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TAXATION ATTY.

MACMOD, CPA
POWER REVIEW

BASIC PRINCIPLES OF TAXATION d. Personal and regulatory


1. Which is not a characteristic of power of Taxation?
a. Power co-exists with the existence of the state 10. 1st Statement – Tax imposed outside the situs of
b. It is absolutely legislative in character Taxation is void.
c. It is subject to inherent limitations 2nd Statement – International Comity is an exception
d. It is subject to limitations found in the 1987 to the territoriality doctrine.
Constitution a. True; False
b. False; True
2. Which of the following statements is correct? c. True; True
a. Tax law is still valid when its theory purposes and d. False; False
basis are disregarded
b. There can be tax exemption solely on the ground 11. Which is not a characteristic of state’s power of tax?
of equity a. It is based on the taxpayer’s ability to pay &
c. Levying or imposition of taxes is known as tax benefits received
administration b. It is legislative in character
d. The power to tax generally includes the power to c. It is an inherent power
destroy d. It is limited by constitutional and inherent
limitations
3. One is not among the canons of taxation:
a. Fiscal adequacy 12. In case of conflict between the tax code and generally
b. Progressive taxation system accepted accounting principles (GAAP):
c. Administrative feasibility a. Both tax codes and GAAP shall be enforced;
d. Equality in taxation b. GAAP shall prevail over tax code;
c. Tax code shall prevail over GAAP;
4. As to subject matter, community tax is: d. The issue shall be resolved by the courts.
a. Personal tax c. Advalorem tax
b. Direct tax d. Local tax 13. Which of the following statements is not correct?
a. Taxes may be imposed to raise revenues or to
5. One of the following is not a valid constitutional regulate certain activities within the state;
limitations on the power of taxation: b. The state can have the power of taxation even if
a. Non appropriation for religious purposes the Constitution does not expressly give it the
b. Non impairment of jurisdiction of Court of Tax power to tax;
Appeals in Tax cases c. For the exercise of the power of taxation, the
c. Non imprisonment for nonpayment of poll tax state can tax anything at any time;
d. Due process of law and equal protection of law d. The provisions of taxation in the Philippines
Constitution are grants of power and not
6. One of the following violates the inherent limitation on limitations on taxing powers.
the power of taxation:
a. Supplier of schools supplies for Department of 14. 1st Statement – Tax exemptions are strictly construed
Education shifted the VAT making the government against the government.
an indirect taxpayer of VAT 2nd Statement – When the tax law is not clear and
b. A revenue regulation was issued by Department of there is doubt whether he is taxable or not, the doubt
Finance to amend mistake in a tax law shall be settled against the government.
c. Income of US government in the Philippines is not a. Only the first statement is correct.
subjected to income taxation b. Only the second statement is correct.
d. Non-resident citizen abroad are taxable from c. Both statements are correct.
within only. d. Both statements are incorrect.

7. A. Courts can review or inquire in to the wisdom or 15. One of them is not an essential characteristic of tax:
advisability of a tax under Power of Judicial Review in a. Generally payable in money
Taxation. b. Mandatory in character
B. Our constitution does not contain any provision c. Proportionate burden
granting tax exemption to the government. d. Imposed on persons or properties
a. True: True c. False; True
b. False; False d. True; False 16. The present Philippine Budget deficit is a violation of
what principle:
8. 1st Statement To be exempt from taxation under the a. Administrative feasibility and compliance
Constitution land & buildings must be exclusively and b. Theoretical justice or equality
actually used for religious, educational or charitable c. Fiscal adequacy
purpose, even if not directly. d. Consistency with economic goods
2nd Statement Exemptions of non-profit schools are
only limited to revenue and assets derived from strictly
school operations. INCOME TAXATION
a. True, True c. False, True 17. Which is not a correct principle of individual income
b. False, False d. True, False taxation?
a. Resident Filipino citizens are taxable on all income
9. Our tax laws are both: from sources within & without
a. Progressive and prospective b. Non-resident citizens are taxable only on income
b. Civil and prospective from sources within
c. Penal and regulatory
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c. Overseas contract workers are taxable only on Dividends received:
income from sources without the Philippines From resident corp. 3,000
d. An alien individual whether resident or not of the From non-resident corp. 1,000
Philippines is taxable only on income from within Interest from bank deposits 10.000
Interest from trade receivables 4,000
18. Which is not a correct principle of corporate income Capital gains on assets held for 8 34,000
taxation mos.
a. Domestic Corporations are taxable on all income Capital loss on assets held for 12 70,000
from within & without mos.
b. Resident Corporations and non-resident 2012- Taxable income from business 140,000
corporations are taxable on all their income from Capital gains on capital assets 30,000
Philippine held for 13 mos.
c. Foreign Corp. are subject to 15% on their Capital loss on assets held for 7 6,000
remittance to their head office abroad mos.
d. Non- resident Corp. are not covered by the rule on Amount received as liquidating 150,000
MCIT dividends
(Cost = 100, 000) held for 19
19. On November 8, 2015, Mr. & Mrs. Tolentino sold their
mos.
principal residence in Makati for P10, 000,000. The
following must be met in order that the capital gains The taxable Income before personal exemption in 2012
presumed to have been realized from such sale may is:
not be subject to capital gains tax, except: a. P62, 000 c. P72, 000
a. They must use the proceeds of the said sale to b. P71, 000 d. P146, 000
acquire or construct a new principal residence
within 2 years from date of sale. 24. If the taxpayer is a corporation, the taxable income in
b. They must inform the BIR of that intention within 2010 is:
30 days from the date of sale a. P 78, 000 c. P 86, 000
c. They can only avail of the said privilege once every b. P 214,000 d. P 49, 000
ten (10) years.
d. The historical cost or adjusted basis of the real 25. The following information are from the record of
property sold shall be carried to the new principal Central Mindanao University Inc., a proprietary
residence built or acquired educational institution, for fiscal year ended March 31,
2015:
20. Which is an incorrect principle about withholding Income: Tuition fees P5,000,000
taxes? Miscellaneous fees 2,500,000
a. Returnable income are income usually subject to Income from rental 150,000
creditable withholding tax Net Income, canteen 350,000
b. Passive income are subject to final non creditable Intercorporate dividends 750,000
withholding tax Interest on time deposit 100,000
c. Special income like income subject to CGT are also Expenses: General & Administrative 1, 500,000
subject to final non creditable withholding tax expenses
d. Fringe benefits are subject to final non creditable Interest expenses, bank 50,000
withholding tax loan
Depreciation, for the year of new bldg.
21. The following expenses are not allowed as deductions costing 1M
from gross income except: Completed of 6 mos. ago (est. useful life
a. Personal, living or family expenses of 20 yrs.) 50,000
b. Amounts paid out for new buildings or for
permanent improvements or betterments made to The income tax due of the corporation for the fiscal
increase the value of the property year is if it opts to claim depreciation expense from the
c. Amounts expanded in restoring a property new building is:
d. Premiums paid by a corporation or any life a. P646, 600 c. P721, 400
insurance policy covering the life of any of its b. P646, 700 d. P645,800
officers or employees
26. The following fringe benefits are not taxable except:
22. 1st Statement- Mr. Yu, Chinese, is a resident manager a. Those which are authorized and exempted under
of China International Bank, a Chinese Bank with an special laws
offshore banking unit in the Philippines. His salary in b. Contributions of the employer for the benefit of the
the Philippines from the said unit is subject to 15% employee to retirement, insurance, hospitalization,
final tax. If Filipino is employed as a manager for the benefit plans, holiday and vacation expenses
aforementioned position, he will be taxed based on the c. Those benefits given to rank and file employees
5-32% schedular tax rates automatically. d. De minimis benefits

