ction if not notari=e-. :8. A&& of the fo&&o!in) are incorrect e"cet6 a. Re*oca%&e transfer are on&( inc&'-i%&e if the )ross estate if the re*ocation !as act'a&&( e"ercise-.

P1.502A

%.

c.

-.

A transfer ortis ca'se of a rea& roert( in the Phi&iines he&- as caita& asset is not s'%+ect to estate ta" Procee-s of &ife ins'rance o&ic( !here the %eneficiar( is the e"ec'tor are inc&'-i%&e in the estate in a&& cases On&( arrie- -ece-ent can c&ai the -e-'ction for fai&( hoe

:9. Mr. ANACONDA -ie- &ea*in) the fo&&o!in) roerties6 E"c&'si*e rea& roert(, 7M;$P9BB,BBB !hen inherite- 5  (rs. a)o an- s'%+ect to a ort)a)e of P:9,BBB at that tie. 7M; at the tie of -eath is P0BB,BBB. Other -ata are6 Con+')a& roerties P 1,0BB,BBB '-icia& e"enses /9,9BB 7'nera& e"enses P 19,BBB ai- %( frien-sG 09,BBB Other o%&i)ations 1,9BB The net estate s'%+ect to ta" is6 a. P :,9BB c. P /9B,BBB %. P /:,BBB -. P /09,BBB ::. The fo&&o!in) are oti*es of ta"a(er that rec&'-e transfer in conte&ation of -eath, e"cet one6 a. To re&ie*e the ta"a(er of the %'r-en of   ana)eent %. To sa*e incoe an- roert( ta"es c. To a*oi- a(ent of estate ta". -. To a4e -een-ents financia&&( -een-ent :0. 1st Stateent$ 3ife Ins'rance rocee-s if the %eneficiar( is the e"ec'tor is inc&'-i%&e in the )ross incoe re)ar-&ess of the -esi)nation. n- Stateent$ 3ife Ins'rance rocee-s if the %eneficiar( is a thir- erson is inc&'-i%&e in the )ross estate if it is re*oca%&e. a. Tr'e@ Tr'e c. 7a&se@ Tr'e %. 7a&se@ 7a&se -. Tr'e@ 7a&se :/. 1st stateent6 Do!ries a-e %( non$resi-ent a&ien arents to their chi&-ren %efore arria)e are e"et fro )ift ta" ' to P 1B,BBB. n- stateent6 Donors can a&!a(s c&ai a ta" cre-it for -onors ta"es ai- to a forei)n co'ntr(. a. Tr'e, Tr'e c. 7a&se, Tr'e %. 7a&se, 7a&se -. Tr'e, 7a&se : to 0 are %ase- on the fo&&o!in) -ata6 On 7e%r'ar( 9, B1, Mr. an- Mrs. ?a(a%as -onate- their con+')a& &an- !orth P9BB, BBB to their three sons, %'t on acco'nt of arria)e to one of the !ho )ot arrie- 9 onths a)o. On >'ne , B1, the( a&so -onate- to the chi&- of Mrs. ?a(a%as %( first arria)e, +e!e&r( !orth P09, BBB on acco'nt of arria)e ore than a onth after the -onation. 7ina&&( on Dece%er 9, B1, the( -onate- to the nehe! of Mr. ?a(a%as a %'i&-in) !orth P09B, BBB, 8B of !hich !as co$o!ne- %( their L'are !ho a)reeto the -onation an- e"ec'te- the necessar( -oc'ents -onatin) his share :. The -onors ta"es -'e on the 7e%r'ar( 9, B1 -onation sho'&- %e6 a. P18, BBB for Mr.  Mrs. %. P5, :BB each for Mr.  Mrs. c. P8, BBB each for Mr.  Mrs. -. P9, 09B each for Mr.  Mrs. 0B. The -onors ta" -'e on the >'ne , B1 -onation is6 a. Mr.  B@ Mrs.  P1, /09 %. Mr.  11, 9B@ Mrs.  P8, 0BB c. Mr.  11, 9B@ Mrs.  P1, 1BB -. Mr.  11, 9B@ Mrs.  P1, /09

