—— TAXATION Tiaved’ Bacolod Cir {cas Andnoig See (Visayas) Bacolod City (034) 4346214 = Cebu City (0 8 Hana (049) 5453807 2) 253790 joc. 218, (Mindanao) Cagayan De Oro City (088) 3093073 * Davao City (082) 2250049 CPA REVIEW J. REYES SS Since 1977 TAX-Income tax 03 OCTOBER 2016 LECTURE NOTES CAPITAL GAINS TAXATION The assets of the business are classified as 1. Ordinary assets ~ includes: 2 Stock in trade of the taxpayer, or othei Property of a kind which would properly Se Included in an iaventory of the taxpayer If on hand at the end of the taxable year Properties held by the taxpayer primarily for sale to customers in the ordinary course of trade or business; ©. properties used in trade or business of a Character which is subject to allowance for depreciation; andi . real properties used in trade or business Examples: inventories, property, plant and equipment 2. Capital assets ~ any other assets that does not fall under the definition of ordinary assets Examples: investment properties, notes receivables and investment in equity or debt securities (for a ‘non-security dealer taxpayer) ITAL GAINS TAX A. Capital gains tax on sale, barter, exchange and other disposition of domestic shares of stock directly to buyer Requisites: 2. There must be a net gain. b. The capital asset sold is 2 domes stock(ordinary or preferred) The sale is made directly to ouyer(not thru local stock exchange) 4d. The seller must be @ non-dealer Capital Gains Tax Rates: _ First 100,000 of the net gain 5% Excess of the net gain ever P100,000 10% When to file the Capital Gains Tax Returns? 1. Per transaction basis: Within 30 days after each transaction (BIR Form 170; 2. Annual basis: (BIR Form 1707-8 2. For individuals ~ On oF before April 15 of the following year b. For corporations - On or before the 15! day of the fourth month following the close. of the taxable year When to pay the capital gains tax? 1. Lump sum ~ Upon date of fling zhe retucn with the Bureau (within 30 days from date of sale) 2. Installment ~ tax on installments is due within 30 days from receipts of each installments Documentary Stamp Tax + Par value stock: P0.75/P200 or fractional part of the par value of due bill, certificate of obligation or stock + No-par stock: 25% of the documentary stamp tax paid on the original issue of said stock. (The documentary stock on original issue of non-par stock is based on actual consideration for the issuance ~ Sec. 174 NIRC) Page 1 of6 + Limit: Only one tax shall be collected on each sale or transfer of stock or securities from one Person to another regardless of whether or not 2 Certificate of stock Is issued or obligation is Issued, indorsed, or delivered in pursuance of such sole or transfer + Deadline: Documentary stamp tax return shall be filed within 10 days after the close of the month when the taxable document was made, Ned, Issued, accepted or transferred, and the tax thereon shail be paid at the same time the return is paid 8. Sale, exchange or other disposition of real property in the Philippines classified as capital asset(BIR Form 1706) Requisites: 2. The real property is located in the Philippines. b. The property is classified as capital asset. c. The taxpayer is an individual or a domestic corporation . The. taxpayer corporation is other than a foreign Tax Rate and Tax Basis: 6% x (the higher of Gross Selling Price or Fair Market Value) Note: For RFC and NRFC, 6% CGT does not apply. The gain wil be treated as capital gain subject to Regular Alternative Taxation: ‘The actual net gain on the sale of real property may be Included under regular income taxation. Requisites: a, the seller is an individual b. the buyer is the government, its political Subdivisions or agencies or GOCCS Tax Exemption: The sale may be exempted from the payment of capital (gains tax provided the following conditions are met: 3. The seller is am individual citizen or resident alten. 