InTax Quiz 9

1. Ethan Winters took a life insurance policy of P5 million where the monthly premium is P10, 000. The proceeds
will be paid to Ethan after 25 years to the Ethan’s estate should X die before completing the equivalent of 25 years
payment. If the Ethan outlived the policy, which of the following is correct?
a. The proceeds will be part of X’s gross estate.
b. The proceeds will be part of X’s taxable income.
c. The proceeds will be party taxable estate and partly exempt.
d. The proceeds will be party taxable income and partly exempt.

2. Shares of stock in a domestic corporation held as investment when sold not through the local stock exchange
shall be subject to:
a. 3% OPT or 12% VAT based on gross income
b. ½ of 1% based on gross selling price or gross value in money.
c. 5% on first P100, 000 capital gain; 10% on excess of P100, 000.
d. 4%;2%;1% based on gross selling price or gross value in money.

3. The deduction allowed for the payment of premium on hospitalization insurance during the taxable year by a
resident citizen amounting to P3, 000 for the months of August to December is:
a. P 3,000
b. P2, 400
c. P1, 200
d. P1, 000
200 x 5 months = 1,000

4. Paquito filed her income tax from return for 2015 on May 16, 2016 and paid the tax of P50,000. Upon audit
by the BIR an assessment notice was issued on April 30, 2019, requiring Paquito to pay a deficiency tax of P
75,000 not later than July 30, 2019. Paquito will:
a. False prescription as defense
b. Request for an extension of time to pay the deficiency income tax.
c. Go to the court of tax appeals to appeal the assessment made by the BIR.
d. Ignore the assessment as the date of collection is already way beyond three years, covering taxable year 2015.

8. Proceeds of life insurance to the extent of the amount receivable by the estate of the deceased, his executor or
administrator under policies taken out by the dependent upon his own life shall be
I. Part of the gross estate irrespective of whether or not the insured retained the power of revocation.
II. Not part of the gross estate if the beneficiary is irrevocable.
III. Part of the gross income if the designation of the beneficiary is revocable.
IV. Not part of the gross income irrespective of whether or not the insured retained the power of revocation.
a. I and II
b. I and III
c. I and IV
d. only I