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01. The -onors ta" -'e on the Dece%er 9, B1 for Mr.  Mrs. are6 a. Mr.  , /09@ Mrs.  P15, 9BB %. Mr.  :0, 9BB@ Mrs.  P:0, 9BB c. Mr.  , BBB@ Mrs.  P15, 9BB -. Mr.  , BBB@ Mrs.  P:0, 9BB 0. The -onors ta" -'e on the Dece%er 9, B1 for their L'are is6 a. PB, BBB c. PB %. P:, BBB -. P5B, BBB 05. Mat'%o Cor. -onate- P1BB,BBB for the 'rose of  ceentin) a ?aran)a( roa- !here its factor( is &ocate-. 1st stateent6 The -onation is e"et fro -onors ta". n- stateent6 The cororation a( c&ai a f'&& -e-'ction for incoe ta" 'roses. a. ?oth stateents are incorrect %. On&( 1st stateent is correct c. ?oth stateents are correct -. On&( n- stateent is correct 08. A -onor )a*e the fo&&o!in) -onations in (ear B1 >an. 8$ 3an- &ocate- in the Phi&iines *a&'e- at P,BBB,BBB to her 'nc&e s'%+ect to the con-ition that 'nc&e !i&& a( the -onors ta" -'e an- ort)a)e to !hich she a)ree- to a( the ort)a)e ao'ntin) to P9BB,BBB. No*.5B$?'i&-in) in an. 8 is6 a. P/8,BBB c. P89B,BBB %. P,BBB -. P8/B,BBB 09. The -onors ta" -'e on the No*. 5B -onation is6 a. P151,BBB c. P80,BBB %. P98,BBB -. P18,BBB VAT AND OPT 0:. MY ?A?Y Sa&es Cororation ro*i-e- the fo&&o!in) -ata for the first 2'arter of B1 first ( ear as ;AT re)istereerson6 Cash sa&es, tota& *a&'e P55:, BBB Oen acco'nt sa&es 11,BBB Consi)nent a-e E"c&'si*e of ;ATG >an. 1$ PBB, BBB 7e%. 19$ 19B, BBB P'rchase- of caita& )oo-s, ;AT e"c&'-e9B,BBB P'rchase- of ateria&s, net of ;AT 8B,BBB ;a&'e of in*entor( as of >an .1 of the (ear P'rchase- fro ;AT Re)istere- Person P8B,BBB P'rchase- fro non$;at Re)isterePerson 9B,BBB P'rchase- of ;AT E"et )oo-s 1B,BBB ;AT ai- on the a%o*e in*entor(G 8,BBB E2'ient 'rchase-, March B1 'sef'& &ife 1B (rs.G PM The ;AT -'e is6 a. P50, BBB c. P91, 8BB %. P5/, BBB -. P99,BB 00. One of the fo&&o!in) acti*ities is not s'%+ect to ;AT6 a. Mo*ie ho'se oerators %. Pa!nsho c. Dr')stores -. Par4in) &ot oerators 0/. A %'i&-in) contractor ro*i-e- the fo&&o!in) -ata a&& fi)'res are net of ;ATG

P1.502A

Ao'nt recei*efro %'i&-in) A-*ances recei*e- fro %'i&-in) Ao'nt recei*efro %'i&-in) net of PBBt retention costG Recei*a%&e fro %'i&-in) Dis%'rseent6 Ser*ices of S'%contractors Materia&s for constr'ction Iorte- ateria&s, &an-ecost Other )enera&  oeratin) e"enses

$1

P/BB, BBB

$

8BB, BBB

$5

/BB, BBB

$8

1,BBB,BBB 9BB,BBB 0BB,BBB   BB,BBB 1BB,BBB

Note6 The iorte- ateria& !as a&so s'%+ecte- to PB, BBB e"cise ta"es6 The ;AT -'e is6 a. P9/, BBB %. PB, BBB

c. P5, :BB -. P:, :BB

0. 1st  stateent6 The in't ta" on 'rchases of caita& )oo-s is srea- o't !hen the ac2'isition cost e"cee-e- P1.9M. n- stateent6 The res'ti*e in't ta" is a&so ca&&e;AT act'a&&( aia. Tr'e, Tr'e c. Tr'e, 7a&se %. 7a&se, 7a&se -. 7a&se, Tr'e /B. 1st  Stateent$ a erson !hose ann'a& )ross sa&es or receits -o not e"cee- P1BB, BBB is not consi-ereen)a)e- in tra-e or %'siness. n- Stateent$ A ;AT re)istere- erson is s'%+ect to ;AT re)ar-&ess of his ann'a& )ross sa&es or receits ro*i-e- he -oes not  a( the 5 OPT. a. Tr'e@ Tr'e c. 7a&se@ Tr'e %. 7a&se@ 7a&se -. Tr'e@ 7a&se /1. CROCODI3E TRANS is a coon carrier %( &an-. D'rin) a artic'&ar 2'arter its receits consists of the fo&&o!in)6 7i)'res are net of an( %'siness ta"esG Transort of assen)ers Transort of )oo-s Transort of car)oes

P8, BBB,BBB 9, BBB,BBB :, BBB,BBB

The tota& %'siness ta"es a(a%&e is6 a. P1,9BB,BBB c. P1,/BB,BBB %. P98B,BBB -. P1,88B,BBB

/. Which is incorrect a. A ta"a(er !hose ann'a& )ross receitsKsa&es e"cee- P 1,1,9BB sha&& a( ;AT e*en if not ;AT re)istere%. A ta"a(er !hose ann'a& receitsKsa&es -o not e"cee- P 1,1,9BB %'t !ho is ;AT re)istere- sha&& a( ;at. c. The sae transaction a( %e s'%+ecte- to %oth incoe ta" an- ;AT -. Mar)ina& incoe earners are %oth e"et fro ;AT an- incoe ta". /5. IMIC Cor. iorte- an artic&e fro
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The iorte- artic&e !as s'%+ecte- to P19B,BBB c'stos -'t( an- P5B,BBB e"cise ta". IMIC Cor. sent P9B,BBB or-inar( receitG for tr'c4in) fro the c'stos !areho'se to not on its !areho'se in Q'e=on Cit(. The iorte- artic&e !as &ater so&- for PBB,BBB, !Ko't ;AT The ;AT -'e is6 a. P8/,5:B %. P8/,BBB

