INCOME

TAXATION
QUIZ BEE

 1st-3rd place= 1 section only= 1 perfect quiz for

the section

If not

1st-1 perfect quiz

2nd-perfect quiz * ½
3rd-perfect quiz *1/4
1. A resident citizen received a prize of P40,000.
Which of the following statements is correct in
connection with the imposition of final tax on the
prize?
a. The first 10,000 is part of taxable income while
the remaining P30,000 is subject to 20% final tax
b. The whole amount is part of taxable income
c. The whole amount of P40,000 shall be subject to
20% final tax
d. The first 10,000 shall be exempt from tax, the
remaining 30,000 is subject to 20% final tax
(1pt)
C
2. An example of a tax where the
concept of progressivity finds
application is the
a. Income tax on individuals
b. Value-added tax on certain articles
c. Excise tax on petroleum product
d. Amusement tax on boxing exhibitions
(1pt)
A
3. Private educational
institution may consider
capital expenditure as
revenue expenditure.
True or False (2pts)
TRUE
4. Non-Resident citizen
may claim tax credit for
income taxes paid to
foreign country (2pts)
FALSE
5. ( 3PTS) A domestic corporation has the following
data for 2017:
Excess MCIT 2016-11,000 Q1 Q2
Income net of 1% w/holding 495,000 792,000
Deductions 480,000 700,000

How much is the income tax still due and payable in

the 2nd quarter
7,000
6. Non-deductible taxes, except
a. Donor’s Tax
b. Estate Tax
c. Special Assessment
d. Percentage Tax
(1pt)
D
 7. ( 3PTS) Mr. Digong earned the
following prizes from two
different competitions:
Date Event Gross Prize
January 4, 2011 Singing competition P 12,000
February 14, 2011 Painting competition 10,000

