Estate tax

Basic Terminologies
1.Anactwhe rebyaper soni spermi ttedwi t
ht hef or mal it
iespr escri
bedbyl aw,to
cont rolt oacer t aindegr eet hedi spositionofhi ses t ate,tot akeeffectaf terhi
s
deat h.
A.wi ll C.l egi time
B.Successi on D.devi ce
2.Theper sonwhosepr oper t
yi st r
ansmi t
t edt hr oughsuccessi on,whet herornot
hel eftawi l
l.
A.successor C.l egat ee
B.hei r D.decedent
3.Theper soncal ledt ot hesuc cession,eitherbyt hepr ovisionofawi l
lorby
oper ationofl aw.
A.Hei r C.devi see
B.le gat ee D.de cede nt
4.Suc cessi onwhi chr esultsf rom t hedesi gnat ionofanhei r,madei nawi ll
execut edi nt hef orm pr escr ibebyl aw.
A.Test ament ar y C.i ntest atesuccessi on
B.mi xedsuccessi on D.l egalsuccessi on
5.Transmi ssionofpr oper tieswher et herei snowi l
l,ori fther ei sawi ll
,thesame
isvoi dornobodysucceedsi nt hewi l
l.
A.tes tament arysuccessi on C.l egalsuc cession
B.mi xedsuccessi on D.escheat
6.Transmi ssionofpr oper tieswhi chi seffe ct edpar tlybywi llandpar tl
yby
oper ationofl aw.
A.tes tament arysuccessi on C.l egalsuccessi on
B.mi xedsuc cessi on D.i nt est atesucc ession
7.Anhei rt oapar t ic
ul arper sonalpr opert ygi venbyvi r
tueofwi ll
.
A.Legacy C.de vi see
B.successor D.l egat ee
8.Anhei rt opar ticul arr ealpr oper tygivenbyvi r tueofwi ll.
A.devi se C.successor
B.devi see D.l egat ee
9.Partoft het estat or’spr oper tywhi c
hhecannotdi sposeofbecauset helaw has
reservedi tforcer tainhei rswhoar ecal ledcompul soryhei rs.
A.legi timat e C.f r eepor tion
B.legi time D.est at e
10.
Awi llwhi chi sent irelywr it
t en,dat edandsi gnedbyt het estator.
A.hi e l
ogl yphi cs C.hol ocaus t
B.hol ogr aphi c D.ownwi ll

Pr
obl
em 1

Li
waywaydi
edl
eavi
ngt
hef
o;;
owi
ngpr
oper
ties:

a.Houseandl otint hePhi

li
ppines(mortgagedf
orP300,
000) 1,
250,000
b.Condomi ni
um uni tinHongkong 1,
000,000
c. CarinPhil
ippines 70,000
d.Cari nHongkong 60,
000
e. Franchi
seexercisedinthePhili
ppines 300,000
f. Franchi
seexercisedinNew York,USA 25,
000
g. Domesti
cshares,certi
ficat
ekeptinNew York,USA 55,000
h.For ei
gnshar
es,90% ofbusinessi
nt hePhil
ippi
nes 60,
000
i. Forei
gnshar
es,30% ofbusinessi
nt hePhil
ippi
nes,wi
thbusi
ness
si
tusinthePhil
ippines. 15,
000
 j
. Foreignshares,60% ofbusinessi
nthePhil
ippines 75,000
1.Thegr ossest
ateift
hedecedentwasaresi
dentcit iz
en,residentalienoranon-
resi
dentciti
zen-
A.2,910,000 C.1, 620,000
B.1,770,000 D.1, 750,000
2.Thegr ossest
ateift
hedecedentwasanon-resi
dental ien(nor eci
pr ocity)-
A.2,910,000 C.1, 825,000
B.1,750,000 D.1, 320,000
3.Thegr ossest
ateift
hedecedentwasanon-resi
dental ien(withr e
cipr ocity)
-
A.2,910,000 C.1, 825,000
B.1,750,000 D.1, 320,000

Pr
obl
em 2

Juan,mar
riedt
oJuana,di
ed.Thef
oll
owi
ngpr
ope
rti
eswer
elef
tuponhi
sdeat
h:

a.Dur i
anpl ant ati
oni nDavao,br oughti ntomar ri
agebyH. -3,000,000
b.I ncomeofpl antat ioninDavaoear neddur i
ngmar ri
age - 250, 000
c. Shar esofst ockswi t
hAgacor p.ear nedbyJuanadur i
ng
mar riage - 420, 000
d.Di videndsf r om AgaCor p.ear neddur ingmar riage - 52, 000
e. Busi nCebu,i nher i
tedbyJuandur ingt hemar r i
age - 760, 000
f.I ncomeofpasse ngerbusear neddur ingt hemar r
iage - 23, 000
g. Ri celandi nLegaz pi,inheritedbyJuanabef oremar riage - 460, 000
h.I ncomeofRi celandi nLegaz piearneddur i
ngt hemar riage -
50, 000
i. Underwear (pant ies,br assiere)ofJuanabr oughti nt
oJuana - 85, 000
j. Cash,uni dent i
fiedwhenandbywhom acqui red - 55, 000
k.Jewel ri
esinher it
edbyJuanadur ingmar ri
agef rom hermot her - 320, 000
4.Theexc lusivepr oper tiesofJuanunderconj ugalpar tnershipofgains--
A.5, 475, 000 C.3,760, 000
B.3, 815, 000 D.4, 610, 000
5.Thegr osses tateofJuani fthespousewer eunderconj ugalpar t
nershipof
gains- -
A.5, 475, 000 C.4, 560, 000
B.4, 610, 000 D.3, 975,000
6.Thecommuni t
ypr oper tyoft hespousesunderabsol utecommuni tyofpr operty
regime- -
A.4, 287, 000 C.4, 560, 000
B.5, 475, 000 D.3, 975,000
7.Thegr osses tateofJuani fthespouseswer eundert heabsol utecommuni tyof
proper tyr egi
me- -
A.5,070, 000 C.4, 287, 000
B.5, 475, 000 D.4, 610,000

Pr
obl
em 3

Mar
ketval
ue–dat
eof

Tr
ansf
er Deat
h Consi
der
ati
on

1.Revocabl
etransfer:
a.Coconutpl antat
ion P1,
500,
000 P1,
800,
000 P1,
000,
000
b.Mitsubishipajer
o 1,
200,
000 1,
000,
000 750,
000
c. Sharesofstoc
k 300,
000 220,
000 250,
000
d.Deliverytruck 400,
000 450,
000 420,
000
 2.Townhouse,i
ncont
empl
ati
onof
deat
h 2,
000,
000 2,
300,
000 1,
500,
00

8.Theamounti
ncl
udi
blei
nthegr
ossest
ateis--
A.1,080,
000 C.1,050,
000
B.1,
850,000 D.1,500,
000

Pr
obl
em 4

Ac t
ual Grossestat
e Deduc tibl
e
a.P60, 000 P1,
500,000 60,000
b. 175,000 5,
000,000 175,000
c. 55, 000 1,
150,000 55,000
d. 225,000 4,
750,000 200, 000

Pr
obl
em 5

Al
,decedent
,hadt
hef
oll
owi
ngdat
aatt
het
imeofhi
sdeat
honJul
y20,2013:

Pr
iordecent–f
ather Pr
esentdecedent

Car P250,
000 P200,000
Land 500,
000 900,
000

Thelandhadanunpai dmortgageofP300,000atthet
imeitwasinherit
edfr
om his
f
atheronJanuary5,2010.AlwasabletopayP200,000befor
ehisdeath.Thegross
e
stateofAlwasP4,
000,000whiletheexpensesamounttoP900,
000brokendownas
f
oll
ows:

Actualfuneralexpenses P175,000
Claimsagainsttheestate 30, 000
Claimsagainstinsolv
entpersons 20,000
Transfert
oCi tyofManilaforpubli
cpur
pose 50,
000
Me di
calexpenses 545,000
RA4917 80,
000

Incl
udedinthegrossest
ateishisfami
lyhome.I
twaspurchasedonFe
b.2012at
P1.8M.Attheti
meofhi sdeath,i
thadavalueofP2,
000,
000

9.
Theamountofvani
shi
ngdeduct
ioni
s—

A.77,
500 C.173,
125

B.90,
625 D.181,
250

Pr
obl
em 6

Indi
cat
ewhet
hert
hef
oll
owi
ngi
temsofde
duc
tionf
rom gr
ossest
atear
e
deduct
ibl
eornot
.

Items of Deduction Resident or Citizen NRA Remarks

Decedent Decedent
ELIT  
Transfer for public use  
Vanishing deduction  
RA 4917 
Share of surviving  
spouse
Medical expenses 
Standard deduction 
Family Home 

Pr
obl
em 7

CountryA:Netest
ateofP100,000andestatet
axpaidofP3,500;Count
ryB:Netest
ate
ofP200,000andestat
etaxpaidofP5,000;Phi
li
ppines:Ne
testat
eofP200,
000.The
decede
ntwasaci t
izenandresidentoft
hePhil
ippi
nes.

9.Thees
tat
etaxcr
edi
tforf
orei
gnest
atet
axpai
dis:

A.P9,
000 C.P8,
000

B.P8,
500 D.P7,
000

10.Thees
tat
etaxst
il
ldueaf
terc
redi
tforf
orei
gnes
tat
etaxespai
dis:

A.P6,
000 C.P7,
000

B.P6,
500 D.P15,
000

Pr
obl
em 8

PapaTaidi
edonJanuary3,2013.Theest
atet
axdueandpayabl
eofP25,
000was
pai
donJanuary3,2015.

11.Thees
tat
etaxdue
,inc
ludi
ngi
ncr
ement
s,i
fany

A.38,
750 C.34,
375

B.36,
250 D.33,
750

12.Assumi
ngt
het
axwaspai donJanuary3,2016andt
hef
ail
uret
opayt
axdueon
ti
mewasduetowi
ll
fulne
glect
,thet
axdueis

A.50,
000 C.37,
500

B.45,
000 D.33,
750

MULTI
PLE CHOI
CE QUESTI
ONS

1.Whi
choft
hef
oll
owi
ngst
atement
siscor
rec
t?

A.Thegrossest
ateofaresi
dentci
tiz
endecedentwoul
dnotincl
udeal
l
pr
oper
ties,whe
therrealorper
sonalandwhe t
herwithi
norwithout
.