2nd Statement- A foreign corporation with a branch 27. All of the following fringe benefits are not taxable
office in the Philippines employed Mr. X, a British as its except:
executive to supervise the company’s operation. He a. De minimis benefits
stayed in the Philippines for 4 months in the year b. Benefits given to clerk of the company
2008. Then left abroad. His salary in the Philippines c. Those authorized and exempted under contractual
from the said corporation will be taxed at 25%. If a agreements
Filipino occupies the said position, he will be taxed d. Contributions of the employer for the benefit of the
based on the 5-32%, schedular tax rates: employee to retirement, insurance and
a. True; True c. True; False hospitalization
b. False; False d. False; True
28. Tarzan Corporation made the following payments for
23. RENO had the following transactions: the 1st quarter of 2015. In behalf of Vice President
2011- Taxable income from her business P 20,000
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To Ever Supermarket, groceries consumed by the a. P384, 000 c. P296, 800
officers family…P100,000 b. P256, 000 d. P423,000
To Ateneo de Davao, tuition of EVP’S youngest son
(one of Company’s scholar’s chosen after passing the 35. If however it is non- resident corporation, its total tax
Company’s qualifying examination)…P50,000 liability is:
Brand new car leased from rent-a-car for use of the a. P384, 000 c. P463, 000
officer (quarterly rental)…P45,000 b. P256, 000 d. P435,000
The fringe benefit tax for the quarter is:
a. P60, 336 c. P86, 194 36. It is a contract for sale of shares of stocks, which the
b. P57, 647 d. P75, 112 seller does not own yet and subject to delivery only in
the future. It is prohibited sales unless made by
29. Mr. Masaya,married, supporting his minor son has the dealers in securities:
following data for the year 2015: a. Wash sale c. Stock sale
b. Short sale d. Short term sale
Gross professional income, net of 10%
w/tax P630,000
37. A situation wherein equivalent stock is purchased
Broker’s Commission, net of 5% P 95,000
within 30 days before or thirty days after the date of
withholding tax
sale known as “60“ day period. Losses are not
Other Income, net of 10% withholding
deductible but gains are taxable
tax 90,000
a. Wash sale c. Stock sale
Deductions claimed:
b. Short sale d. Short term sale
Salaries of staff, net P5, 000
withholding tax 250,000
38. All are considered large taxpayers except one:
Advertising expenses 3,000
a. Business establishment with VAT paid or payable
Bad debt (P2, 500 actually written off) 4,000
of at least P100, 000 for the preceding taxable
Cost of office equipment purchased on 120,000
quarter.
April 1, 2015 (useful life, 5years)
b. Corporate income tax paid or payable of at least
Fire insurance premium on office
P1M for the preceding taxable year
equipment for One year paid on
c. Excise tax paid or payable of at least P1M for the
August 1, 2015 1,500
preceding taxable year
Rent of office space for 2 yrs. at
d. Withholding tax payment or remittance was less
P10,000 per month Paid on February
than P1M for the preceding taxable year.
1, 2015 240,000
Traveling expense (business trip 50%
39. Case 1: Mr. Ramos inherited from his parents large
only) 100,000
parcels of undeveloped land acquired by them years
Charitable contribution to religious
ago with total cost of P500,000. Mr. Ramos now sells
corp. 100,000
all of these parcels for P2M. How much gain should Mr.
Ramos report for income tax purposes?
Using itemized deduction, the taxable income is:
Case 2 : Suppose that when Mr. Ramos inherited
a. P460, 875 c. P339,787
these parcels of land, they were already developed real
b. P414, 787 d. P777, 000
estate subdivisions with small lots being sold on
installment bases. He now sells all these parcels for
30. Using optional standard deduction, the taxable income
P4M. How much gain should be reported by Mr. Ramos
is:
for income tax purposes?
a. P P460, 875 c. P465,000
Answer to Case 1: None because the properties are
b. P414, 787 d. P777, 000
capital assets and the transaction is subject to capital
gains tax and not basic income tax.
31. All are exempted from IAE tax except:
Answer to Case 2: Mr. Ramos should report gains from
a. Banks and non-banking financial institutions
the sale amounting to P3.5M because the properties
b. Life insurance companies
sold are ordinary assets. The transaction is subject to
c. Private educational Institutions
income tax.
d. Taxable partnership
a. Both answers are correct
b. Both answers are wrong
32. All are exempt from MCIT except:
c. Answer to Case 1 wrong, answer to Case 2 correct
a. Hospitals c. offshore banking units
d. Answer to Case 1 correct, answer to Case 2 wrong
b. International Carriers d. resident foreign corps.
40. RICO, an official of ABC Corporation asked for an
33. STARK Corp. provided the following data for taxable
earlier retirement because he was emigrating to
year 2015:
Canada, he was paid P2M separation pay in recognition
Philippines Abroad
of his valuable services to the corporation plus P200,
Gross Income P1M P2M
000 13th month pay. Jekky, another official was
Allowance deductions P200,000 P300, 000
separated for his failing eyesight. He was given P1M
Intercorporate dividends P100,000
separation pay. Juan was separated for occupying a
Sale of real property in the Philippines held as capital
redundant position. He was given P500, 000 separation
asset in the Philippines was P1, 200,000 costs P800,
pay. Benjie opted to retire at 55 years old. After
000 but with a zonal value P1, 300,000.
working for 10 years in the same company. He
received P1M. All of them except Benjie were not
If the Corp. is a domestic corporation, its total tax
qualified to retire under the BIR approved pension
liability is
plan.
a. P878, 000 c. P800, 000
The total income subject to withholding tax on the
b. P928, 000 d. P828,000
above payment is:
a. P2, 200,000 c. P3, 000,000
34. If the corporation is a resident corporation and it
b. P2, 118,000 d. P4, 000,000
remitted 50% of its net profit to its head office abroad,
total taxes liability is:

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41. On January 1, 2010, lessor leased a lot with a building
thereon for a period of 10 years. It was agreed that 47. If the partnership is an ordinary partnership, the
the lessee will pay the following: taxable income of the partnership is:
a. Rent of P240,000 per year a. P284,000 c. P250,000
b. Fire insurance premium in the building of b. P320,000 d. P280,000
P16,000/year
c. Real property tax of P10,000/year 48. A taxpayer sold his stock investments in 2012 as
Lessee will also construct a warehouse on the land follows:
at a cost of P3,600,000 with a useful life of 10 1. Selling price ( A Co. shares, not traded in the stock
years completed on June 30, 2012, which shall exchange) P300,000
belong to the lessor at the end of the lease. Cost 120,000
The lessor shall report for year 2012 as income Net Gain P180,000
from lease the total amount of:
a. P336,000 c. P326,000 2. Selling price (B Co. shares, not traded in the stock
b. P366,000 d. P1,296,000 exchange) P400,000
Cost 340,000
42. Based on the above problem the lessee can deduct the Net gain P 60,000
total rental expenses of:
a. P516,000 c. P636,000 3. Selling price (C Co. shares, traded in the stock
b. P506,000 d. P576,000 exchange) P150,000
Cost 230,000
43. ABS Company, a subcontractor, sold one of its Net loss P 80,000
machines in installment, the details of which are:
Date of sale The total final withholding tax due on the sales is:
March 2011 Cost P960,000 a. P21,000 c. P16,000
Accumulated Depreciation 576,000 b. P21,375 d. P16,750
Terms of Sale:
Downpayment P180,000 49. A taxpayer, married, with five minor children, three of
Due on: them are gainfully employed, provided the following
May 2011 180,000 data:
August 2012 300,000 Compensation Income
December 2012 300,000 (gross of 10% SSS, Union
During the year, under the installment method, the dues, Pag-IBIG & Philhealth,
company will report income from the sale in the net of P145t 13Tth mo pay) 200,000
amount of: Gross sales 500,000
a. P144,000 c. P576,000 Cost of Sales 320,000
b. P216,000 d. P180,000 Other income, 80% represents
income from bank deposits, Phils. 20,000
44. But assuming that the company is a dealer of the said Expenses (15% represents personal
personal property, it will report in year 2011 income expenses and health insurance
from the sale in the amount of: of P2,000 included in the 15%) 50,000
a. P180,000 c. P216,000 Income treasury bills 40,000
b. P144,000 d. P576,000
If the taxpayer is a resident citizen, the taxable income
45. Mr. Abuda, non-resident alien stockholder received is:
dividend income of P600,000 in 2015 from a resident a. P228,500 c. P284,500
foreign corporation. The resident corporation’s gross b. P236,500 d. P186,500
income from within and without the Philippines for
three years preceding 2015 are as follows: 50. Mr. Juan dela Cruz transferred his commercial land
Gross Income 2012 2013 2014 with a cost of P500,000 but with a fair market value of
Philippines P32M P24M P28M P750,000 to JDC Corp. in exchange of the stocks of the
Abroad P36M P28M P32M corporation with par value of P1,000,000. As a result
Mr. Abuda’s dividend income taxable in the Philippines of the transfer he became the majority stockholder of
is: the corporation. As a result of the transfer:
a. P300,000 c. P600,000 a. The recognized gain is the difference between the
b. P0 d. P540,000 fair market value of the shares of stocks and the
cost of the land.
46. Pio, married, with five minor children and Pia, single, b. The recognized gain is the difference between the
with 2 legally adopted children are partners, sharing par value of the stocks and the fair market value of
profits and losses into 4:6. The following data pertain the land.
to the partnership account and the accounts of the c. No recognized gain because the land was in
individual partners in their own business. exchange of purely stocks and Mr. dela Cruz
Partnership Pio Pia became the majority stockholder.
Gross Income P570,000 P280,000 P190,000 d. No recognized gain because the land was in
Allowable Deductions 250,000 150,000 70,000 exchange of stocks of the corporation.
Drawing Accounts 30,000 20,000 10,000
Other Income 20,000 10,000 51. Mr. Paul Herce is an Australian citizen employed as an
Charitable partnership contribution: (not included auditor in a Canadian-based professional services firm
above) contracted by the Philippine Government to find out
To: UP P20,000
the extent of corruption in a suspected government
To: Malate Church 50,000
agency. He received compensation income of P365,000
If the partnership is a GPP, the taxable income of Pio
for his services from that Canadian firm for 365 days,
is:
250 days of which was spent in the Philippines and the
a. P194,000 c. P211,000
rest in Indonesia. Based on these information what
b. P187,000 d. P100,000

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amount of Mr. Herce’s compensation should be 59. H and W married without a marriage settlement. H
considered as earned within the Philippines? died on August 20, 2015. The estate reported the
a. P365,000 c. P500,000 following assets and deductions of H and W:
b. P250,000 d. P182,000
Conjugal Properties of H and W:
52. ABS Corporation, a domestic corporation now on its 5th Fishpond, Bulacan P1,500,000
year of operation provided the following data: Apartment houses, Makati 1,500,000
Cash in bank 650,000
Gross sales P1,100,000 Others 100,000
Sales returns and allowances 200,000 Exclusive Properties of H:
Cost of goods sold 300,000 Land, inherited from father who
Gain on sale of capital assets held for died on August 20, 2011.
7 months 10,000 Value of land when inherited was
Loss on sale of capital assets held for P210,000. The land had
15 months 5,000 a mortgage of P30,000 when inherited of
Interest income (BPI) 50,000 which P10,000
Allowable business expenses 580,000 was paid by H before he died. P400,000

Income tax due is: Land, donated on February 14,2012 by his


a. P8,800 c. P12,000 mother who died
b. P 7,500 d. P9,625 on November 2,2013. Value of land when
donated was P500,000. 600,000
53. In computing gain or loss from sale or other disposition
of property acquired by gift or donation, the basis or
Exclusive Properties of W:
cost of the donee is:
Farm in Laguna, acquired
a. Fair market value, time of donation
before marriage 2,000,000
b. Purchase price plus expenses of acquisition
including VAT
Deductions claimed:
c. Fair market value, when purchased
Funeral expenses 250,000
d. The basis as if it is in the hands of the donor
Fire loss of apartment
(occurred 4 months after death) 80,000
54. 1st statement- Overtime and holiday pay are included
Bad debt (represents unpaid receivable
in computing the Minimum wage.
from Bert, an insolvent) 100,000
2nd statement- Dealers of real property need not be
Mortgage on inherited land 30,000
observe the 25% rule to qualify under installment
Vanishing deduction on
method.
inherited land 40,000
a. True: True c. True; False
Vanishing deduction on
b. False; False d. False; True
donated land 20,000
Standard deduction 2,000,000
55. 1st statement- Net operating loss in the preceding year
Death benefits (R.A 4917) 150,000
shall be added in the net income in the succeeding
year for purposes of computing the IAET.
The gross estate of H is:
2nd statement- In computing the net operating loss,
a. P4,900,000 c. P6,900,000
capital asset transactions (CAT), if any is included.
b. P5,000,000 d. P4,500,000
a. True: True c. False; True
b. False; False d. True; False
60. The total conjugal and special deduction is:
a. P1,564,000 c. P1,380,000
56. The following individuals are not required to file their
b. P1,530,000 d. P430,000
ITR except:
a. Minimum wage earner who has business and other
61. The total deduction exclusive deduction is:
income
a. P277,600 c. P73,600
b. One whose only income is subject to final tax.
b. P93,600 d. P80,000
c. One whose gross compensation income in one year
does not exceed P60, 000
62. A resident decedent married and under absolute
d. One whose income is exempt under a treaty or
community of properties, died on January 15, 2015.
special law.
He left the following properties, expenses and
obligations:
57. A tax payer provided the following data
Community properties, Philippines (including family
Sales (net of P1M discounts and returns) P 10M
Home valued at P3, 000, 000) P5,000,000
COGS P 4M
Community properties, Japan 2,500,000
Operating expenses P 2M
Exclusive properties, Philippines 2,000,000
Royalty income P 1M
Actual funeral expenses 300,000
Using OSD, the taxable net income the taxpayer is a
Judicial expenses 200,000
corporation is
Medical expenses (documented w/in
a. P 3,600,000 c. P 5,900,000
1yr. before death) 600,000
b. P 4,200,000 d. P 6,450,000
Transfer for public purpose (National Gov’t) 50,000
Legacy to (Local Gov’t) 70,000
58. Using OSD, the taxable net income the taxpayer is an
Death benefits receive from employer
individual, married w/ 5 minor children is
(included above) 500,000
a. P 5,900,000 c. P 3,600,000
b. P 5,850,000 d. P 5,450,000 The taxable net estate is:
a. P2,680,000 c. P1, 430, 000
ESTATE AND DONOR’S TAX b. P3,680,000 d. P4, 380, 000
63. Which of the following is incorrect:

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a. The allowable deduction for funeral expenses can to the donation and executed the necessary documents
never be more than the actual funeral expenses donating his share
paid. 69. The donor’s taxes due on the February 25, 2012
b. Vanishing deduction diminishes the estate donation should be:
physically a. P14, 000 for Mr. & Mrs.
c. Taxes in order to be deductible must accrue before b. P3, 600 each for Mr. & Mrs.
the decedent’s death c. P4, 000 each for Mr. & Mrs.
d. Claims against the estate even for equitable d. P5, 750 each for Mr. & Mrs.
reasons is not allowed as deduction if not
notarized. 70. The donor’s tax due on the June 9, 2012 donation is:
a. Mr. – 0; Mrs. – P1, 875
64. All of the following are incorrect except: b. Mr. – 11, 250; Mrs. – P4, 700
a. Revocable transfer are only includible if the gross c. Mr. – 11, 250; Mrs. – P1, 100
estate if the revocation was actually exercised. d. Mr. – 11, 250; Mrs. – P1, 875
b. A transfer mortis cause of a real property in the
Philippines held as capital asset is not subject to 71. The donor’s tax due on the December 25, 2012 for Mr.
estate tax & Mrs. are:
c. Proceeds of life insurance policy where the a. Mr. – 9, 875; Mrs. – P13, 500
beneficiary is the executor are includible in the b. Mr. – 67, 500; Mrs. – P67, 500
estate in all cases c. Mr. – 9, 000; Mrs. – P13, 500
d. Only married decedent can claim the deduction for d. Mr. – 9, 000; Mrs. – P67, 500
family home
72. The donor’s tax due on the December 25, 2012 for
65. Mr. ANACONDA died leaving the following properties: their Kumpare is:
Exclusive real property, FMV-P500,000 when a. P90, 000 c. P0
inherited 3 ½ yrs. ago and subject to a mortgage b. P6, 000 d. P30, 000
of P65,000 at that time. FMV at the time of death
is P700,000. 73. Matubo Corp. donated P100,000 for the purpose of
Other data are: cementing a Barangay road where its factory is
Conjugal properties P 1,700,000 located.
Unpaid mortgage on the 1st statement: The donation is exempt from donor’s
inherited property 15,000 tax.
Judicial expenses 85,500 2nd statement: The corporation may claim a full
Funeral expenses (P 15,000 deduction for income tax purposes.
paid by friends) 75,000 a. Both statements are incorrect
Other obligations 19,500 b. Only 1st statement is correct
The net estate subject to tax is: c. Both statements are correct
a. P 699,500 c. P 850,000 d. Only 2nd statement is correct
b. P 286,000 d. P 875,000
74. A donor gave the following donations in year 2012
66. The following are motives of taxpayer that preclude Jan. 24- Land located in the Philippines valued at
transfer in contemplation of death, except one: P2,000,000 to her uncle subject to the
a. To relieve the taxpayer of the burden of condition that uncle will pay the donor’s
management tax due and mortgage to which she
b. To save income and property taxes agreed to pay the mortgage amounting
c. To avoid payment of estate tax. to P500,000.
d. To make dependents financially dependent Nov.30- Building in US valued at P4,500,000 to
her sister. Donor’s tax paid in US was
67. 1st Statement- Life Insurance proceeds if the P400,000.
beneficiary is the executor is includible in the gross The donor’s tax on the gift on Jan. 24 is:
income regardless of the designation. a. P84,000 c. P450,000
2nd Statement- Life Insurance proceeds if the b. P92,000 d. P480,000
beneficiary is a third person is includible in the gross
estate if it is revocable. 75. The donor’s tax due on the Nov. 30 donation is:
a. True; True c. False; True a. P131,000 c. P47,000
b. False; False d. True; False b. P524,000 d. P124,000

68. 1st statement: Dowries made by non-resident alien VAT AND OPT
parents to their children before marriage are exempt 76. MY BABY Sales Corporation provided the following data
from gift tax up to P 10,000. for the first quarter of 2015 first year as VAT
2nd statement: Donors can always claim a tax credit for registered person:
donor’s taxes paid to a foreign country.
a. True, True c. False, True Cash sales, total value P336, 000
b. False, False d. True, False Open account sales 112,000
Consignment made
69 to 72 are based on the following data: (Exclusive of VAT)
On February 25, 2012, Mr. and Mrs. Bayabas donated their Jan. 1- P200, 000
conjugal land worth P500, 000 to their three sons, but on Feb. 15- 150, 000
account of marriage to one of them who got married 5 Purchased of capital goods,
months ago. On June 9, 2012, they also donated to the VAT excluded 50,000
child of Mrs. Bayabas by first marriage, jewelry worth P75, Purchased of materials, net of VAT 40,000
000 on account of marriage more than a month after the Value of inventory as of Jan .1 of the year
donation. Finally on December 25, 2012, they donated to Purchased from VAT Registered Person P240,000
the nephew of Mr. Bayabas a building worth P750, 000, Purchased from non-Vat Registered
40% of which was co-owned by their Kumpare who agreed Person 50,000
6
Purchased of VAT Exempt goods 10,000 b. A taxpayer whose annual receipts/sales do not
VAT paid on the (above inventory) 4,000 exceed P 1,919,500 but who is VAT registered shall
Equipment purchased, March 2012 pay Vat.
(useful life 10 yrs.) P2M c. The same transaction may be subjected to both
The VAT due is: income tax and VAT
a. P37, 000 c. P51, 400 d. Marginal income earners are both exempt from
b. P38, 000 d. P55,200 VAT and income tax.

