Professional Documents
Culture Documents
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19. The 22-year old widow and the children of a passenger who died in a plane crash were paid P500000
by Bagsak Airlines. This figure was reached after negotiation between the heirs of the deceased and
Balasubas Insurance Company, the insurer of the airlines, the latter having received indubitable
evidence that the deceased had net income of P50000 at the time of his death , and that 10 productive
years would have insured financial stability for his family. Should the heirs declare this amount in their
income tax returns?
Pabaya Corporation took a keyman insurance on the life of its Executive Vice President. The policy
designated his spouse as its revocable beneficiary. Will the insurance proceed be treated as income
subject to tax by the spouse?
20.Anthony an amateur boxer, represented the Philippine team in Beijing Olympics. He received the
following income: P200,000 cash prize from the Olympic association; P500,000 cash donated by
Rubberwood Philippines; P400,000 talent fee as model of Nike shoes and shirts, P1,000,000,
professional fee as an actor.
On the other hand. Pacman a professional boxer won in a non titled bout between him an El Terrible
held at Mandalay Bay, Las Vegas, Nevada. Pacman received the following; P25 Million as cash prize in
the fight; P30 Million from PAY Per View; 12 Million talent fee as commercial model of San Miguel Beer.
Anthony Pacman
C. 1,400,000 67 million
D. 1,000,000 12 million