B.Thegrosses
tateofanAmer i
candecedentwhowasar
esi
dentoft
he
Phi
li
ppinesi
ncl
udesallproper
tiesi
nthePhil
ippinesonl
y.
 C.Thegrossest
ateofaFili
pinodecedentwhowasr
esi
dingi
nAus
tral
iawoul
d
i
ncl
udeal
lpropert
iesr
egardl
essoflocat
ion.
 D.Thepersonalpr
opertyofanon-r
esidental
ieni
snoti
ncl
udedi
nthegr
oss
e
stat
einthePhil
ippinesi
ftheyareint
angi
ble.

2.I
ncomput
ingt
hegr
ossest
ateofadecedent
:

A.Ifhewasanon- resi
dent,butciti
zenofthePhil
ippi
nes,t
angi
bleand
i
ntangi
bleproper
ties,r
egardl
essoflocat
ion,shal
lbeincl
uded

B.Ifhewasar e
si dentwhowasnotaci t
izenofthePhil
ippi
nes,t
angi
bleand
i
ntangi
bleproper
ties,regardlessofl
ocat
ion,shallbei
ncluded

C.I
fhewasanon- r
esi
dentwhowasnotacit
izenofthePhil
ippi
nes,tangi
ble
andi
ntangi
bleper
sonalpr
opert
ies,l
ocat
edi
nthePhil
ippi
nes,shal
lbeincl
uded.

D.Al
laboves
tat
ement
sar
ecor
rec
t.

3.Acitizenoft
hePhi
li
ppi
nes
,si
ngl
e,di
edar
esi
dentofCanada,l
eavi
ngt
hef
oll
owi
ng
proper
ties:

Realpr
oper
tyi
nCanada,i
nher
itedf
rom f
atheroneandone-
hal
f P2,
000,
000
year
sago
Per
sonalpropertyi
nt hePhi
li
ppinesinheri
tedf
rom fat
her 1,
600,
000
Famil
yhomei nCanada 1,
400,
000
Thegrossestat
esubjectt
oPhili
ppineestat
etaxis:

A.P3,
400,
000 C.P1,
600,
000

B.P5,
000,
000 D.P3,
000,
000

4.Whi
choft
hef
oll
owi
ngi
snoti
ncl
udedi
nthegr
ossest
ate
?

A.Rev
ocabl
etr
ansf
erwher
etheconsi
der
ati
onwasnotsuffici
ent

B.Rev
ocabl
etr
ansf
erwher
ethepowerofr
evocat
ionwasnotexer
cised

C.Tr
ansferunderagener
alpowerofappoi
ntmentwhe
ret
heconsi
der
ati
onwas
notsufficient

D.Tr
ansf
erunderaspeci
alpowerofappoi
ntment

5.Ar
evocabl
etr
ansf
erwi
thaconsi
der
ati
onr
ecei
ved:

Consi
der
ationr ecei
ved P200,000
Fai
rmarketv al
ueofpr opert
yatthetimeoftr
ansfer 300,000
Fai
rmarketv al
ueofpr opert
yatthetimeofdeat
h 250,000
Val
uetoincludei nthegrossest
atei
s:

A.300,
000 C.100,
000

B.250,
000 D.50,
000

6.Whi
choft
hef
oll
owi
ngi
snoti
ncl
udedi
nthegr
ossest
ate
?

A.Tr
ansf
eri
ncont
empl
ati
onofdeat
hwher
etheconsi
der
ati
oni
snotsuffici
ent

B.Rev
ocabl
etr
ansf
erwher
ethepowerofr
evocat
ionwasnotexer
cised

C.Pr
oceedsofli
feinsurancewher
ethebenefici
arydesi
gnat
edi
stheexecut
or
andt
hedesignati
onisirr
evocable

D.Pr
oceedsofl
if
einsur
ancewher
ethei
rrev
ocabl
ydesi
gnat
edbenefici
aryi
sthe
mot
her
7.Acit
izenofJapan,resi
dinginHongkong,withpropert
iesinHongkongandthe
Phi
li
ppines,hadthefol
lowingdat
aonpr oper
tiesandrightsatt
hetimeofhisdeat
h
andtheirval
ues.

Realestate,Hongkong P1,000,000
Realestate,Phili
ppines 2,000,000
Sharesofs tockofadomes ticcorporation 200,000
Sharesofs tockofaJapanesecor porat i
on 300,000
Sharesofs tockofaCanadi ancor poration,doi
ngbusinessi
nt he 100,000
Phili
ppinesonl y
Phili
ppinepesodeposi tinMe t
robank 500,
000
Receivabl
eunderal if
einsurancewi thani nsurancecompany 250,
000
doingbusi nessinHongkong
Thegr ossestatethatshouldber eportedi nthePhil
ippi
nesis:

A.P4,
350,
000 C.P2,
800,
000

B.P3,
700,
000 D.P4,
000,
000

8.Whi
chs
tat
ementi
swr
ong?Thegr
osses
tat
eshal
lbeval
ued:

A.Atitsfai
rmar ketval
ueatthetimeofdeath
B.Atitsfai
rmar ketval
ueattheretur
ni sdue
C.Inrealproperty
,thezonalval
ue,whichmaybehi ghert
hant
heassessed
val
ue
D.Inthecas eofcommonshar esofst
ock,atbookvalue

9.Pers
onalpr
opertywit
hacostofP400,000andaf ai
rmar
ketval
ueatt
het
imeof
deat
hP900,000,butsubjectt
oamortgageofP250,
000

a.Shal
lbei
nthet
axabl
ene
test
ateatP500,
000

b.Shal
lbei
nthegr
ossest
ateatt
hedecedent
’sequi
tyofP650,
000

c.Shal
lbei
nthegr
osses
tat
eatP400,
000

d.Shal
lbei
nthegr
osses
tat
eatP900,
000

10.1ststat
ement:FormarriagesonorafterAugust3,1988,thepropertyrel
ati
onshi
p
betweenhusbandandwi f
e,intheabsenceofawr it
tenagreementbetweenthem,is
thesystem ofabsol
utecommuni tyofpr
operty.

2nd st
atement:The
remaybeapropertyrel
ati
onshi
pofconj
ugalpar
tner
shi
pofgai
ns
eveni fmarri
agewasonoraf
terAugust3,1988.

a.Onl
ythefir
stst
atementi
str
ue

b.Onl
ythesecondst
atementi
str
ue

c.Bot
hst
atement
sar
etr
ue

d.Bot
hst
atement
sar
efal
se

11.Whichoft
hefoll
owi
ngi
scorr
ect
?Underthesyst
em ofconj
ugalpar
tne
rshi
pof
gai
nsandabsolut
ecommunit
yofpr
oper
ty:

a.Proper
tyacquir
edduri
ngt
hemar
riagebyi
nher
itanceorgi
fti
sexcl
usi
ve
pr
oper
t yunderbothsystems

b.Pr
oper
tyowne
dbef
oret
hemar
riagei
sexcl
usi
vepr
oper
tyunderbot
hsyst
ems
 c.I
ncomeofpr
oper
tyunder(
a)i
sexcl
usi
vepr
oper
tyunderbot
hsyst
ems
d.Propert
yunder(a)maybeconjug
alorcommuni
tywhenexpr
essl
ydecl
aredby
t
hebene
factorasconj
ugalorcommunit
y
12.Oneoft
hef
oll
owi
ngst
atement
siswr
ong:

a.Amount
srecei
vabl
eunderRA4917,anddur
ingt
hemar
riage,ar
econj
ugal
pr
oper
t i
es

b.I
ncomeoutoft
hel
aboroft
hehusbandi
sconj
ugalpr
oper
ty

c.I
ncomeoutofexc
lusi
vepr
oper
tyoft
hewi
fei
sconj
ugalpr
oper
ty

d.Pr
opert
yi nher
itedwhenthef
airmarke
tvaluewasP600,
000,sol
dforcash
duri
ngthemarriagewhent heval
uewasP1,
000,000resul
tedi
ngainofP400,
000.The
gai
nisconj
ugalpropert
y

13.AcitizenandresidentofthePhil
ippi
nesdi
edonOctober5,2010.Hewasa
mar r
iedandt hepropertyrel
ati
onshi
pdur i
ngthemar
riagewasabsolut
ecommuni
tyof
propert
y.Heleftbehindproperti
eswithmarke
tval
uesasfoll
ows:

Agr icul t
uralland P100,000
Houseandl otacqui redbyi nher i
tancebef orethemar riage4- 1/2yr s. 500,
000
ago,usedasf ami lyhome( withaFMVofP420, 000andamor tgageof
P120, 000whenacqui red:P20, 000waspai dbyt hedecedentbef or
ehe
died)
Jewel ryofwi fe,acqui r eddur ingt hemar ri
agewi thheri ncome 50,
000
Clothesacqui r eddur ingt hemar riage,wi thincomedur ingt he
mar riage:
Foruseoft hedecedent 60,
000
Forusoft hewi fe 70,
000
Cashonhandandi nbanks:
Incomef rom uni dent ifiedsour ces 300,
000
Fr om asal eatal ossofexc lusivepr opert
y 1,500,
000
Recei vedasgi ftsixyr s.agoandbef orethemar riage(cur rentaccount) 40,000
Ot herpr operties:
Ownedbef or ethemar riage 90,
000
Acqui r
eddur ingt hemar ri
age 20,
000
Thegr ossestat eis:

a.P1,
560,
000 c.P2,
660,
000

b.P1,
100,
000 d.P3,
660,
000

14.Whi
chofthefol
lowings
tat
ementsi
swr ong?For,adecedentwhowasmar
riedat
thet
imeofdeat
h,theremaybededuct
ibl
efuneralexpenses:

a.Whet
herpai
dorunpai
d

b.Byf
uner
alexpensesi
ncur
redbe
for
eint
ernment

c.Reducest
hedi
str
ibut
abl
eest
atebyt
heal
lowabl
e5% oft
hegr
osses
tat
e

d.Atnotmor
ethanP200,
000

15.Whichofthefoll
owi
ngdeduc
tibl
efort
hepur
posesofc
omput
ingt
hene
t
di
str
ibutabl
eestat
e?

a.Vani
shi
ngdeduc
tion c.unpai
dmedi
cale
xpe
nses

b.st
andar
ddeduct
ion d.RA4917

16.Whi
choft
hef
oll
owi
ngs
tat
ement
siswr
ong?Deduct
ionf
orf
uner
alexpensesshal
l
beal
lowed:
a.Shal
linnocaseexceed5% oft
hegr
osse
stat
e
 b.Shal
linnocasee
xceedP200,
000

c.Onl
yifpai
doutoft
heest
ate

d.Foranon-
resi
dental
ien,onl
ythatwhi
chwasact
ual
lyi
ncur
redi
nthe
Phi
li
ppines

I
TEMS17THROUGH 19ARE BASED ON THE FOLLOWI
NG I
NFORMATI
ON:

Ar esi
dentciti
zendiedwi t
hpr opert
iescons
titut
inghi
sgrossestat
eofP5,
000,000.
Actualfuneralexpensesamount edtoP220,000andotherexpensesandcl
aimswhich
aredeductionsfrom thegrossestat
eamount edtoP1,
200,000.

