Taxation Exam

TAXATION INSTRUCTIONS: Select the best answer for each of the following questions. ALL questions are compulsory and MUST be attempted. Mark only one answer for each item on the answer sheet provided. Strictly NO ERASURES ALLOWED. Erasures will render your examination answer sheet INVALID. Use PENCIL NO. 2 only. GOODLUCK! 1. The Congress, after much public hearing and consultations with various sectors of society, came to the conclusion that it will be good for the country to have only one system of taxation by centralizing the imposition and collection of all taxes in the national government. Accordingly, passed law that would abolish the taxing power of all local government units. Would such a law be valid under the present Constitution? I. Yes, the law centralizing the imposition and collection of all taxes in the national government would not contravene the Constitution as long as a new law is enacted for the common good of the people. II. No because under the present Constitution, each local government unit shall have the power to create their own sources of revenue and to levy taxes, fees, and charges subject to such guidelines and limitations as Congress may provide consistent with the basic policy of local autonomy. III. No. It is clear that Congress can only give the guidelines and limitations on the exercise by the local governments of the power to tax but what was granted by the fundamental law cannot be withdrawn by Congress. a. I only c. I, II and III b. II and III only d. None of the above 2. Statement 1: Income tax collected from the taxpayers is the main source of revenue of the local government. Statement 2: Taxes collected are the main source of revenue of the government. A. B. C. D. Statement1: True True False False Statement2: True False True False 3. Which of the following statements is true? a. The power of taxation and eminent domain are both exercisable only by the government and its political subdivision. b. In police power, the property taken is preserved for public use. c. The power of eminent domain is created by the constitution. d. The exercise of the power of eminent domain and police power can be expressly delegated to the local government units by the law making body. 4. Under the Final Withholding Tax system, which of the following statements is not correct? a. Income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income. b. The liability for payment of the tax rests primarily on the payee as a recipient of income. c. In case of failure to withhold the tax, the deficiency tax shall be collected from the withholding agent. d. The payee is no longer required to file an income tax return for the particular income. 5. Situs of taxation is world/global taxation A. B. C. D. Resident citizen True True True False Nonresident True True False False citizen OCWs True True False False Special Filipino True True True False employee Resident alien True False False False Nonresident alien True False False False Special alien True False False False employee 6. Determine the correct classification of the following: I. Manny, a Filipino businessman, went on a business trip abroad and stayed there most of the time during the year. II. Kyla, a Filipino professional singer, held a series of concerts in various countries around the world during the current taxable year. She stayed abroad most of the time during the year. III. Efren, a Filipino “cue” artist who went to Canada during the taxable year to train and participate in the world cup of pool. He stayed therein most of the time during the year. A. B. C. D. I NRC RC RC RC II NRC NRC RC RC III NRC NRC NRC RC 7. LJ, married, left the Philippines in the middle of the year on July 1, 2015 to go abroad and work there for five (5) years. The following data were provided as of December 31,2015: Gross Business Business Expenses PERIOD Income Phls. Abroad Phls. Abroad Jan. 1 to P300,000 P200,000 P100,000 P50,000 June 30 July 1 to 600,000 400,000 150,000 50,000 Dec. 31 His taxable income is: a. P750,000 b. P950,000 c. P1,100,000 d. P600,000 8. Vincent sold his principal residence for P10,000,000 to his friend. Its FMV when he inherited it from his father was P12,000,000 although