ReSsA 8 The Review School of Accountancy ‘Tel. No. 735-9807 & 734-3989 TAXATION February 10, 2019(Sunday) First Pre-Board Examination 11:45 AM to 2:45 P.M. MULTIPLE CHOICE INSTRUCTIONS: Select the correct answer For each of the Tollewing questions. Mock only one answer for each item by shading the box corresponding €o the jetter of your choice an the sheet provided. STRICTLY NO ERASURES ARE ALLOWED. vse pencil no. 2 only Philippines on July 31, 2018 to reside here permanently after many you Viving abroad. The following data for the year 2018 on his sncome are made avai lable: Gross incone, foreign sources (in Philippine pesos) 1, A nonresident citizen ar January 1 to July 31 500,000 Seoss income, PhOippine sources, Auqust 2 to Decemner 32 300,000 Gross income, foreiyn sources, (in Philippine pesos) 400,000 August 1 to December 51 For Philippine income tx purposes, how much is his taxable gross income? ‘a. P800,.000 2. aon, 000 . P?00, 000 2) ¥300, 000 2. A nonresident alien individual who shail cone to the Philippines and stay therein for an aggregate period of mors than 180 days during the aalendar year shall be dened a “nonresident alien doing in the Philippines” regardless of whether or not he is actually engaged in business in the Philipesnes b. only when Re is actually engaged in business in the Philippines then his income dees not sume from the performance of personal seivices in the Pnilippines when he cones t0,che Phitigpines for a definite purpose which in its nature Would reqiire ai exended stay and to that end makes his ‘hone fenporacily tn the Philippines, although it may be his intention at ail times to retven to hic domicile abroad. 3. Me. Allyza is employed in JBC Corporation. She receives the following for the current year: Statutory minimum wage, ‘inclusive of the, 13" month pay overtime pay Nightshift different iat Commission from the sane euployer Total FL75,000 40, 000 How much is the exempt amoun 2. 260,000 =. 20,000 b. 240,000 None of the choices 4 to 6 are based on the following: in 2018, Mz. Cris Yabut owns a nightclub and videoke bar, with qross sales/receipts of P2,500,000.00 for the period under consideration. His cost of sales and operating expenses are P1,000,050.09 and 690,000.00, respectively, and with non-operating income of 1106, v0.09, 4. How much is the business tax due from Mr. Yabut? a. P750,000 ©. P3275, 000 b. 450,000 4. 250,000ReSA: The Review Schoo! of Accountancy Page 2 of 10 What BIR Form No. \- he going re fale? a. 2550 © 23814 b. 2550 0 9. 2551 © f Nhen is the last day for the filing of the BIR Form in the preceding nunber assuming it covers the first tarable period of the calendar year? April 20, 2018 c. September 30, 2018 be April 25, 2018 d. None of the choices @ are based on the following: Mr. Flong Aranas, an officer of AMBS International Coxp., earned in 2018 an annual compensation of £,200,000.00, exciisive of 13th month and other benefits in the be avail of the @+ income tax rate option? =. Yes, because neu incone trom operation does not exceed the VAT threshold. ». No, because his gross sales exceed the VAT threshold ©. Yes, because his sale of farm products is subject to 9% income tax J. Mo, because mixed income earners are not allowed to avail of, the 8% income tay rate aption 8. How much is his taxable comonsation income fer 20187 3. P3, 100,000 © Pl, 110,000 b. P1,200, 000 1. None of the choices 9. What business tax is he Jiable to? a. Value-Added Tax b. 3 Percentage Tax under see. 119 c. 3s Percentage Tax under See. 136 G None of the chesrss 10. individuals earning purely coupensation income shall be taxed based on che: graduated income tax ra 8% income tax rate if VAT threshold. cs 8 income tax rate oF graduated income tax rates at his discretion G. graduated incone tax rates provided his total compensation income exceeds the VAT threshold. 