MTE_BTT_2020

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Section *

3B
3C

Surname, Given Name, Middle Initial *

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point
a. Only one item is true
b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True
*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

*
1 point

a. Only one item is true

b. Only two items are true
c. Only three items are true
d. All of the items are True
e. None of the items are True

11. The reciprocity rule in donor’s tax is applicable only to the resident alien donors who donate: *
1 point

a. Tangible personal property within the Philippines

b. Intangible personal property within the Philippines
c. Intangible real property within the Philippines
d. All of the foregoing

12. Which of the following transactions is deemed a taxable gift? *

1 point

a. Condonation or remission of a debt

b. Sale of residential house and lot for less than a adequate and full consideration on money or money’s worth.
c. Both (a) and (b)
d. Neither (a) nor (b)

13. Determine which of the following items may be deducted from gross gifts: *
1 point

a. Mortgage paid the donor on the donated property

b. Gift given on account of marriage
c. Non-accredited NGO
d. None of the foregoing

14. Determine which of the following exempt gifts shall be included as part of the gross gifts in the donor’s tax return: *
1 point

a. Gift given to the government

b. Gift given to educational, religious, cultural or social welfare institutions
c. Both (a) and (b)
d. Neither (a) nor (b)

15. Which of the following items may be deducted from the gross gifts? *
1 point

a. Amount of mortgage assumed by the done

b. Gifts declared as exempt by law
c. Both (a) and (b)
d. Neither (a) nor (b)

16. X donated a motorbike valued at P250,000 to Y, son of X’s first cousin. What is the tax consequence of the foregoing
donation? *
1 point

a. X is liable to pay donor’s tax in the amount of P75,000 (P250,000x 30%)

b. X is liable to pay donor’s tax in the amount of P15,000 per tax donor’s tax rate (P250,000x 6%)
c. X is not liable to pay any gift tax on the transfer.
d. None of the foregoing

17. S sold his residential house and lot to his best friend for P4,000,000. At the time of the sale, the property had a fair market
value of P5,000,000. What is the tax consequence of the foregoing sale for insufficient consideration? *
1 point

a. S shall be liable to pay donor’s tax in the amount of P60,000 (P5,000,000 – 4,000,000 = P1,000,000 x 6%)
b. S shall be liable to pay donor’s tax in the amount of P45,000 (P1,000,000 – 1,000,000 = P750,000 x 6%)
c. S shall be liable to pay capital gains tax in the amount of P240,000 (P4,000,000 x 6%)
d. S shall be liable to pay capital gains tax in the amount of P300,000 (P5,000,000 x 6%)

18. Gifts are to be computed on a cumulative basis provided the said gifts are given during the same: *
1 point

a. Calendar year
b. Fiscal year
c. Either (a) or (b)
d. Neither (a) nor (b)
19. H (husband) and W (wife) are recently separated by judicial decree. Custody of their 15-year old child, X, was awarded to
court to W. When X turned 18 years of age, she married Y, H and W gave the newlywed a diamond ring as wedding present. This
ring was purchased by H a week before the celebration of the marriage of X and Y. What is the legal consequence of the donation
for purposes of donor’s tax?
1 point

a. H and W shall each report one-half (1/2) of the value of the ring as gross gift
b. H shall report the entire value of the ring as gross gift
c. W shall report the entire value of the ring as gross gift
d. None of the foregoing.

Clear selection

20. Assume the same facts in no. 19, except that the diamond ring was donated to H by a wealthy relative at a time when H and
W were not yet married. What is the legal consequence of the donation for purposes of donor’s tax?
1 point

a. H and W shall each report one-half (1/2) of the value of the ring as gross gift
b. H shall report the entire value of the ring as gross gift
c. W shall report the entire value of the ring as gross gift
d. None of the foregoing.