c. P5B,BBB -. P5:,BBB

/8. LATRINA in*este- P9BB, BBB in the shares of stoc4 of  Mani&a Tra-in) Cor. 3ater she so&- the sai- shares for on&( P59B, BBB. The cororations shares are &iste- anare tra-e- in the &oca& stoc4 e"chan)e. The ercenta)e ta" on the sa&e is6 a. None c. P1, 09B %. P, 9BB -. P9B, BBB /9. S!eetie Pie Refinin) Coan( an'fact'res refines')ar. It ha- the fo&&o!in) -ata -'rin) the first 2'arter of BB6 Sa&e of refine- s')ar, net of ;AT P,BBB,BBB P'rchases of s')ar cane fro farers 'se- in the an'fact're of refines')ar 9BB,BBB P'rchase of ac4a)in) ateria&s, )ross of ;AT 0/8,BBB P'rchase of &a%e&s, )ross of ;AT 11,BBB The ;AT a(a%&e is6 a. P18,BBB %. P11,9BB

c. P188,BBB -. P :,BBB

/:. >. Sha))( ;AT$re)istere-, a-e the fo&&o!in) 'rchases -'rin) the onth of >an'ar(, BBA6 Foo-s for sa&e, inc&'si*e of ;AT P 8:,8BB S'&ies, e"c&'si*e of ;AT B,BBB Office air con-itioners, tota& in*oice ao'nt 9:,BBB Hoe a&iances for resi-ence, )ross of ;AT 10,B Office achine, / (ears 'sef'& &ife, net of ;AT

,BBB,BBB

Reair of store ao'nte- to PB,BBB e*i-ence- %( or-inar( receit of contractor Cre-ita%&e In't ta"es are6 a. P5/,/BB c. P50,88B %. P58,/BB -. P59,9B /0. A ta"a(er re)istere- 'n-er the ;AT s(ste on >an'ar( 1, BB?. His recor-s -'rin) the onth sho!6 ;a&'e of in*entor( as of Dece%er 51, BBA 'rchase fro ;AT$re)istereP1BB,BBB ersons ;AT ai- on in*entor( as of Dece%er 51, BBA 9,BBB ;a&'e of in*entor( as of Dece%er 51, BBA 'rchase-, fro non$;AT ersons BB,BBB Sa&es, net of ;AT 18B,BBB Sa&es, )ross of ;AT 89,B P'rchases, net of ;AT 0B,BBB P'rchases of ;AT e"et )oo-s 9B,BBB ;AT a(a%&e is6 a. P/,5B %. P15,5B

c. P 0,5B -. P15,8BB

REMEDIES

Which of the fo&&o!in) stateents is not tr'e# a. A ta" assessent is necessar( to a criina& rosec'tion for !i&&f'& attet to -efeat an- e*a-e a(ent of ta"es.

P1.502A

%. c.

-.

A con*iction for ta" e*asion is not a %ar for co&&ection of 'nai- ta"es. Criina& rocee-in)s 'n-er the Ta" Co-e is no! a o-e of co&&ection of interna& re*en'e ta"es, fees an- char)es. If the ta"a(er is ac2'itte- in a criina& *io&ation of the Ta" Co-e, this ac2'itta& -oes not e"onerate hi fro his ci*i& &ia%i&it( to a( the ta"es.

/. The r'nnin) of the rescriti*e erio- for assessent an- co&&ection of ta"es is s'sen-e- 'n-er the fo&&o!in) circ'stances, e"cet one6 a. When ta"a(er is o't of the co'ntr( %. When the ?IR Coissioner is rohi%ite- fro assessin) or co&&ectin) the ta" c. When the ta"a(er re2'ests for a rein*esti)ation -. When the !arrant of -istraint an- &e*( is -'&( ser*est

B. 1 stateent$ The ?IR Coissioner a( a%ate or cance& the a(ent of interest re*en'e ta" !hen6 a. A reasona%&e -o'%t as to *a&i-it( of the c&ai a)ainst ta"a(er e"ists, or %. The financia& osition of the ta"a(er -eonstrates a c&ear ina%i&it( to  a( the ta" assesse-. n stateent$ The ?IR Coissioner a( coroise the a(ent of ta" !hen6 a. The ta" or an( ortion thereof aears to %e 'n+'st&( or e"cessi*e&( assesse%. The a-inistration an- co&&ection costs in*o&*e- -o not +'stif( the co&&ection of the ao'nt -'e. a. Tr'e@ Tr'e c. Tr'e@ 7a&se %. 7a&se@ 7a&se -. 7a&se@ Tr'e 1. Which of the fo&&o!in) is not 'n-er the o!er of ?IR Coissioner as ro*i-e- in the Ta" Co-e# a. A'thorit( to terinate ta"a%&e (ear an- a4e assessent. %. A'thorit( to in2'ire into the ta"a(ers %an4 -eosits if there is a reasona%&e )ro'n- to in*esti)ate -'e to ta" e*asion. c. A'thorit( to o%tain inforation, e"aines, s'on an- ta4e testion(. -. A'thorit( to rescri%e 7M; of rea& roert( . Which of the fo&&o!in) stateents a%o't assessent is incorrect# a. It is an officia& action of an officer a'thori=e- %( &a! in ascertainin) the ao'nt of ta" -'e fro a ta"a(er. %. If not conteste- %( the ta"a(er !ithin 5B -a(s fro receit, it %ecoes fina& an- e"ec'tor(. c. It is an action for co&&ection of ta"es. -. It fi"es an- -eterines the ta" &ia%i&it( of the ta"a(er. 5. Where a ret'rn is fi&e-, as a )enera& r'&e, the rescriti*e erio- for assessent after the -ate ret'rn fi&e- or -'e !hiche*er is &ater, !ithin6 a. t!o (ears c. three (ears %. fi*e (ears -. ten (ears 8. The sei='re %( the )o*ernent of ersona& roert( to enforce the a(ent of ta"es to %e fo&&o!e- %( its '%&ic sa&e if the ta"es are not *o&'ntar( ai-6 a. 7orfeit're c. 3e*( %. Distraint -. Farnishent

