m CRC-ACE The Professional CPA Review School Main: 3F C. Vilaroman Big, 873. Campa St. cor Espana, Sample, Manta ' (02) 735 8901 / 735 9031 / 0922 861 019% ‘mal add: cr_ace@yehoo.com i Pavao ag Baguio ude! Bldg, V, Lower Mabin cor Diego Siang, Baguio ity S/F GCAM Bldg. Monteverde St. Davao Cy 18 (074) 442-1440 os2-B480196 (082) 285-8805 / 0925-7271223 MAY 2017 BATCH AXATION PRE-WEEK issuance of a formal letter of demand and final assessment notice FLD/FAN) may not ordinarily be stayed because of the lifeblood theory. However, there, are certain Where the running of the prescriptive period may be suspended. Which among the following iptions which suspend the prescriptive period within which to assess? for and is granted a reinvestigation by the Commissioner, out of the country The prescriptive period for the informing the Commissioner of such change he Commissioner of Internal Revenue is prevented from making an assessment and within ‘March 8, 2014 sd with the BIR March 18, 2014 April 8, 2014 Date petition for reinvestigation was fi Dat ng of documents to support the petition cision on the protest is received as of Fi October 1, 2014 he last day to appeal to the CTA is chs - 190K day A. October 31,2014 B, October 8, 2014 C. November 4,2014D, March 8, 2016 March 8, 2014 March 18, 2014 April 8, 2014 Date assessment was received Date petition for reinvestigation was filed with the BIR f filing of documents to support the petition Date of decision of denial of the petition was received sac p AptiL 28, 2014 Request for reconsideration was filed with the BIR May 7, 2014 Date of decision of denial of request for reconsideration was received June 2, 20144 21d The last day to appeal to the CTA is = June 23 A. July 2, 2014 B. June 7, 2014 © June 23, 2014 + D. June 21, 2014 January 15, 2014 Date of payment of tax erroneously paid Date a claim for refund was filed February 16, 2015 Date of decision of denial by the BIR was received October 18, 2015 4 30a The last day to appeal to the CTA is: + NOV 13,2018 A. January 15,2016 B. March 1, 2016 C. November 17,2015 D. November 17,20} | ¢ Using No. 4, if date of decision of denial by the BIR was received on December 21, 2015, the last day to appeal tothe CTA i 2016 B, January 15,2016 C, April 15, 2016 D. March 17, 2016 A. January 20, Date of tax erroneously paid June 10, 2014 Date of claim for refund was filed with the BIR March 3, 2016 June 2, 2016 Date of BIR decision of denial was received The last day to appeal fo the CTA is: A. June 10, 2016 B. July 2, 2016 C, July 10, 2016 D, August 2, 2016 ‘The power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereof, or other matters arising under the Tax Code or other laws or positions thereof administered by the BIR is vested in the: ‘A. Regional Trial Court C. Secretary of Finance B, Court of Tax Appeals D. Commissioner of Internal Revenue Which ofthe following statements is true? Ke A. The final tax on gompensation of special kind of non-resident aliens is 25% of the gross income. * B, Informer’s reward is subject to final tax of 10% based on the 10% ofthe value of the tax assessment or P1,000,000 whichever is higher. 1 fewerwi A by pa, Neate ke gation in is right t t as filed Tale and fraudulent \ 8. The income taxes due and payabl 7 ’ rroneously paid 5, 2014; Date a lain for refund Date of decision of denial by the Bureau Bi D. November 27,2015 2 had th following investmena a ie h operat nd radio broadcasting franchise provides the following in ter franch P 2,000,000 » 2% = Mk Radio franchise 10,000,000 x 3% » 3aox 140k Dperating expen: 5,000,000 it income ‘000,000 240,00 B. P340,000 . P360,000 D, P210,000 4. Which of the following is subject wo 10% percentage tx by agent of domestic insures company.= i 2% by a resident foreign insurance company, ~5 3. Life insurance policy premiums collect C. Life insurance policy premiums o Premiums on insurance policy taken directly by the owner of the property insured with fore insurance company. - 9h ed by ayent of non-resident foreign insurance company 4 15. Which of the following is subject A. Sale of non-food agricultural products in thei original slate by Farmers B. Services of non-VAT person subject to percentage tax C. Sale or importation of agricultural and marine food products in their original state fod ~ exempt D. None of the aboveCRC-ACE/TAX: AX: Preweek Quizzer (MAY 2017 bueh) Page 3 16.A closely hel n ra tel Bexpoetsa tx intty Gebel te scan in the Philippine Stock Exchange, The following data pe &Periain tothe initial public offer Number of shares sold in IPO P _ $00,000 shares 1,500,000 shares Gross siatanding shares, before the sting inthe Philippine Stock Exchange Gross value money ofthe 1PO wy 4h ea “a HR hy > 2h he percentage tax due is a Aso A. PS0,000 B. P100,000 a 000 ‘D. P400,000 Alt (through the local stock exchange shall be subject to: 8 Of Stock held as investment when 2 of 196 based on gross selling price or B. VAT based on gross income. 