EXERCISE DRILL NO.

3
Exempt or Taxable

1. Winnings from gambling

TAXABLE
2. Income from swindling
TAXABLE
3. Indemnity for moral damages
EXEMPT
4. Harvested fruits from an orchard
EXEMPT
5. Compensation income
TAXABLE
6. Interest income
TAXABLE
7. Amount received by the insured in excess of
insurance premiums paid
TAXABLE
8. Proceeds of life insurance received by the heirs of
the insured
EXEMPT
9. Gain on sale of goods by the home office to its
branch
EXEMPT
10. Gain on sale of goods and services between
relatives
TAXABLE
11. Gain on sale of goods by a parent corporation to a
subsidiary corporation
TAXABLE
12. Appreciation in the value of land
EXEMPT
13. Birth of animal offspring
EXEMPT
14. Income of a registered Barangay Micro-Business
Enterprise
EXEMPT
15. Cancellation of debt out of gratuity of the creditor
EXEMPT
16. Cancellation of debt by the creditor in exchange of
services rendered by the debtor
TAXABLE
17. Matured interest from coupon bonds
TAXABLE
18. Receipt of bank loan
EXEMPT
19. Salaries of a minimum wage earner
EXEMPT
20. PCSO or lotto winnings
TAXABLE
21. Benefits from GSIS, SSS, Pag-Ibig or PhilHealth
EXEMPT
22. Discovery of hidden treasure
EXEMPT
EXERCISE DRILL NO. 5
World Income or Philippine Income

1. Non-resident citizen
Philippine Income
2. Resident alien
Philippine Income
3. Non-resident alien engaged in trade or business.
Philippine Income
4. Resident foreign corporation
Philippine Income
5. Resident citizen
World Income
6. Non-resident alien not engaged in business.
Philippine Income
7. Non-resident foreign corporation
Philippine Income
8. Domestic corporation
World Income
9. Taxable trusts established by a Filipino citizen in
the Philippines.
World Income
10. Taxable estate of a non-resident citizen judicially
administered abroad.
Philippine Income
EXERCISE DRILL NO. 6 #8-15
Compute how much is earned within and earned
outside the Philippines from each of the ff.:

8. John sold his stocks in a domestic corporation to a

foreign investor at a gain of P50,000.
WITHIN – 50k

W/O – 0
9. Villanueva received P20,000 dividends from a
domestic corporation and P30,000 dividend income
from a non- resident foreign corporation.
WITHIN – 20k

W/O – 30k
10. Andrew Johnson received P40,000 dividends from
a resident foreign corporation; 60% of its historical
income is from the Philippines.
WITHIN – 40k

W/O – 16k
11. Abreeza, Inc. manufactures in the Philippines and
sells to unaffiliated export clients. A total of
P100,000 gross income was earned during the
period.
WITHIN – 100k

W/O - 0
12. Marawi manufactures abroad and sells to its
Philippines branch at market prices. Production
cost abroad were P200,000. Billings to branch
totaled P300,000 while branch sales totaled
P450,000.
WITHIN – 150k

W/O – 100k
13. James Fernandez received P100,000 dividends
from a resident foreign corporation which realized
40% of its income in the Philippines.
WITHIN -

W/O – 100k
14. Kevin received P20,000 dividend from a non-
resident foreign corporation.
WITHIN - 0

W/O – 20k
15. Macahambus plant manufactures tables and sells
to resident clients. A total of P400,000 gross
income was realized during the period.
WITHIN – 400k

W/O - 0