its present FMV is P15,000,000. He used ½ of the proceeds to buy a new principal residence within eighteen (18) months after the sale. Assume further that Vincent properly informed the BIR about the sale within the required period. It shall be: a. Exempt from capital gains tax b. Subject to P300,000 capital gains tax c. Subject to P450,000 capital gains tax d. Subject to P600,000 capital gains tax 9. Mr. Almansor Sebastian, an Arabian and a resident of Saudi Arabia, requested you to determine his taxable income tax for 2015. His gross income in the Philippines is composed of P400,000 interest income from various peso bank deposits, P200,000 FCDS bank deposits, P100,000 dividend income from domestic corporations and PCSO winnings of amounting to P500,000. The total income subject to tax in the Philippines is a. P0 c. P1,000,000 b. P1,000,000 d. P1,200,000 12. Assuming the taxpayer is a Special Filipino Employee, his total combined taxes on all income from the Philippines is: a. P380,500 c. P595,000 b. P304,000 d. P446,500 10. Ms. Ganda Mee, a resident citizen with four (4) qualified dependent illegitimate children living with and dependent also for her chief support provided the following data for the year: Compensation income as a Secretary P375,000 to the President of MVUS Corporation (net of P125,000 withholding tax) Mid-year bonus and 13th month pay 60,000 Rental income from condominium units 228,000 in Ortigas(net of withholding tax) Income as a professional singer in an 229,500 international hotel in Makati (net of creditable withholding tax) Income from talent fees paid by TV 955,000 Shows as regular host (gross amount however the creditable tax was already remitted) Interest income from deposits in 50,000 domestic bank Royalty income from pocketbooks 300,000 published During the year, two of her children became gainfully employed, one got married at the age of 19 and the eldest reached the age of 21. Determine the correct amount of basic tax and final tax on passive income A. Basic Tax Final Tax P235,250 P40,000 B. P235,250 P70,000 C. D. P283,000 P283,000 P40,000 P70,000 Use the following data for the next three (3) questions Hajib, a Russian national who is an employee in the regional area headquarter of a multinational corporation, occupying “managerial” position, had the following data for taxable year 2015: Salaries received P600,000 Allowances and honoraria 50,000 Other emoluments 100,000 Monetary value of fringe benefits subject to 170,000 fringe benefit tax De minimis benefits (within the ceiling) 50,000 Dividend income from a domestic corporation 40,000 Interest income from peso bank deposit 50,000 Interest income from foreign currency deposit 20,000 under FCDS PCSO winnings (gross) 1,000,000 Raffle draw winnings 80,000 Gain from sale of shares of a domestic corporation sold directly to a buyer 150,000 Gain from sale of a vacant lot in Quezon City 500,000 held as investment (SP=P2,500,000; Cost=P2,000,000; Zonal Value=P2,500,000) 11. The total income tax expense of Hajib in the Philippines is: a. P535,000 c. P570,000 b. P565,000 d. P315,000 13. Mike Ong received P100,000 winnings from cockfighting. Determine his tax liability. I. Subject to 10% OPT (tax on winnings) under Section 126 of the Tax Code II. Subject to basic income tax III. Subject to 20% final tax on passive income IV. Subject to 10% OPT (tax on winnings) under Section 126 of the Tax Code and 20% final tax on passive income a. I only c. III only b. II only d. I and III 14. Mike Ong received P100,000 winnings from horseracing. Determine his tax liability. I. Subject to 10% OPT (tax on winnings) under Section 126 of the Tax Code II. Subject to basic income tax III. Subject to 20% final tax on passive income IV. Subject to 10% OPT (tax on winnings) under Section 126 of the Tax Code and 20% final tax on passive income a. I only c. III only b. II only d. I and III 15. A “Joint Account” is constituted when one interests himself in the business of another by/and I. Contributing capital thereto. II. Sharing in the profits or losses in the proportion agreed upon. III. They are not subject to any formality. IV. It may be privately contracted orally or in writing. a. I and II only c. I, II, III and IV b. I, II and III only d. None of the above 16. Statement 1: The share of a co-venturer individual in the net income of a tax-exempt joint venture or consortium is subject to normal income tax under Section 24A of the tax code. Statement 2: The share of a co-venturer individual in the net income of a tax-exempt joint venture or consortium is subject to creditable withholding tax of 20%. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect 17. The following information were taken from the records of NFJPIA Inc., a domestic corporation already in its fifth year of operation: Gross profit from sales P3,100,000 Capital gain on sale directly to 100,000 buyer of shares in a domestic corporation Dividend from: Domestic corporation 20,000 Resident foreign corporation 10,000 Interest on: 20,000 Bank deposit Trade receivable 50,000 Business expenses 2,100,000 Income tax withheld 115,000 Quarterly income tax payments 160,000 Income tax payable prior year (10,000) The income tax due at the end of the year: a. P318,000 c. P43,000 b. P63,200 d. P33,000 Next two (2) questions are based on the following: Be Jolly Corporation has the following information for the taxable year 2015: QUARTER First Second Third Fourth RCIT 200,000 240,000 500,000 300,000 MCIT 160,000 500,000 150,000 200,000 Creditable Withholding Tax 40,000 60,000 80,000 70,000 Additional Information: a) MCIT carry-over amounts to P60,000; b) Excess tax credits from prior year amounts to P20,000. 18. How much was the income tax payable for the second quarter? a. P660,000 c. P200,000 b. P460,00 d. P160,000 19. Using the same data except that the MCIT on the 4 th Quarter is P500,000, how much was the annual income tax payable? a. P330,000 c. P380,000 b. P1,310,000 d. P360,000 20. JC Corporation, a domestic corporation had the following data for 2015: Sales P5,000,000 Cost of goods sold 2,000,000 General selling and administrative 500,000 expenses Interest income from Philippine bank 100,000 deposit Rental income (net of 5% withholding 190,000 tax) Dividend Income: From domestic corporation 60,000 From foreign corporation 50,000 Capital gains from sale of domestic shares of stocks sold Directly to 75,000 buyer Dividend declared and paid during the 500,000 year Retained earnings, 12/31/2014 1,000,000 Par Value of outstanding shares, 500,000 12/31/2015 Appropriation for future plant 800,000 expansion The Improperly accumulated earnings tax was: a. P208,125 c. P213,625 b. P108,125 d. P105,125 21. Offshore Banking Units (OBUs) are tax exempt on income derived from I. Foreign currency transactions with local commercial banks. II. Foreign currency transactions with branches of foreign banks authorized by BSP. III. Interest income derived from foreign currency loans granted to other residents. a. I only c. I and II only b. II only d. II and III only 22. An offshore banking unit, already in its 8 th year in the Philippines, has the following data in its income and expenses for the year 2015: Foreign currency transactions with: Non-residents 1,800,000 Local banks 1,200,000 Branches of foreign banks 1,000,000 Another OBU 500,000 Other residents (Interest 800,000 Income) Other income: Rent income Miscellaneous income 1,000,000 500,000 Operating Expenses 2,380,000 How much is the total income tax for the year? a. P80,000 c. P372,500 b. P292,500 d. P0 Use the following data for the next two questions: Bobadilla Uro Partnership is a general professional partnership, with Bobadilla, married, and Uro, single, participating equally in the income and expenses. The following are the data for the partnership and the partners in a calendar year: BU Partnership Gross Income Expenses P600,000 350,000 Uro P150,000 70,000 Bobadilla P200,000 120,000 NOTE: Uro uses his personal car in going to meetings with client. He was able to determine that the allocated depreciation and gasoline expense to such meetings is P35,000. The said amount was not included in the expenses claimed by the partnership. 