tota& ao'nt of ta" a(a%&e as sho!n assessent notice if ?IR fo'n- o't fra'-# a. P, BBB c. P58, BBB %. P9, BBB -. PB, BBB

in

the

:. ?ar%( fi&e- her B1B ITR an- ai- the ta" sho!n thereon on Ari& 1B, B11. <on in*esti)ation the ?IR fo'n- o't a -eficienc( incoe ta" of PB, BBB. The ta" a(er a)ree- !ith the sai- fin-in)s an- on >'&( 19 , B11, assessent notice !as sent to her )i*in) her ' to >'&( 5B, B11, to a( the ao'nt sho!n thereon &'s ena&t( an- interest. ?ar%( ho!e*er fai&e- to a( the ta" as !e&& as the ena&t( an- interest on the -'e -ate. She !as on&( a%&e to a( on Dece%er 19, B11. The tota& correct ao'nt of ta" to %e ai- is6 a. P59,B/ c. P/,85/ %. P58,:01 -. P58,::0 0. Which stateent is !ron)# A re*en'e %i&& a. M'st ori)inate fro the Ho'se of Reresentati*es an- on !hich sae %i&& the Senate a( roose aen-ents. %. Ma( ori)inate fro the Senate an- on !hich sae %i&& the Ho'se of Reresentati*es a( roose aen-ents. c. Ma( ha*e a ho'se *ersion an- a senate *ersion aro*e- searate&( an- then conso&i-ate- !ith %oth ho'ses aro*in) the conso&i-ation *ersion. -. Ma( %e recoen-e- %( the Presi-ent to Con)ress. /. Stateent 16 The o!er of Coissioner of Interna& Re*en'e to recoen- the ro'&)ation of r'&es anre)'&ations %( the Secretar( of 7inance a( not %e -e&e)ate-. Stateent 6 The o!er of Coissioner of Interna& Re*en'e to iss'e r'&in) of first iression or to re*erse, re*o4e, or o-if( an( e"istin) r'&es of the ?'rea' of Interna& Re*en'e a( not %e -e&e)ate-. a. ?oth are Tr'e %. ?oth are 7a&se c. 7irst stateent is Tr'e, secon- stateent is 7a&se -. 7irst stateent is 7a&se, secon- stateent is Tr'e . Stateent 16 The Coissioner of Interna& Re*en'e has a'thorit( to terinate the ta" erio- of a ta"a(er !ho is retirin) fro a %'siness s'%+ect to ta", or is inten-in) to &ea*e the Phi&iines or to reo*e his roert( or to hi-e or concea& his roert(, or to erfor an act ten-in) to o%str'ct the co&&ection of  ta"es. Stateent 6 When a ta" erio- is terinate-, an( 'nai- ta" is -'e ie-iate&(. a. 7irst stateent is Tr'e, secon- stateent is 7a&se %. 7irst stateent is 7a&se, secon- stateent is Tr'e c. ?oth are Tr'e -. ?oth are 7a&se 1BB. Which of the fo&&o!in) *io&ations cannot %e s'%+ecteto coroise ena&ties# a.

7ai&'re to 4eeKreser*e %oo4s of acco'nts anacco'ntin) recor-s. %. 7ai&'re to 4ee %oo4s of acco'nts or recor-s in nati*e &an)'a)e or En)&ish. c. 7ai&'re to ha*e %oo4s of acco'nts a'-ite- an- ha*e a financia& stateents attache- to incoe ta" ret'rn certifie- %( in-een-ent CPA. -. Leein) t!o sets of %oo4s of acco'nts or recor-s.

