TAXATION REVIEWER and QUIZZER ee hae Ms SS — 2013 Edition VIRGILIO D. REYES The Law Explained: Basic Principles of Taxation Income Tax Estate Tax Donor’s-Tax Business Taxes Local Taxation and Community Tax Tax Remedies and Penalties The Bureau of Internal Revenue Multiple Choice Questions and Answers SRO AMANO LLL) COMPACT, COHESIVE AND COMPREHE NiiTAXATION Reviewer and Quizzer For the CPA Reviewee, For the Bar Reviewee, and For the,student in an advanced subject in Taxation By VIRGILIO D. REYES A Teacher and Reviewer in Taxation for more than forty years IN THE ACADEME: Faculty Member College of the Holy: Spirit, Manila De La Salle University, Taft Avenue, Manila San Beda College, Manila St. Paul College University, Manila St. Scholastica’s College, Manila University of the Philippines, Quezon City. University of Santo Tomas Special: Lecturer in Taxation (Enhancement lectures) De La Salle University, Manila Pamantasan Ng Lungsod Ng Maynila San Beda College, Alabang San Sebastian College, Manila St. Louis University, Baguio City St. Scholastica’s College, Manila University of the East, Kalookan University of the East, Manila Vice-Head Department of Taxation and Tariff College of Business Administration University of the East, Manila Chairholder (in Taxation) Far Eastern University, Manila CPA Reviewer in Taxation Institute of Professional Review and Skills Development Manila Review Center Professional Review and Training Center Professional Review and Training Center- De La Salle Consortium University of the East, Manila University of the East Center for Review and Special Studies University of Santo Tomas iPhippine Copyright, 2013, by VIRSILIO D. REYES All ights reserved. Printed in the Philippines. No part of this book may be usedir Prined in any form or by any means, or stored in a data base of retrieval syste, Withut the prior written approval of the author. Any copy of this book without te ‘Signature of the author on this page shall be considered as coming from an illeg! Soure WARNING 1: For any violation of the property rights of the author, protection ati €nfacement shall be sought under the Philippine Copyright laws, the New Ci Cod: of the Ptilippines, the Revised Penal Code of the Philippines. and th 'ntenational corventions to which the Philippines is a signatory, and criminal ard Civil Proceedings shall be uncompromisingly and vigorously pursued againt wheever may publish, print, or sell the unauthorized copy of the book. Violation the ights of the author by a lawyer or CPA shall also result in an administrativ Cesefor disbarment or cancellation of the CPA certificate. A POSSESSOR of ary Unauthorized copy of the book by purchase is in violation of the antifencing lav that shall result ina penalty on him of fine/imprisonment. WARNING 2: Any book coming from an unlawful source is not an update’ dition of the book. It may be a copy of an old edition, even as the cover ma Pretend that the insides have updated information. Usual earmarks of a “fake” s @ diferent shade in the color of the cover and/or a prospective buyer is nd allowed to remove the tight plastic wrapping of the book being sold, thus the Prospective buyer cannot leaf through the pages of the book. Ore who May be thinking of buying from an unlawful source may not readily note at ihe time of the intended purchase the changes in the new edition: on the dis- Cussion — contents and language used, points of emphasis, insertion of New, or revision on old, questions and answers and problems and solu. tions, even as the number of pages may remain the same as the number Pages in an older edition, on the appendices and on the plates. Only when he is using the book already does he become aware that what he has in his Hands is a “fake”, and that he had abetted a crime, but more importantly, COnpromised his search for knowledge. WARNING 3: What is your religion? Do you fear your God? Do only what is "ight...to use a book from an illegal source is to dishonor Him...and He will not blets you for a good understanding and good retention of what you read... for a temporary mundane advantage, you have reduced a perfect opportunity for a blessed quest for knowledge.