Individual Taxpayer

1. Which of the following income is subject to final tax if

received by an individual taxpayer?
I. Share of a partner in the net income of a business
partnership.
II. Cash dividend received by a stockholder from a domestic
corporation.
III. Winning in lotto
IV. Raffle prizes amounting to P6,000
a. I and II
b. III and IV
c. I, II, and IV
d. I,II,III and IV

2. Elvis and Madonna, husband and wife, have the following data in
2011:

Elvis Madonna

125,000.0 60,000.0
Compensation income P 0 P 0
Rent income (net of 5%
WT) 76,000.00

70,000.0
Royalties on books 0

Dependent children 6
Withholding tax on
compensation 10,000.00 4,000.00

During the year, the spouses had an income of P120,000 and

expenses of P65,000 which cannot be identified as solely earned by
the wife or the husband,
The final income tax on the passive income is
a. P14,000
b. P7,000
c. None
d. 0

P 70,000.0
Royalties 0
Rate of tax 10%
Final
Withholding
Tax 7,000.00
 3. Rewards given to persons instrumental in the discovery of
violations of the National Internal Revenue Code are subject to
a. Final tax of 10% on rewards collected
b. Final tax of 10% of P1,000,000
c. Final tax on 10% of rewards collected or P1,000,000 whichever is
higher
d. Final tax on 10% of rewards collected or P1,000,000, whichever
is lower

4. Which of the following statements is incorrect on winnings of a

resident citizen?
a. Lotto winnings in the United States of a Filipino residing in
the Philippines is taxable in the Philippines.
b. Lotto winnings sponsored by the Philippine Charity
Sweepstakes Office is not taxable to a resident citizen.
c. Winnings of a brand new car in a raffle draw sponsored by a
shopping mall is taxable.
d. Winnings in a raffle draw sponsored by a cigarette company is
subject to tax based on the schedule of rates in the tax
liable if the amount involved does not exceed P10,000.
5. Carandang is indebted to Dacuycuy. Due to his inability to pay
the debt, he was asked to clean the piggery of the latter for
three months. Thereafter, Dacuycuy gave him P5,000 cash and
condoned the debt amounting to P10,000.
How much income should be declared by Carandang?
a. P 5,000
b. P 10,000
c. P 15,000
d. P 0

Cash Payment P 5,000.00

Amount of debt, condoned 10,000.00

Gross income 15,000.00

Condonation of debt by the creditor after requiring the debtor to

render services to him ia a taxable income to the debtor.
6. Boy, a resident citizen, received the following interest income:
 P80,000 from short-term Peso time deposit
 P16,000 from a five-year bonds issued by a commercial bank
 P24,000 from 5/6 lending to market vendor
How much final tax must have been withheld from Boy’s interest income?
a. P 0
b. P 16,000
c. P 20,000
d. P 24,000

7. Yvonne, a non-resident alien not engaged in trade or business,

made a $5,000,000 deposit to FCDU Bank. The deposit pays 8%
annual interest. Compute Yvonne’s final tax in the first year.
a. $ 0
b. $60,000
c. $12,000
d. $ 16,000
8. Mr. Siegfried, a resident citizen, received P100,000 dividend
income from Vodka, Inc., a domestic corporation. How much final
tax must have been withheld by Vodka, Inc.?
a. P 0
b. P11,111
c. P 20,000
d. P 25,000
9. Mr Bayugan published his book abroad for the international
market. During the first quarter, he earned a gross royalty of
P1,000,000. How much final tax will be withheld by the foreign
publisher?
a. P250,000
b. P200,000
c. P100,000
d. P0

10. Mr. Tuao won an P800,000 prize in a national dancing

competition. The organizer of the event declared that the
P800,000 grand prize was “tax free”. How much final tax must be
remitted by the organizer to the BIR?
a. P200,000
b. P160,000
c. P88,889
d. P0
11. Who is a resident citizen?
a. A citizen who went on tour abroad
b. A citizen of the Philippines who established to the
satisfaction of the CIR the fact of his physical presence
abroad with a definite intention to reside therein.
c. A citizen of the Philippines who leaves the Philippines
during the taxable year to reside abroad
d. A citizen of the Philippines who works and derives income
abroad and whose employment requires him to be physically
present abroad most of the time during the year.
12. A non-resident alien is considered engaged in trade or
business in the Philippines if he stayed therein for
 a. At least 183 days
b. At least 180 days
c. More than 183 days
d. More than 180 days
13. How long does a citizen have to stay abroad before being
classified as a non-resident?
a. At least 183 days
b. At least 180 days
c. More than 183 days
d. More than 180 days
14. How long shall an alien have to stay in the Philippines
before being classified as a resident alien?
a. At least 183 days
b. More than 183 days
c. At least 1 year
d. More than 1 year
15. Which of the following is subject to final tax?
th
a. 13 month pay and other benefits
b. Supplemental compensation
c. Fringe benefits
d. Regular compensation income
16. A non-resident alien, not engaged in trade or business is
not subject to
a. Final tax
b. Capital gains tax
c. Regular tax
d. None of these
17. Jerson, married 15 dependents, had the following income
within and outside the Philippines:

Philippines Abroad
Compensation 280,000
income P .00 0
50,000. 100,000
Rent income 00 .00
32,000. 25,000.
Royalties- books 00 00
9,000.
Domestic dividends 00 0
40,000
Foreign dividends 0 .00

Compute his taxable income assuming she is a resident citizen.

a. P330,000
b. P371,000
c. P495,000
d. P536,000
 18. Compute his taxable income assuming she is a resident
alien.
a. P330,000
b. P371,000
c. P495,000
d. P536,000

19. The following relate to the net income of the firm of Mr.
Aguin O. Odit:

Professional fees P 600,000.00

Long-term capital
gain 80,000.00
Short-term
capital gain 45,000.00

Ordinary gain 20,000.00

Long-term capital -
loss 90,000.00
Short-term -
capital loss 30,000.00
-
Ordinary loss 40,000.00
Other business -
expenses 200,000.00

Net Income P 385,000.00

Compute his taxable income
a. P385,000
b. P390,000
c. P410,000
d. P435,000

20. Nicanor earned the following incomes (gross amounts) in

2020: (Assume source is Phils unless stated)
• Dividends from ABC Corp. a domestic corp – Php 100,000
• Dividends from XYZ Corp. a foreign corp (dominant income is
abroad) – Php 100,000
• Royalty from books – Php 100,000
• Royalty from other brands – Php 100,000
• Royalty received from abroad – Php 100,000
• Prizes from raffle – Php 10,000
• Prize from a TV show – Php 1,000,000
• Lotto winnings – Php 10,000
• Lotto winnings – Php 10,000,000

Compute the total passive income in the Philippines subject to

final tax.
a. Php 11,320,000
b. Php 11,310,000
c. Php 11,300,000
d. Php 11,520,000

21. Compute the total passive income exempt from taxation

a. Php 0
b. Php 10,000
c. Php 20,000
d. Php 30,000
22. Compute the total final tax.
a. Php 2,150,000
b. Php 2,270,000
c. Php 2,250,000
d. Php 2,252,000
23. Nicanor earned the following incomes (gross amounts) in
2020: (Assume source is Philippines unless stated)
From Business:
Gross sales – Php 1,000,000
Cost of sales – Php 200,000
Allowable deduction – Php 300,000
Other income: Rental – Php 100,000
Interest income – Php 100,000

Compensation:
 Gross compensation income – Php 120,000
Non-taxable compensation income – Php 20,000
Passive Income: Dividends from ABC Corp. – Php 100,000
Cash Prizes – Php 10,000

Capital gains:
Sale of real property classified as capital asset:
− Selling price – Php 5 Million
− Zonal value – Php 10 Million
− Assessed value – Php 4 Million
− Appraiser’s value – Php 20 Million

Sale of shares of stocks not listed in stock exchange:

− Selling price – Php 2,000,000
− Acquisition Cost – Php 1,000,000
− Fair market value of stocks – Php 3,000,000

Compute the total capital gains tax.

a. Php 900,000
b. Php 750,000
c. Php 1,350,000
d. Php 1,500,000
24. Partial taxation under the 6% capital gains tax will result
when
a. The proceeds from the sale of the old property exceeds both
its cost and the acquisition price of the new property.
b. The proceeds from the sale exceeds its zonal value and
Assessor’s fair value.
c. The proceeds of the old property exceeds the acquisition
price of the new property regardless of the tax basis, zonal
value, and Assessor’s fair value of the old property.
d. The zonal value is greater than the sales proceeds of the old
property.

24. The documentary stamp tax on the sale of domestic stocks

directly to a buyer is based on
a. Selling price
b. Par value
c. Fair Value
d. Cost
25. Mr. Dionisio sold domestic stocks directly to a buyer at a
mark-up on cost of P200,000. He paid P5,000 broker’s commission
and P8,000 documentary stamp tax on the sale. Compute the
capital gains tax.
a. P28,050
b. P14,500
c. P14,200
d. P13,700
 26. Mr. Antonio disposed his principal residence for P2,000,000
and immediately acquired a new one for P1,800,000. The old
residence cost Mr. Antonio P1,000,000 and had a fair market
value of P2,500,000 on the date of sale.

Compute the capital gains tax to be deposited in escrow.

a. P0
b. P60,000
c. P120,000
d. P150,000
27. Manny, a resident Filipino citizen, sold his principal
residence (house and lot) at its original purchase price of
P11,000,000. The property had a P13,000,000 fair value at that
time.

If the proceeds of the sale were not invested in the new

principal residence but instead, new funds of P15,000,000 were
used to construct it, the capital gains tax is

a. P0
b. P660,000
c. P750,000
d. P780,000

28. Which is an ordinary asset

a. Home appliances
b. Personal car
c. Personal cellphone
d. Office supplies
29. Statement 1: The gain on sale of domestic stocks directly
to a buyer is presumed.
Statement 2: The gain on sale of real properties is presumed.

Which of the following is correct?

a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true

30. Which is not subject to the 6% capital gains tax?

a. Donation of property
b. Foreclosure of a mortgaged property
c. Expropriation of one’s property in favor of the government
d. Sale of property for an insufficient consideration