5 52600 first 100,000 capital gain; 10% on excess of P100,000. D. 4%; 2%: 1% based on gross selling price oF gross value in’-money din /xtment when sold through the local stock exshange shall be subject to ice or gross value in money. 18. Shares of stock he A. 1/2 of 1% based on gross selling pric % VAT based on gross income, on first P!00,000 capital gain; 10% on excess of P100,000. "6: 1% based on gross selling price or gross value in money, 19, zis subject to the 0% gross receipts tax? erest, commissions and discounts from lending activities and inzome from quity shares in net income of subsidiaries. als of property (real or personal), profits from exchanges and all other iterns treated s income in the Tax Code, 8 gains within the taxable year on foreign currer inancial instruments. cy, debt securities, derivatives enct other Property, real or personal, is subject to 4... 7% gross receipis tax if the lessoris a bank. IL. 12% VAT if the lessor is not a bank. 3 : A. Yes tol and Il B.No to Land If ©. Yes to Lonly D. ¥esto Hf only Questions 21 and 22 are based on the following information: Miehty Builders is a contractor. It entered into a contract on February 1, 2013, which was completed on sorry 15, 2014. It received the total value of the contract amounting to PS.500,000 on February 25, 2014, Mighty Builders spent forthe materials used in the contract which it acquired froin VAT-repistered Suppliers costing P1.500,000. During the month of February 2014, it purchased an eqaiipment with total greed price of P2,500,000 and paid P1,000,000. All amounts were exclusive of value-added tax 21. The value-added tax payable for February 2014 is: A.P180,000 B.P315,000 . P360,000 D. Pa75,000 * Assuming the amount collected was P2,000,000, the value-added tax for February 201 4 is A. Payable of PO C. Refundable of P60,009 B. Payable of P55,000 D. Refundable of P240,000 23. A VAT registered public works contractor has the following data for the second quarts of 2014 (VAT exclusive): Contract price (private sector clients) . 5,000,000 Contraet price (Government) 3,000,000 Collections from Government contracts subjected to 5% fina! withholding WAT. 950,000- Collections from private sector clients 2,000,000- Purchases during the quarter (used on private sector clients contracts) 800,000- Payments for services of a VAT-registered sub-contractor (used in Government 400,000 contracts) Purchases during the quarter (used in both Private sector clients and Government 300,000- pre, contracts) eS, FS E s 1 400 P121,500 xoess input tax cant anded or ¢ nto tax credit a 7 1 Development Bi 2ert-raled : Research Institute. reve -rated n export sales istered taxpayers. teo-rated »-VAT exporter. vat ecemp! ity prop 5,000,000 . perty were the following : Jand inherited from dent's father who pred im 3 1/2 yeats ago. FMV at . 00.000 (no mortgage indebtedness), FMV at the time of present T ‘teaged during the mar the benefit of the family for sent decedent's death. FMV D €. 536,000 D. P636,500 ought into the marriage are generally classified as ership of gains ‘xclusive properties under ec ler absolute community of properties re Both I and Il are correct , D. Both I and TL are incorre r ilippine domestic corporation a property located abroad valued at no's tax on the donation was P100,000. A donation earlier within the same ton lewitimate daughter, property valued at P300,000. The donor's tax due on credit for foreign donor's tax paid is B, P52, C. PS6,000 D. Ps8,500 following data pertain to the estate of a married decedent: Conjugal real properties 5,000,000 2,000,000 Conjugal fumily home 2,500,000 Conjugal ordinary deductions: 250,000 Funeral expenses Other deductions 1,300,000 _ 1,550,000 Medical expenses 500,000 The taxable net estate is: ¥ 4. P3,750,000 B. P3,350,000 ©. 