77. One of the following activities is not subject to VAT: 83. IMIC Corp. imported an article from USA. The invoice
a. Movie house operators value of the imported articles was $7,000 ($1-P50).
b. Pawnshop The following are incurred in connection with the
c. Drugstores importation:
d. Parking lot operators Insurance P15,000
Freight 10,000
78. A building contractor provided the following data (all Postage 5,000
figures are net of VAT) Wharfage 7,000
Amount received from -1 P800, 000 Arrastre charges 8,000
building Brokerage fee 25,0000
Advances received from -2 400, 000 Facilitation fee 3,000
building
Amount received from -3 800, 000 The imported article was subjected to P150,000 customs
building (net of P200t duty and P30,000 excise tax.
retention cost) IMIC Corp. spent P50,000 (ordinary receipt) for trucking
Receivable from building -4 1,000,000 from the customs warehouse to not on its warehouse in
Disbursement: Quezon City. The imported article was later sold for
Services of Subcontractors 500,000 P900,000, w/out VAT
Materials for construction 700,000
Imported materials, landed 200,000 The VAT due is:
cost a. P48,360 c. P30,000
Other general & operating 100,000 b. P48,000 d. P36,000
expenses
84. KATRINA invested P500, 000 in the shares of stock of
Note: The imported material was also subjected to Manila Trading Corp. Later she sold the said shares for
P20, 000 excise taxes: only P350, 000. The corporation’s shares are listed and
are traded in the local stock exchange. The percentage
The VAT due is: tax on the sale is:
a. P58, 000 c. P93, 600 a. None c. P1, 750
b. P20, 000 d. P69, 600 b. P2, 500 d. P50, 000

79. 1st statement: The input tax on purchases of capital 85. Sweetie Pie Refining Company manufactures refined
goods is spread out when the acquisition cost sugar. It had the following data during the first quarter
exceeded P1.5M. of the current year:
2nd statement: The presumptive input tax is also called Sale of refined sugar, net of VAT
VAT actually paid P2,000,000
a. True, True c. True, False Purchases of sugar cane from farmers
b. False, False d. False, True used in the manufacture of refined
sugar 500,000
80. 1st Statement- a person whose annual gross sales or Purchase of packaging materials,
receipts do not exceed P100, 000 is not considered gross of VAT 784,000
engaged in trade or business. Purchase of labels, gross of VAT 112,000
2nd Statement- A VAT registered person is subject to
VAT regardless of his annual gross sales or receipts The VAT payable is:
provided he does not pay the 3% OPT. a. P124,000 c. P144,000
a. True; True c. False; True b. P112,500 d. P 62,000
b. False; False d. True; False
86. J. Shaggy VAT-registered, made the following
81. CROCODILE TRANS is a common carrier by land. purchases during the month of January, 200A:
During a particular quarter its receipts consists of the Goods for sale, inclusive of VAT P 246,400
following: (Figures are net of any business taxes) Supplies, exclusive of VAT 20,000
Office air conditioners, total invoice
Transport of passengers P4, 000,000 amount 56,000
Transport of goods 5, 000,000 Home appliances for residence,
Transport of cargoes 6, 000,000 gross of VAT 17,920
Office machine, 8 years useful life, 2,000,000
The total business taxes payable is: net of VAT
a. P1,500,000 c. P1,800,000
b. P540,000 d. P1,440,000 Repair of store amounted to P20,000 evidenced by
ordinary receipt of contractor
Creditable Input taxes are:
82. Which is incorrect a. P38,800 c. P37,440
a. A taxpayer whose annual gross receipts/sales b. P34,800 d. P35,520
exceed P 1,919,500 shall pay VAT even if not VAT
registered 87. A taxpayer registered under the VAT system on
January 1, 200B. His records during the month show:
Value of inventory as of December 31,
7
200A purchase from VAT-registered P100,000 d. It fixes and determines the tax liability of the
persons taxpayer.
VAT paid on inventory as of December 31,
200A 5,000 93. Where a return is filed, as a general rule, the
Value of inventory as of December 31, prescriptive period for assessment after the date
200A purchased, from non-VAT persons 200,000 return filed or due whichever is later, within:
Sales, net of VAT 140,000 a. two years c. three years
Sales, gross of VAT 45,920 b. five years d. ten years
Purchases, net of VAT 70,000
Purchases of VAT exempt goods 50,000 94. The seizure by the government of personal property to
enforce the payment of taxes to be followed by its
VAT payable is: public sale if the taxes are not voluntary paid:
a. P8,320 c. P 7,320 a. Forfeiture c. Levy
b. P13,320 d. P13,400 b. Distraint d. Garnishment

95. X filed his ITR and paid the tax shown thereon in full
REMEDIES on April 15, 2011. On April 15, 2012, X received an
88. Which of the following statements is not true? assessment notice and demand from BIR to pay a
a. A tax assessment is necessary to a criminal deficiency tax of P20, 000 excluding surcharge and
prosecution for willful attempt to defeat and evade interest on or before April 30, 2012. How much is the
payment of taxes. total amount of tax payable as shown in the
b. A conviction for tax evasion is not a bar for assessment notice if BIR found out fraud?
collection of unpaid taxes. a. P29, 000 c. P34, 000
c. Criminal proceedings under the Tax Code is now a b. P25, 000 d. P20, 000
mode of collection of internal revenue taxes, fees
and charges. 96. Barby filed her 2010 ITR and paid the tax shown
d. If the taxpayer is acquitted in a criminal violation thereon on April 10, 2011. Upon investigation the BIR
of the Tax Code, this acquittal does not exonerate found out a deficiency income tax of P20, 000. The tax
him from his civil liability to pay the taxes. payer agreed with the said findings and on July 15 ,
2011, assessment notice was sent to her giving her up
89. The running of the prescriptive period for assessment to July 30, 2011, to pay the amount shown thereon
and collection of taxes is suspended under the plus penalty and interest. Barby however failed to pay
following circumstances, except one: the tax as well as the penalty and interest on the due
a. When taxpayer is out of the country date. She was only able to pay on December 15, 2011.
b. When the BIR Commissioner is prohibited from The total correct amount of tax to be paid is:
assessing or collecting the tax a. P35,208 c. P28,438
c. When the taxpayer requests for a reinvestigation b. P34,671 d. P34,667
d. When the warrant of distraint and levy is duly
served 97. Which statement is wrong? A revenue bill
a. Must originate from the House of Representatives
90. 1st statement- The BIR Commissioner may abate or and on which same bill the Senate may propose
cancel the payment of interest revenue tax when: amendments.
a. A reasonable doubt as to validity of the claim b. May originate from the Senate and on which same
against taxpayer exists, or bill the House of Representatives may propose
b. The financial position of the taxpayer demonstrates amendments.
a clear inability to pay the tax assessed. c. May have a house version and a senate version
2nd statement- The BIR Commissioner may approved separately and then consolidated with
compromise the payment of tax when: both houses approving the consolidation version.
a. The tax or any portion thereof appears to be d. May be recommended by the President to
unjustly or excessively assessed Congress.
b. The administration and collection costs involved do
not justify the collection of the amount due. 98. Statement 1: The power of Commissioner of Internal
a. True; True c. True; False Revenue to recommend the promulgation of rules and
b. False; False d. False; True regulations by the Secretary of Finance may not be
delegated.
91. Which of the following is not under the power of BIR Statement 2: The power of Commissioner of Internal
Commissioner as provided in the Tax Code? Revenue to issue ruling of first impression or to
a. Authority to terminate taxable year and make reverse, revoke, or modify any existing rules of the
assessment. Bureau of Internal Revenue may not be delegated.
b. Authority to inquire into the taxpayer’s bank a. Both are True
deposits if there is a reasonable ground to b. Both are False
investigate due to tax evasion. c. First statement is True, second statement is False
c. Authority to obtain information, examines, d. First statement is False, second statement is True
summon and take testimony.
d. Authority to prescribe FMV of real property 99. Statement 1: The Commissioner of Internal Revenue
has authority to terminate the tax period of a taxpayer
92. Which of the following statements about assessment is who is retiring from a business subject to tax, or is
incorrect? intending to leave the Philippines or to remove his
a. It is an official action of an officer authorized by property or to hide or conceal his property, or to
law in ascertaining the amount of tax due from a perform an act tending to obstruct the collection of
taxpayer. taxes.
b. If not contested by the taxpayer within 30 days Statement 2: When a tax period is terminated, any
from receipt, it becomes final and executory. unpaid tax is due immediately.
c. It is an action for collection of taxes. a. First statement is True, second statement is False
b. First statement is False, second statement is True
8
c. Both are True separation pay. Ben opted to retire at 55 years old
d. Both are False after working for 10 years in the same company. He
received P1M. All of the foregoing are not covered
100. Which of the following violations cannot be subjected by BIR approved Retirement Plan except for Ben.
to compromise penalties? The total income subject to withholding tax on the
above payment is:
a. Failure to keep/preserve books of accounts and a. P 2,520,000 c. P 3,400,000
accounting records. b. P 2,370,000 d. P 2,468,000
b. Failure to keep books of accounts or records in
native language or English. 109. A building contractor provided the following data (all
c. Failure to have books of accounts audited and have figures are net of VAT)
a financial statements attached to income tax Amount received from Building 1 P 800,000
return certified by independent CPA. Advances received from Building 2 400,000
d. Keeping two sets of books of accounts or records. Amount received from Building 3
(net of P400T retention cost) 800,000
101. The accounting period of Corporation A is fiscal year Receivable from Building 4 1,000,000
ending on October 31. For the year 2012, Corporation Disbursements:
A filed its annual income tax return on March 15, Services of contractors 500,000
2013. The last day of BIR assess is on: Materials for construction 700,000
a. February 16, 2016 c. March 15, 2016 Imported material, landed cost 200,000
b. March 14, 2016 d. April 16, 2016 Other general and operating expenses 100,000