2. The real property sold is his principal residence, 3. The full proceed of the sale is utlized in acquiring another principal residence, 4. A new residence must be acquired or constructed within 18 calendar months from the date of sale. 5. The BIR is duly notified by the taxpayer of his intention to avail of the tax exemption within 20 days from the date of sale through a prescribed return 6. The capital gains tax thereon is held in escrow in favor of the government, 7. ‘The exemption can only be availed once every 10 years. 8, The historical cost or adjusted basis of the real property (principal residence) sold shall be carried aver to the lew principal residence built or acquired Documentary Stamp Tax + Amount: P15 ~ if selling price after allowance for ‘encumbrances does not exceed P1,00045 ~ for each P1,000 or fractional excess above ‘PSE at & gain of P200,000 1,000 of such selling price 2 POGI, 2 security dealer, sold domeste + Deadline: Documentary stamp tax return shail be stocks through the PSE at 2 gain of filed and the tax thereon paid within 5 days after the 200,000 Ry close of the month when the taxable document was [3 Poc!, a searity dealer, sole domestic made, signed, issued, accepted or transferred. ‘stocks directly to a buyer at @ gain of |___P200,000 PROBLEM 1 POG! a realty Gealer, sold domestic { Realty ‘Security | Merchandiser | ‘common stock to JONAS, Inc. at a gain Develover | Dealer cm ‘oF P200,000, Vacant lot ‘Ordinary | Capital | Capital Asset | 5. POGI, Inc. sold domestic stocks though + | Asset Asset _| the PSE at a gain of 200,000 — Office supplies | Capital | Capieat ia} Ordinary & POG, Inc. issued ts shares of Stock ab asset | asset | Asset | |=" 200/000 in excess of ts par value, | sy Domestic Capital | Ordinary | Capital Asse 7 POGI, Inc. exchanged the shares of | stocks Asset__| Asset JONAS, Inc. It aequire for P1,000,000 Bonds Capital | Ordinary | Capital Asset |__ for a it valued at 1,200,000, oe Asset___| asset POGT sold his investment in domestic ‘RosDunES/ROeES | Capital | Capital | Capital Asset stocks to the issuing Company, POGI, receivables | Asset__| asset Ine. The transactions realized a gain of | Office building | Orainary | Ordinary | Ordinary 200,000. Je 00¢ asset___[Asset_ | asset__| 5. POGT sold domestie bonds dredtiy ty ] ‘Office ‘Ordinary | Ordinary | Ordinary buyer at a gain of P200,000 | | equipments _| Asset _| Asset | Asset 70. POG! sold his interest in @ partnership | Land where | Ordinary | Ordinary } Ordinary for 400,000. His interest had a tax the: office | Asset ‘Asset Asset basis of P300,000 at the date of sale. |! 10 building stands | | Ti, POGI, Inc. acquired JONAS stock rights | Personal car of | Capital | Capital | Capital Asset for '>200,000, POGI subsequently | the business | Asset | Asset | lsposes this rights for P400,000, 1 00> _| proprietor | 72, POGI purchased a stock option from taxpayer JONAS, Inc. Subsequentiy, POGI sold Personal house | Capital | Capital | Capital Asset ihis options ata gain of P150,000, and fot of the | Asset | Asset | 73, POGI purchased domestic common proprietor- | | stock for P100,000 and sold the same ae | for P160,000" ar the date Of sale the Jewelry of the | Capital | Capital | Capital Asset] stock figs @ fair market value of | proprietor- | Asset Asset | |__pai9,0¢ f000, taxpayer [¥4POGr purchased ordinary shares for| | 200,000 from JONAS, Ine., 2 resident | PROBLEM 2 corporation operating inthe | A. Transactional Capital Gains Tax Philippines. After 2 years, it sold the| © For each of the following scenarios, compute the same directly to buyer for P300,000 capital gains tax: when the fair market value ‘was | 7 car {__©280,000. | (H-FOGT seid domestic stocks through te) 7 | 5. Annualized Capital Gains Tax POGL resifent an, taxpayer made the folowing Sspostions of shares of stock durin 2016 Capital Date ‘Security ‘Selling | Cost Mode of settlement | Gains Tax price TBA | Domestic common | 400,500 | PI20,000 | Diredtly to buyer S , : Pag [Pezac0e | a, eo | 2eomyyo 2/12/16 | Domestic bonds 200,600 | 780,000 | Dreatiy t