9. X fi&e- his ITR an- ai- the ta" sho!n thereon in f'&& 1B1. The acco'ntin) erio- of Cororation A is fisca& (ear on Ari& 19, B11. On Ari& 19, B1, X recei*e- an en-in) on Octo%er 51. 7or the (ear B1, Cororation assessent notice an- -ean- fro ?IR to a( a A fi&e- its ann'a& incoe ta" ret'rn on March 19, -eficienc( ta" of PB, BBB e"c&'-in) s'rchar)e anB15. The &ast -a( of ?IR assess is on6 interest on or %efore Ari& 5B, B1. Ho! 'ch is the a. 7e%r'ar( 1:, B1: c. March 19, B1: %. March 18, B1: -. Ari& 1:, B1:

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P1.502A

1B. If in the a%o*e ro%&e, the ta" a(er is an in-i*i-'a& ta"a(er, the &ast -a( o f ?IR assess is o n6 a. March 19, B1: c. March 19, B10 %. Ari& 19, B1: -. Ari& 18, B1/ 1B5. It is a fai&'re to a( the correct ao'nt of ta". a. De&in2'enc( c. Defa'&t %. Deficienc( -. De&a( 1B8. Mr. X fi&e- his ITR on Ari& 19, B11. He recei*e- an assessent fro the ?IR on >'ne 5B, BB1. His &ast -a( to fi&e a rotest is on6 a. >'&( 5B, B1 c. Ari& 19, B15 %. >'ne 5B, B19 -. Ari& 19, B19 1B9. If his rotest a%o*e !as -enie- %( the ?IR Coissioner an- he recei*e- the sai- -ecision on A')'st 51, B1, his ree-( is6 a. Aea& to the Co'rt of Ta" Aea&s on or %efore Sete%er 5B, B1. %. Aea& to the Co'rt of Aea&s on or %efore Sete%er 19, B1. c. Aea& to the Office of the Presi-ent on or %efore Sete%er 5B, B1. -. Aea& to the 7inance Secretar( on or %efore Sete%er 5B, B1. 1B:. Miraars incoe ta" for B1B !as P09, BBB, as sho!n in her incoe ta" ret'rn ITRG. She fi&e- her ret'rn on&( on >'&( 19, B1 an- ai- the tota& ao'nt 'on fi&in) the ret'rn. The tota& ao'nt a(a%&e ass'in) there !as fra'- sho'&- %e6 a. P151, 9B c. P/, 09B %. P11, 9BB -. P0, 9BB 1B0. Ta"a(er !as assesse- -eficienc( incoe ta" of  PBB, BBB a(a%&e on or %efore >'ne 19, B1. Within the erio- ho!e*er, he !as on&( a%&e to a( P1BB, BBB an- the %a&ance on&( on A')'st 5B, B1. The tota& ta" -'e that he is &ia%&e sho'&- %e6 a. P1, 199 c. P9/, 555.55 %. P19, BBB -. P 9B, BBB MISCELLANEOUS 1B/. 7&o(- an officia& of A?S Cororation as4efor an ear&ier retireent %eca'se he !as ei)ratin) to Cana-a, he !as ai- PM searation a( in reco)nition of his *a&'a%&e ser*ices to the cororation &'s P1BB,BBB 15th onth a(, Ne&son another officia& !as searate- for his fai&in) e(esi)ht. He !as )i*en P1M searation a( &'s P19B,BBB 'nai- sa&aries. Rico !as searate- for *io&atin) coan( r'&es %'t !as )i*en P5BB,BBB searation a(. ?en ote- to retire at 99 (ears o&after !or4in) for 1B (ears in the sae coan(. He recei*e- P1M. A&& of the fore)oin) are not co*ere- %( ?IR aro*e- Retireent P&an e"cet for ?en. The tota& incoe s'%+ect to !ithho&-in) ta" on the a%o*e a(ent is6 a. P ,9B,BBB c. P 5,8BB,BBB %. P ,50B,BBB -. P 5,89B,BBB 1B. A %'i&-in) contractor ro*i-ethe fo&&o!in) -ata a&& fi)'res are net of ;ATG Ao'nt recei*e- fro ?'i&-in) 1 P /BB,BBB A-*ances recei*e- fro ?'i&-in)  8BB,BBB Ao'nt recei*e- fro ?'i&-in) 5 net of P8BBT retention costG /BB,BBB Recei*a%&e fro ?'i&-in) 8 1,BBB,BBB Dis%'rseents6 Ser*ices of contractors 9BB,BBB Materia&s for constr'ction 0BB,BBB Iorte- ateria&, &an-e- cost BB,BBB Other )enera& an- oeratin) e"enses 1BB,BBB