2,750,000 . P2,200,000 29. The following data pertain othe estate of an unmarried but head ofthe family decedent Real and personal properties 5,000,000 Family home 800,000 Ordinary deductions Funeral expenses 200,000 Other deductions 1,300,000 1,500,000 300,000 Medical expenses The taxable net estate is A. P3,000,000 B. P2,200,000 C. P3.200,000 D, P1,500,000YD 8 Sn oer urt of Tax Appeals not late than: appeal A. August 31, 2014 C. August 15, 2014) B. August 30, 2014, D. August 1, 2014, A m taxation shall not be paid to any religious dignitary EXCEPT when: nitary is assigned to the Philippine Army C. The payment is passed in audit by the COA. L rt of lawmakers pork barrel « ul when the prescriptive period for the assessment of a tax deficiency is about to the taxpayer has not yet conislied with the BIR requirements for the production of books nd other rec ntiate the claimed! deductions, exemptions or credits’ a explain the delay BI 0 1 of the taxpayel tie . Issue a jeopard sment coupled with a leter of deman B Pierre d ny. a Frenchman, arived in the Philippines on January 1, 2014 arxd continued to live and engage in business in the Philippines, He went on « tour of Soytheast Asia from August 1 ta November 2014. He returned to the Philippines on November 6, 2014 and stayed until April 15, 2015 when he retumed to France, He earned during his stay jn the Philippines a gross income of P'3 million from his investments in the country. For the year 2014, Pierre's wxable status is that of A. Anon-resident alien not engaged in trade or business in the Philippines. B. Anon-resident alien engaged in or business ia the Philippines, C. Aresident alien not engaged in trade or business in the Philippines. D. A resident alien engaged in t ness in the Philippines ble deductions over gross income of the business in a taxable year is known as bleloss, D. NOLCO Hh 38: The excess of allon A. Net operati Joss. B. Ordinaty loss, . Net deduems, resulting in failure to recruit well- P100 tively manage the school. In 2014, Don Leon do or paying the salaries, wages, and of Don Leon's taxable the tax lability of a taxpayer who does not protest an assessment for deficiency oR 7 ps jppeal his liability to the CTA since th decision of the . B. The BIR could already enforce the collection of the taxpayer's liability fit could secure authority from the CTA C. The taxpayer’ lability becomes fixed and subject to collection asthe assessment becomes final and jon of the period to pr \d Victoria who was getting married. Celia gave no other gift during nat is the donor’ tax implication on Celia’s donation P the donation is exempt since given in consideration of marriage nation is exempt being a donation in consideration of marriage. donor's tax on the P110,000 donation, 000 portion of the donation is exempt under the rate schedule for domor's tax general role, within what period must a taxpayer elevate to the Court of Tax Appe his application for reflund of income tax overpayment? sa denial of ithin 30 day e Com rom receipt of B. Within 30 days from zeceipt ofthe issioners denial of his application for refund, nial which must not exceed 2 years from payment of income C, Within 2 years from payment of the income taxes sought to be refunded, D. Within 30 days from receipt of the denial or within two years from payment. B 45. Jeopardy assessment is a valid ground to compromise a tax liability A. Involving deficiency income taxes only, but not for other txes, B. Because of doubt as to the validity of the assessment. C. If the compromise amount does not exceed 10% of the basic tax. D. Only when the jproval of the National Evaluation Board a were legally separated. They had six minor children, all qualified to be claimed as ‘additional exemptions for income tax purposes. The court awarded custody of two of the children to Dondofi and three to Helena, with Dondon directed to provide full financial support for them as wel The court awarded the 6th child to Dondon's father with Dondon also providing full financial support. Assuming that only Dondon is gainfully employed while Helena is not, for how many children could Dondon claim additional exemptions when he files his ineome tax retum? A. Six children B. Five children , Three children 46, Dondon and Heleeer Inc 1 te a : >. Tot uct her 2014 ional in her ea Gerard - i led