buyer _ | 3/14/16 | Domesti preferred | 300,000 ‘250,000 | Through PSE stocks «0 [73278 —| Resident corp. soa. “126,000 Bireetly w buyer 1 [6/48/16 | Domestic stock options 120,000 | Directly to buyer 7 ae 000 ¥e/ © [8/15/16 Resiaent corp. bonds 240,000 | Directly to buyer 9/2/18 [Domestic comman 320,000 Through PSE stocks 9724716 | Domestic preferred | 280,000 | 300,000 | Directly to buyer oo ba ones less of 20 co) [AOPBIS | Domestic stock rights “| 100,000 | 120,000 | Direatiy to buyer | TI toss oF eT 12/11/16 | Domestic preferred | 400,000 380,000 | Directly to buyer A XA stocks | ‘Resume all capital Gains or losSAs are long-term and that the taxpayer has other regular Income of P300,000. ‘Ie 801 Required: Compute the following 20 4. Capital gains tax payable at year-end _ whe 2. Total percentage tax paid Tay (201) 3. Total regular income of the taxpayer is (2et) “hr Page 2 of 6 TAX.EXCEL PROFESSIONAL SERVICES, INC. C. Special Cases Assessed value 5,000,000 1, POGI exchanged his Jonas, Inc. shares which he Appraised value 7,000,000 previously acquired at P200,060 for the shares, Cost 4,000,000 of Reyes, Inc. valued at P300,000 in pursuant to 2 merger agreement between Jonas, Inc. and For each of the following independent, indicate Reyes, Inc. Compute the capital gains. tax. the capital gains tax —— ~ POGI sold his principal residence 2. On July 1, 2036, POGT sold his domestic stocks | fer 8,000,000. He immediately with aggregate’ par value of P250,000 and repurchased @ new residence for | 8,400,000. Lo. acquisition cost of 300,000 to Jeni for POGI sold his principal residence 500,000. Jeni made a downpayment of 50,000 and signed a note for the balance for 5,000,000. He immediately payable in 9 semi-annual installments starting repurchased @ new residence for December 31, 2016. 4,000,000. Bevo 3. POG! sold fis principal residence Required: for 5,000,000. He. immediately | 1. Compute the 2016 capital gains tax repurchased @ new residential lot | 30 for P4,000,000. 340600 2. Compute the documentary stamp tax on the 4 POG sold one of fis residential me ae property for 8,000,000. He immediately repurchased a new PROBLEM 3 |_ residence for P8,400,000 fe 000 5. POG! sold his residence lot Tor ‘A. 6% Capital Gains Tax 3,000,000. He immediately | eae areas Cot] repurchased @ new residence for 1. POGI, Inc. disposed a vacant lot } 8,400,000. $0 G00 costing 2,000,000 at 2 gain of 6 POGI Corp. Sold @ vacant lot Tor 1,000,000. The lot has a fair value of | P8,000,000. within 18 months, it 2,500,000 at the date of disposal, | IN 00: used the proceeds to. purchase 2 POGI, Inc. disposed its old office "| residential houses for its directors | building with a carrying amount of -__and officers. 12000 2,000,000 st ‘@ gain of 2,000,000, POGI's house and Tot was one oF The lot has a fair value of P2,500,000 | the several properties to be at the date of disposal. expropriated by the government to [3 PoGI, inc, resident foreign | build on an airport. The | | corporation, disposed its headquarter government paid" POGI | with carrying amount of 2,000,000 at P6,000,000. POGI leases _ his a gain. of. Pt,000,000,. The residence since then. POGT opted to be subjected to capital gains tax. uo 000. POGTs house and Tot was headquarter has a’ fair value of 4,000,000 at the date of disposal, [Post ‘sold his old residence for 4,000,000 to finance his business. foreclosed after his failure to pay His old residence has an appraisal | the 4,000,000 morgage on the | value of 5,000,000, assessed vaiue Property. The bank paid him 7 |___3f £000,600" and” zone vaive ot | 1,000,000 after the auction sale, | %0 ol P4,5i a0 4,500,000. _|* POGI sold his house and lot with fair value of 5. POGI, @ dealer of personal property, | 2,500,000 for P3,000,000 on July 1, 2016. The sold vacant lot in LIPA City at 2 gain house and lot, whic: was subject to 2,000,000 fof 400,000. The lot cost him mortgage was acquired for P1,500,000 in 2011. 