1 tetol compensation income does nor exceed the Inder the TRAIN, the term ‘texable income’ as applied to individvals means: 1e pertinent Ltens ef gros: ancone specified in the Tax Code, less deductions if any, authorized for such types ef income by the Tax Code or other special Laws b. the pertinent items ot yross income specified in the Tax Code, less deductions including personal exerptions, if any, authorized for such types of income by the Tax Code or other special laws. ~ c. the pertinent item: of gross income specified in the ‘Tax Code. d. the pertinent items of gross income specified in the Tax Code excluding salaries received from umpleyment 12. Which of the following statenents is incorsec 8. The term “minimum waje everer” sholi cetcr ta a worker in the private sector paid the statutory minimim wage, or to an employes ‘im ene Public sector with consensaticn income ef not more than the stacutory minimum wage in the nen-ayricaltural sector where he/she is assigned b. Minimum wage earners shall be exempt fron the payment of income ‘ar on their taxable income. c. The holiday pay, overtime pay, night shift differential pay, and hozacd pay received by such minimum wage corners shall Likewise be exempt 4. None of the choices TAXATION - FIRST PRE-BOARD EXAMINATION (BATCH 37) &o 6 ReSA: The Review Schooi of Accountancy 3. 4 45 v. Or Provinedy of ihe threshold shalt be subject 0 VAT peoapect ively pelfemployed indiviauals ang, be ejemptoyed inal * anator protessionals shall nave the options to 12 HAdvated income tae mace on taxable income or 12 an etme erate RS" monmoperating income ir 4 4 : z {250,000} in lien of chens Percentage tax under Section | Both options are correct Both options are incorreet y Hes - i i Only the second statement is corscct erence the! following stetoments ig. ines rect the yay time daring a given taratte ya, ee praducteg MEeahOTA (ube, O61 na), Taejein SRE tutomatically be subjected to the Sradated rates under Section 24:41 (91 ee he Tax Code, as amended, SLSaRAT Feaistered Cannayer ihe inition opted to avail of the Bt option but nas on the fin (AE threshold driea the taxanle yore anced ve subject to 38 Percentage tax cede? LiTSt #3, 000,000.00 of his/her grece sales/receipts under Section 116 of the Tax Foltows’, amended, with imposition ot wocsie aT Payment is timely made on. the following month witen the thresnold 1s beeen yer"8 ross sales or receipts exceeded and the 68 income tax Provided Paid shad be credited to the Incene Tas Oe enue Cae Graduated rates None ot ener ceo" 24CAI (2) 4a) of the Tax Coder ne eg enaee 4. None of the choices Onder the TRAIN, individual tixpwers are allowed to claim: 1 ~ Basic personal exemption of 750,006 Tt Additional exenption of £25,000 per qualified child not exceeding tour a. T and 11 correct c. Only tis correct Ps Tand IT are incorrect 4. only In is corect Pranatee FOES are taxes smposed upon the gratuitous dispost io Property Br OneEnee Feal or cersono), tangipte or intangible. bs which are real ans tangible only, s- whieh are personal onty @. Whether real or persunai only. Sieg Sth Cruises was an American citizen residing in the Philippines. te ciee ait the USA when Le visited his soe ty Philippine estate tax Purposes, the Estate of Paul Cruise would includes ALL properties whoreve: siturtod b. All properties situated in iiSA only. RuL Properties situaced i the Pailippines only . None of the choices . gross esate at ce gine setae Of Juan Santos claims as deduction From the <. ee ST ites that are deductible from gross income for income tax " purposes are alse olloved t2 be educted Prog poate, £26 income TAXATION - FIRST PRE-BOAKD EXAMINATION (BATCH 37) &ReSA: The Review School of Accountancy Page 4 of 10 1s. p20. A 2 bk has, 5 4 Boas. Cc 26 Dp 27 ‘The gross estate of the decedet is P10,100,000. ‘The total amount of funeral expenses incurred is /230,000, where P20,000 is still unpaid, The funeral expenses incurred ‘x in addition to the memorial plan of the decedent amounted to P50,000 tow mech +5 the deductible funeral expenses 1 the decedent dies on Necenber 2. 500,000 ©. 2250, 000 b. 280,000 “Mone! of the choices Using the same infoumatcn in the preceding number, suppose the decedent ches on January 1, 2613, how much is the deductible funeral expenses? 2. 