17.Theal
lowabl
ededuc
tionf
orf
uner
alexpense
sis:

a.220,
000 c
.200,
000

b.250,
000 d.Nonegi
ven

18.Thet
axabl
enetes
tat
eis:

a.P3,
600,
000 c.P3,
700,
000

b.P2,
600,
000 d.P3,
580,
000

19.Thedi
str
ibut
abl
eest
atewasdi
mini
shedby:

a.P1,
420,
000 c.P1,
200,
000

b.P1,
400,
000 d.Someot
heramount

I
TEMS20and21ARE BASED ON THE FOLLOWI
NG I
NFORMATI
ON:

Propert
iesi
nt hePhil
ippi
nes–P500,000;Pr
operti
esout
sidethePhil
ippi
nes–
P300,000;Actualf
uneralexpensesi
nthePhil
ippi
nes–P20,000;Ac
tualfuner
al
expensesoutsi
dethePhili
ppines–P10,
000.

20.Ift
hedecede
ntwasaci
tiz
enorr
esi
dentoft
hePhi
li
ppi
nes
,thededuc
tibl
efuner
al
expe
nsesi
s:

a.P30,
000 c
.P18,
750

b.P40,
000 d.P25,
000

21.Ifthedecedentwasanon-
resi
dent
,notci
tiz
enoft
hePhi
li
ppi
nes,t
hededuc
tibl
e
funeralexpensesi
s:

a.P15,
625 c
.P18,
750

b.P40,
000 d.P25,
000

22.St ement1:Lossescanbededuc
at tedonl
yifi
ncur
reddur
ingt
heset
tlementoft
he
est
ate.

Statement1:Lossescanbededuct
edonl
yift
hepr
oper
tyl
osti
sincl
udedi
nthegr
oss
estate.

a.bot
hst
atementar
etr
ue.
b.bot
hst
atementar
efal
se.
c.t
hefir
stst
atementi
str
ue,butt
hesecondst
atementi
sfal
se.
 d.t
hefir
stst
atementi
sfal
se,butt
hesecondst
atementi
str
ue.

23.Whi
chs
tat
ementi
swr
ong?Los
sesar
ededuc
tibl
efr
om t
hegr
osse
stat
e:

a.i
far
isi
ngf
rom ear
thquake
.

b.i
fnotcompensat
edbyi
nsur
anceorot
herf
orm ofi
ndemni
ty.

c.i
fthel
ossar
isesf
rom sal
eofc
api
talasset
s.

d.mus
tbei
ncur
reddur
ingt
hese
ttl
ementoft
heest
ate.

24.Ar
esi
dentFi
li
pino,di
edonMay5,2012andhi
ses
tat
eincur
redl
ossesasf
oll
ow:

1stl
oss:From fir
eonJul
y2,2012ofi
mpr
ovementonhi
spr
oper
tynotcompensat
edby
i
nsur ance
.

2nd l
oss:Fr
om floodonJul
y2,2011ofhouse
hol
dfur
nit
ureal
sonotc
ompensat
edby
i
nsur ance.

a.1stl
ossi
snotdeduc
ti eand2nd l
bl ossi
sdeduc
tibl
e.

b.bot
hlossesar
enotdeduct
ibl
e.

c.bot
hlossesar
ededuct
ibl
efr
om gr
ossest
ate.

d.1stl
ossi
sdeduct
ibl
eand2nd l
ossi
snot
.

25.Whichstat
ementiscor
rect
?Realpr
oper
tywit
hacostofP300,
000andaf air
marke
tvalueattheti
meofdeathofP1,
000,
000,butsubj
ectt
omortgageofP200,
000.

a.Shal
lbei
nthet
axabl
ene
test
ateatP800,000.

b.Shal
lbei
nthegr
ossest
ateatt
hedecedent
’sequi
tyofP800,000.

c.Shal
lbei
nthegr
osses
tat
eatP300,000.

d.Shal
lbei
nthegr
osses
tat
eatt
hedecedent
’sequi
tyofP100,000.

26.Kenkoyinheritedpr opertyonNovember1,2012,wi thaf airmarketvalueanda

mortgageatthattimeofP200, 000andP100, 000,respecti
v el
y.Hemar ri
edonJanuary
10,2013,undert hepr opertyrelati
onshipofconjugalpar tnershi
pofgains.OnMar ch
5,2014,hebor r
owedP200, 000f rom abankandmor tgagedt hesamepr opert
y.
Kenkoydiedwithoutpayi nganyoft hemor tgageindebtedness.Disr
egardingaccrued
i
nterestonthemor t
gagei ndebtedness,deductionagainstexclusi
vepropertyis:

a.P200,
000 c.P300,
000

b.
P100,
000 d.Noneoft
hes
e

27.Aresidentdecedentwasmarri
edundert
heconjugalpar
tnershi
pofgai
ns .An
obli
gat
ionofP100, 000,i
ncur
redduri
ngthemar
riageandsecuredbyamor tgageof
excl
usiveproper
tyi s:

a.Adeduc
tionf
rom t
hegr
ossest
ateatP100,
000agai
nstconj
ugalpr
oper
ty.

b.Adeduc
tionf
rom t
hegr
osses
tat
eatP100,
000ag
ainstexcl
usi
vepr
oper
ty.

c.Adeduc
tionofP50,
00f
rom t
hegr
ossest
ateagai
nstconj
ugalpr
oper
ty.

d.Adeduc t
ionofP100,
00fr
om t
hegrossestat
eagai
nstexcl
usi
vepr
oper
ty,but
wi
tharecei
vabl
eofP50,000fr
om t
hesurvi
vingspouse.
28.Whichs
tat
ementi
scor
rect
?Cl
aimsagai
nstt
hees
tat
e,asdeduc
tionf
rom t
hegr
oss
est
ate:
 a.Repr
esent
sobl
igat
ionsenf
orceabl
edur
ingt
hel
if
eti
meoft
hedecedent
.

b.Shoul
dal
waysbeevi
dencedbyanot
ari
zeddocument
.

c.i
ssuffici
entf
ordeduct
ibi
li
tyi
faavl
idobl
igat
ionundert
hel
aw onobl
igat
ions.

d.Ifunpai
dmortgageofanon-r
esident
,notcit
izenoft
hePhi
li
ppi
nes,t
he
pr
oper
t yshouldbei
ncl
udedi nthePhi
lippi
negrossestat
e.

29.Whi
choft
hef
oll
owi
ngi
sdeduct
ibl
efr
om t
hegr
ossest
ate
?

a.I
ncomet
axpai
doni
ncomer
ecei
vedaf
terdeat
h.

b.Unpai
dpr
oper
tyt
axesac
cruedi
ntheyearofdeat
h.

c.Donor
’st
axaccr
uedaf
tert
odeat
h.

d.Est
atet
axpai
dtoaf
orei
gncount
ry.

30.Whi
chi
swr
ong?Deduc
tionf
ort
rans
fer
sforpubl
icpur
pose:

a.Meansl
egacyi
nal
astwi
llandt
est
amentt
othegove
rnment
.

b.Meansde
vicei
nal
astwi
llandt
est
amentt
othegov
ernment
.

c.I
ncl
udespr
oper
tiest
rans
fer
redi
ntervi
vos.

d.wi
llnoti
ncl
udel
egaci
est
ochar
itabl
einst
itut
ions.

31.Indet
ermi
ningt
het
axabl
enetes
tat
eofadecedent
,whi
choft
hef
oll
owi
ngr
ulesi
s
cor
rect
?

a.Realest
ateabr
oadi
snoti
ncl
udedi
nthegr
ossest
ateofadec
edentwhowasa
r
esi
dentali
en.

b.Vani
shi
ngdeduct
ionmus
tbesubj
ectt
oli
mit
ati
ons.

c.Shar
esofs t
ocksbeingint
angi
blepr
oper
tyshal
lbei
ncl
udedi
nthedece
dent
’s
gr
ossestat
ewhereversit
uated.

d.Funeralexpensesar
ededuct
ibl
etot
heext
entof5% oft
het
otalgr
ossest
ate
butnotexceedi
ngP100,000.

32.Whichofthefol
lowi
ngs
tat
ementi
scor
rect
?Pr
oper
tysubj
ectt
ovani
shi
ng
deduct
ionshoul
dbe:

a.I
fthedecedentwasanotci
tiz
ennorr
esi
dentoft
hePhi
li
ppi
nes
,thepr
oper
ty
s
houl
dnotbelocat
edi nthePhi
li
ppi
nes.

b.Ifthedecedentwasaciti
zenorr
esi
dentoft
hePhi
li
ppi
nes,t
hepr
oper
tymay
notbelocat
edint hePhil
ippi
nes.

c.I
fthedecedentwasacit
izenbutar
esi
dentoft
hePhi
li
ppi
nes,t
hepr
oper
ty
neednotbelocat
edinthePhi
li
ppines.

d.I
fthedecedentwasacit
ize
nandr
esi
dentoft
hePhi
li
ppi
nes,t
hepr
oper
ty
s
houl
dbelocat
edint hePhi
li
ppi
nes.

33.A resi
dentdecedent
,duringhisli
fet
ime,wasundertheconj
ugalpart
ner
shipof
gai
ns.Amonghi sall
owablededuct
ionsfrom t
hegrossest
atei
svanishi
ngdeduct
ion
andthefoll
owing:
Funeralexpenses P80,
000
Judici
alexpenses 100,
000
Clai
msagai nstconj
ugalpr
oper
ties 120,
000
 b.Judi
ciale
xpenses d.Cl
aimsag
ains
tthees
tat
e

I
tems42t
hrough46ar
ebasedont
hef
oll
owi
ngi
nfor
mat
ion:

Aciti
zenandr es
identoft
hePhili
ppines,di
edonOc t
obe
r10,2010,l
eavi
ngt
he
f
oll
owingproperti
es,ri
ght
s,obl
igati
onsandcharge
s:

Conjugalpr oper t
ies( i
nc l
udingafamil
yhomeofP3,000,000
andamountr e
ceivableunderRA4917ofP200, 000) P6,
000,
000
Exc l
us i
vepr operti
es( i
ncludingcashofP500,
000inher
ited41/2
yearsago) 4,
000,
000
Me dicalexpensesunpai d,January2012 600,
000
Funer alexpe nses 350,
000
Judicialexpe nses 500,
000
Othe robligati
ons 100,
000
43.Thededuct iblefune r
ale xpensesi
s:

a.P350,
000 c
.P500,
000

b.P100,
000 d.P200,
000

44.Thevani
shi
ngdeduc
tioni
s:

a.P460,
000 c
.P92,
000

B.
P184,
000 d.P138,
000
45.Thededuct
ionf
orf
ami
lyhomei
s:

a.P3,
000,
000 c.P1,
000,
000

b.P1,
500,
000 d.P500,
000

46.Thededuct
ibl
emedi
cale
xpensesi
s:

a.P600,
000 c
.P500,
000

b.P300,
000 d.250,
000

47.Thet
axabl
enetes
tat
eis:

a.P4,
808,
000 c.P3,
808,
000

b.P4,
908,
000 d.P3,
908,
000

48.Es
tat
etaxcr
edi
tforf
orei
gne
stat
etaxpai
disav
ail
abl
etot
hee
stat
eof
:

a.Resi
dentorci
tiz
enoft
hePhi
li
ppi
nes

b.Non-
resi
dental
ien

c.Al
lki
ndsofdece
dent
s

d.Noneoft
hes
e

49.