Compute the total final tax that

should have been withheld from the
above prizes.
2,400
 8. ( 3PTS) HARRY Corporation entered into a
memorandum of agreement with HOGWARTZ
High School, a public secondary school, by
contributing its services to the “Adopt a School
Program”, a priority program designated by the
NEDA. The agreed value fixed in the MOA for the
construction of the public school building was
Php 2,000,000. ABC Corporation was able to
complete the building at total cost of Php
1,600,00. ABC Corporation shall be allowed to
deduct
 D
Regular itemized cont.
expenseP1,600,000 
Special itemized cont. expense
(P1,600,000 x 50%) 800,000
P2,400,000
9. ( 2PTS) A domestic corporation was
registered with the BIR on January 1,
2004. what year would be the first
MCIT be imposed on such
corporation?
2008
10. ( 1PT) The income tax
rates for corporate
taxpayers apply to
taxable estates and
trust
FALSE
11. ( 1PT) For a trust to
be taxable, it must be
irrevocable, both as
to corpus(principal)
and income
TRUE
12. ( 2PTS) What would be
the allowable deduction for
P10,000 contribution made by
a resident citizen to a religious
organization from his P80,000
net income after
contribution?
9,000
 13. ( 3PTS) ABC Corporation, to improve productivity, negotiated
productivity incentive program wherein the employees will receive
productivity bonus equivalent to 40% of production cost savings
measured by an independent expert. ABC Corporation requires
employees to undergo studies through an “employee advancement
study program” with the TESDA. All employees who finished their
special studies are required to remain at ABC Corporation for a
period of not less than 2 years. The following were determined
during the year;
Total distributable productivity bonus - Php
1,000,000
Cost of Special Studies:
Supervisory employees 500,000
Rank & file employees 1,500,000 2,000,000
Total Php 3,000,000
The allowable deduction for the benefits given is
Total   P1,000,000  
distributable
productivity  
bonus
Cost of special      
studies  
  Supervisory   500,000  
employees
  Rank & file   1,500,000  
employees
Special additional      
deductions  
  Productivity   500,000  
bonus
(P1,000,000 x
50%)
  Special studies   __750,000 P4,250,000
(rank & file)
(P1,500,000 x
50%)
 14. ( 1PT) The taxpayer is not allowed to
claim additional exemptions
a. Recognized natural son who celebrated
his 21st birthday January 1 of the
taxable year
b. Legally adopted daughter, 25 years old
but incapable of self support due to
mental defect
c. Foster child, `18 years old, living with
the taxpayer for more than one year
d. Legitimate daughter who got married
on December 30 of the taxable year, one
day before she turned 22
D
 15. ( 1PT) One of the following may not
be deducted from gross compensation
income of a resident citizen
a. SSS Premium contributions
b. Health and/or hospitalization
insurance premiums
c. Pag-ibig premiums contributions
d. Basic personal exemption
B
16. ( 1PT) A CPA and a
Lawyer may form a
general co-
partnership to sell law
and accounting books
True or False
TRUE
17. ( 3PTS) A retailer of goods, whose
accounting method is under accrual, has
a gross sales of 1M with a cost of sales
amounting to P800,000 for year 2014.
the taxpayer is qualified to choose OSD
as deduction. How mush is the amount
of OSD assuming the taxpayer is
individual?
400,000
18. ( 2PTS) Which of the following income is NOT
subject to final withholding tax?
a. Dividend income earned from domestic
corporation of NRA-ETB
b. Interest income from any currency bank
deposit
c. Interest income received from expanded
foreign currency deposit system earned by a
non-resident citizen
d. Royalties earned from literary works
C
19. ( 1PT) Which is not taxable on
unrelated activities?
a. Government agencies
b. Non-profit corporations
c. Government-owned and
controlled corporations
d. Non-profit schools
D
20. ( 2PTS) The power to
demand proportionate
contributions from
persons and property to
defray the expenses of the
government
POWER OF
TAXATION
 21. (1PT) This is part of taxable income
subject to schedular rate if received by a
resident alien
a. Cash dividend from a resident foreign
corporation
b. Winnings from PCSO draw
c. Refund of Philippine income tax paid
d. Interest income from a resident alien
debtor
D
22. ( 2PTS) Special
deduction is given when a
company makes facilities
for breastfeeding. It is
______% based on the
direct costs incurred.
100%
23. ( 2PTS) Sale of the
principal residence of the
taxpayer where the entire
proceeds is used to
purchase a vacation lot in
Tagaytay is exempt from
CGT.
FALSE
24. ( 3PTS) Compensation income is
earned when an employer-
employee relationship exist. Which
of the following income represents
income earned through employee-
employer relationship?
I. Professional fees
II. Honorarium
III. Wages
IV. Capital gain
II & III
25. ( 2PTS) Interest expense
paid or incurred to finance
petroleum operations in
the Philippines is a
deductible expense.
FALSE
26. ( 1PT) The following
are not taxable, except:
a. Refund of fringe benefits tax
b. Refund of Philippine income tax
c. Refund of estate or donor’s tax
d. Refund of special assessments

.
A
 27. ( 1PT) Which of the following is included
in gross income?
a. Amounts received by insured as return of
premium
b. Life insurance proceeds
c. Compensation for injuries or sickness
d. Share in net income of a general
professional partnership
D
28. ( 3PTS) A corporate taxpayer, single, has
the following data for the current year:
Ordinary income P150,000
Long term capital gain 40,000
Short term capital loss 10,000
 
How much is the net taxable income?
180,000
 29. (1PT) An individual taxpayer is
qualified to substituted filing of income
tax if he meets the following requisites,
except:
a. Pure compensation income only
b. One employer during the calendar
year
c. Creditable withholding tax is correct
d. Should be a minimum wage earner
D
30. ( 3PTS) Zeus, a professional practitioner, received
the following from his clients:
 
Advances for future services to be rendered
P 30,000
Collections for past services rendered70,000
Reimbursements for client expenses 40,000
Reimbursement for out-of-pocket expenses 10,000
How much will be included in Zeus’ gross income for
regular taxation purposes?
110,000