101. Mantika Corp., a VAT registered Corp. is a producer of cooking oil from coconut and corn.

It
had the following data for the month of January 2018:
Sales gross of VAT P784,000
Corn and Coconut, Dec 31, 2018 50,000
Purchases of coconut and corn in 2018 330,000
Purchases from VAT suppliers , VAT included:
Packaging materials 56,000
Supllies 16,800

The value-added tax payable for the month:

a.P56,060
b.P54,900
c.P60,650
d.63,000

102.When is the input tax on purchases of capital assets is amortized over 60 months or useful lives of
the capital assets if shorter than 60 months?
a. If capital assets have been acquired from enterprises registered with and located at the export
processing zones.
b. If the value of the capital asset purchased, excluding vat, exceed P 1,000, 000.
c. If the aggregate monthly purchases of the capital assets , excluding vat, exceeds P1,000,000
d. if the vat taxpayer has secured prior approval for him to amortized input tax on purchases of
capital assets.

103. Statement 1: The input vat on purchase of the capital goods valued at P 1,000,000 shall be
spread over 60 months if the life of property is equivalent to 5 years or more.

Statement 2: The input vat on purchase of capital goods valued at P1,000,000 shall be spread over the
life of property if the life of property is less than 5 years.
a. Both statements are correct
b. Only first statement are correct
c. Both statements are incorrect
d. Only first statement incorrect

104. A taxpayer has excess credit as a result of input taxes paid on purchases of capital goods, he may:
a. Have his excess tax credit refunded to a vat registered person.
b. Make his application for refund in the subsequent period following the period during which the
purchases were made.
c. Carry-over and apply his excess tax credit against output taxes in the subsequent period or
periods.
d. Use it in payment of any internal revenue tax of a vat registered person.

105. Pedro, vat registered, made the following purchases during the month of January , 2018:
Goods for sale, inclusive of Vat P246,400
Supplies, exclusive of Vat P20,000
Packaging materials, total invoice amount 56,000
Home appliances for residence, gross of vat 17,920
Office machines ( 5 pcs) , 8 years useful life, net of Vat 2,000,000

Creditable input taxes are:

a. 38,800
b. 34,800
c. 37,440
d. 35,520

Use the following data for the next five (5) questions:
Mother’s best corporation is a manufacturer of cooking oil made of corn since however, for 2018
taxable year, it started its operation as vat registered ( from being exempt). The following were the
transactions during the first quarter taken from its book records.
July August September
SALES P78,000 P 640,000 720,000
PURCHASES:
Corn used as raw materials 125,000 160,000 210,000
Supplies and other materials q 150,000 175,000 170,000
Two (2) heavy equipment ( U.L -8 years) 800,000
Four (3) heavy equipment ( U.L -4 years) 450,000

Beginning inventory:
Supplies /other materials –from vat suppliers 10,000
Supplies / other materials - from non-vat suppliers 60,000
Corn 25,000

Determine the following:

114. Transitional input vat is

a. 0
b. P200
c. P1,200
d. P1,400

115. Vat payable for the month of July is

a. (P80,800)
b. 64,575
c. 66,475
d. 66,675

116. Vat payable for the month of August is

a. 48,000
b. 47,800
c. 45,900
d. (96,750)

117. Vat payable for the month of September is

a. 53,750
b. 53,950
c. 51,850
d. (88,075)

118. How much is the correct vat payable ( excess input vat) for the month of September assuming the
company disposed one of the heavy equipment during the month?
a. 8,150
b. 7,750
c. 13,925
d. 10,725

1. A tax imposed on the gratuitous transfer of property between two or more persons who are living
at the time the transfer is made.
a. estate tax
b. donor’s tax
c. income tax
d. transfer tax

2. One of the following is not a distinction between donation inter vivos and mortis causa.
a. Donation inter vivos takes effect during the lifetime of the grantor while donation mortis causa takes
effect after the death of the grantor.
b. Donation inter vivos is subject to donor;s tax while donation mortis causa is subject to estate tax.
c. Donation inter vivos requires a public document while donation mortis causa may not
required a public document.
d. Donation inter vivos is valued at fair market values at the time the property is given while donation
mortis causa is valued at the fair market value at the time of the death of the grantor