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Note6 The iorte- ateria& !as a&so s'%+ecte- to PB,BBB e"cise ta"es. The ;AT -'e is6 a. P9/,BBB c. P:,:BB %. PB,BBB -. P110,:BB 11B. D')on) Trans, is a coon carrier %( sea. D'rin) a artic'&ar 2'arter its receits consist of  the fo&&o!in)6 7i)'res are net of an( %'siness ta"esG Transort of assen)ers P 8,BBB,BBB Transort of )oo-s 9,BBB,BBB Transort of car)oes :,BBB,BBB The tota& %'siness ta"es a(a%&e is6 a. P1, 9BB,BBB c. P1,/BB,BBB %. P89B,BBB -. P1,88B,BBB 111. TONY, 7 i&iino, sin)&e, has the fo&&o!in) transactions in B16 ?'siness )ross incoe PBB,BBB ?'siness e"enses :B,BBB Wa)erin) )ains 1B,BBB Wa)erin) &osses 9,BBB Se&&in) rice, artnershi interest 1BB,BBB In*estent in artnershi in BB1 B,BBB Fain in sa&e of caita& asset he&- for 1B,BBB 8 (ears 3oss on sa&e of caita& asset he&for / onths 1,BBB 3oss on acco'nt of fai&'re to e"ercise  onth otion to %'( roert( ,BBB 3i2'i-atin) -i*i-en- fro  Co. 19B,BBB Cost of in*estent in  Co. in BB1 :B,BBB Note6 In B11, Ton( ha- a net incoe of P:9,BBB an- a net caita& &oss of P,BBB. The ta"a(ers ta"a%&e net incoe is6 a. P1:,BBB c. P1B:,BBB %. P181,BBB -. P 191,BBB 11. Mr. Cor's, arrie- !ith  inor chi&-ren, has the fo&&o!in) transactions in B16 Coensation Incoe P BB,BBB Sa&es 1,88B,BBB Cost of )oo-s so&::B,BBB De-'ctions6 Oeratin) E"enses 88B,BBB 3oss -'e to theft roer&( reorte-G :B,BBB Contri%'tions6 To a )o*ernent riorit( ro+ect in e-'cation 1,BBB To St. >'-e ch'rch 8,BBB Other incoe6 Rent 5:,BBB Caita& )ain fro sa&e of ersona& car he&- for  (ears :,BBB The ta"a(er !i&& reort a ta"a%&e net incoe of6 a. P80,BBB c. P8B,8BB %. P8/B,8BB -. P9BB,8BB Qu!t"o#! $$%&$$' are %ase- on the fo&&o!in) inforation6 Cororation A has the fo&&o!in) transactions -'rin) the (ear B116 Fross Incoe, Phi&iine %'siness P,8BB,BBB Fross Incoe, >aan %'siness :BB,BBB ?'siness e"enses, Phi&iines 1,59B,BBB ?'siness e"enses, >aan 19B,BBB Other e"enses connecte- !ith the Phi&iine %'siness B,BBB Other e"enses connecte- !ith the >aan %'siness :B,BBB Other e"enses connecte- !ith the %'siness in the Phi& an- >aan 19B,BBB

P1.502A

Other %'siness e"enses !hich cannot %e a&&ocateIntercororate -i*i-en-s fro P3DT

%( the %'(er 1/B,BBB 1BB,BBB

115. If the ta"a(er is a -oestic cororation, its incoe ta" -'e is6 a. P5B:,BBB c. P5:,8BB %. P590,BBB -. P8B5,BB 118. If the ta"a(er is a resi-ent forei)n cororation, an- it reitte- 8B of its rofit to
c. P1,BBB -. 0,9BB

110. On Octo%er 1, B1, Dra)on Fir& Co. &ease- a resi-entia& ho'se for the 'se of one of its e"ec'ti*es, Mr. L'r'4'r', a secia& a&ien e&o(ee. The rent a)ree- 'on !as P10B,BBB er onth. The 7?T for the 2'arter is6 a. P98,8BB c. P89,BBB %. P98,BBB -. P19,BBB 11/.

Ta"a(er so&- caita& assets as fo&&o!s6 3ot 1 3ot  Se&&in) Price P:,BBB,BBB P1B,BBB,BBB Cost ,9BB,BBB 1,BBB,BBB Fain &ossG P5,9BB,BBB P,BBB,BBB Ters of Sa&e6 Do!n a(ent 1K19KBB/ P9BB,BBB P1,9BB,BBB Pai- on :K19KBB/ 9BB,BBB 1,BBB,BBB Pai- on K19KBB/ 9BB,BBB 1,BBB,BBB Insta&&ent -'e 1K19KBB ,BBB,BBB ,BBB,BBB Insta&&ent -'e 9K19KBB ,9BB,BBB 5,BBB,BBB Mort)a)e ass'e-

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1,9BB,BBB

The fina& ta" a(a%&e 'n-er the insta&&ent etho- for BB/ for &ot 1 is6 a. P5:B,BBB c. P,9BB %. PB,BBB -. P5,9BB Qu!t"o#! $$( )#* $+, are %ase- on the fo&&o!in) inforation6 Eon) )a*e the fo&&o!in) -onations6 9K1BKB1 To &e)itiate son on acco'nt of  /K19KB1 !ith P1BB,BBB ass'e- %( the -onee.

/K19KB1

To his &e)itiate -a')hter on arria)e on /K19KB1

1BKBKB1

3ot -onate- to the Nationa& Fo* %e 'se- for '%&ic 'rose. ;a&

11K1 9KB1

To his %rother on acco'nt of  11K19KB1

11. The tota& e"etion or -e-'ctions fro the tota& )ross )ift is6 a. P1B,BBB c. P11/,BBB %. P1/,BBB -. P1B,BBB 1B. The )ift ta" a(a%&e on 11K19KB1B -onation is6 a. P1,BB c. P1,/BB %. P1BB -. P/BB Qu!t"o#! $+$ )#* $++ are %ase- on the fo&&o!in) inforation6 3an- &ocate- in the Phi&iines *a&'e- at P,BBB,BBB to her 'nc&e s'%+ect to  >an. 8 $ the con-ition that 'nc&e !i&& a( the -onors ta" -'e an- ort)a)e to !hich her 'nc&e a)reean- a( the ort)a)e ao'ntin) to P9BB,BBB. No*. 5B $ ?'i&-in) in
11. The -onors ta" -'e on the )ift on >an. 8 is6 a. P/8,BBB c. P89B,BBB %. P,BBB -. P8/B,BBB