2200, 000 =186, 000 b. 180,000 Kone’ of the choices Under the TRAIN (R.A, No. 10%u3}, the estate of a non-resident alien decedent cannot deduct which of the following items of deductions from its gross estate? “ a. Family home deduct Claims against insolvent debtor bs Standard deductic 4. None of the choices Phe decedent dics on way U1, “018, the available cash of the estate is insufficient to pay the tauel estate tax due. Which of the following 15 correct? 5. Payment by installment shall be allowed within two (2) years from statutory date for ite payment without civil penalty and interest. bo Payment by installment shal! be allowed within two (2) years trom statutory date for ica payment subject co civil penalty and int ©. Payment by installment shall be allowed within one (1) year from Statutory date for its payment without civil penalty and interest c. Payment by installment shal! not be allowed under the TRAIN. Your client dies on March 1°, 2018, The estate's gross estate 13 P10,000,000 uiseh includes cat, lend avi sbacts of stock. Tho total deductions amounts co 238,000,000. Whach of the .o cin 1s NOE required to be filed? J. Noties of death Statements certifind to by # CPR 5 Rll of the emo. your client dies on July 14, 2018. You are appointed as Administrators You withdraw from his bank deposit P100,000 because the estate needs cash to settle some obligations. What is the fe of your witheraval from the decedent's bank deposit? subject Lo fine) ox of 68 subject to cre wschneldiag tax of 6 Mot subject to withholding cax a. Subject to penalty and interest because such withdrawal i9 noe allowed. If the decedent dies on June 1, 2018 the estate tax return shall be filed and the state tax shall be paid to avoid penalties on or before: a. December 1, 2010 ©. Juno 1, 2020. bl dune 2, 2019. 4. Mone of the choices: 3£ che family home valucd at 27,509,209 Ls conjugal property and the resident decedent dies on tlov + 2017, how much is the deductible family hone? ‘a. PZ, 500,000. ©. P1,000, 000 be. P1,250,000. d. None of the choices LE the family home valued at 722,500,000 is conjugal property and the non resident alien decedent dies op Niuvenber 1, 2018, how much 4s the deductible family hone? ‘a. P22, 500, 000. cs P20,000,000. b, P11, 259, 000. None of the choices TAXATION ~ FIRST PRE-BOARD EXAMINATION (BATCH 37)ReSA: The Review School of Accountancy Page 5 of 10 28 to 30 are based on the fclloving: The decedent is a non-resident citizen, eeried head of ‘amily, with the following data (ales May 14, 2017): al and petsons propertics (ewisiating of piece of land valuec 000,000; car valued at 500,000; pieces of jewelry valued < P500,000; clains of P50,060 against insolvent debtors and bant deposit valued at P9N0, 500 oF winch P160,000 was transferred : covernaent) 2,700,000" Funeral expenses 200,000 Other deductions (includes cioms against the estate amounting t 2,000,000 P50, 000 28. The total deductible amovnt from gross estate excluding special deductions 2,240,000 ce. P1,140,.000 Pl, 285, 000 @. None of the choices 29. The Cexable net eatate 3. P1, 565, 000, 2. P1, 140, pilatss ooo Si tone of the choices 0, (state tax return te avers 11 be filed on or be: a Novenber 14, 2017 ce May 14, 2029 May 14, 2018 5. None of the choices 31. Which of the following stutemencs regarding donor’s tax is incorrect? 5. A donation inter vivos 4s decmed perfected form the moment the donor Tearned of the donec’s acceptance of the donation, making the donee the absolute owner of the property donated. Title to immovable property dues not pass from the donor to the donee by dintue of Deed of Dorat ion until ond unless it has been accepted in a public instrument ani the anor duly notified of such acceptance. f the acceptance af the uowtion is made in 2 separate instrument, the donor must be notified in an authentic form, and the same must be notes in both instrunents. ln acceptance clause does not indicate chat the donation is inter nce acceptance is not roquirenent for donation inter vivos, such Fequirenent is for donation mortis causa. big, Gel verechs Corp., YAT-reqistered real estate lot te a client for P1,000,000. The fair market clue of che residential ior 1 the time of sale was P1,500,000. Its cost wa S500, 000. The sale oF property was made in the ordinary course of 2 Crangaction, at arm's length, and was Business which was a dors fra free trom any