600,000 and has an assessed value The buyer assumed the mocigage on the ‘and onal value of P800,000 and | 1,200,000, respectively. property and signed a note payable for the balance payable in 5 semi-annual installments. &. POG! wishes to expand business. He | Required: Compute the folowing: sold his warehouse consisting of a lot 1. Intl payment - ‘and building for PS,000,000. The lot 2. Contract price ean 2D ‘and building has assessed value of | 3. Capital gains tax in 2016 “ay > | 4,000,000" and “zonal value of 4,500,000. RAT PROBLEM 4 POGI sold one of Fis house and lot In ] POGI sold his residential house under the USA at a gain of 2,000,000. This | following terms: Property has an appraised value of 5,000,000 and were acquired at Cash received, January 10, 2016 P 100,000 3,000,000, pat Amount received, June 10, 2016 400,000 %. POGI Realty Corporation sold an Installment due, June 10, 2017 600,000 undeveloped lot in Batangas. The lot ‘Additional Information: cost P2,000,000 and were sold at its | 4. Cost of the land P 150,000 current fair value of P3,000,000. x Mortgage assumed by the buyer 200,000 aitent fet value of F2,000,000,_t__] Mortgage on the land executed by EXEMPTION the buyer in 600,000 Information for the property disposed of: favor of the seller to guarantee Zonal value P 6,000,000 Deyroent,Require Compute the following: 1. Seling price 1 3. 750,000 «. 850,000 ®. P-800,000 44,000,000 2. Contract price “a, P 750,000 oP 850,000 B. P 800,000 6. P4,000,000 3._ Initial payments a. P 100,000 250,000 b. P 200,000 4. P 150,000 4. Capital gains tax in 2016 goa i500 c.P22,333 by 17,647 4. P 66,000 5. Documentary stamp tax a. 12,000 ¢. 714,325 B. P12,750 315,000 MULTIPLE CHOICES 1. When is the capital gains tax retum filed by 3 natural or juridical person, resident or nonresident, who Is not exempt under existing laws for the sale, barter, exchange or other onerous disposition intended to transfer ownership of shares of stocks in domestic corporation classified as capital assets, not traded through the local stock exchange? Eewithin 30 days after each sale, barter, exchange or ‘other disposition of shares of stock not traded through the LSE U-In case of installment sale, the return shal be flled within 30 days following the receipt of the first down payment and within 30 days following each subsequent installment payment and If are correct ’b. Both I and Il are incorrect, Only Tis correct G. Only Ils correct, 2. When is the filing of BIR Form 1707-A? 2. Within 30 days after the end of the taxable year 2 Bp-On or before the 15% day of the 4* month following the close of the taxable year c. On or before the 15% day of the 3% month following the close of the taxable year d. Within 15 days after the end of the taxable year 3. In the case of cash sale of shares of stock not traded 5E, the selling price shall be the: Total consideration per deed of sale b. Sunt of money and the fair market vatue of the property received cc. Fair market value of the property received d._None of the above 4, In case the fair market value of the shares of stock sold, bartered, or exchanged is greater than the ‘amount of money and/or fair market value of the property received, the excess of the fair market value of the shares of stock sold, bartered or exchanged over the amount of money and the fair market value of the property, if any, received as _pseeraton sna be deemed Gift Subject to donor's tax . Taxable income ¢, Dividend distribution d. Capital gain 5. In the case of shares of stock not listed and traded = in the LSE, what shall be considered as the fair market valiie? ‘Page 4 of 6 a. The closing price on the day when the shares are sold, transferred, or exchanged 'b. The book value of the shares of stock as shown in the financial statements duly certified by an Independent certified public accountant nearest to the date of sale c. The acquisition cost of the shares sot, transferred or exchanged he selling price or the bid price nearest to the ‘ate of sale as published In any newspaper or publication