1. The -onors ta" -'e on No*e%er 5B -onation is6 a. P151,BBB c. P80,BBB %. P98,BBB -. P18,BBB 15. Which of the fo&&o!in) is correct a%o't estate ta"# a. The a(ent of estate ta" is a ersona& o%&i)ation of the heirs. %. Estate is a ta"a(er create- %( the -eath of a erson. c. A resi-ent a&ien -ece-ents sit's of ta"ation is !ithin the Phi&iines on&( +'st &i4e in incoe ta". -. Co'rts a( a&&o! the -istri%'tion of the estate to the heirs in the interest of +'stice an- e2'it( %efore estate ta" is ai-. 18. Which is fa&se a%o't estate ta"# a. The a&&o!a%&e f'nera& e"ense can ne*er %e ore than the act'a& e"enses ai-. %. Death %enefit as a -e-'ction 'st %e inc&'-e- in the )ross estate first. c. ;anishin) -e-'ction -oes not -iinish the estate h(sica&&(

P1.502A

-.

7ai&( hoe a( %e )rante- to a arrie- non$ resi-ent a&ien.

19. Which sha&& not for art of the )ross estate of a -ece-ent6 a. Intan)i%&e ersona& roert( of non$resi-ent a&ien -ece-ent !itho't recirocit( &a! %. Re*oca%&e transfer c. Transfer assin) secia& o!er of aointent. -. 3ife ins'rance !here the e"ec'tor is the %eneficiar( an- it is irre*oca%&e 1:. Which of the fo&&o!in) stateents is correct# a. Act'a& -aa)es ai- to the *icti are not ta"a%&e inc&'-in) a(ent for &ost sa&ar( or incoe. %. Mora& an- e"e&ar( -aa)es ai- to the *icti o't of a *ehic'&ar acci-ent are not ta"a%&e. c. Mora& an- e"e&ar( -aa)es ai- -'e to %reach of contract in %a- faith are a&so not ta"a%&e. -. Ao'nt recei*e- as ret'rn of ins'rance rei's is not ta"a%&e re)ar-&ess of the ao'nt ai- %( the ins'rance. 10. 1st Case6 Mr. X so&- his 9 $ -oor aartent for P1B,BBB,BBB. The onth&( renta& er 'nit is PB,BBB. This sa&e is s'%+ect to caita& )ains ta". n- Case6 Mr. Na-a& %o')ht a &ot for P,BBB,BBB !hich he inten-e- to %e 'se- as fai&( hoe. After 9 (ears, he a%an-one- his &an an- so&- it for P5,BBB,BBB. This sa&e is s'%+ect to caita& )ains ta". a. On&( the first stateent is correct. %. On&( the secon- stateent is correct. c. ?oth stateents are correct. -. ?oth stateents are incorrect. 1/. Which of the fo&&o!in) incoe fro Phi&iine so'rce of a resi-ent in-i*i-'a& is not s'%+ect to the rates in Sect. 8 A of the Ta" Co-e# a. Fain fro sa&e of his ersona& otor *ehic&e. %. Fain fro sa&e of resi-entia& ho'se an- &ot. c. Sa&ar( recei*e- %( a ana)in) artner of a artnershi. -. Passi*e incoe fro ri=es !on in a raff&e ao'ntin) to P/,BBB. 1. In >an'ar( B1, Dino an- >i+i !ere searate- %( co'rt or-er. Dino !as a!ar-e- the c'sto-( of their  (ear o&- -a')hter Dina an- >i+i !as a!ar-e- the c'sto-( of their 9 (ear o&- son >o+o. To reser*e the ties aon) the the co'rt or-ere- Dino to sho'&-er 0B of the financia& s'ort for >o+o an- >i+i to sho'&-er 0B of the financia& s'ort for Dina. The( co&ie- !ith the a%o*e or-er. The ao'nt of ersona& e"etions %asic ana--itiona&G Dino an- >i+i co'&- c&ai each in their resecti*e incoe ta" ret'rns is6 a. P9B,BBB c. P1BB,BBB %. P09,BBB -. PB 15B. A
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%. c. -.

E"enses inc'rre- to increase 'sef'& &ife of an asset. Charita%&e -onation to a riest. Schoo& ?'i&-in) erecte- %( a
15. The !i-o! of (o'r %est frien- has +'st %een aiP1,BBB.BBB on acco'nt of the &ife ins'rance o&ic( of  the -ecease- h's%an-. She as4s (o' !hether she sho'&- -ec&are the ao'nt for incoe ta" 'roses or for estate ta" 'roses. 1st a-*ice6 The rocee-s of &ife ins'rance ai- to the %eneficiar( 'on the -eath of the ins're- are e"et fro incoe ta" an- nee- not %e -ec&are- for incoe ta" 'roses. n- a-*ice6 The rocee-s of &ife ins'rance !o'&ha*e to %e -ec&are- for estate ta" 'roses if the -esi)nation of the %eneficiar( !as irre*oca%&e, other!ise it nee- not %e -ec&are-. a. ?oth a-*ices are correct. %. 1st a-*ice correct@ n- a-*ice !ron)@ c. ?oth a-*ices are !ron). -. 1st a-*ice !ron), n- a-*ice correct 155. 3ai&a too4 o't a &ife ins'rance o&ic( for P9BB,BBB nain) her niece, Saantha, as %eneficiar(.
P1.502A

