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TAXATION

CONCEPTS SHORT QUIZ.

1. Leasehold that becomes the property of the lessor at the end of the lease
term is taxable. – TRUE
2. Net sales or net cash receipts are synonymous with the term gross taxable
income. - FALSE
3. Gift, bequest, and devices ate subject to final tax- FALSE
4. Refund of overpayment of income tax is taxable. – FALSE
5. All recoveries are not taxable- FALSE
6. Tips are subject to final tax- FALSE
7. All amounts received from a life insurance annuity are taxable.- FALSE
8. Income that is not realizes are not taxable – TRUE
9. Income represent inflow of money or benefits even coming from illegal
source- TRUE
10. Non- taxable income are those coming from illegal sources- FALSE
11. Proceeds of life insurance policy received by the heirs or beneficiary if the
insured, due to death of the latter, are not taxable. – TRUE
12. Passive income refers to income that is expressly exempted by law from
taxation- FALSE
13. An income that has been subjected to final tax is still included in the
computation of gross taxable income subject to basic tax. - FALSE
14. Interest income on deposit earned in the Phil. Is an example of a passive
income- TRUE
15. Prizes in athletic competitions sanctioned by the phil. Gov’t are exclusions in
gross income subject to final tax but are inclusion in gross income subject to
regular tax.- FALSE

TAXABLE UNDER NORMAL TAX TAXABLE UNDER FINAL TAX TAX- EXEMPT

1. Capital gain on sale if shares of stocks directly to buyer


2. Collection of advance rentals
3. Dividend income received by a nonresident alien from a nonresident
foreign corp
4. Refund for overpayment of local taxes
5. Pure stock dividend
6. Capital gain on sale of personal car
7. Refund of income tax previously paid
8. Life insurance proceeds received by the insured person in excess of
premium paid
9. Interest income from5/6 lending to clients
10. Damages on unrealized income
11. Interest income from bank deposits located abroad earned by a
resident citizen
12. Interest on nontaxable damages
13. Royalty income from franchise
14. Capital gain on sale of shares of stock through the local stock exchange
15. Prize received from car racing
16. Income generated by a public office in connection to its governmental
functions
17. Intercorporate cash dividend
18. Intercorporate property dividend
19. Gain from sale of office Furniture
20. Gains from sale of shares in mutual fund

TAX EXEMPTED CORPORATIONS

1. Government educational institutions


2. Nonstock and nonprofit educational insttutions
3. Nonprofit labor, agricultural or horticultural organizations
4. Associations of farmers, fruit growers, and the like whose primary function
is to make the product of their members
5. Organizations with a purely local operation … to meet operational
expenses
6. Non- stock corporation or association organized and operated exclusively
for religious, charitable, scientific, athletic or cultural purposes
7. Non-stock/ non profit mutual savings bank or nonstock/non profit
cooperative bank
8. Non profit civic league or organization operating exclusively for the benefit
of its members
9. Cemetery company owned and operated exclusively for the benefit of its
members
10. Business league, chamber of commerce or board of trade
11. Association, orders, beneficiary societies