102. If in the above problem, the tax payer is an individual Note: The imported material was also subjected to
taxpayer, the last day of BIR assess is on: P20,000 excise taxes.
a. March 15, 2016 c. March 15, 2017 The VAT due is:
b. April 15, 2016 d. April 14, 2018 a. P58,000 c. P69,600
b. P20,000 d. P117,600
103. It is a failure to pay the correct amount of tax.
a. Delinquency c. Default 110. Dugong Trans, is a common carrier by sea. During a
b. Deficiency d. Delay particular quarter its receipts consist of the
following: (Figures are net of any business taxes)
104. Mr. X filed his ITR on April 15, 2013. He received an Transport of passengers P 4,000,000
assessment from the BIR on June 30, 20015. His last Transport of goods 5,000,000
day to file a protest is on: Transport of cargoes 6,000,000
a. July 30, 2015 c. April 15, 2018 The total business taxes payable is:
b. June 30, 2018 d. April 15, 2018 a. P1, 500,000 c. P1,800,000
b. P450,000 d. P1,440,000
105. If his protest above was denied by the BIR
Commissioner and he received the said decision on 111. TONY, Filipino, single, has the following transactions
August 31, 2012, his remedy is: in 2015:
a. Appeal to the Court of Tax Appeals on or before Business gross income P200,000
September 30, 2012. Business expenses 60,000
b. Appeal to the Court of Appeals on or before Wagering gains 10,000
September 15, 2012. Wagering losses 5,000
c. Appeal to the Office of the President on or before Selling price, partnership interest 100,000
September 30, 2012. Investment in partnership in 2001 20,000
d. Appeal to the Finance Secretary on or before Gain in sale of capital asset held for 10,000
September 30, 2012. 4 years
Loss on sale of capital asset held
106. M’s income tax for 2013 was P75, 000, as shown in for 8 months 12,000
her income tax return (ITR). She filed her return Loss on account of failure to
only on July 15, 2015 and paid the total amount exercise
upon filing the return. The total amount payable 2 month option to buy property 2,000
assuming there was fraud should be: Liquidating dividend from Z Co. 150,000
a. P131, 250 c. P98, 750 Cost of investment in Z Co. in 2001 60,000
b. P112, 500 d. P97, 500 Note: In 2014, Tony had a net income of P65,000
107. Taxpayer was assessed deficiency income tax of and a net capital loss of P92,000.
P200, 000 payable on or before June 15, 2015.
Within the period however, he was only able to pay The taxpayer's taxable net income is:
P100, 000 and the balance only on August 30, 2015. a. P196,000 c. P106,000
The total tax due that he is liable should be: b. P141,000 d. P 151,000
a. P129, 155 c. P258, 333.33
b. P125, 000 d. P 250, 000 112. Mr. Corpus, married with 2 minor children, has the
following transactions in 2015:
MISCELLANEOUS Compensation Income P 200,000
108. Floyd an official of ABS Corporation asked for an Sales 1,440,000
earlier retirement because he was emigrating to Cost of goods sold 660,000
Canada, he was paid P2M separation pay in Deductions:
recognition of his valuable services to the Operating Expenses 440,000
corporation plus P100,000 13th month pay, Nelson Loss due to theft (properly reported) 60,000
another official was separated for his failing Contributions:
eyesight. He was given P1M separation pay plus To a government priority
P150,000 unpaid salaries. Rico was separated for project in education 12,000
violating company rules but was given P300,000 To St. Jude church 42,000
Other income:
9
Rent 36,000 117. On October 1, 2015, Dragon Girl Co. leased a
Capital gain from sale of personal residential house for the use of one of its executives,
car held for 2 years 96,000 Mr. Kurukuru, a special alien employee. The rent
agreed upon was P170,000 per month. The FBT for
The taxpayer will report a taxable net income of: the quarter is:
a. P472,000 c. P420,400 a. P54,400 c. P45,000
b. P480,400 d. P500,400 b. P524,000 d. P15,000