3. Donor’s tax is:

a. A property tax
b. A personal tax
c. A business tax
d. An excise tax

4. the following are requisites of a donation for purposes of the donor’s tax, except one.
a. Capacity of donor
b. Capacity of the done
c. Delivery of the subject matter or gift
d. Donative intent

5. Which of the following is subject to donor’s tax?

a. Those made between persons who were guilty of adultery or concubinage at the time of the donation.
b. Those made to conceived but yet to be born children.
c. Those made to a public officer by reason of his office.
d. Those made between husband and wife during their marriage

6. Which of the following is not subject to donor’s tax?

a. Donation mortis causa
b. Donation which will take effect upon birth of the donee.
c. A creditor who, out of his affection, cancelled the debt of the debtor.
d. A parcel of land in U.S.A donated by a non-resident Filipino to a foreigner

7. Which of the following donations inter vivos may not required that it be in writing?
a. Donation of personal ( movable ) property, the value of which exceeds P5,000
b. Donation of personal ( movable ) property, the value of which is P5,000
c. Donation of real ( immovable) property, the value of which is less than P5,000
d. Donation of real ( immovable) property, the value of which exceeds P5,000

8. For the donation to be considered valid, acceptance of the donation must be made:
a. During the lifetime of the donor only
b. During the lifetime of the donee only
c. During the lifetime of the donor and the donee
d. none of the choices

35. A tax minimization scheme which is done by spreading the gift over numerous calendar years to
avail of the lower tax liability.
a. Spread out method
b. Donation of life insurance
c. Splitting of gift
d. Void donation

36. Your bachelor client, A Filipino residing in Quezon City, wants to give his girlfriend a gift of
P400,000. He seeks your advice, for purposes of reducing of not eliminating the donor’s tax on the
gift, on whether it is better for him to give all of the P400,000 on Christmas ( December 25, 2018)
or to give P200,000 on Christmas and the other P200, 000 on January 1, 2019.

Which of the following will be your advice?

a. Split the donation to totally relieve the donor from the donor’s tax.
b. Split the donation to reduce the donor’s tax.
c. Splitting the donation will not reduce the applicable donor’s tax.
d. The gift should be made on account of their planned marriage to avail of dowry exemption.

39. On July 18, 2018, Mr. Dela Cruz gave a property with a fair market value of P550,000 to Lester, a
legitimate son, and Jennifer, Lester’s bride, on account of their marriage celebrated on July 19, 2017.
The donor’s tax payable is:
a. 87,100
b. 38,000
c. 84,100
d. 18,000

The next 4 questions are based on the following data:

On February 25, 2018, Mr. and Mrs. Salomon donated their conjugal land worth 500,000 to their
three sons. One of them is getting married which prompted to donation.
On Jun3 9, 2018 they also donated to the child of Mrs, Salomon by first marriage, jewelry worth
75,000 on account of marriage more than a month after the donation.
Finally on December 25, 2018, they donated to the nephew of Mr. Salomon a building worth
P750,000. 40% of which was co-owned by their kumpare who agreed to the donation and executed
the necessary documents donating his share.

40. The donor’s tax due on the February 25, donation is:
a. 14,000 for Mr. and Mrs.
b. 3,600 each for Mr. and Mrs.
c. 4,000 each for Mr. and Mrs.
d. 0 for each spouse

41. Then donor’s tax due on the June 9 donation is:

a. Mr. -2,250 for each spouse
b. Mr. -11,250 Mrs. -4,700
c. Mr – 11,250 Mrs. 1,100
d. Mr. – 11,250 Mrs. 1,875

42. The donor’s tax due on the December donation is:

a. Mr. -9,875 Mrs- 13,500
b. Mr – 67,500 Mrs – 67,500
c. Mr – 13,500 Mrs -13,500
d. Mr – 9,000 Mrs 67,500

43. The donors tax due for their kumpare on December 25, donation is:
a. 90,000
b. 18,000
c. 0
d. 3,000

9. When is the donation perfected?

a. The moment the donor knows of the acceptance by the done
b. The moment the thing donated is delivered, either actually or constructively to the donee
c. Upon payment of the donors tax.
d. Upon execution of the deed of donation