Phi
li
ppi
nes For
eign

Gr
osse
stat
e P6,
000,
000 P4,
000,
000

Cl
aimsagai
nstt
hees
tat
e 1,
000,
000 1,
000,
000

How muchwasthePhili
ppi
neestat
etaxdueift
hedecedentwasanon-resi
dent,not
c
iti
zenoft
hePhi
li
ppines,andther
ewasaforei
gnest
atetaxpaymentofP400,000?

a.P0 c
.P571,
875
 b.P515,
000 d.P443,
000

50.Theest
atetaxr
etur
nshoul
dbeaccompani
edbyacer
tificat
eofani
ndependent
CPAifthegros
sest
atei
s:

a.P2,
000,
000 c
.OverP2,
000,
000

b.P2,
000,
000orover d.P50,
000orover

51.Whichoft
hefoll
owingstatement
sisfal
se?Whenanes t
atetaxretur
nhadbee n
filedandtheest
atetaxhadbe enpaidbutsubseque
ntl
y,becauseoferror
sint
he
ret
urn,adefici
encyestat
et axhastobepaid:

a.TheBureauofInter
nalRev
enuecanas
kpaymentf
rom t
hehe
irst
owhom t
he
e
stat
ehadbe endist
ribut
ed.

b.TheBureauofInt
ernalRevenuecannotasktheexecutororadmini
str
atort
o
paybecausehewouldhavebeendis
char ge
dfrom li
abi
li
tyfortheestat
etaxtothe
hei
rsoncetheest
atetaxhadbeenpai d.

c.TheBur
eauofI nt
ernalRevenuecans ti
llasktheexecutororadmini
str
at ort
o
pay,e
veni ft
heheir
shav edissi
pate
dt heinheri
tance,i
ftheexecutororadmini
strator
didnotaskforawr i
tte
ndischargefrom l
iabi
li
tyfrom t
heBur eauofInter
nalRevenue.

d.TheBureauofI
nternalRe
veneushal
lhav
eal
ienont
hepr
oper
tiesoft
he
e
stat
eonc eademandforpaymenthadbeenmade.

52.Whenadonati
onwhichpaidadonor’
staxwasac t
ual
lyadonati
onmorti
scaus
a,
asascer
tai
nedbytheBureauofI
nter
nalRevenue,whi
choft
hefoll
owingi
strue
?

a.Thedonati
onshallber
equi
redtopaytheest
atetaxonit
sproperval
uat
ionat
t
het
imeofdeath,andther
ecanbear ef
undforthewrongpaymentoft
hedonor’
stax.

b.Thedonat
ionshallberequi
redtopayt
heestat
et axs
othatt
hees
tat
etax
c
omputedshal
lbereducedbythedonor’
staxal
readypaid.

c.Thedonat
ionshal
lnotpayanyt
rans
fert
axanymor
e.

d.Thedonat
ionhast
opayt
heest
atet
axi
naddi
ti
ont
othedonor
’st
ax
pr
evi
ouslypai
d.

53.Taxpayerdi
edFebruary2,2013.Nojudi
cialpr
oceedi
ngswereins
tit
utedfort
he
set
tle
mentofhisest
ate.Retur
nwasfil edandt axofP20,000waspaidNovember2,
set
tle
mentofhi
sest
ate.Re
tur
nwasfiledandtaxofP20,000waspaidNovember2,
2013.Thees
tat
etaxdue,i
ncl
udi
ngi
ncr
ements,asofNovember2,2013is:

a.P26,
000 c
.P31,
000

b.P26,
250 d.P31,
500

-
---
---
---
---
---
---
---
--end-
---
---
---
---
---
---
---
---
 TAX.M-1402Donor
’sTax

Pr
obl
em 1

Ar
agav
ethef
oll
owi
ngpr
oper
tie
stov
ari
ousdoneesonDec
ember25,2012:

Houseandl
oti
nLondon P3,
500,
000

Apar
tmenthous
einNag
aCi
ty 8,
000,
000

Cari
nIr
igaCi
ty 520,
000

Cari
nLondon 900,
000

Savi
ngsdeposi
twi
thBPI 50,
000

Ti
medeposi
tinaNe
w Yor
kBank 120,
000

Account
srecei
vabl
e,debt
orr
esi
dingi
nthePhi
li
ppi
nes 140,
000

Account
srecei
vabl
e,debt
orr
esi
dingi
nHongkong 35,
000

Fr
anchi
seexe
rci
sedi
nNew Yor
k 225,
000

Fr
anchi
seexe
rci
sedi
nPhi
li
ppi
nes 120,
000

I
nves
tmenti
nGoodTi
meCo.
,par
tne
rshi
pes
tabl
ishe
dinHongkong 160,
000

I
nves
tmenti
nLove
rsCompany
,par
tne
rshi
pest
abl
ishe
dint
hePhi
l’
s. 125,
000

1.Thegr
ossgi
fti
fAr
aisar
esi
dentorc
iti
zen

a.P13,
895,
000 c.P8,
520,
000

b.P8,
955,
000 d.none

2.Thegr
ossgi
fti
fAr
aisar
esi
dentandci
tiz
enofuni
tedst
ates(
wit
houtr
eci
proc
ity
).

a.
13,
895,
000 c.8,
520,
000

b.8,
955,
000 d.None

3.Thegr
ossgi
fti
fAr
aisar
esi
dentandci
tiz
enoft
hedonorasdi
minut
ionont
he
pr
ope
rtydonat
ed.

a.
13,
895,
000 c.8,
520,
000

b.8,
955,
000 d.None

Pr
obl
em 2

Anac
let
ogav
ethef
oll
owi
ngdonat
ionst
o:

02-14-
12—Az
ucena,l
egi
timat
edaught
eronacc
ountofmar
riagel
astDe
cember31,
2010—P190,
000.

06-01-12—Br
usc
o,br
otheronac
countofmar
riag
esc
hedul
edDe
cember31,2011—
P160,000.

10-13-
12—Cari
zosa,l
egi
timat
edaught
er,onac
countofmar
riageonNov
embe
r12,
2011—P180,
000

05-
15-13—Dalmaci
o,fat
her,onacc
ountofmarr
iage
,landwi
thafai
rmarketval
ueof
P1,
000,000butmortg
ageforP100,
000whichwasassumedbyt
hedonee.
 4.Thegi
ftt
axpayabl
eonFe
bruar
y14,2012

a.190,
000 c.2,
000

b.1,
800 d.200,
000

5.Thegi
ftt
axpayabl
eonJune1,2012

a.6,
200 c.1,
200

b.8,
000 d.350,
000

6.Thegi
ftt
axpayabl
eonOc
tober13,2012

a.15,
200 c
.7,
800

b.15,
800 d.7,
200

7.Thegi
ftt
axpayabl
eonMay15,2013

a.900,
000 c.44,
000

b.1,
000,
000 d.
38,
000

Pr
obl
em 3

Mr
.andMr
s.Al
avadogav
ethef
oll
owi
ngdonat
ions:

May3,2013 -Conj
ugalpr
oper
tyval
uedatP300,
000donat
edt
oBar
umbado,
l
egi
timat
esonwhogotmarri
edJanuary1,2013.

Jul
y14,2013 -
Capit
alpr
opert
ydonat
edt
oCar
lot
a,l
egi
timat
edaught
erwhogot
marri
edJune1,2013.Val
ue–P500,
000.

Dec.30,2013 -
Conj
ugalpr
oper
tydonat
edt
oCar
lot
a.Thedowr
yhasf
airmar
ket
val
ueofP800,000

8.Thegi
ftt
axdueofMr
s.Al
avadoonMay3,2013

a.1,
000 c.800

b.5,
600 d.6,
000

9.Thegi
ftt
axdueofMr
.Al
avadoonJul
y14,2013.
 a.21,
800 c.12,
600

b.21,
000 d.6,
400

10.Thegi
ftt
axdueofMr
s.Al
avadoonDecember30,2013

a.15,
000 c.8,
200

b.9,
000 d.15,
800

Pr
obl
em 4

Anac
onda,r
esi
dent
,gav
ethef
oll
owi
ngdonat
ions:

Done
e Januar
y22,2013

Bar
bado Legi
timat
eson,onaccountofgr
aduat
ion–P140,
000.

NagaCi
ty Apar
celofl
andt
obeusedf
orpubl
icpur
posed–P200,
000.

Coronado Legit
imat
echi
ldonac
countofi
tsf
ort
hcomi
ngmar
riageonFe
bruar
y14,
2013–P6,000.

Dimal
upig Legi
timat
edaught
er,onacc
ountofmar
riageonFebr
uar
y4,2012.-
P7,
000.

Mar
ch25,2013

Bar
bado Onaccountofmar
riageonApr
il10,2013–P150,
000.

Cor
onado Addi
tionaldonat
iononac
countofmar
riageFe
b.14,2013–P69,
000.

Di
mal
upi
g Addi
ti
onaldonat
iononaccountofmar
riageFeb.4,2012–P200,
000.

Devt
.Acade
myoft
hePhi
l’
s Foreducat
ionandt
rai
ningpur
pose
s,P50,
000.
11.Thedonor
’st
axdueonJanuary22,2013.

a.800 c.140,
000

b.660 d.6,
600

12.Thedonor
’st
axdueonMar
ch25,2013.

a.
16,
700 c
.9,
200

b.15,
900 d.15,
720

Pr
obl
em 5

Mr
.andMr
s.Al
banog
avet
hef
oll
owi
ngdonat
ions:

July1,2013 Communit
ypropert
ywasdonat
edt
oBal
aoi
ng,si
sterofMr
.
Albano.Thef
airmar
ketv
aluei
sP650,000.