withi Spanflex still hi matt CTA a cold its 8 Pre due e438 the BIR issued 4 final assessment reducing the amount of the tax demanded. Since Miguel ‘soods wes satisfied with the reduction, it did not do anything anymore. On April 15, 2015 the BIR garnished the poration's bank deposits to answer for the tax liability, Was the BIR action proper? tA. Yes, The BIR has 5 years fom the filing of the protest within which to calles B. Yes, The BIR has 5 years from the issuance of the final assessment within which 10 collect ©. No. The taxpayer did not apply D. No, Without the taxpayers prio for a compromis authority, the BIR action violated the Bank Deposit Secrees’ Law Descartes, a French citizen permanently residing in the Philippiies, received several items dur taxable year. Which among the following is NOT subject to Philippine income taxation A. Consultancy fees received for designing a computer program and installing the sume in the Shanghai facility of a Chinese fi B. Interests from his deposits in a local bank of foreign currency earned abroad converted to Philippi. = C. Dividends received from an American corporation which derived 60% of its annual gross ce eipts from Philippine sources for the past 7 year D. Gains derived from the sale of his condominium unit located in The Fort, Taguig City, to anoth 1 52.0n July 31, 2014, Esperanza received a preliminary ussessrent notice from the BIR demanding that the pays P180,000 deficiency income taxes on her 2012 income How many days from July 31.20 14 should Esperanza respond ta the notice A. 180 days B30 days €..60 days D.1S days A 8 Matibag, a 5 and sells “kumot at kulambo” both of which are subjeét t as his taxable year, his taxable quarters end on th last day of March, June, September, and December, When should KaPedring file the VAT quarterly return for his gross sales or receipts for the petiod of July 1 to September 30? A. Within 25 days from September 3 C. Within 15 days from September 30 B. Within 45 days fi D. Within 30 days from: ax. Since he is using the calendar ye om September 30 September 30i at a mark-up by its exclusive mports of Kit fro Aplets and im, Isthe BIR correct ade ot business in the Phil iopines. revenues and not net incor 1 trade or business in the Phe tippines. cexchisive distributor, Kim's Trading part of its inventory of veal prop *ties, 1 March 3 : : fen rable 2014. The parcel of land has a zonalvalantion of P42 don ] oe Jonas the remaining F200 ner P01 13. hen, in 2016, I theory /Hecersly dochire D. Symbiot . lag stsk exchange 10,000 PL ata Dp ah a the D 69. Keyrand, inc. « u a "i tone , in its income t ducting its cost of it D. Wahall oy ater of oneal ot 195 the P2 mili C 1 such ne is rn zi able income is recognized when thepurposes shall b 4 ns icy for P SM where ; after 25 years ot to A's estate should A die before completing 2 policy, which of the following is correct The proceeds will be part of A's taxable incor B. The proceeds will be part of A's gross estate C. The proceeds will be partly taxable income and partly exempt D. ‘The proceeds will be partly taxable estate and partly exempt. 1t after paying the anmual payment fi 00 and B paid the annual premiums as they mature int rece com B is part of A's taxable income The proceeds received by B is part of his taxable income amount received by A from B is p will be part of A's gross es rdm/reh he annual premium is P 20,000. ately and then consolidated a of tax are legislative in executive branches of the D, False, false nants thereto. 1d non. ty ceeds will be If A outlived 400 Fovable SPO hen taeable (Ceok no) After 10 years, Which of the tly taxable income and partly exemptCapitalized | no 47,500-~ (50/200 x 200,000) Total cost of the 225 shares sold 2,000,000 40,000 00.000 340,000 OPT rat OPT due 1,500,000 applicable 5,500,000 x 1,500,000. x x 12 x 1460 able jeductible loss on wash sale CRCOC-ACE The Professional CPA Review School malo hon gee (082) 288-8005 /0925:7272223 WEEK MAY 2017 BATCH 2012 2013 2014 650,00 800,000 1,300,000 0,000) (400,000) (00,000 400,000 $5000) (300,000) zi 112,500 : 4.000) ‘000 150,000, 99,000 2,500 10,000,000 4% 400,000 ) 660,000 (180,000) (3,000) 475,000 oTdt)F i 400,000 Strange Relative 00,000 100,000 SSS 1/2 x $,500,000 Taxable Ni. Page 3 | 2 4 ae ‘ 5,400,000 | , (1$300,000) «as000,000) 300,000) | 6. A 64. A oe | 67. ¢ 68, B 6. D 71, B oauc