23. The taxable income of Uro is a. P220,000 b. P120,000 c. P155,000 d. P30,000 24. The taxable income of Uro if the Partnership is engage in trade or business is: a. P220,000 c. P155,000 b. P120,000 d. P30,000 25. The taxable income of Uro if the Partnership opted to use Optional Standard Deduction is: a. P220,000 c. P155,000 b. P120,000 d. P30,000 Use the following data for the next two (2) questions: A resident alien had the following data in 2014: Gross income, Philippines P2,000,000 Business expenses 1,200,000 Dividends received: From domestic corporation (net) 60% of its income came from the Philippines 40% of its income came from the Philippines From resident foreign corporation (gross) 60% of its income came from the Philippines 40% of its income came from the Philippines 90,000 72,000 50,000 40,000 26. The taxpayer’s taxable income is a. P750,000 b. P780,000 b. P112,500, P67,500 and P45,000, respectively c. P225,000, P0 and P0, respectively d. None of the choices c. P796,000 d. P800,000 32. Juan received as gift from his mother property purchased ten years ago for P100,000. At the time of donation, the property had a fair market value of P2,000,000. After owning the property for 3 years, Juan sold them for P2,500,000. Which of the following statements is correct? a. The gain on the sale was a capital gain of P2,400,000. b. The gain on the sale was an ordinary gain of P2,400,000. c. The holding period of the asset is immaterial d. The gain on the sale going into the net taxable income was P2,400,000.       27. Lenovo, Inc., a resident foreign corporation, has earned the following income during the taxable year: DIVIDEND INCOME FROM: Microsoft, a non-resident foreign P 500,000 corporation Intel, a resident foreign 400,000 corporation (ratio of Philippine income over world income for the past 3 years is 40%) Panday, a domestic corporation 300,000 INTEREST INCOME FROM: Current account, BDO 600,000 Savings deposit, ABN-AMRO 700,000 bank, UK FCDU deposits 800,000 ROYALTY INCOME from various 100,000 domestic corporations The total final tax on passive income for the taxable year is: a. P200,000 c. P230,000 b. P1,088,000 d. P328,000 How much is the taxable income? a. P505,000 c. P535,000 b. P525,000 d. P555,000 28. Which of the following test of source of income is incorrect? a. Interest income - residence of the debtor b. Income from services – place of performance c. Royalties – place of use of intangible d. Gain on sale of real property – place of sale. 34. Based on the above problem, but the taxpayer is a corporation, how much is the taxable income? a. P570,000 c. P560,000 b. P545,000 d. P600,000 29. Situs of taxation on income from sale shares of a domestic corporation. a. Always treated as income derived from within the Philippines b. Always treated as income derived from without the Philippines c. May be treated as income within or without the Philippines depending on the place of sale d. May be treated as income within or without the Philippines depending where the shares are kept 35. BSE College, a proprietary educational institution, spent P10 million for the construction of a new school building. The amount spent for the construction a. Must be claimed as expense in the year of completion b. Capitalized and claim annual depreciation over the life of the building c. Capitalized or expensed outright at the option of the school d. Capitalized or expensed outright at the option of the BIR 30. Situs of taxation on income from sale shares of a foreign corporation. a. Always treated as income derived from within the Philippines b. Always treated as income derived from without the Philippines c. May be treated as income within or without the Philippines depending on the place of sale d. May be treated as income within or without the Philippines depending where the shares are kept Use the following data for the next two (2) questions: Floyd, not a dealer in securities, had the following transactions on ordinary shares of JJ Co. (a domestic corporation) for 2015 taxable year: Jan. 12 Purchase 100 shares P100,000 June 20 Sold the shares purchased on 80,000 Jan. 12 June 30 Purchased 70 shares 50,000 Oct. 15 Sold the shares purchase on 75,000 June 30 31. Joseph provided the following data on sale of his personal property sold in 2013 held by him for 15 months: Cost P225,00 0 Mortgage assumed by the buyer Installment Collection Schedule: - 2013 - 2014 - 2015 270,000 67,500 67,500 