She fi&e- her ret'rn on&( on >'&( 19, B1 an- aithe tota& ao'nt 'on fi&in) the ret'rn. The tota& ao'nt a(a%&e if ass'in) she fi&e- !ith the !ron) RDO is6 a. P115,09B c. P1B/,09B %. P151,9B -. P 0,9BB

The net ta"a%&e estate is6 a. P 1,9B,BBB %. P ,9BB,BBB

188. The fo&&o!in) in-i*i-'a&s are &ia%&e to a( co'nit( ta", e"cet6 a. E*er( inha%itant of the Phi&iines !ho is at &east 1/ (ears o&-. %. An(%o-( !ho has !or4e- in the Phi&s. for at &east 5B consec'ti*e -a(s. c. An(%o-( !ho is en)a)e- in %'siness or ractice of rofession. -. O!ners of rea& roert( !ith assesse- *a&'e of  P1B,BBB or ore.

15. Mr. >ose, 7i&iino, arrie- -ie- &ea*in) the fo&&o!in) estate6 Car ac2'ire- %efore arria)e %( Mr. >ose Car ac2'ire- %efore arria)e %( Mrs. >ose Ho'se an- &ot ac2'ire- -'rin) arria)e >e!e&ries of Mrs. >ose Persona& roerties inherite- %(6 Mr. >ose -'rin) arria)e ?enefits fro SSS Retireent %enefits fro a ri*ate fir Procee-s of )ro' ins'rance ta4en %( his e&o(er 3an- inherite- %( the !ife -'rin) arria)e Incoe earne- fro the &an- inherite- %( !ife 9 of !hich !as earne- after -eathG

P 5BB,BBB 89B,BBB 1,9BB,BBB 1BB,BBB

189. The co'nit( ta" for in-i*i-'a& is %asic ta" of  P9.BB &'s6 a. P1.BB for e*er( P1,BBB )ross sa&es %. P1.BB for e*er( P1,BBB )ross receits c. P1.BB for e*er( P1,BBB net incoe -. P1.BB for e*er( P1,BBB )ross incoe

9B,BBB 9B,BBB 19B,BBB   09,BBB 1,BBB,BBB

The a"i' co'nit( ta" for in-i*i-'a& sha&& %e6 P9BB c. P1,BBB P9,BBB -. P1B,BBB

BB,BBB a. %.

The )ross estate 'n-er con+')a& artnershi of )ain is6 a. P,:BB,BBB %. P5,:BB,BBB c. P1,9B,BBB -. P,BB,BBB

180. The fo&&o!in) entities or association are &ia%&e to a( co'nit( ta", e"cet6 a. A&& -oestic cororations %. A&& forei)n cororations en)a)e- in %'siness in the Phi&iines. c. A&& artnershis for rofit. -. A&& +oint *ent'res en)a)e- in ener)( oerations !ith the Phi&iine Fo*ernent.

18B.
The co'nit( ta" for cororations is P9BB &'s6 a. P.BB for e*er( P9,BBB !orth of rea& anersona& roert(. %. P.BB for e*er( P9,BBB )ross receits or earnin)s in Phi&s. c. P.BB for e*er( P9,BBB )ross sa&es in Phi&s. -. P.BB for e*er( P9,BBB net incoe in Phi&s.

Mr. Tantor arrie- 'n-er the re)ie of a%so&'te co'nit( of roert(. S'r*i*e- %( his !ife, &eft %ehinthe fo&&o!in) roerties an- char)es 'on his estate6 Rea& roert( ac2'ire- -'rin) the arria)e P 5,BBB,BBB 7ai&( Hoe, %'i&t 'sin) co'nit( f'n1,BBB,BBB Rea& roert( recei*e- as a )ift -'rin) the Marria)e ,BBB,BBB 3ot !here fai&( hoe !as %'i&t, inheriteD'rin) the arria)e 8BB,BBB 7'nera& e"enses 5BB,BBB Ta"es an- 3osses 1,5BB,BBB Me-ica& E"enses, !ith receit, inc'rre!ithin 1 (ear erio1,BBB,BBB

1. a. %. . a. %.

c. P 1,9BB,BBB -. P 8,BBB,BBB

The a"i' co'nit( ta" for cororation is6 a.P9BB c. P1,BBB %.P9,BBB -. P1B,BBB Co'nit( ta" is -'e a.?efore the &ast -a( of >an'ar( %.?efore the &ast -a( of 7e%r'ar( c.?efore the &ast -a( of March -.?efore the &ast -a( of Ari&

The a&&o!e- fai&( hoe -e-'ction is6 P1,BBB,BBB c. PBB,BBB P1,8BB,BBB -. P0BB,BBB

The -e-'ction for share of the s'r*i*in) so'se is6 P ,9BB,BBB c. P 8,BBB,BBB P 1,9B,BBB -. P 1,9BB,BBB

 In e*er( cha&&en)e or 'n-erta4in), the iortant thin) is (o' -o (o'r %est, its ' to Fo- to -o the rest.U  $ ;ICTOR $ en- of re!ee4 $

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P1.502A