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HONOR CODE: A SYSTEM OF EXAMINATION THAT RELIES SOLELY ON THE HONESTY

OF THOSE CONCERNED. MY FULL TRUST IS ALWAYS WITH YOU.

Identification. Write your answers on the space provided before each item.
(1 point each)
183 days 1. The number of days required for a citizen of the Philippines to
have stayed outside the Philippines to be considered as
nonresident.
Alien 2. A foreign-born person who is not qualified to acquire Philippine
citizenship by birth or after birth.
Original or regular 3. Refers to income such as compensation, business income,
income income from practice of profession, income from sale and/ or
dealings of property and miscellaneous income and passive
income other than those subject to final taxes and capital
gains tax.
Passive Income 4. Subject to final withholding taxes as enumerated under Section
24B of the Tax Code.
Self employed 5. A sole proprietor or an independent contractor who reports
income earned from self-employment.
Mixed income earner 6. A taxpayer deriving income both from self-employment and
from compensation income.
Capital Assets 7. Include all other property held by the taxpayer not included in
the definition of ordinary assets.
Other percentage 8. OPT
tax
Principal Residence 9. The family home of the individual taxpayer.
Creditable 10. CWT
withholding tax

Tax Rates. Indicate the correct rate before each number. (1 point each)
25% 1. The income tax rate for nonresident alien not engaged in trade or business
based on gross income.
5% 2. Creditable withholding tax rate for rent income.
8% 3. Optional gross income tax rate for individuals.
12% 4. Value Added Tax.
6% 5. Capital gains tax on sale of real properties.
Problem Solving. Please refer to your book – Multiple Choice Questions (pp. 135-
145). Please do not refer to other pages of your book other than the MCQ part. The
answer is provided on the space prior to the item number. You are to provide the
solution in good form on the space provided. (5 points each)
700,000 2. Gross income, Philippines P800,000
Gross income, USA 600,000
Expenses, Philippines (400,000)
Expenses, USA (300,000)
Taxable Income P700,000

34,250 19. Amount Rate

Proceeds from copyright royalty (11,250/90%) 12,000 10% P1,250
Proceeds from mineral claim royalty
(12,000/80%) 15,000 20% 3,000
Share from trading partnership 300,000 10% 30,000
Total Final tax P34,250

64,000 21. Interest on bank deposit under FCDU

((212,500/85%)-212500) P37,500
Royalty in Books
((94,500/90%)-94,500) 10,500
Dividend Income from a domestic corporation
((144,000/90%)-144,000) 16,000
Total FWT on passive income P64,000
46,500 22. Interest on bank deposit under FCDU
(212,500/85%) x 15% (exempt)
Royalty in Books
(94,500/90%) x 10% P10,500
Dividend Income from a domestic corporation
(144,000/80%) x 20% 36,000
Total FWT on passive income P 46,500

90,000 28. P 4,000,0000 – 2,500,000 = P 1,500,000

Taxable Amount = 1,500,000/4,000,000 = 3/8
3/8 x 4,000,000 x 6% = P90,000

57,500 29. Gross sale P 1,650,000

Cost of sale (500,000)
Business Expense (425,000)
Rent income (308,750/95%) 325,000
Taxable Income P 1,050,000
 First 800,000 P 130,000
Excess (1,505,000 – 800,000x30%) 75,000
Income tax due 205,000
CWT (65,000)
Quarterly payment (82,500)
Income tax payment P 57,500
(9,500) 30. Income tax due
(1,650,000+325,000*8%)-250,000 P138,000
CWT (65,000)
Income tax payed quarterly (82,000)
Total income tax due P(9,500)

90,500 31. Gross sales P 1,650,000

Rental income (P308,750/95%) 325,000
Taxable Gross sale P 1,975,000
Tax rate 8%
Tax due: P158,000
CWT (65,000)
Quarterly tax payments (82,500)
Basic Tax on Compensation income
P30,000 + (P200,000 x 25%) 80,000
Income Tax Payable P 90,500

415,000 32. Prof Income P600,000

Rental income 50,000
Wagering Gains 50,000
Kickbacks received from suppliers of clients 40,000
Prof expense (325,000)
Taxable Income P415,000

11,500 33. Interest income – BDO-Marikina (P20,000 x 20%) P4,000

Interest income FDCU - BDO-Mandaluyong
(P50,000 x 15%) 7,500
Total final tax on passive income P11,500
322,500 34. Capital Gains Tax on Sale of Residential House
(5,000,000x6%) P 300,000
Capital Gains Tax on Sale of Share of Stocks
(150,000x15%) 22,500
Total Capital Gains Tax Due P 322,500

4,200,00 35. Gross Sales, Philippines P5,000,000

0 Sales return and allowances, Philippines (500,000)
Cost of sales, Philippines (1,500,000)
Gross Sales, Ukraine 3,000,000
Sales return and allowances, Ukraine (200,000)
Cost of sales, Ukraine (800,000)
Business Expenses, Philippines (500,000)
Business Expense, Ukraine (300,000)
Taxable Net income P4,200,000