of general circulation, whichever is higher 6, The cost basis for determining the capital gains or losses for shares of stock acquired through purchase shall be governed by which of the following rules? a. If the shares of stock can be identified, then the cost of acquisition, such as commissions, documentary stamp taxes, transfer fees, etc. b. If the shares of stock cannot be properly Identified, then the cost to be assigned shall be ‘computed on the basis of the FIFO Method c._If books of accounts are maintained by the seller where every transaction of 2 particular stock is yecorded, then the moving average shall be ropes rather than FIFO @. Allof the above “Ten shares of stock In POGI Company were acquired at @ total cost of P2,000 or at P200/share. POGI Company declared and issued 30 shares of stock as stock dividend. How much is the cost basis for each shase after the stock divi ? a. 200 %, PSO b. P100 4. P150 8, First Statement: If the property was acquired by Inheritance, devise or bequest, the basis shall be the 4. FMV of such property at the time of death of the decedent, Second Statement: If the property was acquired by ‘gift, the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, except that if such basis is greater than the FMV at the time of gift, then for the purpose of determining the gain/loss, thpasis shall be such FMV. Both staternents are correct . Both statements are incorrect c. Only the first statement is correct d._ Only the second statement is incorrect 9. Assume that Mr. Lucas bought shares of stock in 1960 at a cost of P200,000. He donated these shares to Atty. Villegas on January 2, 1970, during which time, the sald shares has a fair market value ‘of 2,000,000 and on the basis of such fair market value, Mr, Torres paid the corresponding donor's tax, Atty. Villegas sold the shares of stock on January 3, 1976 for 2 consideration of P4,000,000. How much is the capital gain/loss from sale of shares of stock? a. P1,800,000 2,800,000 b-3/800,000 apo 40. Assume that Mr, Capuno sokd to Mr. Escala, shares fof stock for @ consideration of P2,000,000. At the = time of the sale, its FMV is P6,000,000. Mr. Escala later on sells thé shares for P3,000,000. How much is the capital gain(loss)? 1,000,000 b. 4,000,000 c. P3,000,000 d. (3,000,000) TAX.ome es 11. The documentary stamp tax on all sales, or ‘agreement to sell, or memoranda of sales, or 1 deliveries, or transfer of due-bills, certificates of obligation, or shares of stock is based on: a. Purchase price FMV BL book value Bepar value 42, Which of the following is not subject to the 6% CGT? fr & Gains presumed to have been realized from the sale, exchange or other disposition of real Property located in the Philippines, classified as capital asset b. Pacto de retro sale of real property by Individuals, including estates and trusts &. Other forms of conditional sale of real property, by Individuals, including estates and trusts d-Pacto de retro sale of real property by RFC and NRFC 13. If there is no full utilization of the proceeds of sale. Cr disposition, the portion of the gain presumed to have been realized from the sale or disposition shall tar a. Exempt from CGT DeTBudject to 6%CGT 14, Filing of BIR Form 1706 Is no longer required when = the real property transaction Involves which of the following? a. The real property is not located in the Philippines b. The disposition of the real property is gratuitous . The disposition of real property is pursuant to ‘Comprehensive Agrarian Reform ‘All of the above «, subject to 10%CGT d. subject to 5% CGT 15. The documentary stamp tax on deeds of sale of real property is based on 2. Actual consideration b. Consideration contracted to be paid for real ey, Consideration contracted to be paid for real property or FMV, whichever is higher 4. Cash price equivalent 16.When one of the contracting parties Is the Government of the Philippines, the DST imposed * shall be based on the: 27 Actual consideration . Consideration contracted to be paid for real property c. Consideration contracted to be paid for real Property or FMV, whichever Is higher 4. Cash price equivatent 17. corporate taxpayer held shares of stock as Investment. During the current year, he sold the shares he bought for P100,000 to a direct buyer for 190,000. He incurred P40,000 selling expenses in connection with the sale’ and P10,000 general administrative expenses. How much was the CGT on the sale, if any? a. 8,000 2,500 B. 2,000 4. 