10. The donation of an immovable property shall be made

a. In writing
b. In public instrument
c. Either A or B
d. Orally

11. Using the preceding number, acceptance by the donee may be made
a. In same deed of donation
b. In a separate document
c. Either A or B
d. Neither A or B

12. A non –resident citizen donor is taxed on his donation of properties.

a. Situated in the Philippines only
b. Whenever situated
c. Situated outside the Philippines only
d. Situated in the Philippines only subject to the rule of reciprocity

13. Which of the following is taxable only with respect to properties donated within the Philippines?
a. resident citizen
b. Non- resident citizen
c. Resident Alien
d. Non-resident alien

14. Which of the following statements is correct?

I. a donation by a non-resident alien of shares of stock of a domestic corporation is subject to donor’s
tax if such corporation have accuired business in the Philippines.
II. A donation by a resident alien of shares of stock of a foreign corporation will only be subject to
donor’s tax if at least 85% of the business of such corporation is located in the Philippines.
III. A Donation by a non-resident alien of bonds of a foreign corporation ( 90 % of the business of
such corporation is located in the Philippines ) is subject to donor’s tax.
IV. A donation by a non-resident citizen of a franchise is a subject to donor’s tax even if such
franchise is exercised outside of the Philippines.
a. III only
b. IV only
c. III and IV only
d. II, III, an IV only
15. If a donor is a non-resident alien and the rule of reciprocity applies, which of the following
properties will not form part of his gross gift?
a. Real properties in the Philippines
b. Tangible personal properties within the Philippines
c. Intangible personal properties within the Philippines
d. All of the choices

16. X, a multinational corporation not doing business in the Philippines, donated 100 shares of stock
of said corporation to Mr. “ Y”, a Filipino citizen. What is the tax liability , If any, of X corporation?
a. The donation is not subject to donor’s tax
b. The donation is subject to 30% donor’s tax based on net gift.
c. The donation is subject to graduated rate based on net gift
d. The donation is subject to 30% donor’s tax based on gross gift

17. A gift that is incomplete because of reserve powers becomes complete when.
I. The donor’s renounces the power
II. His right to exercise the reserve power ceases because of the happening of some events or
contingency or the fulfilment of some condition other than because of the donor’s death.
a. I only
b. II only
c. Either I or II
d. Niether I nor II

18. Which of the following is subject to donor’s tax?

I. Pedro donated a house and lot to Ana. Pedro reserved the right to live in the house and lot until he
dies.
II. Stanley donated a commercial complex apartment to Wendy. Stanley reserved the right to the
rentals for five years from thr date of donation. Stanley died on the third year.
III. Angelica donated a mango farm to Sergio. Angelica reserved the right to the fruits for five years
from the date of donation. Angelica died on the seventh year.
a. II only
b. III only
c. I and II only
d. None of the above

19. When an indebtedness is cancelled without any service rendered by the debtor in favour of the
creditor, the forgiveness of debt will result to:
a. taxable income
b. distribution of dividend
c. Taxable donation
d. Taxable estate

20. If an individual perform services for a creditor who in consideration there of cancels the debt,
the cancellation of indebtedness may amount to a:
a. Gift
b. Capital Contribution
c. Donation Inter vivos
d. Payment of income

21. What is the tax implication if a corporation condones the debt of a shareholder beacause of a
good thing done by the latter to the corporation?
a. The condonation is based on the liberality of the corporation , therefore, it is subject to donor’s tax.
b. The condonation is subject to donor’s tax on the corporation because it is based on its liberality.
Moreover , it is equivalent to a payment of dividend income on the shareholder, which is therefore,
subject to a final withholding tax on income of 10%.
c. It is tantamount to a declaration of dividend. Therefore, it is an income which is a subject to
10% final withholding tax on the shareholder, However, it is not subject to donor’s tax on the
corporation.
d. It is just a simple case of extinguishment of an obligation which is neither subject to income tax
on the part of the shareholder nor a donor’s tax on the corporation.
23. Which of the following events is not a subject to donor’s tax?
a. A Filipino Citizen donated a parcel of land located in the United States to B, non-resident alien.
b. A resident alien made a gift of 200,000 to his daughter on account marriage.
c. A non-resident citizen gives his girlfriend a diamond ring worth 100,000 as a birthday gift.
d. A and B are the only heirs of C. A renounces his share of inheritance in favour of B.

