Tax on Individuals QUIZ

INSTRUCTIONS:
 Cheating is strictly prohibited. If cheating is confirmed, the student(s) involved will automatically FAIL in this exam.
 Show your solutions. No solution, no credit.
 This exam is good for 1.5 hours.

Problem 1

A married taxpayer with two (2) qualified dependent children provided the following data for the taxable year:

Gross compensation income 750,000

Fixed allowances regularly received 100,000

Assume the taxable year is 2018, determine the income tax due if the taxpayer is:
a) The taxpayer is an alien employed by ROHQ holding managerial and technical position.
b) The taxpayer is a Filipino citizen employed by ROHQ holding managerial and technical position.
c) The taxpayer is a Filipino citizen employed by an Offshore Banking Unit holding managerial and technical
position.
d) The taxpayer is a Filipino citizen employed by a Petroleum Contractor holding managerial and technical
position.

Problem 2

A practicing professional, single, with his parents living and dependent upon him, revealed the following data for
2018 taxable year:

Income from
Philippines Abroad
Income from employment 180,000 280,000
Business income 850,000 960,000
Deductible business expenses 610,000 730,000
Interest income on personal loans 6,000 3,000
Interest income on bank deposits 10,800 4,200
Interest income on money market placements 7,500 1,600
Dividend income from foreign corporation 5,700 -
Dividend income from foreign corporation 6,800 2,000
Royalty income 90,000 50,000
Winnings/prizes from lotteries, raffle draws 45,000 16,900
Prizes from singing contest 5,600 -
Lotto winnings 150,000 50,000
Royalty income from sale of books 68,000 -

ADDITIONAL DATA:

 In February, the taxpayer bought a lot deemed as capital asset. The acquisition cost was P840,000. He later
sold the lot the lot in December for P1,060,000.
 In September, the taxpayer sold his 560 shares of stock of Ayala Investment Corporation held by him as
capital asset, thru a local stock exchange. The cost was P36,900 whereas the sales price was P154,000.
 In October, the taxpayer sold for P820,000 his house and lot located in Makati, held as capital asset (not his
principal residence). The fair market value on the date of sale was P950,000 and the acquisition cost was
P475,000.

REQUIRED:
1. Determine the following assuming the taxpayer is a resident citizen:
A. Taxable net income
B. Income tax payable
C. Final tax on passive income
D. Capital gains tax

2. Determine the following assuming the taxpayer is a non-resident citizen:

Tax on Individuals QUIZ

A. Taxable net income

B. Income tax payable
C. Final tax on passive income
D. Capital gains tax

3. Determine the following assuming the taxpayer is a NRA-ETB:

A. Taxable net income
B. Income tax payable
C. Final tax on passive income
D. Capital gains tax

Problem 2

JM, single, had the following data for 2018 taxable year:

Gross business income, Philippines P1,000,000

Gross business income, USA 500,000
Business expenses, Philippines 700,000
Business expenses, USA 430,000
Compensation income, Philippines 600,000
Dividend income from a domestic corporation 50,000
Dividend income from a foreign corporation 40,000
Interest income from peso bank deposit-Philippines 20,000
Interest income from bank deposits abroad 30,000
Interest income from FCDS deposits 40,000
Royalty income from composition 25,000
Raffle draw winnings 10,000
PCSO winnings 200,000
Creditable withholding taxes on business income 125,000

REQUIRED:

1. Determine the following assuming the taxpayer is a resident citizen:

a) Taxable net income
b) Income tax payable
c) Total final taxes on passive income
d) Total income tax expense

2. Determine the following assuming the taxpayer is a non-resident citizen:

a) Taxable net income
b) Income tax payable
c) Total final taxes on passive income
d) Total income tax expense

3. Determine the following assuming the taxpayer is a resident alien:

a) Taxable net income
b) Income tax payable
c) Total final taxes on passive income
d) Total income tax expense

4. Determine the following assuming the taxpayer is a non-resident alien engaged in trade or business:
a) Taxable net income
b) Income tax payable
c) Total final taxes on passive income
d) Total income tax expense

Problem 3
Tax on Individuals QUIZ

Instruction: Determine the Income tax due/payable

1. Papa P is a resident citizen, earning purely compensation income as follows for 2018 taxable year:
A. P200,000
B. P250,000
C. 800,000
D. 2,800,000

2. Papa P is a resident citizen, earning purely business income for 2018 taxable year:

Gross sales P2,800,000

Cost of Sales 1,200,000
Operating expenses 650,000
Rental income (net of CWT) 380,000
Other creditable withholding taxes 80,000

3. Use the same data in #2 but assume that Papa P opted to be taxed using 8% income tax rate.

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