45,000 How much is the income subject to income tax in 2013, 2014, and 2015? a. P56,250, P33,750 and P22,500, respectively 33. Mr. Mapagbigay had the following data during the year: Gross income from business P1,000,000 Compensation income 40,000 Long-term Capital gain 50,000 Short-term Capital loss 20,000 Operating expenses 400,000 Donation to an accredited 30,000 NGO Donation to church 40,000 36. How much was the loss on wash sale? a. P20,000 c. P14,000 b. P6,000 d. P0 37. How much was the capital gain on sale of shares on October 15? a. P25,000 c. P5,500 b. P11,000 d. P0 38. Which of the following is subject to 3% percentage tax under Section 116 of the Tax Code? I. Fruit dealer whose gross receipts for the year amounted to P1,200,000 only. II. An individual taxpayer whose gross sales for the year amounted to P100,000. III. School bus operator whose gross receipts for the year amounted to P1,919,500 a. I and II only c. All of the above b. I and III only d. None of the above 39. The taxpayer is a trader of poultry feeds. Determine his applicable business tax. a. Subject to 12% vat b. Vat exempt but subject to 3% OPT under Section 116 c. 12% vat or 3% OPT, at his option d. Exempt from 12% vat and OPT 40. In the case of a person whose VAT registration is cancelled and who becomes liable to the 3% tax on VAT-exempt persons under Section 116 of the tax code, the tax shall accrue from the date of cancellation and shall he paid within: a. 10 days after the end of each taxable month b. 15 days after the end of each taxable month c. 20 days after the end of each taxable month d. 30 days after the end of each taxable month 41. Which one of the following percentage taxes is paid on a quarterly basis? I. Tax on overseas dispatch, message, or conversation originating from the Philippines II. Amusement taxes and taxes on winnings III. Stock transactions tax IV. Percentage tax on international carriers a. I and II only c. I, II and III only b. III and IV only d. I, II, III and IV 42. In 2015, ADB Finance (domestic corporation) purchased various equity securities from listed domestic corporations for P100,000. ADB classified the securities as Trading Securities/FAFVPL under the applicable accounting standards. ADB received P10,000 dividend income from such investments in 2016.. Determine the applicable tax of ADB. a. The P10,000 dividend income is subject to normal corporate tax of 30% b. The P10,000 dividend income is subject to a final withholding tax of 10% c. The P10,000 dividend income is subject to a final withholding tax of 20% d. The dividend income is tax exempt 43. In 2015, ADB Finance (domestic corporation) purchased various equity securities from listed domestic corporations for P100,000. ADB classified the securities as Trading Securities/FAFVPL under the applicable accounting standards. ADB sold the shares in 2016 for P150,000. Determine the applicable tax. a. The P50,000 gain is subject to normal corporate tax of 30% b. The P50,000 gain is subject to 5% capital gains tax c. The P150,000 selling price is subject to stock transaction tax of ½ of 1%. d. The sale is exempt from business tax 44. In 2015, ADB Finance purchased equity securities from ABC Corporation (non-listed) for P100,000. ADB classified the securities as Available for Sale Securities/FAFVOCI under the applicable accounting standards. ADB sold the shares in 2016 for P150,000. Determine the applicable tax. a. The P50,000 gain is subject to normal corporate tax of 30% b. The P50,000 gain is subject to 5% capital gains tax c. The P150,000 selling price is subject to stock transaction tax of ½ of 1%. d. The sale is exempt from business tax 45. In 2015, ADB Finance purchased debt securities from various companies (listed) for P100,000. ADB classified the securities as Trading Securities/FAFVPL under the applicable accounting standards. ADB received interest income from those securities amounting to P20,000. Determine the applicable tax. a. The P20,000 interest income is subject to normal corporate tax of 30% b. The P20,000 interest income is subject to 20% final tax c. The P20,000 interest income is subject to 5% capital gains tax d. The P20,000 interest income is tax exempt 46. JJ wants to