Professional Documents
Culture Documents
Sum
Sum
Losses
- arising from fire, storms, casualties, theft and other losses in connection with trade within the taxable
year without insurance is allowed as deductions
- must submit a declaration of loss not less than 30 or more than 90 days
Casualty loss
Nominal value outstanding shares – par value of stock issued to the stockholders of the corporation
Loss from shrinkage of stock value - caused by fluctuation of stock market. loss value allowed is the
value the stock is disposed off
Loss from stocks becoming worthless - must have clear and convincing evidence of stocks being
worthless to be allowed as deductions
Loss from wash sales – deductions allowed if securities transactions are in the ordinary course of
business
Loss from farming - livestock and other farm losses deductible in the year the loss is incurred
Bad Debts – receivables which collection of through courts is costlier to the tax payer
Tax benefit - Rule recovery of bad debts from the preceding year shall be recorded part of the gross
income in the current year
Depreciation
Depletion - Wasting assets only replaceable by nature
Cost depletion method – a reasonable allowance for depletion computed in accordance to cost
depletion method prescribed by secretary of finance for oil, gas well and mines
Certificate of Donation – donor must notify Revenue District officer every 1M donation
Date and Place of Filing - Claims for limited or full deductibility of donation contributions by the donor at
the time of filing their income tax return
Research and development – Cost of materials used for research that have no alternative uses
- paid or incurred
- not treated as expenses
- chargeable to capital account
Limitations on deductions
Pension Trust – Payment of a reasonable amount to the employee shall be allowed as deductions
- Personal expenses
- Amount for building or improvements
- amount for restoration
- Premiums paid on life insurance
- Losses from sales or exchange of property between related tax payer.