Discussions Questions

1. Enumerate examples of taxable donations

2. What is net gift? Explain briefly.
3. Why is the P250, 000 gift exemption not a deduction in computing net gift?
4. Discuss the valuation rules on donated properties.
5. Explain the treatment of donation of common properties.

True or False 1

1. The donor’s tax rate to relatives is a progressive tax.

2. The donor’s tax rate to strangers increases as the net gift increases.
3. Donation between juridical person is not qualified to P250, 000 gift exemption.
4. The gift of real property may be measured at independent at independent appraisal value.
5. The gift if listed shares is the closing price of the shares at the date of donation.
6. Corporate donors are subject to 6% flat donor’s tax. Individual donors are subject to a tabular
donor’s tax.
7. Donation to corporate donees is not qualified to P250, 000 gift exemption.
8. The gift to non-residents is exempt from donor’s tax.
9. The gifts made to residents are generally subject to donor’s tax.
10. Donations to donees abroad are exempt from donor’s tax.
11. The donation to a future heir is not subject to donor’s tax.
12. Donation in trust which is irrevocably designated is subject to donor’s tax .
13. The registration of a property in the name of another person is taxable donation.
14. The cancellation of the indebtedness of another for a consideration is a donation.
15. Donation in a revocable trust is excluded in net gift.
16. Husband and wife are considered separate taxpayers.

True or False 2

1. The donation of communal or conjugal properties is presumed made one-half by the husband
and one-half by the wife.
2. Under the TRAIN law, the donation of a donee has no difference with a donation to several
donees.
3. Transfers mortis, whether inter vivos or mortis causa, for an insufficient consideration are
subject to donor’s tax.
4. Gifts of preferred shares are measured at the par value of the shares.
5. Net gift must be valued at the point of death of the donor.
6. Net gift must be valued at the completion of a conditional donation.
7. The value of gift on revocable transfers is determined when the contingent donee accepts the
property.
8. If either of the spouses did not consent to the donation of a conjugal or communal property,
there is only one donor for purposes of the donor’s tax.
9. Obligations assumed by the donor are deductible in computing net gift.
10. The assumption of the donee’s obligation by the donor is a form of donation subject to donor’s
tax.

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 11. The obligations of the donor on the property donated, if assumed by the donee, is deducted in
computing net gift.
12. Donations to the government involving properties are exempt from donor’s tax
13. Donations to accredited non-profit institutions for administrative purposes are exempt from
donor’s tax.

Multiple choice- Theory: Part 1

1. A gift is valued at the date of

a. Death of the donor.
b. Notarization of the donation.
c. Completion or acceptance of the donation.
d. Payment of the donor’s tax.
2. A donation of real property is valued at
a. Zonal value of the property.
b. Value per tax declaration.
c. Independent appraisal value.
d. The higher of zonal value or value per tax declaration.
3. Which type of donation is exempt?
a. Renunciation of the right to collect an indebtedness of a debtor.
b. General renunciation if inheritance by an heir.
c. Transfer for an insufficient consideration
d. Irrevocable donation in trust.
4. The donation of preferred stocks are valued at
a. Book value
b. Par value
c. Second-hand value
d. Independent appraisal value
5. For purposes of donor’s taxation, the fair value of common stocks is determined as its book
value using the
a. Asset appraisal method
b. Independent appraisal method
c. Adjusted net asset method
d. Market price averaging method
6. Which is correct regarding donation of common properties?
a. Both spouses shall file separate donor’s tax returns
b. Either spouse shall file a donor’s tax return
c. The spouses shall file a consolidated donor’s tax return.
d. Any of these at the discretion of the spouses.
7. The donation of common property shall be considered.
a. The donation of common property shall be considered
b. Totally made by the spouse signing the deed of donation.
c. Void unless with the consent of both spouses.
d. Donation made by the head family
8. Donations of properties to joint donees are treated as

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 a. Separate donations to be reported under a separate donor’s tax return.
b. Donations to each donee which will be classified according to the relation of each donee to
the donor.
c. A dononation to a partnership; hence, these are subjects to 30% donor’s tax
d. A single donation which will be reported in a single donor’s tax return.
9. Which of the following donations is taxable?
a. Donation to an accredited charitable institution
b. Donation to an association
c. Donation to an educational institution accredited by CHED
d. All of these
10. Which of the following obligations, even if assumed by the donee, is not deductible in computing
net gift?
a. Mortgage payable
b. Real property tax
c. Donor’s tax
d. All of these
11. Which of these donations to a non-profit institution are exempt from donor’s tax?
a. Donations restricted by the donor for salaries of staff of the non-profit institutions
b. Donations restricted by the donor for utilities expense of the non-profit institutions
c. Donations restricted by the donor to be used only for program expenses of the non-profit
institution to carry out its organizational mission
d. All of these
12. Obligations, if assumed by the donor, are
a. Deductible by residents or citizens
b. Deductible by non- residents aliens
c. Deductible by any donor
d. Never deductible
13. Statement 1: where property is transferred during person’s lifetime for less than adequate and
full consideration in money’s worth, then the amount by which the value of the property
exceeded the value of the consideration shall, for the purpose of the donor’s tax, be deemed a
gift.
Statement 2: Encumbrance on the property donated, if assumed by the donor, is deductible for
donor’s tax purposes.
Which is true?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement

Multiple choice- theory part 2

1. Statement 1: Donations abroad are exempt from donor’s tax to an alien donor.
Statement 2: Donations in the Philippines are exempt to a non-resident donor.
Which is false?
a. Statement 1

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 b. Statement 2
c. Both statements
d. Neither statement
2. Which is correct regarding the exemption of donation to non-stock and non-profit institutions?
a. It must be made to accredited institutions only.
b. It must be made to bona fide non-profit institutions, whether accredited or not.
c. The donor must be a resident or a citizen of the Philippines.
d. The property donated must be situated in the Philippines at the date of donation.
3. Donations in the tax return is presented on a cumulative year-to-date basis. This is true to
a. Donations to individual only
b. Donations to juridical person only
c. Both donations to individuals and donations to corporations
d. Donations made in the Philippines only
4. Statement 1: Donor’s tax rates vary depending on the applicable tax law at the time of gift.
Statement 2: the law in force at the time of completion or perfection of the gift shall govern the
contract of a donation.
Which is correct?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement
5. Which of these donations to the government are subject to donor’s tax?
a. Donations of tanks and ammunitions to the Philippine military
b. Donations of computer to the department of education
c. Donations to the government-owned and controlled corporations
d. None of these
6. Counted from the date of donation, the donor’s tax paid is within
a. 10 days
b. 15 days
c. 30 days
d. 60 days
7. Which is not a required disclosure in the donor’s tax return?
a. Current and past gifts during the year.
b. Donations made last year
c. Name of the donee
d. Deductions claimed
8. Which is not included in net gift?
a. Transfers to the government
b. Transfers to non- profit and non-stock charitable institutions
c. Portion of the fair value of the property adequately paid for
d. All of these
9. Which of the following is included in net gift?
a. Transfers to the government
b. Transfers to non-profit and non-stock charitable institution

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 c. Portion of the donation representing dowry
d. Excess of the fair value of the property over the consideration paid by the donee
10. Which of these is not included in net gift?
a. Dowry gift to a step-child
b. Gift to a spouse
c. Gifts to relatives
d. Gift to a stranger
11.

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