procure marine insurance for his vessels from International Aquatic Insurance Co., a nonresident foreign corporation, through its agent, in the Philippines. He paid premiums in 2016 amounting to P5 million. How much is the premiums tax payable on the transaction? a. P500,000 c. P200,000 b. P250,000 d. nil 47. Bulwagan ng Katotohana, radio and television broadcasting franchisee, recorded the following gross receipts and expenses during the taxable year: Advertising revenue from: Television division P20,000,000 Radio division 5,000,000 Donation received for calamity 5,000,000 victims Expenses: Salary 8,000,000 Other Operating expenses, 7,840,000 including VAT What is the amount of business tax advantages (disadvantages) if AB-GMS is VAT-registered? a. P840,000 b. P1,699,200 c. (P2,250,000) d. (P1,410,000) 48. Statement 1: International air carriers and international shipping carriers shall not be subject to 12% value added tax but to 3% common carrier’s tax based on gross receipts derived from their transport of passengers and goods from Philippines to other countries. Statement 2: In cases when the Gross Philippines Billings Tax of 2.5% for international carriers is not applicable (i.e., tax exempt based on reciprocity or treaty), the common carrier’s tax under Section 118 of the NIRC, as amended, shall still apply. A. B. C. D. Statement 1 True True False False Statement 2 True False True False 49. Farmers products (FP) is a buyer and miller of agricultural products. During the first quarter, its transactions are recorded as follows: Units Cost/kg. Purchase of palay 500,000kg 15 Purchase of corn 200,000kg 8 Milling of palay of 4,000,000k 2 customers g Milling corns of customer 3,000,000k 2 g Purchases of Corn & Coconut Corn & Coconut, 1-31-13 Purchases from VAT suppliers, VAT included: Packaging Materials Supplies FP milled its purchase for productions of rice and corn grits with an output of 80% and sold the products to various retailers for P30 per kilo of palay and P20 per kilo of corn grits. How much is the VAT payable of FP during the quarter? a. P1,680,000 c. P384,000 b. P1,440,000 d. P0 330,000 20,000 56,000 16,800 The value-added tax payable for the month: a. P56,060 c. P60,650 b. P54,900 d. P63,000 50. Farmer’s foods services (FFS) is an agricultural contract grower. During the first quarter, its transactions are recorded as follows: Service rendered production Fee per pdn units Hatching and sorting 1,600,000 10/tray of eggs trays Dressing and packing 1,200,000 20/pack broilers packs Reforestation with 1,000,000 5/tree government program trees FFS conducts production 30 days in a month because of the demand of the service. It also runs a canteen for its workers and passers-by. The canteen has a total sales of P50,000 a day. 54. Sweet Tooth Inc. is a manufacturer of sugar. It has the following data for the year 2013 (assume that amount is net of VAT unless otherwise stated): Sales from Raw Sugar P4,000,00 0 Sales from Refined Sugar 6,000,000 Sugar Cane Inventory, 12-31-12 1,500,000 Purchases of Sugar Cane 7,000,000 Sugar Cane Inventory, 12-31-13 2,500,000 Purchases from VAT suppliers, 672,000 gross of VAT How much is the VAT payable? a. P396,800 c. P368,000 b. P508,800 d. P480,000 Use the following data for the next three questions: A VAT-registered trader has the following transactions: Sales of good to private entities, net of VAT Purchases of goods sold to private entities, gross of 12% VAT Sales to a government owned corporation (GOCC), net of VAT Purchases of goods sold to GOCC, net of 12% VAT How much is the VAT payables of FFS during the quarter? a. P600,000 c. P135,000 b. P540,000 d. P0 51. Determine the business taxes of the following: I. Lease of residential units with a monthly rental per unit not exceeding P12,800 (regardless aggregate annual gross rentals). II. Lease of residential units with a monthly rental per unit exceeding P12,800 but the aggregate of such rentals of during the year do not exceed P1,919,500. III. Lease of commercial units regardless of monthly rental per unit. A B C D I None None None Vat II OPT OPT OPT Vat III Vat OPT Vat Vat P2,500,000 700,000 56. How much is the input tax closed to expense (income)? a. P14,000 