28. Alpha Corporation is transferring its office from Makati to Manila. It sold to omega Corporation
its existing lot and office building valued at P80M for P60M.What tax should be imposed and
collected from Alpha Corporation as a result of the transaction?
a. Capital gains tax
b. Donor’s Tax
c. Real Property tax
d. Capital gains tax and Donor’s tax

Next 3 question are based on the following data:

Rody, a resident citizen made the following donations.
a. To Mar, a land worth 450,000 in Manila
b. To Leni, jewelry worth 100,000 in Japan
c. To Miriam , PLDT shares amounting to 150,000
d. To Jojo , a building in Italy 1,600,000 mortgaged for 50,000 assumed by the donee.
e. To Allan, land in Davao worth 300,000.
f. To Antonio, 300,000 cash, PNB New York.
g. 200,000 receivable to Joy, 50% condoned by Rody

Rody also transferred the following properties:

Selling Price FMV
Car, Makati 200,000 300,000
Car, Malaysia 300,000 200,000
Rest House,
Tagaytay 1,000,000 2,000,000
Rest House,
Malaysia 1,500,000 2,500,000

29. How much is gross gift?

a. 5,200,000
b. 4,200,000
c. 4,100,000
d. 3,200,000

30. If he is a non-resident Alien, his gross gift is:

a. 3,200,000
b. 1,200,000
c. 1,100,000
d. 850,000

31. If he is a non-resident alien, and there is reciprocity law, his gross gift is;
a. 850,000
b. 950,000
c. 1,050,000
d. 700,000

32. Which of the following is not a deduction from gross gift?

a. Unpaid mortgage on the donated property assumed by the donee.
b. Unpaid real estate tax on the property donated assumed by the donee.
c. Diminution on the donated property specifically provided by the donor.
d. Unpaid donor’s tax on the donated property assumed by the donee.

33. Which of the following is not exempt from gift tax under special laws?
a. Donation to the integrated Bar of the Philippines
b. Donation to development Acadamy of the Philippines
c. Donation to development Institute of Certified Public Accountants
d. Donation to international Rice Research Institute
Use the following data for the next two questions:
48. During the current year, Mr. and Mrs. Cabaries, non-resident citizens, donated the following:

Sept.25. To Leona, a legitimate child, on account of marriage last month, a conjugal property located
in the Philippines, FMV, 600,000.

To Leo, nephew of Mr. Cabaries , on account of marriage, a property located

In USA exclusively owned by him with fair market value of 150,000 (gift tax in USA 5,000 )

Oct 9 ; To Leonor, a legitimate child, conjugal property in the Philippines with fair market value of
100,000.

The gift tax payable on the September 25 gift of the husband is:
a. 8,000
b. 3,000
c. 8,600
d. 7,000

49. Using the data in the preceding number, the gift tax payable on the October 9 gift of the husband
is:
a. 8,000
b. 3,000
c. 7,100
d. 2,500

50. Mr. Riano made the following gifts in 2018:

Phils. USA UK Italy
Gross gift 750,000 500,000 250,000 500,000
Deductions 250,000 200,000 150,000 150,000
Tax Paid ----- 25,000 12,000 10,000

The donor’s tax payable is:

a. 26,000
b. 25,600
c. 33,520
d. 30,800

51. Statement 1: A donation can be both a part of the gross gift of the donor and a taxable income
to the donee.
Statement 2: A donation may be exempt from donor’s tax but not necessarily a deduction from the
donor’s gross income.
a. Only statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

52. Statement 1: Only one return shall be filed for several gifts ( Donation ) made by a donor to
different donees on the same date.
Statement 2: If the donation involves conjugal/community property , each spouse shall file
Separate return corresponding to his/her respective share in the conjugal/community property.
a. True, False
b. False, True
c.True, True
d. False, False