Questions 113-114 are based on the following 118. Taxpayer sold capital assets as follows:
information: Lot 1 Lot 2
Corporation A has the following transactions during the Selling Price P6,000,000 P10,000,000
year 2014: Cost 2,500,000 1,000,000
Gross Income, Philippine business P2,400,000 Gain (loss) P3,500,000 P9,000,000
Gross Income, Japan business 600,000 Terms of Sale:
Business expenses, Philippines 1,350,000 Down payment
Business expenses, Japan 150,000 1/15/2008 P500,000 P1,500,000
Other expenses connected with the Paid on 6/15/2008 500,000 1,000,000
Philippine business 90,000 Paid on 9/15/2008 500,000 1,000,000
Other expenses connected with the Installment due
Japan business 60,000 1/15/2009 2,000,000 2,000,000
Other expenses connected with the Installment due
business in the Phil and Japan 150,000 5/15/2009 2,500,000 3,000,000
Other business expenses which Mortgage assumed
cannot be allocated 180,000 by the buyer 1,500,000
Intercorporate dividends from PLDT 100,000
The final tax payable under the installment method for
113. If the taxpayer is a domestic corporation, its income 2008 for lot 1 is:
tax due is: a. P360,000 c. P22,500
a. P306,000 c. P326,400 b. P90,000 d. P32,500
b. P357,000 d. P403,200
Questions 119 and 120 are based on the following
114. If the taxpayer is a resident foreign corporation, and information:
it remitted 40% of its profit to USA (Head Office) the Emong gave the following donations:
total tax liability is: 5/10/2012 To legitimate son on
a. P222,720 c. P238,032 account of marriage
b. P244,188 d. P251,117 on 8/15/2012 with
P100,000 mortgage
115. Taxpayer, individual, married with 3 minor children, assumed by the
one is gainfully employed, has the following donee. P300,000
transactions in 2015: 8/15/2012 To his legitimate
Sales P2,000,000 daughter on account
Cost of sales 1,150,000 of marriage on
Operating expenses 560,000 8/15/2012 8,000
Other transactions: 10/20/2012 Lot donated to the
c. Sale of office equipment held for 2 years: National Government
Selling price 100,000 to be used for public
Cost 120,000 purpose. Value 100,000
Accumulated depreciation 80,000 11/1 5/2012 To his brother on
b. Sale of family van held for 4 years: account of marriage
Selling price 300,000 on 11/15/2012 5,000
Cost 210,000 P413.000
c. Sale of family car held for 15 months:
Selling price 480,000 119. The total exemption or deductions from the total
Cost 500,000 gross gift is:
Taxpayer will report a taxable income of: a. P120,000 c. P118,000
a. P335,000 c. P360,000 b. P218,000 d. P120,000
b. P325,000 d. P285,000
120. The gift tax payable on 11/15/2010 donation is:
116. RA-A-A Corporation, a domestic corporation now on a. P1,900 c. P1,800
its 5th year of operation provided the following data: b. P100 d. P800
Gross sales P1,100,000
Sales returns and allowances 200,000 Questions 121 and 122 are based on the following
Cost of goods sold 300,000 information:
Gain on sale of capital assets held Land located in the Philippines valued at P2,000,000 to her
for 11 months 10,000 uncle subject to
Loss on sale of capital assets held Jan. 24 - the condition that uncle will pay the donor’s tax
for 20 months 5,000 due and mortgage to which her uncle agreed
Royalty income 50,000 and pay the mortgage amounting to P500,000.
Allowable business expenses 580,000 Nov. 30 - Building in USA valued at P4,500,000 to her
sister. Donor’s tax paid in USA was P400,000.
Income tax due is:
a. P8,800 c. P12,000
b. P10,500 d. 7,500 121. The donor’s tax due on the gift on Jan. 24 is:
a. P84,000 c. P450,000
b. P92,000 d. P480,000
10
ties among them the court ordered Dino to shoulder
70% of the financial support for Jojo and Jiji to
122. The donor’s tax due on November 30 donation is: shoulder 70% of the financial support for Dina. They
a. P131,000 c. P47,000 complied with the above order.
b. P524,000 d. P124,000 The amount of personal exemptions (basic and
additional) Dino and Jiji could claim each in their
123. Which of the following is correct about estate tax? respective income tax returns is:
a. The payment of estate tax is a personal a. P50,000 c. P100,000
obligation of the heirs. b. P75,000 d. P0
b. Estate is a taxpayer created by the death of a
person. 130. AUSTIN, single, Filipino, provided the following data
c. A resident alien decedent's situs of taxation is for 2015:
within the Philippines only just like in income tax. Compensation income P250,000
d. Courts may allow the distribution of the estate to Loss from stocks becoming worthless 100,000
the heirs in the interest of justice and equity Transportation expense 50,000
before estate tax is paid. Health Insurance Premiums (6 months
@ P500/mo.) 3,000
124. Which is false about estate tax? The amount he can deduct from his income for ITR
a. The allowable funeral expense can never be purpose is?
more than the actual expenses paid. a. P50,000 c. P51,200
b. Death benefit as a deduction must be included in b. P52,400 d. P173,500
the gross estate first.
c. Vanishing deduction does not diminish the estate 131. The following are not allowed as deductions from
physically gross income except:
d. Family home may be granted to a married non- a. Personal, family & living expenses supported by
resident alien. document & notarized.
b. Expenses incurred to increase useful life of an
125. Which shall not form part of the gross estate of a asset.
decedent: c. Charitable donation to a priest.
a. Intangible personal property of non-resident d. School Building erected by a University.
alien decedent without reciprocity law
b. Revocable transfer 132. The widow of your best friend has just been paid
c. Transfer passing special power of appointment. P1,000.000 on account of the life insurance policy of
d. Life insurance where the executor is the the deceased husband. She asks you whether she
beneficiary and it is irrevocable should declare the amount for income tax purposes
or for estate tax purposes.
126. Which of the following statements is correct? 1st advice: The proceeds of life insurance paid to the
a. Actual damages paid to the victim are not beneficiary upon the death of the insured are exempt
taxable including payment for lost salary or from income tax and need not be declared for
income. income tax purposes.
b. Moral and exemplary damages paid to the victim 2nd advice: The proceeds of life insurance would
out of a vehicular accident are not taxable. have to be declared for estate tax purposes if the
c. Moral and exemplary damages paid due to designation of the beneficiary was irrevocable,
breach of contract in bad faith are also not otherwise it need not be declared.
taxable. a. Both advices are correct.
d. Amount received as return of insurance b. 1st advice correct; 2nd advice wrong;
premiums is not taxable regardless of the c. Both advices are wrong.
amount paid by the insurance. d. 1st advice wrong, 2nd advice correct
127. 1st Case: Mr. X sold his 5 - door apartment for
133. Laila took out a life insurance policy for P500,000
P10,000,000. The monthly rental per unit is P20,000.
naming her niece, Samantha, as beneficiary. Under
This sale is subject to capital gains tax.
the terms of the policy, the insurer, Paramount
2nd Case: Mr. Nadal bought a lot for P2,000,000
Insurance Corp., will pay Laila the amount of
which he intended to be used as family home. After
P500,000 after the 25th year of the policy, and her
5 years, he abandoned his plan and sold it for
beneficiary, should she die before that date. Laila
P3,000,000. This sale is subject to capital gains tax.
outlived the policy and received the proceeds of
a. Only the first statement is correct.
P500,000. The premiums paid on the policy were
b. Only the second statement is correct.
P400,000. The proceeds from the life insurance
c. Both statements are correct.
policy of Laila is:
d. Both statements are incorrect.
a. exempt from income tax
128. Which of the following income from Philippine source b. taxable to the extent of P100,000
of a resident individual is not subject to the rates in c. the entire proceeds is taxable
Sect. 24 A of the Tax Code? d. taxable to the extent of PI 00,000 less current
a. Gain from sale of his personal motor vehicle. rate of interest
b. Gain from sale of residential house and lot.
c. Salary received by a managing partner of a 134. Which of the following income of an individual
partnership. taxpayer is subject to final tax?
d. Passive income from prizes won in a raffle a. P10,000 prize in Manila won by a resident citizen.
amounting to P8,000. b. Dividend received by a resident citizen from a
resident corporation.
129. In January 2012, Dino and Jiji were separated by c. Shares in the net income of a general professional
court order. Dino was awarded the custody of their 9 partnership received by a resident alien.
year old daughter Dina and Jiji was awarded the d. Dividend received by a non-resident alien from a
custody of their 5 year old son Jojo. To preserve the domestic corporation.