c. (P14,000) b. P34,000 d. (P34,000) 57. How much is the VAT payable to the BIR? a. P404,000 b. P390,000 c. P204,000 d. nil    58. JJ gave gifts to the following persons on his 40th birthday: A second hand car worth P350,000 to Kaskasero, his trusted driver. The donation was made orally. Since then, the driver had taken possession of the property. To his Mayordoma, Ms. Mercy, a lot with a bungalow thereon, The value of the property is P1,200,000. The donation provides that it may be revoked anytime at the pleasure of JJ. His flower shop worth P700,000 to Hardinero, his gardener. The donation is provided in his will. Cash of P50,000 each to his three closest friends.  The vat payable of CG should be a. P216,000 c. P156,000 b. P204,000 d. P96,000 How much is the donor's tax due on the above donations? a. P720,000 c. P100,000 b. P45,000 d. P1,000 53. Mantika Corp., a VAT-registered Corp., is a producer of cooking oil from coconut and corn. It had the following data for the month of January 2014: Sales, gross of VAT P784,00 0 50,000 1,000,000 55. How much is the creditable input tax? a. P166,000 c. P70,000 b. P96,000 d. P180,000 52. CG Corporation is a vat registered entity with the following data for a taxable month: Domestic sales P500,000 Transaction deemed sales 500,000 Export sales 500,000 Sales to DEF, an export oriented 500,000 enterprises (2/3 of DEF’s annual output is actually exported) Purchases (invoice cost from vat 224,000 registered entities) Purchases (invoice cost from non-vat 100,000 registered entities) Corn & Coconut, 12-31-12 896,000 59. Amanda Raya sold her properties to her son on the following prices:   Residential house for P100,000 Personal properties for P50,000 The current fair market value on the date of sale was P1,000,000 for the house, and P500,000 for the personal properties. Assuming that you know the facts as a BIR officer, the correct total tax payable on the transaction is – a. P12,000 b. P72,000 c. None d. P38,000 60. The spouses Esme and Carlisle wanted to donate a parcel of land to their son Edward who is getting married in December, 2014. The parcel of land has a zonal valuation of P420,000.00. What is the most efficient mode of donating the property? a. The spouses should first donate in 2014 a portion of the property valued at P20,000, then spread the P400,000 equally for 2015, 2016, 2017 and 2018. b. Spread the donation over a period of 5 years by the spouses donating P100,000 each year from 2014 to 2018. c. The spouses should each donate a P110,000 portion of the value of the property in 2014 then each should donate P100,000 in 2015. d. The spouses should each donate a P100,000 portion of the value of the property in 2014, and another P100,000 each in 2015. Then, in 2016, Esme should donate the remaining P20,000. 61. On July 18, 2014, Mr. Dela Cruz gave a property with a fair market value of P550,000 to Lester, a legitimate son, and Jennifer, Lester’s bride, on account of their marriage celebrated on July 19, 2013. The donor’s tax payable is: a. P87,100 c. P84,100 b. P38,000 d. P15,800 62. During the current year, Mr. and Mrs. Cabarles, nonresident citizens, donated the following: Sept. 25: To Leona, a legitimate child, on account of marriage last month, a conjugal property located in the Philippines, FMV, P620,000. To Leo, nephew of Mr. Cabarles, on account of marriage, a property located in USA exclusively owned by him with fair market value of P150,000 (gift tax in USA, P 5,500) Oct. 9 : To Leonor, a legitimate child, conjugal property in the Philippines with fair market value of P100,000. The gift tax payable on the October 9 gift of the husband is: a. P14,000 c. P500 b. P1,800 d. P4,200 63. Mr. Nakalimot Huminga, head of family died on January 15, 2013, leaving the following properties and obligations: Cash in bank, 50%, donated mortis P300,000 causa to Nat’l Govt;50-% to Q.C. gov’t House and lot in Makati, F. Home 1,500,000 Personal properties 1,500,000 Farm lot 825,000 Claim against an insolvent debtor 225,000 1,500,000 Transfer in contemplation of death Transfer passing under special power of 75,000 appointment Deductions claimed: Funeral expenses 575,000 Judicial expenses 67,500 Donation mortis causa to