donative Latent. What national taxes are due from this Tticular sate, if any? VAT, donor's tax and income tax 8! var’ and donor’s tax only Income tax only sc. None Fercuary 14, fealer, sold a residential 33. Under the TRAIN, the tax for cact calendar year shall be: oer cin percent (68) computed on the basis of the total gifts made Guring the caleadur yo. b. Six percent (64) computsd on the basis of the total gifts in gxcess of Thee hundred thousand pesos (P300, 000) exempt gift made during the calendar year. Six percent (6) computed on the basis of the total gifts jneluding those made in the previous calendar year in excess of Two hundred fifty thousand pesos (P25D,000) exempt gift made during the calendar year. Gi. bin percent. (9b) computed on the basis of the total gifts in excess of Two hundred fifty choveand pesos (P250, 000) exempt gift made during the colenda: year —_—___________. TAXATION ~ FIRST PRE-BOARD EXAMINATION (BATCH 37)ReSA: The Review School of Accountancy Page 6 of 10 in Diokno, revocably transfers his car to his nephew. He challenges his re Beatination because if he does, he will ‘the nephiw tops the CPA Licensure The 34. Me nephew to pass the CPA iicens waive Mis power to revoke the transfer. clus power te revoke the transfer. Faor nation. Mr. Reyes wale Transfer is subject to: a Estate tax. onor''s tax. ther donor's tax or estate tax. 1.veither donor's tax nor estate tax. November 30, 2017, Mr. Ciin Maealintal cancelled the debt of Mr gin sano, son of his first cousin, withavt the latter rendering servic of Mr. Macalintal..‘The cusrionation ist 8. Subject to the 308 donor's tax. ject to the donor’s Lax besed on ths Zt to 15% rates. ‘ ubject to S# donor's tas 3. Subject to final tax on cividends. 36. Under the TRAIN, which of che fotlewing is no longer allowed te be de the gross gifts Dowries or gifts made on account of marriage ané \4 before its celebration rwithin one year therosftec by parents to each of their legitimate, ecognized natural, ot adopted children to the extent of the first 10, 000 the use of the Natsonal Government or any entity b. Gifts made to or for Gonducted for profit, or to reatod by any of its wencies which 1a not ony political subsivisice of the said Government “jucat onal and/or charitable, religious, cultural institution, accredited nengovernment athropic organization or research in faver of an Social welfare corporat io! ganization, trust. or ph: tution or organization. abrance on the property donated if assumed by the donee 57. Which of the following shall sot be exempt from donor's tax? oe sSnation to the Tateavated #ar of the Philippines (1BP) retin Of parcel of land ta the Government made by 2 Philippine Grporation to be used au kelocation site for the less fortunate soretion to parish ctusen where more than 30% of the said gifts shall cMUsed by the parish church for adrinistration purposes filed a return of contributions J. Donation to a political party which wath the COMELEC 6. un January 15, 208, Mr. Pilo Gytve donated # conjugal piece of land valued 250,000 to a son who graduated summa cum laude and an exclusive piece cha’ valued at P600, 000 to # daughter who is getting married Which of following is not correct in connection with the donations? nly one return shail be filed by Mr. Pilo Gutoc for the two donations co the different donees tiaa2 on the same date, Pilo Gutoc will decier» one-half of the value of the conjugal piece * Gnd und ful vaiue of exclusive piece of land as his gross gifts. c. Mr. Pllo Gutoe will file PIK Form No. 1800 on or before February 14, 2018 te, Pilo Gutoc shall give 4 notice of donation on these donations. 