Clear selection

21. H (husband) and W (wife) gave a lot as wedding gift to X (widowed mother of H). This lot was donated to W before her
marriage to H. The current market value of the lot when it was donated X was P500,000. Which of the following statements is
correct?
1 point

a. W shall be liable for the gift tax in the amount of P30,000

b. W shall be liable for the gift tax in the amount of P15,000
c. H and W shall be liable for the gift tax in the amount of P15,000 each
d. None of the foregoing

Clear selection

22. The donor’s tax return, as well as the donor’s tax due thereon, shall be filed and paid not later than: *
1 point

a. 1 month from the date of the gift

b. 30 days from the date of the gift
c. 3 months from the date of the gift
d. 90 days from the date of the gift

23. X is a Chinese national who is residing in China. He donated his Philippine shares of stock to his Chinese friend, Y, who is
residing in the Philippines. Assume Chinese Tax law imposes gift tax on all real and personal properties donated by Chinese
citizens, whether located in China or elsewhere, but does not allow any tax credit for gift taxes paid in foreign countries. X paid gift
taxes to both the Chinese and Philippine governments. Which of the following statements is correct? *
1 point

a. X may claim a tax credit for the China gift tax because he also paid Philippine donor’s tax
b. X may claim a tax credit for the China gift tax because of the burdensome effect of “international double taxation” on the same property
c. X cannot claim a tax credit for the China gift tax because of the absence of reciprocity
d. X cannot claim a tax credit for the China gift tax because a non-resident alien is not allowed to claim a tax credit for foreign gift taxes under
Philippine tax law

24. Inday, a Filipina with stage three cancer, made a last will and testament disposing of properties mentioned in the last will and
testament. On the same day, she made gifts inter vivos to her children. A few days later she died. Were the donated properties
still to be included in her gross estate? *
1 point

a. No if the donor’s tax had been paid already on the donations.

b. No, because they were no her properties anymore at the time of her death.
c. Yes, because the donations were donation mortis causa and must be governed by the rules on estate taxation.
d. No, because they were not transfer in contemplation of death since the donations were not simultaneous with the execution of the last will and
testament.

1 point
a. Both statements are true.
b. Both statements are false.
c. Only the 1st statement is True.
d. Only the 2nd statement is True.

Clear selection

26. With information from an obituary in a newspaper of general circulation on the death of a well-known Filipino politician, the BIR
communicated with banks asking them to give information on the bank deposits of the decedent. Can the bank give information on
the bank deposits? *
1 point

a. Definitely no.
b. Yes, at the option of the bank.
c. No. because of the restriction of the bank secrecy law on deposits.
d. Yes, because this is one of the exceptions in the Secrecy of Bank Deposits Law.

27. The following are the requisites for vanishing deduction to be allowable, except one. *
1 point

a. The estate tax of the prior succession must have been finally determined and paid
b. He present decedent died within five (5) years from date of death of the prior decedent
c. The property with respect to which deduction is sought can be identified as having been received by the present decedent from the prior
decedent
d. The property must have formed part of the gross estate situated outside the Philippines of the prior decedent

28. A resident citizen had a family home in the Philippines. He worked abroad and was temporarily absent his family home when
he died in 2018. The executor of the estate inquired from you whether or not to claim family home deduction from the gross estate
for Philippine estate tax purposes. What would you tell him? *
1 point

a. The estate would not be allowed family home deduction because he was abroad when he died
b. The estate would not be allowed family home deduction because he was a non-resident citizen when he died
c. The estate would be allowed family home deduction because actual occupancy of the family home was not interrupted or abandoned because
of his temporary absence
d. The estate would be allowed family home deduction of P10,000,000 because all decedents were allowed family home deduction.

29. In the case the available cash of the estate is insufficient to pay the total estate tax due, payment by installment shall be
allowed: *
1 point

a. Within two (2) years from the statutory date for its payment without civil penalty and interest
b. Within two (2) years from the statutory date for its payment with civil penalty and interest
c. Within one (1) year from the statutory date for its payment without civil penalty and interest
d. Within six (6) months from the statutory date for its payment without civil penalty and interest

30. A sale, exchange, or other transfer if property made in the ordinary course of business (a transaction which is a bona fide, at
arm’s length, and free from any donative intent), will be considered as made for an adequate and full consideration in money or
money’s worth and therefore: *
1 point

a. Subject to donor’s tax

b. Not subject to donor’s tax
c. Subject to estate tax
d. Choice not given

31. When an indebtedness is cancelled without any service tendered by the debtor in favor of the creditor, the forgiveness of debt
will result to: *
1 point

a. Taxable income
b. Distribution of dividend
c. Taxable indirect donation
d. Taxable estate