Quezon City 150,000 government Unpaid mortgage on the farm lot 75,000 Medical expenses (included in the 225,000 funeral expenses incurred within the 1 year period with receipts) The farm lot was inherited 5 ½ years by the decedent before his death with a value then of P575,000 and a mortgage indebtedness of P150,000. The taxable net estate is: a. P3,757,500 b. P4,982,500 c. P2,757,500 d. P2,672,329 64. Jiraiya, non-resident Japanese, died leaving the following: Exclusive properties, Philippines P560,000 Conjugal properties, Philippines 420,000 Conjugal properties, Abroad 1,820,000 Funeral expenses 100,000 Judicial expenses 100,500 Unpaid expenses 150,500 Losses: occurring 3 mos. After death 120,000 due to fire Donation mortis causa to Makati City 180,000 Hall Family Home (inc. above), located 1,000,000 abroad Standard deduction 1,000,000 The taxable net estate is: a. P516,500 c. P1,900,000 b. P635,150 d. P2,100,000 65. Expenses not essential in the proper settlement of the estate but incurred for the individual benefit of the heirs, legatees, or devisees are not allowed as “judicial expenses.” Which of the following is not allowed as deduction from the gross estate under this category? I. Attorney's fees paid by the heirs to their respective lawyers arising from conflicting claims are not deductible as judicial expenses. II. Premiums paid by a judicial administrator on his bond. III. Compensation of trustees a. I only c. I and II only b. II only d. I, II and III The next two (2) questions are based on the data provided below: Mr. J. Chavez died leaving the following properties: Rest house in Cebu, acquired before 6,000,000 marriage Income from rest house in Cebu 600,000 Condominium in Davao, brought to 3,600,000 marriage by wife Income from condominium in Davao 360,000 Town house in Quezon City, acquired 10,500,000 during marriage Income from town house in Quezon City 1,050,000 Car, inherited by wife during marriage 1,300,000 (the testator provided in his Will that it shall form part of the common properties of the spouses) Jewelry, acquired during marriage for 200,000 exclusive use of the wife 66. How much is the conjugal properties under Conjugal Partnership of Gains? a. P12,510,000 b. P22,310,000 c. P18,510,000 d. P23,610,000 67. How much is the community properties under Absolute Community of Property? a. P12,510,000 c. P18,510,000 b. P22,310,000 d. P23,610,000 70. A taxpayer disclosed to you the following information: Date of filing the Income Tax Mar. 28, 2012 Return: Date assessment was June 20, 2014 received: Request for reinvestigation July 4, 2014 was filed: Assuming the taxpayer submitted the documents supporting his motion on August 26, 2014. The Bureau of Internal Revenue should act on the protest not later than a. September 26, 2014 b. April 15, 2015 c. February 26, 2014 d. February 22, 2015 68. Marcelina filed her 2013 Income Tax Return and paid the tax due thereon on April 1, 2014. The last day for the Bureau of Internal Revenue to send an assessment is a. April 1, 2017 c. April 15, 2017 b. April 15, 2019 d. April 15, 2024 69. Apolonio filed his Income Tax Return (ITR) for taxable year 2013 on May 2, 2014. After an investigation, it was discovered that the tax paid was deficient. The last day for the BIR to send an assessment: a. April 15, 2017 c. May 2, 2016 b. May 2, 2017 d. April 15, 2016 ***End of Mock Board Exam*** DONOR’S TAX TABLE Over P100T 200T 500T 1M 3M 5M 10M But not over The tax shall be P100T 200T 500T 1M 3M 5M 10M Plus Of the excess over Exempt 0 2,000 14,000 44,000 204,000 404,000 1,004,000 2% 4% 6% 8% 10% 12% 15% P100T 200T 500T 1M 3M 5M 10M ESTATE TAX TABLE Over P 200,000 500,000 2,000,000 5,000,000 10,000,000 But Not Over P 200,000 500,000 2,000,000 5,000,000 10,000,000 And Over The Tax Shall be Exempt 0 P 15,000 135,000 465,000 1,215,000 Plus Of the Excess Over 5% 8% 11% 15% 20% P 200,000 500,000 2,000,000 5,000,000 10,000,000 INCOME TAX TABLE FOR INDIVIDUALS Over 10,000 30,000 70,000 140,000 250,000 500,000 But not over 10,000 30,000 70,000 140,000 250,000 500,000 - The Tax Shall be 500 2,500 8,500 22,500 50,000 125,000 Plus Of excess over 5% 10% 10,000 15% 30,000 20% 70,000 25% 140,000 30% 250,000 32% 500,000 - end -