39 to 42 are based on the following: On March 1, 2017, Ms. Samira Aquino Gonated a piece of land to hur best Ericad, Har Koxas. She also donated to a ereprofit religious organization. The donation to her traend was a piece aerend which hed an asoee.cd Value 9f P1,000,000 and zonal value of $600,000 af the tine of dune.iun, Cre donations to a non-profit rel:qious brgonization were cash smocrlicg tu P200,U09 and an automobile with a foechase price of P100,090. Ti rice Of land was encumbered with an unpaid ssuned by the 400 Tm addition, the horegage of P300,000 whict: v5 m1 Genee agreed to pay the appiicoble donor's tax of P210,000 the gross gite 2h, 090,000 lone of tne chotees 39. How mach is the vaiue + PL, 900, 000 e bs P1,700,000 a _———— TAXATION ~ FIRST PRE-BOARO EXAiAINATION (BATCH 37) &7 ReSA: The Review School of Accountancy Page 7 of 10 8 40. How much was the votal deduct ons? a. P1,410, 000 P 900, 000 b. P1200, 000 tone Of the choices BAL, How much were the taxable net qifte? a. BL, 900, 000 900, 000 PL, 000, 000 dL None’ of the choices B42. How much was the donor! vax due? =. P510, 000 . &270,000 ». 300, aoe 4! None’ of the choices © 43, Avsuming the donations were given on March 1, 2018, how much is the donor's Loe due? P124, 600 c. 45,000 P 60,000 4) None of the choices a 44. Donors tax is ‘ sa property tax. ba national tax cc. a Hirect tax. 1 a excise tax. B 45. A non-resident citizen donc’ is ‘axed on his donation of properties: e Situated in [hc chilippiras onay é wherever situated. 8 ©. Situated outside the Philippines only &. Situated in the Philinpines only subject to the rule of reciprocity. D 46. Value-added Tax is not: a national tax ‘an ad valorem Lax a progressive tax an indirect tax Romy Tanada has the #7 ang 48 are based on the Following: In the year 2016, Me following transact ions: Gross receipts, teucksay boviness 3,800, 000 Gross receipts, lease of residential units (monthly fental is 125,00" ner unit. 3, 500, 000 Gross receipts, practice of accountancy 1,000, 000 Sale of four (4) revideutial lots at P1,$00,000 each Lo four (4) ind: vidual buyers 6,000, 000 Sale of three (3) parking spaces at P500,000,each 3,500, 000 47. How much is che VAT-esempi gross receipes, assuming the taxpayer is VAT- registered? 2. P2, 500, 000, c. PL, 00,000 >. P3,500, 000 4. tone Of the choices c 4B. How much is total VAT- aa considered “constructive receipts”? bie Co the seller of services without b. Issuance by the debtor of a notice to offset any debt or obligation and Sezeptance thereof by the seller as payment for services rendered cransfer of amounts retained by the payor to the account of the 4. advan.c payments receive during the taxable period for the services performed or to be pertgzmad for another person 2. of the following “se to VAT ®. Importation of rabbi! Sale of banana by ?-Eleven Store © Sale of roasted chicken ior take out Sale of marinated spicy-flavored milkfish 53, The term “Livestock” far VAT purposes includes: rabbs ninals considered as pets. >. 200 animals: vace horses. 58. Which of the following statene ic is incorrect? S. for indirect taxos like VAT, the proper party to question or seek a refund of the tax is the statutory taxpayer/seller, or the payor, not the end b.The printing of the word “sero-rated” is required to be placed on the VAT invoice or receipts covering zero-rated sales in order to be entitled to claim for tax creditor 1 no unless there are other documents that can determine the veracity of the taxpayer’s claims For a claim for refund, taxpayer must not only prove that it is a VAT= registered entity but’ thst, also, it filed its claim within the prescriptive perica. wuld the input taxes re trangactions, any exces over che output taxes shall be rotunded the taxpayer from rero-rated or effectively zero-rated 55. Beginning January 1, 2021, wh from VAT? 4 Sale of real properties nor primarily held for sale to for lease’ in the ordinary course of trade or business of the following shall no longer be exenet customers or held Sale of teol property wilsaed Loe eoclalized hovsing as defined by Republic Act No. 1279 Sale of house and lot, and other residential dwellings with selling price of jot more than Two Mil}ion Fesu9 (PZ, 000,009.00), ‘Lion Five Hundred Thousand Pesos Gd. Sale of residential lot valued at one (P1, 500,000.00) and beiow 56 and 57 are based on the following: A taxpayer imports office equipment on December 1, 2021. Its total landed cost is P2,400,000. The estimated life of the vehicle is 5 years? 