Sept
.25,2013 CashofP300,
000t
oCuar
to,sonofMr
s.Fr
om hert
een-
age
boyf
riend.

Nov
.10,2013 CashofP250,
000wasdonat
edt
oBal
aoi
ng.

13.Thedonor
’st
axdueonMr
.andMr
s.Al
banoonJul
y1,2013–

a.7,
000;
7,000 c
.97,
500;
7,000
 b.7,
000;
97,
500 d.97,
500;
97,
500

14.Thedonor
staxdueonMr
.Al
banoonSept
ember25,2013–

a.1,
000 c.45,
000

b.90,
000 d.6,
000

15.Thedonor
’st
axdueonMr
.andMr
s.Al
banoonNovembe
r102013,2013–

a.5,
000;37,
500 c.
37,
500;
37,
500

b.10,
000;5,
000 d.500,
500

Pr
obl
em 6

Ar
andasis
oldt
hef
oll
owi
ngasset
s:

Dat
eofSal
e Buyer Mar ue Sel
ketVal lingPri
ce Cost/Book
value

Jewel
ry June11 Ni
ece P 130,
000 P 15,
000 P100,
000

Res
.House June22 Gi
rl
fri
end 1,
000,
000 600,
000 750,
000

Apt
.House Sept
.25 Le
gal
lyadopt
edc
hil
d 900,
000 600,
000 750,
000

Del
.Tr
uck Oc
t.10 Cont
rol
ledcor
p. 450,
000 400,
000 350,
000

16.Thegi
ftt
ax,i
fany
,ineachoft
hei
ndepende
ntt
ransact
ionsabov
e.

(
a) (
b) (
c) (
d)

Jewel
ry P 300 P 300 P 600 P 600

Res
ide
nti
alhous
e 120,
000 None 120,
000 75,
000

Apt
.house 6,
000 6,
000 1,
000 1,
000

Del
iver
ytr
uck None 15,
000 15,
000 None

Pr
obl
em 7

17.Whi
choft
hef
oll
owi
nge
xampl
esi
staxabl
e?

a.A,Amer
icanc
iti
zendonat
edapar
celofl
andl
ocat
edi
ntheuni
tedSt
atet
oS,
ar
esi
dental
ien.

b.OnJune1,2013,TmadeagiftofP200,
000t
ohi
sdaught
eronacc
ountof
hermarri
agecel
ebr
atedonMay1,2012.

c.U,ami
nimum wageear
ner
,gi
veshi
ssonagi
ftwor
thP2,
000asabi
rthday
gi
ft.

d.VandW ar
etheonl
yhei
rsofX.Vr
enounc
eshi
sshar
eofi
nher
itancei
nfav
or
ofW

Pr
obl
em 8

18.Stat
ement1:Asarule,donat
ionst
ocandi
dat
esi
nlocaland/ornat
ionale
lect
ions
arenotsubj
ectt
odonor
’stax.

St
atement2:Donati
ontoapoli
ti
calpar
tyisnotsubjectt
odonor’
staxifiti
s
report
edbyt hedonort
ot heCome
lecandbythecandidateinhi
sStatementof
Expenditur
es.
 a.Tr
ue;Tr
ue c.Fal
se;Fal
se

b.Tr
ue;Fal
se d.Fal
se;Tr
ue

Pr
obl
em 9

19.Oneoft
hef
oll
owi
ngs
tat
ementi
sfal
se:

a.Cont
ract
sofdonat
ionbe
twee
nhusbandandwi
fear
evoi
dinmos
tcases.

b.Thedonat
ionbythepubl
icwor
kscont
rac
tort
oaMayor
,invi
ew ofherpubl
ic
officeisvoi
dinallcase
s.

c.Donat
ionsbe
twee
nper
sonsgui
ltyofadul
ter
yorc
oncubi
nagear
evoi
d.

d.Donat
iont
oac
onc
eiv
edorunbor
nchi
ldr
eni
sval
id.

Pr
obl
em 10

20.A,aciti
zenandr esi
dentoft hePhili
ppines,madedonat i
onsonJanuar y10,2013,
asfoll
ows:Donati
ont oB,al egi
timateson,onacc ountofmar r
iage,t
obecelebrate
don
February14,2013,propert
yi ntheUni tedState
s( onwhichaU. S.donor
’staxof
P1,200waspaid),withafairmar ketval
ueofDonat i
ontoB,cashi nthePhili
ppinesof
Donor’staxcredi
tfordonor’staxpaidt otheU.S.:

a.
P1,
200 c.P600

b.P1,
000 d.P2,
000

Pr
obl
em 11

21.Oneoft
hef
oll
owi
ngs
tat
ement
siscor
rec
t.Thedonor
’st
axr
etur
n:

a.Mus
tbefil
edwi
thi
nthi
rtydaysaf
tert
hee
ndoft
hecal
endarye
ar.

b.Mus
tbefil
edwi
thi
nthi
rtydaysf
rom t
hedat
eofdonat
ion.

c.Mustbeac
compani
edbyacer
tificat
eofani
ndepe
ndentCer
tifiedpubl
ic
Account
anti
fthegr
ossgi
fti
sP50,
000ormore.

d.I
nthecaseofhusbandandwif
emakingdonati
ons,onedonor
’st
axr
etur
n
s
hal
lbefiledandsignedbyei
thert
hehusbandorthewif
e.

22.Oneofthef
oll
owingstatement
sisnott
rue.Whi
chisit?Ifonanyonedat
ether
e
i
sadonationbyonedonort oadoneewhoisnotast
range
rt oget
herwi
thadonat
ion
t
oadoneewhoi sas t
range
r :
 a.Therewil
lbetwoseparat
edonor’
st axret
urnbecauset
hedonor
’st
axonthe
donat
iont oanon-
str
ange
risatgraduat
edr ateswhil
ethedonor
’st
axonthedonat
ion
toastrangeri
sattheflatrat
eof30%.

b.Ther
ewil
lbeonedonor’staxret
ur nonly,wherethedonor’
staxatgraduat
ed
rat
esonthedonat
iontoanon-st
rangerwillbeshownt oge
therwiththedonor’
staxat
theflatrat
eof30% onthedonati
ontoas t
ranger,t
hetotalbe
ingthedonor’
staxto
pay.

c.Ift
herewerepre
viousdonati
onstostr
anger
sduringtheyear,t
hepriornet
gi
ftst
ostrange
rsneednotbeadde danymoreinthecomputat
ionofaggreg
atenetgif
ts,
donor
’staxonaggre
gatenetgif
tsanddonor’
staxdueont hedonati
onstostrange
rs.

d.Adonat
iononacc ountofmar r
iage,be
for
ethemarri
age,byaparentt
oason
anddaught
er-
in-
law shal
lbeconsider
edasdonat i
onstoanon-st
range
randstrang
er.

23.OnMar ch6,2013,aFil
ipinocit
izendonatedhouseandl
otwit
hfairmarketvalue
ofP200,000tohischi
ldonaccountofmar r
iageonJanuary1,
2013.Gif
ttaxreturn
wasfil edandtaxpaidonJul y5,2013.Thedonor’
staxdue,i
ncl
udingincr
eme nts,as
ofJuly5,2013is:

a.2,
400 c.2,
600

b.2,
340 d.1,
800

Mul
tipl
eChoi
ceQues
tions
1.Whichoft
hefol
lowi
ngst
atementiswr
ong?Adi
sti
nct
ionbet
weenadonat
ioni
nter
vi
vosandadonati
onmort
iscausais:

a.Thefirs
ttakeeffectduri
ngt
hel
if
eti
meoft
hegr
ant
orwhi
let
hese
condt
ake
s
e
ffe
ctaftert
hedeat
hofthegrant
or.

b.Thefir
sti
ssubj
ectt
othedonor
’st
axwhi
let
hese
condi
ssubj
ectt
othee
stat
e
t
ax.

c.Thefir stal
waysr
equi
resapubl
icdoc
umentwhi
let
hese
condmaynotr
equi
re
apubl
icdocument.

d.Thefirsti
sval
uedatfai
rmarketv
alueatt
heti
met heproper
tyisgivenwhi
le
t
hesecondisval
uedatf
airmar
ketval
ueattheti
meofthedeathofthegrant
or.

2.Thef
oll
owi
ngar
ether
equi
sit
esofadonat
ionf
orpur
pos
esoft
hedonor
’st
ax,except
one:

a.capaci
tyoft
hedonor c.de
liv
eryoft
hesubj
ectmat
terofgi
ft

b.capaci
tyoft
hedonee d.donat
ivei
ntent

3.1ststat
ement:Asoldhiscar(cost
,P300,000)toB f
orP500,000.Thecarhasaf ai
r
marke tval
ueofP900,000atthetimeofsal
e .Thediffer
enceofP400,000insel
li
ng
pri
ceandf ai
rmarke
tvalueconst
itutesagi
ftsubjec
ttodonor
’stax.

2nd statement:C purchasedal otandcottageinAlaminosCity(homeof100i sl

ands)i
n
2009f orP1,000,000.Itwasus edassummervacat i
onhousebyhi sf
ami ly
.In2010,C
deci dedtose l
lthelotandc ott
aget oD f
orP2,000,000althoughitspresentmarket
valuei sP2,500,000.TheP500, 000di
ffer enceinsell
ingpriceandmar ketval
ueisagif
t
butnotsubj ecttodonor’stax.

a.bot
hst
atement
sar
etr
ue
 b.bot
hst
atement
sar
efal
se

c.Thefir
sts
tat
ementi
str
ueandt
hesecondst
atementi
sfal
se.

d.Thefir
sts
tat
ementi
sfal
seandt
hesec
ondst
ate
menti
str
ue.

4.Stat
ement1:Thegr ossgif
tsofadonorwhoi
sanon-
resi
dental
ienwi
lli
ncl
udeal
l
proper
tiesr
egar
dlessoflocat
ion.

St
ate
ment2:Thegrossgif
tsofadonorwhoisanon-resi
dental
ienoft
hePhi
li
ppi
nes,
wi
lli
ncl
udeonl
ypropertylocat
edi
nt hePhi
li
ppi
nes.

a.bot
hst
atement
sar
ecor
rec
t

b.bot
hst
atement
sar
ewr
ong

c.Thefir
sts
tat
ementi
scor
rec
tandt
heseconds
tat
ementi
swr
ong
.

d.Thefir
sts
tat
ementi
swr
ongandt
hese
conds
tat
eme
nti
scor
rec
t.