32. A client asked you whether or not to add the gifts made in the previous year to the gifts made in the current year. What would
your answer be? *
1 point

a. The gifts made in the previous year should not be added to the gifts made in the current year because the computation of the taxable net gifts is
cumulative basis over a period of one year
b. The gifts made in the previous year should be added to the gifts made in the current year because the computation of the taxable net gifts is
cumulative basis over several calendar years
c. The gifts made in the previous year should not be added to the gifts made in the current year because the BIR would have no way of knowing
them anyway
d. The gifts made in the previous year should be added to the gifts made in the current year so that the progressive effect of donor’s tax will be
felt.

33. A resident citizen has a property situated in Quezon City. His legal residence is in Masbate City. While in Cebu City on a
business trip, he donated his property situated in Quezon City to a relative who is long-time resident of Cebu City. Where will the
donor file the donor’s tax return? *
1 point

a. Quezon City
b. Cebu City
c. Masbate City
d. Any of the three cities

34. Motivated by love, Ms. D donated a car to his brothers, Mr. E and Mr. F, the naked title to Mr. E and usufruct to Mr. F for one
year. Is the transfer of the car, naked title to Mr. E and usufruct to Mr. F a valid donation? *
1 point

a. Yes, the transfer of the naked title to E and usufruct to F is a valid donation, provided all the donees are living at the time of donation
b. No, the donation is not valid because it is specifically provided in the Civil Code that such donation is not allowed.
c. Yes, the donation is valid provided that Mr. E agrees to the donation of usufruct to Mr. F
d. No, the donation is not valid because a right (usufruct) cannot be donated.

35. The administrator of the Estate of Juan Santos claims as deductions from the gross estate a receivable from a person who
absconded. His assertion is that the claim against that person can no longer be collected. He also explains that for income tax
purposes bad debts are deductible from the gross income so the receivable from a person who absconded shall also be treated in
the same manner as in estate tax. Despite the administrator’s contention the BIR disallowed as deduction the claim against a
person who absconded. Is the BIR correct? *
1 point

a. Yes, to be allowed as deduction from the gross estate the claim must be against an insolvent debtor and that the incapacity of the person must
be a fact that collection is almost impossible
b. No, not to allow it to be deducted from the gross estate will be a great injustice because of the fact that collection is almost impossible
c. No, all items that are deductible from gross income for income tax purposes are also allowed to be deducted from the gross estate.
d. Yes, the regulations are not clear, and it requires BIR ruling for such claim to be allowed as deduction

36. The decedent dies on May 31, 2018, the available cash of the estate is insufficient to pay the total estate tax due. Which of the
following is correct? *
1 point

a. Payment by installment shall be allowed within two (2) years from statutory date for its payment without civil penalty and interest.
b. Payment by installment shall be allowed within two (2) years from statutory date for its payment subject to civil penalty and interest.
c. Payment by installment shall be allowed within one (1) year from statutory date for its payment without civil penalty and interest.
d. Payment by installment shall not be allowed under TRAIN.

37. Your client dies on March 15, 2018. The estate’s gross estate is P10,000,000 which includes car, land and shares of stock.
The total deductions amount to P15,000,000. Which of the following is not required to be filled? *
1 point

a. Notice of death
b. Estate tax return
c. Statement certified to by a CPA
d. All of the choices

38. On November 30, 2017, Mr. Erin Macalintal cancelled the debt of Mr. Mar Alejano, son of his first cousin, without the latter
rendering services in favor of Mr. Macalintal. The condonation is: *
1 point

a. Subject to the 30% donor’s tax

b. Subject to the donor’s tax based on the 2% to 15% rates
c. Subject to 6% donor’s tax
d. Subject to final tax on dividends

39. Under the TRAIN, which of the following is no longer allowed to be deducted from the gross gifts: *
1 point

a. Dowries or gifts made on account of marriage and before its celebration recognized natural or adopted children to the extent of the first
P10,000.
b. Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any
political subdivision of the said Government
c. Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited non-government
organization, trust or philanthropic organization or research institution or organization.
d. Encumbrance on the property donated if assumed by the donee