4,000 18, Mr. POGI acquired his principal residence In 2014 at. 2 cost of P,000,000. He sold the said property on January 1, 2016, with FMV of 5,000,000 for a ‘consideration of P4,000,000. Within 18 months, he Purchased his new ' principal residence "for 6,000,000. How much is the basis of the new principal residence? Page 5 of 6 © a. 34,000,000 3,000,000 a. 4,000,000 be P3,000,000 «. P2,000,000 . P1,000,000 19. Mr. POGI acquired his principal residence in 2014 at. (2 Cost of 1,000,000. He sold the said property on January 1, 2016, with FMV of 5,000,000 for a consideration of 4,000,000. Within 28 months, he purchased his new principal residence for 3,000,000. How much is the CGT? ‘2. 420,000 b. 240,000 «. P75,000 d. exempt How much is the basis of the new principal residence? . P4,000,000 d. 2,000,000 . P1,000,000 #7750,000 20. Atty. Villegas exchanged his principal residence in Darasa to Capuno Reaity Corp's condominium unit int Lipa City. Atty. Villegas will lease the condominium Unit to Mr. Escala. What Is the tax consequence? 2. Atty, Villegas will be exempt from CGT while Capuno Realty Corp shall be subject to Income tax b. Atty. Villegas will be subject to CGT as well as Rune Reaty Corp ‘Atty. Villegas wil be subject to CGT, Capuno Realty Corp wil be subject to Income ta d. None of the above 21, Atty. Villegas exchanged his principal residence for ‘Atty. Capuno's residential lot. What is the tax ‘consequence? a. Atty. Villegas will be exempt from CGT as well as, Capuno ‘Both of them will be subject to CGT Atty. Villegas will be exempt from CGT, Atty. Capuno will be subject to CGT d. Atty. Villegas will be subject to CGT, Atty. Capuno will be exempt from CGT 22, Mr. POGI exchanged his principal residence with FMV ‘of 4,000,000 and in addition paid P2,000,000 for Mr. “Escala’s principal residence, ' having 2 5,000,000 FMV. Both of them intend to use the received property as new principal residence. The historical cost of the old principal residence of POGI 's P1,000,000 while the historical cost of the old principal residence of Mr. Escala is P500,000. Hpw ‘much Is the CGT due of POGI? a. 500,000 b. 360,000 0,000 23. How much is the cost basis of new principal residence of POGI? «. P500,000 0. 416,667 24, How much is the CGT of Mr. Escala? a. P500,000 2°°60,000 b. 360,000 ‘d. none 25. How muca is the cost basis of new principal residence of Mr. Escala? {a P4,000,000 b. 3,000,000 «¢, P500,000 FPHE,657 ADDITIONAL MATERIALS 1. The term “capital assets” includes a. Stock In trade or other property Included in the Scones ater ee TAX.&Real property primarily use for sale to customers in the ordinary course of trade or business. 4d. Property used in the trade or business of the ‘taxpayer and subject to depreciation, 2. Lots being rented when subsequently sold are classified a. Capital assets xebrdinary assets b. Liquid assets d. xed assets 3. On 3uly 4, 2016, POGI sold shares of stock for 200,000. ‘The shares which were acquired for 140,000 acquire on June 1, 2007, have a par value of 150,000, were held as investment, and were sold to a buyer under the following terms: Downpayment, July 1, 2016 P. 20,000 Installment due, October 10, 2016 30,000 Instaliment due, October 10, 2017 75,000 Installment due, October 10, 2018 75,000 How much was the capital gains tax due in 2016? a. P-500.00 . P§25.00, b. P450.00 50.00 4. How much was the documentagysstamp tax due? 2. P600.50 7? 