5.Ther
eci
proc
ityc
lausei
nthedonr
’st
axl
aw appl
iest
oa:

a.Non-
resi
dentc
iti
zen c
.Resi
dentci
tiz
en

b.Resdi
ental
ien d.Non-
resi
dental
ien

6.I
nthepr
evi
ousquest
ion,t
her
eci
proci
tyc
lauseappl
iest
o:

a.Realpr
oper
ty c.I
ntangi
blepe
rsonalpr
oper
ty

b.Tangi
bleper
sonalpr
oper
ty d.Al
loft
hese

7.I
fhei
sar
esi
dental
ienhi
sgr
ossgi
fti
s:

a.P2,
100,
000 c.P2,
950,
000

b.P1,
950,
000 d.P3,
000,
000

8.I
fhei
sanon-
resi
dentJapanes
e,andt
her
eisr
eci
proci
tyl
aw,hi
sgr
ossgi
fti
s:

a.P850,
000 c
.P1,
050,
000

b.P650,
000 d.P700,
000

9.Whichofthef
oll
owi
ngst
atement
siscor
rec
t?Adonat
ioni
nte
rvi
vosbyhus
bandand
wif
e,j
oint
lyduri
ngthemar
riage
 a.Isadonat
ionofconj
ugalpr
opert
ythatwillrequireonecomputat
ionoft
he
donor
’stax,i
fthes
pousesareunderthesys
tem ofconjugalpart
nershi
pofgai
ns.

b.Isadonat
ionofcommunityproper
tyt hatwi
llr
equir
eonec
omputat
ionofthe
donor
’stax,i
fthes
pousesareunderthesyste
m ofabsolut
ecommunit
yofpr
opert
y.

c.Isadonationofexc
lusi
vepropertybytheeit
herspous
ethatwil
lrequi
reone
computati
onofthedonor’st
ax,ift
hes pousesareundert
hesyste
m ofc
onjugal
part
nershipofgai
ns.

d.Isadonationofeachspousetotheext
entofone-
halft
hatwil
lrequir
e
s
eparatecomputat
ionfortwodonor’st
axes,underwhic
heverpr
oper
tyrelat
ionshi
p
e
xist
sbe t
weenthes pouses
.

10.Si
tuat
ion1:M,i
ntradi
ngbusiness,hadar
ece
ivableofP150,000fr
om N.Wi
thout
exe
rti
ngutmosteffor
ttocol
lec
t,M cancel
edt
heindebtednessofN.

Sit
uat
ion2:O sol
dtoPper
sonalproper
tyworthP200,
000forac onsi
der
ati
onof
P50,
000,totakeeffecti
mmediat
elyuponrec
eiptoft
heconsi
derat
ion.

a.Si
tuat
ion1i
nvol
vesadonat
ionofP150,
000andshoul
dbecov
ere
dbya
donor
’st
axr
etur
nwi
thi
nthi
rtydaysf
rom t
hedat
eofc
ancel
lat
ionoft
hei
nde
bte
dness
.

b.Si
tuati
on1i sbaddebtexpensesoft
hebus
inessandshoul
dnotbet
reat
edas
i
nvol
vingataxabledonat
ion.

c.Sit
uat
ion2shal
lbeconsi
der
edabadbar
gai
nandnoti
nvol
vingat
axabl
e
donat
ion.

d.Sit
uation2inv
olv
esadonati
onofP200,
000andshoul
dbecove
redbya
donor
’staxret
ur nwi
thi
nthir
tydaysf
rom t
hedateoft
hesal
e.

11.Q soldhisl
and(capitalasset)onSeptember5,2012t ohisbestfri
endf
or
P300,000whent hemarke tvaluewasP500, 000Heg aveacommi ssi
onofP20,000t
o
thebrokerandspentfordocument ar
ystampt axesandtransf
erfeestheamountof
P4,000.Theint
ernalrevenuet axpayabl
ei s:

a.Fi
nalcapi
talgai
ntaxofP30,
000

b.Fi
nalcapi
talg
aint
axofP18,
000

c.Donor
’st
axofP60,
000

d.None
,asi
tisexemptf
rom anyi
nter
nalr
evenuet
axes

12.Statement1:I
nshowi nggrossgi
ftsi
nt hedonor
’staxretur
n,buildi
ngsshouldbe
valuedatthecurr
entfai
rmar ketval
ueasshowni ntheassessmentroll
s,orthefai
r
mar ke
tvalueasdeter
minedbyt heCommi ssi
onerofInt
ernalRevenue,whic
heveris
higher.

Stat
ement2:
Inshowinggrossgi
ftsi
nthedonor
’st
axret
urn,per
sonalprope
rty
s
houl
dbev al
uedatcur
rentfai
rmarketval
ueoratcos
t,whi
chev
erislower
.

a.Bot
hst
atement
sar
ecor
rect

b.Bot
hst
ateme
ntsar
efal
se

c.Thefir
sts
tat
ementi
scor
rec
tandt
heseconds
tat
ementi
swr
ong
.

d.Thefir
sts
tat
ementi
swr
ongandt
hese
conds
tat
eme
nti
scor
rec
t.

13.Adonat
iononac
countofmar
riagewi
llgav
eadonorade
duc
tionf
rom t
hegr
oss
gi
ftsmadei
f:

a.Thedoneei
sal
egi
timat
echi
ldc.Thedone
eisnotas
tranger

b.Thedoneei
sanybody d.Noneoft
hes
e.

14.Whichofthef
oll
owi
ngs
tat
ement
swr
ong?Adeduc
tionf
oradonat
iononacc
ount
ofmar
riage:

a.Shal
lbeal
lowedt
oar
esi
dentci
tiz
enwhent
hepr
oper
tydonat
edi
slocat
ed
out
sidethePhi
li
ppi
nes.

b.Shal
lbeallowedt
oar
esi
dentc
iti
zenwhent
hepr
oper
tydonat
edi
slocat
ed
wi
thi
nt hePhil
ippi
nes.

c.Shal
lbeallowedt
oar
esi
dental
ienwhe
nthepr
ope
rtydonat
edi
slocat
ed
out
sidethePhil
ippi
nes.
 d.Shal
lbeallowedt
oar
esi
dental
ienwhent
hepr
oper
tydonat
edi
slocat
ed
wi
thi
nt hePhil
ippi
nes.

15.Al
lofthef
oll
owi
ngs t
atement
sar
ewr
ong,exc
eptone
.Ift
hedonori
sanonr
esi
dent
,
notci
ti
zenoft
hePhil
ippines:

a.Proper
tysi
tuat
edabr
oadbutdonat
edt
oac
iti
zenoft
hePhi
li
ppi
neswi
llpay
t
hedonor
’stax.

b.Pr
opert
ysituat
edi
nthePhi
li
ppi
nesbutdonat
edt
oadoneeaboar
dwi
llnot
payt
hedonor’stax.

c.Proper
tyoutsi
det
hePhili
ppi
nesdonat
edonaccountofmar
riaget
oar
esi
dent
oft
hePhi
li
ppineshasadeduct
ionofP10,
000.

d.Pr
oper
tyinthePhi
li
ppi
neswithaval
ueofP150,
000donat
edt
oac
iti
zenof
t
hePhi
li
ppi
neswil
lpayadonor’
stax.

16.Husbandandwi femadeoutofc onj

ugalcashofP1,000,000,adonati
onon
accountofmarr
iage,toalegit
imat
ec hi
ld.Whichoft
hef ol
lowingst
atementsi
snot
cor
r ec
tondeducti
onf ordonati
ononaccountofmarriage?
 a.P10,
000t
oeac
hspouse
,onsepar
atec
omput
ati
onf
ordonor
’st
ax.

b.P5,
000t
oeachs
pous
e,ons
epar
atecomput
ati
onf
ordonor
’st
ax.

c.P10,
000onase
par
atecomput
ati
onf
ordonor
’st
axoft
hehus
band.

d.P10,
000onasepar
atec
omput
ati
onf
ordonor
’st
axoft
hewi
fe.

17.Onacontr
ibuti
ontotheRomanCathol
icChurc
hbyani ndi
vidual
,whi
choft
he
f
oll
owi
ngcorr
ectl
ys t
ate
/struer
ule/si
ncomputi
ngt hedonor’
stax.

a.Ther
eisnodeduc
tionf
rom t
hegr
ossgi
ft.

b.I
tisnotconsi
der
edagi
ftonwhi
cht
her
ewi
llbeadonor
’st
ax.

c.I
tisc
ons
ide
redagr
ossgi
ftandadeduc
tionf
rom t
hegr
ossgi
ft.

d.Itpayst
hedonor
’st
axatt
het
imeoft
hecont
ribut
ionatt
hegr
aduat
edr
ates
ofdonor
’stax.

18.Si
nceadonat
iont
oachar
itabl
eins
tit
uti
onhasadeduc
tionwi
thoutanycei
li
ng.

Stat
ement1:Thenetgi
ftwi
llbezero,sothati
ncomput
ingthedonor’
stax,t
he
donat
ionmaybeomi t
tedi
ngrossgif
tifi
tislikewi
seomi
tte
dindeduct
ions.

Stat
ement2:Thegr
ossgi
ftss
houl
dber
epor
tedandt
hededuc
tionshal
lbe
c
lai
med.

a.Bot
hst
atement
sar
ecor
rect
.

b.Bot
hst
ateme
ntsar
ewr
ong.

c.Thefir
sts
tat
ementi
scor
rec
tandt
heseconds
tat
ementi
swr
ong
.

d.Thefir
sts
tat
ementi
swr
ongandt
hese
conds
tat
eme
nti
scor
rec
t.

19.Whi
choft
hef
oll
owi
ngdonat
ionsi
snotent
itl
edt
odeduct
ion?

a.Donat
iont
ochar
itabl
einst
itut
ion

b.Donat
iont
osci
ent
ificor
gani
zat
ion

c.Donat
iont
osoci
alwe
lfar
e
 d.Donat
iont
oapol
iti
calpar
ty

20.R donate
dat otalamountofP500,000,½ totheQue zonCityHal land½ toa
chari
tabl
eins t
ituti
on,TAHANANG WALANG HAGDANAN.Uponi nquiry,i
twasve r
ified
thatthecharit
ablei nst
ituti
on’
stot
alrecei
ptsf
rom donationamount edtoP10M andi t
s
tot
aladministrati
veexpe nsesr
eachedP4.0M.Rcancl ai
m at ot
aldeduc ti
on/exempti
on
of:

a.P250,
000 c
.P200,
000

b.P500,
000 d.None

21.Al
loft
hef
oll
owi
ngexce
ptonear
eexemptf
rom gi
ftt
axunders
peci
all
aws:

a.Donat
iont
oInt
egr
ate
dBaroft
hePhi
li
ppi
nes

b.Donat
iont
oDeve
lopmentAcademyoft
hePhi
li
ppi
nes

c.Donat
iont
oPhi
li
ppi
neI
nst
itut
eofCe
rti
fiedPubl
icAc
count
ant
s

d.Donat
iont
oInt
ernat
ionalRi
ceRese
arc
hInst
itut
e

22.Firstdi
sti
nct
ion:Ther
atesf
ordonor
’st
axar
elowert
hant
hosef
orest
atet
ax,i
nal
l
cases.