11
135. 1st Statement: If an estate is not the object of Medical Expenses, with receipt, incurred
judicial or intestate proceeding, an estate is not the within 1 year period 1,000,000
income taxpayer but the direct beneficiaries.
2nd Statement: If an estate is the object of judicial 141. The allowed family home deduction is:
or intestate proceeding, an estate emerges as a. P1,000,000 c. P900,000
taxable person. The personal representative must file b. P1,400,000 d. P700,000
an annual return for the estate up to final
settlement. 142. The deduction for share of the surviving spouse is:
a. True, True c. False, True a. P 2,500,000 c. P 4,000,000
b. False, False d. True, False b. P 1,250,000 d. P 1,500,000

136. One of the following is exempt from both MCIT 143. The net taxable estate is:
(Minimum Corporate Income Tax) and IAET a. P 1,250,000 c. P 1,500,000
(Improperly Accumulated Earnings Tax) b. P 2,500,000 d. P 4,000,000
a. Private Educational Institutions
b. International Carriers 144. The following individuals are liable to pay community
c. Publicly held corporations tax, except:
d. Corporations registered with EPZA or PEZA a. Every inhabitant of the Philippines who is at least
18 years old.
137. The accounting period of Corporation A is .fiscal year
b. Anybody who has worked in the Phils. for at least
ending on October 31. For the year 2010,
30 consecutive days.
Corporation A filed its annual tax return on March
c. Anybody who is engaged in business or practice
15, 2011. The last day for BIR to assess is on:
of profession.
a. February 16, 2014 c. March 15, 2014
d. Owners of real property with assessed value of
b. March 14, 2014 d. April 16, 2014
P10,000 or more.
138. Miramar's income tax for 2013 was P75,000 as
shown in her income tax return (ITR). She filed her 145. The community tax for individual is basic tax of
return only on July 15, 2015 and paid the total P5.00 plus:
amount upon filing the return. The total amount a. P1.00 for every P1,000 gross sales
payable if assuming she filed with the wrong RDO is: b. P1.00 for every P1,000 gross receipts
a. P113,750 c. P108,750 c. P1.00 for every P1,000 net income
b. P131,250 d. P 97,500 d. P1.00 for every P1,000 gross income

139. Mr. Jose, Filipino, married died leaving the following 146. The maximum community tax for individual shall be:
a. P500 c. P1,000
estate:
b. P5,000 d. P10,000
Car acquired before marriage by Mr. Jose P 300,000
147. The following entities or association are liable to pay
Car acquired before marriage by Mrs. Jose 450,000
community tax, except:
House and lot acquired during marriage 1,500,000
a. All domestic corporations
Jewelries of Mrs. Jose 100,000
b. All foreign corporations engaged in business in
Personal properties inherited by:
the Philippines.
Mr. Jose during marriage 250,000
c. All partnerships for profit.
Benefits from SSS
d. All joint ventures engaged in energy operations
50,000
with the Philippine Government.
Retirement benefits from a private firm 150,000
Proceeds of group insurance taken by his
148. The community tax for corporations is P500 plus:
employer 75,000
a. P2.00 for every P5,000 worth of real and
Land inherited by the wife during marriage 1,000,000
personal property.
Income earned from the land inherited by
b. P2.00 for every P5,000 gross receipts or
wife
earnings in Phils.
(25% of which was earned after death) 200,000
c. P2.00 for every P5,000 gross sales in Phils.
d. P2.00 for every P5,000 net income in Phils.
The gross estate under conjugal partnership of gain is:
a. P2,600,000 b. P3,600,000
149. The maximum community tax for corporation is:
c. P1,950,000 d. P2,200,000
a. P500 c. P1,000
b. P5,000 d. P10,000
140. Under the same problem, the gross estate under
absolute community of property is:
150. Community tax is due
a. P2,600,000 b. P3,600,000
a. Before the last day of January
c. P1,950,000 d. P2,500,000
b. Before the last day of February
c. Before the last day of March
141-143
d. Before the last day of April
Mr. Taho married under the regime of absolute community
of property. Survived by his wife, left behind the following
151. Mr. J. Cruz is the owner of a small variety store. His
properties and charges upon his estate:
gross sales in any one year do not exceed of P1.9M.
He is not VAT-registered. The following data are
Real property acquired during the marriage P 3,000,000
taken from the books of the variety store for the
Family Home, built using community fund 1,000,000
quarter ending March 31, 2016
Real property received as a gift during the
Merchandise inventory, 12/31/15 P 100,000
Marriage 2,000,000
Gross sales 450,000
Lot where family home was built, inherited
Purchase from VAT-reg. suppliers 350,000
During the marriage 400,000
The percentage tax due is:
Funeral expenses 300,000
a. P 54,000 c. P 16,500
Taxes and Losses 1,300,000
b. P 13,500 d. None
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b. False, False d. True, False
152. Adventurer’s Corp. has the following data as of
March 31, 2015: 159. Every person subject to IR Tax shall register once
Sale of Goods, on account with the appropriate RDO within the following
(50% collected) P200,000, net period. Which is incorrect?
Sale of Service, on account a. 30 days from date of employment
(60% collected) 100,000, net b. On or before commencement of business
Consignment: c. Before payment of any tax due
Jan. 15 P150,000, net d. Upon filing a return document required by BIR
Feb. 15 250,000, net
Goods given to creditors as 160. 1st: Maximum Penalty for tax evasion is P100,000
Payment for debts 200,000, net 2nd: Maximum imprisonment for evasion 4 years.
Total output tax is: a. True, True c. False, True
a. P73,200 c. P70,000 b. False, False d. True, False
b. P78,000 d. P49,200
161. 1st: Penal liability of a corporation or a taxpayer is
maximum of P100,000.
153. The present Tariff and Customs Code is: 2nd: OR is mandatory where the amount of sale of
a. PD 1977 c. PD 1464 goods or service is over P25.
b. RA 1937 d. RA 8424 c. True, True c. False, True
d. False, False d. True, False
154. Under the Customs and Tariff Code, Imported
Articles may be categorized into the following, 162. Language allowed in which books are to kept are,
except: except:
a. Prohibited importation a. Spanish c. any native language
b. Dutiable importation b. English d. any intenational
c. Absolutely free importation language
d. Conditionally free importation

155. The term means taxes on imports and exports


a. Customs duties
b. Customs lien
c. Tariff charges
d. Output Tax

156. 1st statement: The first principal duty of Customs


Commissioner is to prevent smuggling.
2nd statement: The term import duties strictly means
a book of rates.

MISCELLANEOUS ADMINISTRATIVE PROVISIONS


157. The following are remedies for collection of
delinquent taxes, except:
a. Distraint of personal property
b. Levy of real property
c. By civil or criminal action
d. By sequestration of taxpayer’s assets

158. 1st: Ditraint and Levy shall not be availed if the tax
involved is not over P1,000
2nd: Property sold due to delinquent taxes may be
redeemed within 2 years from date of sale.
a. True, True c. False, True
a. True, True c. False, True
b. False, False d. True, False

“In every challenge or undertaking, the important thing is you do your best, it’s up to God to do the rest.”
- VICTOR

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