19.

Income distributed to the beneficiaries of estates and trust, shall be

subject to a creditable withholding tax of? A. 10% B. 15% C. 20% D. 30%
20. A contract grating a person the exclusive privilege to buy or not to
buy a certain objects at any time within the agreed period at a fixed
price. A. Option B. Securities C. Dividend D. Warrants 21. True or false.Tax
on improperly accumulated earnings is 10% of net income. 22. True or
false. A taxable partnership is subject to the improperly accumulated
earnings. 23. True or false. A resident foreign corporation may also avail
of the 40% optional standard deduction. 24. True or false. Estate not
under judicial settlement are taxed as mere co-ownerships or general
professional partnerships. 25. True or false. Estates are taxable only if
they are under judicial settlement. 26. The tax code used the “_____” in
defining capital assets. A. Definition by exclusion approach C. Both A
and B B. Definition by inclusion approach D. None of the above 27.
Other term for estate A.I nheritance B. Fiduciary C. Trust D. Nation 28.
The person who establishes the trust. A. Trustee B. Grantor C. Heir D.
Beneficiary 29. Called to the succession either by the provision of a will
or by operation of law. A. Trustee B. Grantor C. Heir D. Benificiary 30. The
person for whose benefit the trust has been created. A. Trustee B.
Grantor C. Heir D. Beneficiary 31. Where the taxpayer is a corporation,
which of the following statements is true? A. The holding period does
not apply to corporation, hence capital gains and losses are recognized
at 50%. B. The net capital loss can be carried over in the next
succeeding year. C. Capital loss is deductible only up to the extent of
ordinary gains. D. Ordinary loss is deductible from capital gains. 32.
Capital losses are deductible from ordinary gains but net capital loss is
not deductible from ordinary gains-ordinary losses are deductible only
to the extent of the capital gains but the net capital loss is not
deductible from ordinary gain. A. true; true B. True; false C. False; true D.
False; false 33. If the interest income is received by the resident foreign
corporation the rate is; A. 15% B. 7.5% C. 12% D. 7% 34. The following rules
as to recognition of capital gains or losses from the disposition of
personal property classified as capital asset apply where the taxpayer is
an individual. Which is the exception? A. Depending on the holding
period, the percentages of gain or loss is 100% if the capital asset has
been held for 12 months or less, and 50% if the capital asset has been
held for more than 12 months. B. Capital losses are deductible only to
the extent of the capital gains, hence the net capital loss is not
deductible. C. Ordinary losses are deductible from capital gains but net
capital loss cannot be deducted from ordinary gain. D. Net capital loss
carry over in a taxable year should not exceed the capital gain in
theyear the loss was incurred. 35. The term “capital assets” include A.
Stock in trade or other property included in the taxpayer’s inventory. B.
Real property not used in the trade or business of taxpayer. C. Property
primarily for sale to customers in the ordinary course of his trade or
business. D. Property used in the trade or business of the taxpayer and
subject to depreciation. 36. They are taxed exactly in the same way
estates under judicial settlement including exemption and rule of
accrual. A. Grantor B. Revocable C. Irrevocable D. Non of the foregoing
37. The income of this property is not included in the income of the
trust for tax purpose but instead to include in computing the net
income of the grantor. A. Grantor B. Revocable trust C. Irrevocable trust
D. Trust Issue 38. It refers to all property rights and obligations which is
not extinguished by his/ her dealth. A. Legatee B. Devisee C. Estate D.
Trustor 39. The following items are allowed as deductions from gross
income of individual corporate tax payers which is not? A. Bad debts B.
Loan C. Taxes D. Research and development 40. The only taxpayers who
cannot claim exemptions or deductions are? A. Non resident alien who
is not engage in trade or business in the Philippines B. Non-resident
citizens of the Phlippines C. Domestic corporation D. Resident foreign
corporation 41. An individual taxpayer owns a 10-door apartment wit a
monthly rental of 10,000.00 each residential unit. He sold this property
to another individual taxpayer. Which is not correct? A. The seller is not
liable to pay the capital gains tax. B. The property sold is a capital asset.
C. The taxpayer is engaged in business D. The rental income is subject
to income tax using the graduated rates. 42. Holding period is the
duration for which the taxpayer held the capital asset. A capital asset
held by the taxpayer fort more than 12 months is said to be. A. Short
term B. Medium-term C. Long- term D. No- term 43.Which of the
following statement is not correct? A. When co-owners invest the
income of the property co- owned in a business or any income
producing properties or activities constituting themselves into a
business partnership, such partnership is consequently

subject to tax as a corporation. B. As a rule, a co ownership is not

subject to income tax because the activities of the co- owners are
limited to the preservation and enjoyment of the property and the
collection of the income there from. C. A co-owner is subject to income
tax on his share in the net income of the co-ownership actually or
constructively received. D. All partnerships, no matter now created or
organized are considered corporations subject to corporate income tax.
44. A domestic corporation may employ as a basis for filing its annual
corporate return the; A. Calendar year only B. Fiscal year only C. Either
calendar or fiscal year D. Neither calendar or fiscal year 45. A
corporation, a resident corporation, provided the following data for
taxable year 2006 Philippines USA Gross income Php 40 million, Php 20
million, Dividend from: Domestic Corp 5 Million, Foreign Corp 4Million,
Business expense 12Million, 8 million. The corporation remitted to its
head office the Php 5 Million dividend income and 40% of its net profit
to its head office in USA. The corporation’s total tax liability including
the tax on the profit remitted is A. Php 10,240,000.00 B. php
11,545,600.00 C. Php 15, 960,000.00 D. Php 12, 448,000.00 46. What is a
corporation? A. A joint stock company B. Created by operation of law
having right of succession, powers and attributes C. An association or
insurance company D. None of the above 47. What is partnership? A. A
practice of profession. B. Created by two or more person contributes
money or property. C. Insurance company D. All of the above 48. What
are the kinds of partnership? A. Taxable partnership B. Joint venture
partnership C. Exempt partnership D. Both A and C 49. A person who
establishes trust? A. Legatee B. Trustor/ grantor C. Devisee D. All of the
above 50. A person who inherits personal property A. Trustor B. Devisee
C. Legatee D. None of the above 51. The portion of the decedent’s estate
which the law reserves to his compulsory heirs. A. Inheritance B.
Legitime C. Free portion D. Will 52. Refers to an heirs who will succeed
personal property. A. Heirs B. Legatee C. Legitimate D. Benefactor 53.
Statement 1: Business partnership may avail of optional standard
deduction. Statement 2: A business partnership is