Seconddisti
nct
ion:I
ndonor
’st
ax,t
hee
xempt
ioni
sP200,
000 whi
lei
nes
tat
etaxi
tis
P100,000.

a.Bot
hdi
sti
nct
ionar
ecor
rec
t c
.Fi
rsti
scor
rect
,secondi
swr
ong

b.Bot
hdi
sti
nct
ionar
ewr
ong d.Fi
rsti
swr
ong,sec
ondi
scor
rect

23.Whi
chs
tat
ementi
swr
ong?Thedonor
’st
ax:

a.I
scomput
edont
hebasi
soft
hene
tgi
ftsofacal
endaryear
.

b.I
scomput
edandpai
dwi
thi
n30daysf
rom t
hedat
eofdonat
ion.

c.I
scomput
edsepar
ate
lyf
oreac
hspousei
ncaseofaj
ointdonat
ion.
 d.Becomepr
opor
tionat
elybi
ggeronl
aterdonat
ions.

24.St
atement1:Al
lgi
ftsmadeont
hes
amedat
epayonedonor
’st
axonl
y.

St
ate
ment2:Adonat iont oal e
giti
mat echi
ldonaccountofmarri
age,whenthe
pr
opertydonat
edwasal readyde l
iver
ed,willnotpayt
hedonor’
staxifthedonee’
s
marr
iagedidnotact
uallyt akeplace.

a.Bot
hst
atement
sar
etr
ue.

b.Bot
hst
ateme
ntsar
efal
se.

c.Thefir
sts
tat
ementi
str
ueandt
hesecondst
atementi
sfal
se.

d.Thefir
sts
tat
ementi
sfal
seandt
hesec
ondst
ate
menti
str
ue.

25.Incomput
ingt
hedonor
’st
axonasubseque
ntdonat
ion,t
hedonormus
tal
so
consi
der:

a.Al
lpr
iorne
tgi
ftsdur
inghi
sli
fet
ime
.

b.Al
lpr
iornetgi
ftsdur
ingt
hecal
endaryear
.

c.Thepr
esentandt
hei
mmedi
ate
lypr
ece
dingdonat
ion.

d.Onl
ythepr
esentdonat
ion.
26.DonationsononedatebyH,af ather
,ofproper
tyandcash,asfollows:ToI,a
l
egiti
matedaughter
,onac countofmarri
age,l
andwi t
hafai
rmar ke
tval ueofP500,000
butsubjecttomort
gageofP100,000whichisassumedbyI.toJ,al egiti
mateson,on
accountofmarri
age,cashofP200,000.Thenetgif
tsmadeare:

a.P680,
000 c
.P590,
000

b.P580,
000 d.P700,
000

27.Whooft
hef
oll
owi
ngi
sas
trangerundert
hedonor
’st
axl
aw?

a.Ac
hil
dofabr
othe
r c.Agr
andunc
le

b.Agr
andchi
ld d.Asecondcousi
n

28.Fordonor
’st
axpur
poses,oneoft
hef
oll
owi
ngi
snotst
ranger
.

a.s
onbyanat
uraladopt
ion c
.gr
ands
on

b.s
tep-
son d.s
on-
in-
law

29.Oneoft
hefol
lowi
ngisn` otarel
ati
vebycons
angui
nit
ynt
hec
oll
ater
all
inewi
thi
n
thef
ourt
hdegr
eeofrelat
ionship.

a.daught
eroft
hedonor
’snephew c.ni
eceoft
hedonor

b.Fi
rstcousi
noft
hedonor d.s
econdc
ous
inoft
hedonor

30.St
atement1:Adonat
iont
oac
orpor
ati
oni
sadonat
iont
oast
ranger
.

Stat
ement2:adonat
ionbyonespousetothel
egi
timat
echi
ldbyaf
ormermar
riageof
theothe
rspousei
sadonati
ontoas t
ranger
.

a.bot
hst
atement
sar
etr
ue

b.bot
hst
atement
sar
efal
se

c.Thefir
sts
tat
ementi
str
ueandt
hesecondst
atementi
sfal
se.

d.Thefir
sts
tat
ementi
sfal
seandt
hesec
ondst
ate
menti
str
ue.

31.Whichofthef
oll
owingst
atementi
swr ong?Adonati
onbyhus
bandandwi
feoutof
conj
ugalorcommunitypr
opertyt
oabr ot
herofthewif
e.

a.I
sone-
hal
fadonat
iont
oanon-
str
angerbyt
hewi
fe.

b.I
sone-
hal
fadonat
iont
oas
trangerbyt
hehusband.

c.I
sadonat
iononwhi
cht
hehusbandmus
tpayadonor
’st
axof30% onhi
sne
t
gi
ft.

d.I
sadonat
iononwhi
cht
hehusbandmustpayt
hegr
aduat
eddonor
’st
axon
hi
sne
tgif
t.

32.Whent
hedoneeorbe
nefici
aryi
sas
tranger
,thet
axpayabl
ebyt
hedonorshal
lbe
.

a.30% oft
hegr
osspr
ofit
s.
 b.30% oft
hene
tpr
ofit
s.

c
.Basedont
hegr
aduat
edr
ate
swi
tht
hefir
stP100,
000ne
tgi
ftexempt
.

d.Basedonthegraduatedrat
eswi
tht
hefir
stP100,
000netgi
fte
xemptor30%
oft
henetgi
ftswhi
cheve
rishigher
.

33.N madeadonationtoO andP,sonanddaught er

-in-
law,onaccountofmar r
iage,of
realproper
tywit
hfairmar
ke tval
ueofP1, 500,000,butsubjec
ttoamor tgageof
P300,000whichwasassumedbyt hedonees.

Thet
otaldonor
’st
axi
s:

a.77,
750 c.185,
950

b.84,
950 d.199,
400

Quest
ions34t
hrough37ar
ebasedont
hef
oll
owi
ngdat
a:

Mr
.andMr
s.K,madet
hef
oll
owi
ngdonat
ions
.

1/25/2013 -
ToL,t
hei
rlegi
timat
eson,onac
countofmar
riagel
ast1/20/2012,c
ar
 wor t
hP400, 000,wi thP200,000mor tgage,½ wasas sumedbyt heone.
5/31/2013 -toM,br othe rofMr .K,hiscapitalprope rtyworthP200,000on
accountofmar r
iage6mont hsagoofM wi t
hac ondi
ti
ont hattheone
willpayt hedonor ’staxthereon.
7/15/2013 -ToN,daught erofMr s.K byf or
mermar r
iage,onaccountofher
mar ri
age12mont hsago,Mr s.K’spar aphernalpropert
ywor th
P100, 000.
8/20/2013 -ToN onac countoft hesamemar r
iage,conjugalcarofthec ouple
wor t
hP400, 000,wi thP200,000unpai dmor tgage,½ assumedbyN.
AndP500, 000wor t
hofl andt otheirfoursonsonac countoftheir
graduat i
on,20% ofwhi chwasownedbyt heirKumpadr ewhoagr eed
todonat ehi ssharet hr
uapubl icdoc ument .

34.Thegi
ftt
axdueofMr
.K asofMay31,2013i
s:

a.8,
000 c.7,
200

b.7,
000 d.6,
600

35.Thegi
ftt
axdueofMr
s.KasofJul
y15,2013i
s:

a.3,
600 c.2,
800

b.2,
600 d.4,
000

36.Thegi
ftt
axesdueofMr
.& Mr
s.K onAug.20,2013ar
e

a.P69,
000& P18,
800,r
espec
tiv
ely

b.P17,
000& P18,
800,r
espe
cti
vel
y

c.P54,
000& P15,
800,r
espec
tiv
ely

d.P54,
000& P18,
800,r
espe
cti
vel
y

37.Thegi
ftt
axdueoft
hei
rKumpadr
eis:

a.P30,
000 c.P45,
000

b.P10,
000 d.none

I
tems38t
hrough41ar
ebasedont
hef
oll
owi
ngi
nfor
mat
ion:

Q aci
ti
zenoft
hePhi
li
ppi
nesmadet
hef
oll
owi
ngdonat
ionsi
n2013:

01/10/2013 :ToR,al egi

timat
edaughter,onac
countofmar ri
agecas hof
P200,000.
05/10/2013 :ToS,al e
giti
mateson,onaccountofmortgage,proper
tywithaf
air
marketvalueofP200,
000andamor t
gagethereon,whichwas
assumedbyS,ofP40, 000.
10/10/2013 :ToT,af
riend,anordi
narydonati
onofP10,
000.
12/10/2013 :ToU,aniece,adonat
iononaccountofmarri
ageofP15,
000.

38.Thedonor
’st
axont
hedonat
ionofJanuar
y10,2013:

a.P150 c.P900

b.P600 d.P1,
800

39.Thedonor
’st
axont
hedonat
ionofMay10,
2013:

a.P5,
750 c
.P4,
500

b.P24,
000 d.P5,
800

40.Thedonor
’st
axont
hedonat
ionofOc
tober10,
2013:

a.P1,
000 c.P6,
250

b.P3,
000 d.P6,
150

41.Thedonor
’st
axont
hedonat
ionofDe
cember10,
2013:

a.P1,
350 c
.P6,
500

b.P2,
450 d.P600

42.St ement1.Taxcr
at editf
ordonor
’st
axpaidtof
ore
igncount
ryi
sal
lowedonl
yift
he
donorisaci
tizenorr
esidentoft
hePhil
ippi
nes:

St
atement2.Therecanbeadonor’
staxpai
dtoafor
eigncountr
yev
eni
ftheci
tiz
en
orr
esidentdonorhadnodonat
ionofproper
tyi
nthePhi
lippi
nes.
 a.Bot
hst
atement
sar
etr
ue.

b.Bot
hst
ateme
ntsar
efal
se.

c.Thefir
sts
tat
ementi
str
ueandt
hesecondst
atementi
sfal
se.

d.Thefir
sts
tat
ementi
sfal
seandt
hesec
ondst
ate
menti
str
ue.