56. Up to what month will the aanetanotion be a. November, 2026 b. December, 2026 January, 2022 | None of the choices 57. Assuming, he imports the vehicle on December 2022, up to when can he amortize the input tax or portation? a. December 2027 bl Novenber 2027 ¢. January, 2023 . None of the choices ee _ TAXATION - FIRST PRE-BOARD EXAMINATION (BATCH 37) &ReSA: The Review School of Accountancy Page 9 of 10 © 58 fo 60 are based on the follawina: Tho Anong Pizea Na, VAT-registered issued the following official receipt to a customer who was with a senior citizen Ordered by a senior citizen Parna pizza 90.00 Fango basi 20100 1,060.00 Ordered by the non-senicr citizen md House salad 420.00 Beef rendang 590.00 Avocado smoothie 190.00 Total sales (VAT inclus-ve! 58. How much is the VAT-exenpt 2,017.85. ce. 9946.43 : P1, 060.00 4d. None of the choices C58. How much is the sales Aiscount c+ senior citizen? 2. P403.57 ec. P189.29 b. P2l2.00 1. None of the choices 8 60. tow much is the totai » 2. P2, 260. 2, 017.85 i b. 2,140.00 1. Nonw of the choices i 61 to 63 are based on the following: A domestic common carrier has the following data on gross receipts and expenses for the {rst quarter of 2016: i Transport of passengers P1, 500, 000 : Transport of goods and cargoes 12500, 000 Expenses, transport of posseraers 300, 000 Expenses, transport of gvods sna cargces 500,000 B «How mich is the business tax ‘fat is a domestic common carrier by land? 3. P80,000 fe. 37, 350 pp. Pa5,000 4. None of the choices D 62. How much Ss the business tax sf is a domestic conmon carrier by water, VAT- registered? ‘2. P90, 000 c. B37, 350 Bl 45/000 3) None of the choices A 63, How much is the business tex i: 1% 4 domestic common carrier by air, not VAT- ce. £37,350 S) Nond Cf tne choices B64. Which of the following is not subject to common carrier's tax? ‘a. International carrier transporting carn oF tal! bl International carrie: Cransportiny passengers ©. domestic conacn carriers By Lind transport iny passengers ©. Mone of the choices 65 to 67 are based on the folloning: A franchise grantee of water utilities has the following gross receipts for thy fiat quarter of the current. year: Gross receipts, sale of water 3, 500, 000 Gross receipts, rent of wffice spaces 3,500, 000 Expenses, sale of water 3,000, 090 Expenses, rent of office ops 500, 000 8 68+ How much is the business ta: cf tne sane of water? 3. 105,000 fe. P50, 000 70,000 4. None of the choices 60, tow much is the business tax oe the rent of office spaces, “assuming the loxpayer is not VAT-reqister a. P4z0, 000 ©. 70,000 1) 105, 000, 4. Wone of the choices ee ee ee AXATION ~ FIRST PRE-BOARD EXAMINATION (BATCH 37) &ReSA: The Review School of Accountancy Page 10 of 10 67. Tf the taxpayer is a concessionar of a franchise grantee of water utilities, Alot VAT-registered, how mich is the business tax, if any? 2. F040, 000 b. P20, 000 ©8. A proprietor of bowling alleys month of July, 2018: Gross receipts from bowling oper: ©. F140, 000 co answer not’ given lias the following gros receipts during the ton 2,000,000 Gross receipts from sale of food and drinks inside the bowling alley Gross ‘receipts fren cont bowling alley How much is the amusement tax? a. P1,050, 000 b. b.'P630,.000 69 to 70 are based on the following: owns 100,000 shares before the 10 he TPO, the shares are selling at 1,000,000 of stally inside the 500, 000 ce. 523,000 4. None of the choices tocknolder of @ closely held corporation Tho cost of the share is P1,000,000. During pi? per share. iis broker-friend advises him jot to sell his shares during tne 100 but instead wait until after the 120 2,000,000 shares aud are now sel?ing et exchange: he stockholder of the slosely he! advice because he is elso plannir and, therefore, not traded through 69. How much ig the rercentage Lay Janvary 2, 2018? ‘a. P48, 000 b. P36, 000 70. Wow much is the percentase toy uenvary 2, 2018? P14, 009, ©. PB, 400 he TPO, the outstanding chares of the closely held corporation are Pl4 per sare at the local stock corporation approaches you to seek your ‘co sel] the shares directly to his friend the iccal stack exchange at P15 per share. Sf he sells his shares during the TPO on P12, 000 (1) Noné of the choices if he sella the shares after the [PO on 2. 4,000 ©. None of the choices BND OF EXAMINATION TAXATION — FIRST PRE-BOARD EXAMINATION (BATCH 37)