562.50 b. P 525.25 4. P 612.50 5. To facilitate the disposal of his shares, POGI sold his shares for P360,000 at 10% discount from its fair value. Even at discounted price, POGI reports a gain of 160,000. Compute the capital gains tax on the transaction. a P 21,000 6,000 bi P 11/000 15,000 6. POGT is a stock dealer and holds 10,000 ordinary stock ‘of MAGINCO Corporation, a domestic corporation, acquired at P100 per share. His valuation for MAGINOO Corporation indicates that MAGINOO's stocks will decline in the near future. If POGI sells his stock investment directly to a buyer, Raegan Capuno, at Pi15 per share, how much is the capital gains tax payable on the transaction? 5,750 2. 5,000 b. P10,000 7. Mr. POGI, a real estate dealer, made the following dispositions directly to buyer: Date Domestic securities ain/tLoss) 2/4/16 Capunocordinary shares —_P 150,000- 5/8/16 Torres bonds 150,000- 7/15/16 Villegas preferred shares (80,000) 9/20/16 _ illegas common shares 50,000- 11/15/16 Escala ordinary shares 80,000- Compute the amount of capital gains tax payable (poetdable) of Mr. POGT for the year 2016. (P1,500) PO . P15,000 4. 38,000 8, Which of the following entities is not exempt to the final capital gains tax imposed on the sale, exchange and 1) other disposition of real property? 2. Banks on thelr sale real and other assets acquired In the Philippines . Resident corporations on their land not used in business in the Philippines Real estate developer or dealer on their sale of outs Fein anon alo one of is esience der orecesure sale 9: The actual capital gain derived by an individual taxpayer may be Included to all income subject to © progressive income tax when Page 6 of 6 2. It involves sales of real property to non-residents At involves sales of real property to the government It involves sales of personal property to non- residents 4. It Involves sale of domestic stocks directly to taxpayer 10. POGI, 2 real estate dealer, sold a real estate for 2,000,000 on November 29, 2016. The cost of the property was P1,500,000. The terms of the sale were 2s follows: Downpayment 400,000 Balance, payable In monthly installments ‘of P100,000 41,600,000 beginning December 23, 2016 until fully paid How much was the income to bg reported in 20167 2. 100,000 7b125,000 b. 112,000 ‘d. Pi40,000 111. Compute the capital gains tax in the above case. pa P30,000 . 8120,000 b. 49,000 0 12. POGE Jonas sold his principal residence for P5,000,000. His principal residence was acquired at 2,000,000 and hhas a fair market value of 6,000,000 at the date of sale. Within 18 months, POG! reconstructed his new principal residence for P4,500,000. Compute the capital gains tax to be deposited in a. P270,000 360,000 BP 300,000 3.0 13, Thg cost basis ofthe new residence is a1 800,000 '.P3,750,000 S pu'soo‘a00 6. 4,300,000 14, The amount of capital gains tax to be released to POG! 's ‘a. P240,000, b. 270,000 « P300,000 (824,000 415. Compute the cost basis of the new residence if it was Bequired for P5,200,000. 2. 2,000,000 572,200,000 16, Which is not a requisite of the wash sales rule of securities? 2. The sale or other disposition of securities resulted toa loss . There was an acquisition or contract or option for ‘acquisition of stock or securities within 30 days before the sale or after the sale. The stock or securities sold were substantially the jame as those acquired within the 61-day period. “The seller must be 2 dealer in securities in a short sale transaction. . PL,733,333 . 4,333,333 17, The following are not substantially identical securities, except one 2. Common stock and preferred stock Voting and non-voting common stock Bonds with different interest rates or secured and eas 18, To which of the following Is the capital gains tax required to be filed? (Select the exception.) 23. Authorized Agent Bank under the Jurisdiction of the RDO where the seller is required to register b. Revenue collection officer ©. Duly authorized City or Municipal Treasurer of the DO where the seller is required to register “office of the Commissioner of Internal Revenue ~done~ TAX.