43.Donat
ionst
oal
egi
ti
mat
echi
ldof
:

Prope
rtyi nthePhil
ippines P110,000
Prope
rtyoutsidethePhi li
ppi
nes,onaccountofmarr
iage 200,000
Donor’staxpaidtoforeigncountry 4,500
Donor ’
staxdueaftertaxc redi
tforf
orei
gndonor
’staxpai
d:

a.P2,
200.
00 c
.P4,
625.
50

b.2,
750.
00 d.P3,
208.
33

Ques
tions44and45ar
ebas
edont
hef
oll
owi
ngdat
a:

Mr
.O,madet
hef
oll
owi
ngdonat
ionsf
ort
hey
ear2013:

Apr
il15 - ToP,legall
yadoptedchildonaccountofmar r
iagelastweek,car
wor thP710,000inthePhili
ppi ne
s.
- ToQ,hi sdaughter
,carinUSAwor t
hP300, 000.The ypaid$180
donor’
st axinUS.($1-P56)
Jul
y20 - ToRni eceinmani l
a,P200,000wort hofpersonalpropert
y.
- ToS,legiti
matedaughteronaccountmar ri
ageinCe bu,l
astJuly18,
2012,carwor t
hP400, 000butmor tgageforP200,000,½ ofwhich
wasassumedbyt hedonee.
44.Thegi
ftt
axdueaf
tert
axcr
edi
tonApr
il15,2013i
s:

a.P30,
800 c
.P44,
000

b.P35,
000 d.P33,
920

45.Thegi
ftt
axdueonJul
y20,
2013i
s:

a.P40,
000 c
.P84,
000

b.P36,
400 d.P38,
920

46.L,acit
ize
nandr esi
dentofthePhil
ippines,madethefol
lowi
ngdonati
onson
January14,2013:ToM,al egi
timat
echild,onaccountofmarri
ageonthesameday
,
prope
rtyinJapan,whichpaidtheJapanesegovernmentadonor’st
axofP52,
000and
withafai
rmar ke
tvalueofP610,000

ToN,af r
iend,or
dinar
ydonati
onofpr
opert
yint
hePhil
ippi
nes
,subjecttoamort
gage
ofP60,
000whi chwasassumedbyN.Fai
rmarke
tval
ueoftheproperty
,160,
000

Thet
axc
redi
tforf
orei
gndonor
’st
axpai
dis:

a.P34,
628.
06 c.P42,
857.
14

b.P52,
000.
00 d.P31,
520.
43

47.Mr
.O madet
hef
oll
owi
nggi
ftst
ohi
sre
lat
ives:

Phi
l. USA UK I
tal
y

Gr
ossgi
ft P750,
000 P500,
000 P250,
000 P500,
000

Deduc
tions 250,
000 200,
000 150,
000 150,
000

Taxpai
d 25,
000 12,
000 10,
000

Thegi
ftt
axdueaf
tercr
edi
tis
:

a.P35,
600 c
.P33,
520

b.25,
600 d.P39,
000

48.Mr.Pisacit
izenandr esi
dentoft hePhil
ippi
nes.OnJuly8,2013,hemade
donat
ionstoQ,af r
iend,ofpropert
iesinCount r
yYandCount ryZ.Donor’
staxeswere
pai
dtocountrytoCount ryYandaf airmarketval
ueofP300,
000whi l
ethepropert
yin
CountryZhadaf airmarketvalueofP200,000.Thedonor’
staxsti
lldueaf
tercredi
t
f
orforei
gndonor’
staxespaidis:

a.P0 c
.P145,
000
 b.P15,
000 d.P10,
000

49.Ononedat e,aresi
dentalie
ndonormadedonat i
onsofproper
tyinthePhilippi
nes
toanon- st
rangerandofpr opertyout
sidethePhil
ippinest
oastranger
.Intakinga
credi
tfortheforei
gndonor’staxpaid,thecredi
tshallbeagai
nstthePhil
ippi
nedonor’s
taxont he:

a.Donat
iont
othenon-
str
anger
.

b.Donat
iont
othes
tranger
.

c.Donat
iont
othenon-
str
angerpl
ust
hatt
othes
tranger
.

d.Noneoft
hes
e.

50.Oneoft
hefol
lowi
ngs
tat
ement
siscor
rec
t.Whi
chi
sit
?Int
hepr
epar
ati
onoft
he
donor
’st
axret
urn.

a.Dowr
iesar
eshownasdeduc
tionsf
rom t
hegr
ossgi
fts.

b.Dowr
iesar
enotshownanymor
easgr
ossgi
ftsandasdeduc
tions.

c.Spousesmaki
ngdonat
ionsofc
onj
ugalorc
ommuni
typr
oper
typr
epar
eone
donor
’st
axr
etur
n.

d.Donor
’staxondonat
ionst
ost
ranger
sandt
onon-
str
anger
sar
ecomput
ed
ands
howni nseparat
ere
turn.

51.Oneofthest at
ement st hatfol
low i
sc orr
ect.Whichi
sit?Adeedofdonat i
onwas
exe
cutedbyG,r esidentofDagupanCi ty,infavorofH,aresidentofBag
uioCity
.H
exe
cutedade edofacc eptanceinBagui oCity.Thedonor’
st axreturnmustbefiled
wit
htheBur eauofI nternalRe v
enueOffic e:

a.Att
her
esi
dentoft
hedonor
.

b.Att
her
esi
dentoft
hedonee
.

c.Att
her
esi
dentoft
hedonorort
he19one,whi
chev
ert
hedonorchoos
es.

d.Noneoft
heabov
e.

52.St
atement1.Adonat
iononwhi
cht
hedonor
’st
axwasnotpai
disnotav
ali
d
donat
ion.

St ement2.Ti
at t
letothedonat
edrealproper
tycannotbetransf
err
edt
othedonee
i
ntheRegi
sterofDeedsunle
ssthedonor’
staxont hedonat
ionhadbeenpai
d.

a.Bot
hst
atement
sar
etr
ue.

b.Bot
hst
ateme
ntsar
efal
se.

c.Thefir
sts
tat
ementi
str
ueandt
hesecondst
atementi
sfal
se.

d.Thefir
sts
tat
ementi
sfal
seandt
hesec
ondst
ate
menti
str
ue.

53.Oneoft
hef
oll
owi
ngs
tat
ement
siswr
ong:

a.TheCommi
ssi
oneri
snotallowedt
ograntext
ensionoftimewi t
hinwhichthe
donor
’staxre
tur
nsmaybefiled,andsuchextens
ionshallnotexceedthi
rtydays.

b.Ther et
urnmaybefil
edi
nonemuni
cipal
ityandt
het
axpai
dinanot
her
muni
cipal
ity
.

c.Whendonor’
staxisassesse
dbyr easonofnegligence,i
ntentionaldisr
egardof
rulesandregul
ati
ons,orf
raudont hepartofthetaxpaye r
,noext e
nsionoft i
mef or
paymentofthetaxmaybegr antedbytheCommi ssi
one rofInternalRev enue
.

d.Agr
ossgi
ftofP50,000f
ort
hewhol
eyeart
onon-
str
ange
rsne
ednotbe
c
over
edbyadonor’
st axret
urn.

54.Statement1:Whe nadonor’staxr
eturnwasfil edandi
twasf oundbytheBureau
ofInt
ernalRevenuet ohavee
rrorswhichgaveri
setoadeficiencydonor’
stax,t
he
donormayber equi
redtopaythedefic i
encyalt
houghhedoesnotpossessorownthe
propert
yanymor e.

St
atement2:TheGovernmentisnotboundbyanyagreementbe
tweent
hedonor
andthedonethatthel
atte
rshallpaytaxonthedonat
ion.

a.Bot
hst
atement
sar
ecor
rect
.
b.Bot
hst
ateme
ntsar
ewr
ong.

c.Thefir
sts
tat
ementi
scor
rec
tandt
heseconds
tat
ementi
swr
ong
.

d.Thefir
sts
tat
ementi
swr
ongandt
hese
conds
tat
eme
nti
scor
rec
t.
TAX.M-1403 VALUE ADDED TAX

Problem 1

Topline Company sold to Bestbooks Enterprises goods worth P 10 000, exclusive of tax. Record
the accounting entries in the sales book and in the purchase book if:

1. The buyer and the seller are subject to VAT.

2. Seller is VAT registered, while buyer is not.
3. Seller is no VAT registered, while buyer is VAT registered.

Answer:

Sales book Purchase book

1. Cash/ accounts receivable P 11 200 Purchases P 10 000
Sales 10 000 Input tax 1 200
Output Tax 1 200 Cash 11 200
2. Cash/ accounts receivable P 11 200 Purchases P 11,200
Sales 10 000 Cash 11 200
Output Tax 1 200
3. Cash/ accounts receivable P 10 000 Purchases P 10 000
Sales 10 000 Cash 10 000

Problem 2
All amounts given are total invoice costs/prices:

A, non-VAT taxpayer, sells to B, VAT taxpayer P 67 200

B, VAT taxpayer, sells to C, VAT taxpayer 100 800

C, VAT taxpayer, sells to D, VAT taxpayer, an exporter 168 000

D, VAT taxpayer, exports 300 000

1. The value-added tax of B:

A. Payable of P 3 600 C. Payable of P 10 080
B. Payable of P 10 800 D. Payable of P 12 096
2. The value-added tax of C:
A. Payable of P 7 200 C. Payable of P 8 064
B. Payable of P 6 720 D. Refundable of P 10 900
3. The value-added tax of D:
A. Payable of P 18 000 C. Payable of P 36 000
B. Refundable of P 18 000 D. Refundable of P 36 000

Problem 3

H and W, husband and wife had the following gross sales (net of tax) during the year:

W- restaurant owner P 800 000

H-
a. Professional CPA P 350 000
b. Medium sized store:
Sale of office/school supplies P1
120 000 Sale of books
P 275 000

4. Which of the following statements is true?

A. For purposes of the threshold of P 1 919 500, the gross receipts of the husband and
wife shall be combined.
B. The gross receipts shall be subject to VAT even if she does not register voluntarily
under the VAT system.
C. For purposes of the threshold of P 1 919 500, the sale of office supplies and the
practice of profession are considered as separate taxpayers.
 D. For purposes of the threshold of P 1 919 500, the aggregation rule for each taxpayer
shall apply. Thus, the gross receipts from the medium sized store shall be added to the
receipts from the practice of profession.

Problem 4

5. Winery is a manufacturer of wine. During a particular calendar quarter, it had the

following transactions (net of VAT):
Jan. 4, 2013 : Consigned wine to a retailer in Makati City amounting to P 200 000.
Feb. 14, 2013 : Exported P 1 000 000 worth of wine to Spain.
Feb. 27, 2013 : President of Winery celebrated his birthday, consuming P 50 000
worth of wine given to him by the company as a birthday gift.
Mar. 20, 2013 : Declared property dividend of one case of wine for every 10 shares,
amounting to P 150 000.

The output tax for the calendar quarter ended March 31, 2013 is:
A. P 48 000 C. P 140 000
B. P 168 000 D. P 40 000

Problem 5