40. On January 15, 2018, Mr. Pilo Gutoc donated a conjugal piece of land valued at P500,000 to a son who graduated summa
cum laude and an exclusive piece of land valued at P600,000 to a daughter who is getting married. Which of the following is not
correct in connection with the donations? *
1 point

a. Only one return shall be filed by Mr. Pilo Gutoc for the two donations to the different donees made on the same date
b. Mr. Pilo Gutoc will declare one-half of the value of the conjugal piece of land and full value of exclusive piece of land as his gross gifts
c. Mr. Pilo Gutoc will file BIR Form no. 1800 on or before February 14, 2018
d. Mr. Pilo Gutoc shall give a notice of donation on these donations

41. A decedent died single, leaving a family home which consists of a piece of land that he inherited 3 ½ years ago (with value at
that time of P600,000) with a fair market value of P800,000 at the time of his death, and a house thereon which he built at a cost
of P650,000, and a fair market value at the time of his death of P450,000. Other properties in his gross estate have a fair market
value of P550,000. Unpaid obligations at the time of his death amounted to P300,000. The vanishing deduction is equal to: *
2 points

a. 500,000
b. 225,000
c. 300,000
d. 40,000
e. 0

42. Jane, marred on January 1, 2017. She left an estate with a fair market value of P4 million. During the year, the estate had a
gross income of P800,000 and related expenses of P300,000. The administrator gave P200,000 to Jimmy and another P200,000
to Jonas, Jane’s beneficiaries, 50% of the amounts given to B and C came from the income of the estate and other 50% came
from the estate. The net taxable income of the estate in 2017 is: *
2 points

a. 250,000
b. 280,000
c. 300,000
d. 50,000
e. 0

43. Mr. Roger died with a receivable from Mr. Novak. Mr. Novak has properties worth P220,000 and Obligations of P320,000.
Included in the obligations are P20,000 owned to the Government for unpaid taxes and P60,000 owed to Mr. Roger. The
deductible claim against insolvent persons amount to: *
2 points

a. 60,000
b. 41,250
c. 40,000
d. 20,000
e. 0

44. *
2 points

a. 2,800
b. 5,500
c. 3,000
d. 3,300
e. 90,000

45. Sally, a Filipino decedent, owns a property valued at P2,000,000 at the time of his death. The said property was sold during
his lifetime to Veronica for P1,300,000 when its real value was P1,700,000. It was agreed by both parties that the delivery and
payment will take place after Sally’s death. For the purposes of Philippine estate tax, the amount to be included in the gross estate
would be: *
2 points

a. 2,000,000
b. 1,700,000
c. 400,000
d. 700,000
e. 0

46. *
2 points

a. 2,130,000
b. 4,260,000
c. 4,380,000
d. 6,260,000
e. None of the above

47. The taxable net estate based on the preceding number is: *
2 points

a. 2,174,000
b. 40,000,000
c. 51,620,000
d. 52,000,000
e. None of the above

48. An unmarried decedent died leaving properties he inherited. 4 ½ ago which had fair market value of P800,000 at the time of
his death (P650,000 at the time of inheritance, and unpaid mortgage of P50,000, P20,000 of which paid by the present decedent
before he died). Other properties in his gross estate had fair market value of P1,000,000. The total expenses, losses,
indebtedness, taxes and transfer for public purpose amounted to P300,000. How much was the vanishing deduction? *
2 points

a. P 225,000
b. P 108,333
c. P 102,900
d. P 100,000

Untitled Title
For the next two items: An unmarried decedent died leaving properties he inherited 4 ½ years ago which had fair market value of P800,000 at the time of his death
(P650,000 at the time of inheritance, and unpaid mortgage of P50,000 paid by the present decedent). Other properties in his gross estate had fair market value of
P1,000,000. The total expenses, losses, indebtedness, taxes and transfer for public purpose amounted P300,000.

