TX-201 TAXATION OF INDIVIDUALS, TRUST AND ESTATES

1. A husband and wife, resident citizens, with one (1) qualified dependent child, had the following income
and expenses for the year 2022. The husband waived the additional exemption in favor of his wife. The
husband waived the additional exemption in favor of his wife.

Salary of the husband, net of P50,000 withholding tax 450,000

Salary of the wife, gross of P60,00 withholding tax 600,000
Gross professional income, husband, gross of 15% withholding tax 1,500,000
Cost of services, husband 500,000
Expenses, practice of profession 300,000
Gross sales, wife 800,000
Cost of sales, wife’s business 300,000
Business expenses, wife 100,000
Gross rental income, lease of common property (Gross receipts, P1,000,000) 700,000
Expenses, leased common property 200,000
Gross business income, Singapore (gross sales, P800,000) 600,000
Business expenses, Singapore 150,000

Compute for the taxable income, income tax due, and income tax payable of the husband and the wife
using:

a) Itemized deductions.
b) Optional standard deductions.
c) 8% preferential income tax.

2. A is employed in XYZ Corporation, She receives the following for the current year:

Statutory minimum wage, inclusive of the 13th month pay 175,000

Overtime pay 40,000
Night-shift differential 25,000
Commission from the same employer 20,000
Gross income from trading business 300,000
Total 560,000

Compute for the following:

a) Exempt amount
b) Taxable income

3. Mr. CSO, works for G.O.D., Inc. He is not engaged in business nor has any other source of income other
than his employment. For 2022, Mr. SO earned a total taxable compensation income of P1,060,000.00.
How much is his income tax liability?

4. Ms. EBQ operates a convenience store while she offers bookkeeping services to her clients. In 2022, her
gross sales amounted to P800,000.00, in addition to her receipts from bookkeeping services of
P300,000.00. She already signified her intention to be taxed at 8% income tax rate in her 1st quarter
return. How much is the income tax liability for the year?

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5. Ms. EBQ above, failed to signify her intention to be taxed at 8% income tax rate on gross sales in her 1st
Quarter Income Tax Return, and she incurred cost of sales and operating expenses amounting to
P600,000.00 and P200,000.00, respectively, or a total of P800,000.00. How much is the income tax due?

6. Ms. MRU operates a convenience store while she offers bookkeeping services to her clients. In 2022, her
gross sales amounted to P1,800,000.00, in addition to her gross receipts from bookkeeping services of
P400,000.00. Her recorded cost of goods sold and operating expenses were P1,325,000.00 and
P320,000.00, respectively.

Questions:
a) How much is Ms. MRU’s taxable income and income tax due if she opted to avail of the OSD?
b) How much is the business tax, if any?
c) Can she avail of the 8% option if she does not opt to use OSD?
d) How much is the business tax if she avails of the 8% option?
e) How much is her income tax liability if she signifies her intention to be taxed at 8%income tax
rate in her 1st Quarter return?

7. In 2022, Mr. MAG, a Financial Comptroller of JAB Company, earned annual compensation of
P1,500,000.00, inclusive of 13th month and other benefits in the amount of P120,000.00 but net of
mandatory contributions to SSS, HDMF, and PHIC. Aside from employment income, he owns a
convenience store, with gross sales of P2,400,000. His cost of sales and operating expenses are
P1,000,000.00 and P600,000.00, respectively, and with non-operating income of P100,000.00.

Questions:
a) How much is his tax due for 2022 if he opted to be taxed at eight percent(8%)income tax rate of
his gross sales for his income from business?
b) How much is his income tax due for 2022 if he did not opt for the eight percent (8%) income tax
based on gross sales/receipts and other non-operating income?
c) How much is the percentage tax 2022 if he did not opt for the eight percent (8%) income tax
based on gross sales/receipts and other non-operating income?

8. On December 1, 2022, Juanito Cruz created a trust for his son Alberto and appointed Danilo Paz as the
trustee. On December 26, 2022, another trust was created by Juanito for the benefit of the same son,
Alberto, single. Juancho Garcia was appointed as the trustee. The following data pertain to the two
trusts:

Danilo Juancho
Gross income 500,000 600,000
Expenses 100,000 300,000
Income distributed to Alberto, gross of 15% withholding tax 50,000 100,000

Compute the tax due from:

a) From each trust
b) The consolidated income
c) Each trust after share in the consolidated income tax
d) The beneficiary

9. Mr. Sixto Cruz IV, a rich businessman, established on December 2021 a trust for the benefit of his son
Sixto Cruz V, 18 years old, single. He transferred to the trust two (2) income producing properties with
the following gross rentals:

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 Vacant lot leased for P600,000 annually, gross of withholding tax
Office building with monthly rental income of P25,000, gross of withholding tax

The appointed trustee was Mr. Osmundo de la Cruz. During the year 2022, ordinary trust expenses
amounted to P350,000 and income distributed to the beneficiary amounted to P150,000. The beneficiary
has gross sales from his trading business amounting to P500,000 and business expenses totaling
P100,000.

Compute the taxable net income of the:

a) Trust using optional standard deductions
b) Beneficiary using itemized deductions

10. Mr. JMLH signified her intention to be taxed at 8% income tax rate on gross sales in her 1st Quarter
Income Tax Return. However, her gross sales during the taxable year has exceeded the VAT threshold.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total Sales 500,000 500,000 2,000,000 3,000,000*
Cost of Sales 300,000 300,000 1,200,000 1,200,000
Operating Expenses 120,000 120,000 480,000 720,000

*Assuming sales were earned equally throughout the quarter

Questions:
a) Compute the quarterly income tax payable and show the due date
b) Compute the income tax due when the final or adjusted return is filed and show the due date
c) Compute the percentage tax, if any.
d) Compute the VAT, if any.

11. Compute the withholding tax using the table on the next page.
a) An employee receiving daily compensation in the amount of P2,500, net of mandatory
contributions.
b) An employee receiving weekly compensation in the of P9,500, net of mandatory contributions.
c) An employee receiving semi-monthly compensation in the amount of P15,500, net of mandatory
contributions.
d) An employee receiving monthly compensation in the amount of P170,500, with supplemental
income of P5,000, net of mandatory contributions.

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