Income Tax - Exercises are P1,000,000 and P600,000, respectively, and with

1. The taxpayer is a married nonresident alien engaged non-operating income of P100,000.

in business in the Philippines with three (3) qualified
dependent children. His country gives a nonresident (a) Assume he signified his intention to be taxed at
Filipino with income therefrom a basic personal 8% income tax rate in his 1st quarter return, the
exemption of P40,000 and P30,000 additional personal total income tax due is:
exemption for each qualified dependent child. For (b) If he did not opt for the 8% income tax , his
taxable year 2017, he is entitled to total personal income tax due is:
exemptions of:
7. On July 1, 2014, Mr. V leased his vacant lot for a
2. Chris, married, supporting his 3 minor children had the period of 12 years to Mr. J at an annual rate of
following data for taxable year 2018: P2,400,000.It was also agreed the Mr. J will pay the
Philippines Abroad following:
Business Income P1,000,000 20,000  P4,800,000 representing rental payment for two
Professional Income 400,000 10,000 (2) years. Subsequent rental payments will be
Salaries 200,000
made every July 1 of the applicable year.
B and P Expenses 250,000 8,000
Income Tax Paid 4,000  Security deposit of P2,400,000.
NOTE= $1– P50  Annual real property tax of P30,000.

(a) If he is a resident citizen, his income tax payable
is:
(b) If he is a resident alien, his income tax payable
is:
(c) If he is a non-resident citizen, his income tax
due after tax credit, if any is:
(d) If he is a non-resident alien engaged in trade or
business in the Philippines but without the
benefit of Reciprocity Law, the income tax due
after tax credit, if any is:
(e) If he is a non-resident alien not engaged in trade
or business, disregarding professional &
business data, the total income tax should be
withheld from his income is:
The lease contract provides, among others that the
lessee will construct a 5-storey building for parking
purposes at a cost of P36,000,000. Ownership of the
building shall belong to the lessor upon the expiration or
termination of the lease contract.
The building was completed on July 1, 2016 with an
estimated useful life of 15 years.
(a) Mr. V shall report total income from the lease for
2014 at:

3. Mr. and Mrs. Cruz, both CPAs and residents of the (b) Assuming Mr. V will us the outright method in
Philippines , with 6 minor children, had the following data recognizing income from leasehold
for taxable year 2018: improvements, how much is the total income
Salaries, Wife P600,000 form lease for year 2016?
Bonus (13th Month pay), wife 60,000
Professional Fees, (net of 10% 7,200,000
withholding tax) (c) Assuming Mr. V will use spread-out method in
Expenses (Practice of Profession) 3,200,000 recognizing income from leasehold
Rental Income (Net of 5% 712,500 improvements, how much is the total income
withholding tax)
from lease for year 2016?
Rental Expenses 280,000
Other Income, husband 840,000

(a) The taxable income of Mr. Cruz is:

(d) Assuming that due to the fault of the lessee, the
(b) The taxable income of Ms. Cruz is:
lease contract was terminated on January 1,
2018, how much income is to be reported by the
4. Ms. Niccalou operates a convenience store while she
lessor in 2018?
offers bookkeeping services to her clients. In 2018, her
gross sales amounted to P800,000, in addition to her
receipts from bookkeeping services of P300,000. She
incurred cost of sales and operating expenses
amounting to P600,000 and P200,000, respectively. She
already signified her intention to taxed at 8% income tax
rate in her 1st quarter return.

(a) How much is the income tax liability for the

year?
(b) If Ms. Niccalou failed to signify her intention to
be taxed at 8% income tax rate on gross sales
on her initial Quarterly Income Tax Return , her
income tax liability is:

5. Mr. Izzy, a financial comptroller of WMSU Company,

earned annual compensation income in 2018 of
1,500,000, inclusive of 13th Month Pay and Other
benefits of P120,000 but net of mandatory contributions
to SSS and Philhealth. Aside from employment income,
he owns a convenience store, with gross sales of
P2,400,000. His cost of sales and operating expenses