49. How much was the vanishing deduction? *

2 points

a. P 500,000
b. P 225,000
c. P 200,000
d. P 100,000

50. Assuming that the inherited property had no unpaid mortgage when received by the present decedent. It was the present
decedent who mortgaged the property for P50,000 when he already owned it. He paid the mortgage indebtedness before he died.
How much was the vanishing deduction? *
2 points

a. P 508,333
b. P 225,000
c. P 208,333
d. P 108,333

Untitled Title
For the next five items: On March 1, 2017 Ms.Samira Aquino donated a piece of land to her best friend, Mar Roxas. She also donated to a non-profit religious
organization. The donation to her friend was a piece of land which had an assessed value of P1,000,000 and zonal value of P800,000 at the time of donation. The
donations to a non-profit religious organization were cash amounting P200,000 and an automobile with a purchase price of P700,000. The piece of land was
encumbered with an unpaid mortgage of P300,000 which was not assumed by the donee. In addition, the donee agreed to pay the applicable donor’s tax of P210,000.

51. How much is the value of the gross gifts? *

2 points

a. P1,900,000
b. P1,700,000
c. P1,000,000
d. None of the choices

52. How much was the total deductions? *

2 points

a. P1,410,000
b. P1,200,000
c. P900,000
d. None of the choices

53. How much were the taxable net gifts? *

2 points

a. P1,900,000
b. P1,000,000
c. P900,000
d. None of the choices

54. How much was the donor’s tax due? *

2 points

a. P570,000
b. P300,000
c. P270,000
d. None of the choices

55. Assuming the donations were given on March 1, 2018, how much is the donor’s tax due? *
2 points

a. P114,000
b. P60,000
c. P45,000
d. None of the choices

56. How much were the total taxable net gifts as of July 10, 2017? *
2 points

a. P290,000
b. P280,000
c. P140,000
d. None of the choices

57. How much was the donor’s tax payable as of November 23, 2018? *
2 points

a. P51,000
b. P36,000
c. P24,000
d. None of the choices

58. *
2 points
a. P 0, P 15,000, and P 21,000, respectively
b. P 0, P 0, and P 21,000, respectively
c. P 0, P 0 and P 0, respectively
d. None of the foregoing

59. X, unmarried, owns a residential land. At the insistence of a close friend, X sold the said land to him at a friendly price of
P600,000, although its fair market value was P1,000,000. The donor’s tax due on the transfer is: *
2 points

a. P 24,000
b. P 21,000
c. P 9,000
d. P 0

60. X, legally separated from his wife, gave his favorite mother-in-law a diamond ring as her wedding gift valued at P300,000 when
the latter remarried at the age of 60. The gift tax due on the donation is: *
2 points

a. P 90,000
b. P 18,000
c. P 3,000
d. P 0

61. *
2 points

a. P 27,000
b. P 12,000
c. P 11,400
d. None of the foregoing
62. Assume the same facts in no. 61. The gift tax due and payable by W amounts to: *
2 points

a. P 33,000
b. P 18,000
c. P 17,400
d. None of the foregoing

63. Mrs. A died leaving 2,000 shares of stocks of ABC Corporation, a closely held corporation, as part of her estate. The balance
sheet of ABC Corporation is shown below together with the fair values of its assets and liabilities: *
2 points

a. P2,920,000
b. P2,880,000
c. P2,000,000
d. P2,400,000
e. None of the foregoing

64. On the preceding number, how much is the capital gain tax? *
2 points

a. P2,920,000
b. P2,880,000
c. P2,000,000
d. P2,400,000
e. None of the foregoing

65. *
2 points
a. P 23,200,000
b. P 23,400,000
c. P 22,200,000
d. P 20,400,000

66. *
2 points

a. None
b. P 3,000,000
c. P 3,500,000
d. P 4,300,000
67. Using Donor’s Tax Return (BIR Form No. 1800), how much will be reflected on line 14 for the return to be filed on November
23, 2018? *
2 points

a. P1,140,000
b. P890,000
c. P140,000
d. None of the choices

68. Using the Donor’s Tax Return (BIR Form No.1800), how much will be reflected on line 18? *
2 points

a. P53,400
b. P8,400
c. (P6,600)
d. None of the choices

69. *
2 points

a. P5,165,000
b. P4,665,000
c. P4,981,250
d. P21,000,000
e. None of the Above

70. Based on the previous information, if the decedent is a Filipino citizen, the taxable net estate is: *
2 points

a. P11,490,000
b. P12,645,000
c. P7,900,000
d. P8,000,000
e. None of the Above

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