1.

A tax imposed on the gratuitous transfer of property between two or more persons who are
living at the time the transfer is made
a. estate tax
b. donor’s tax
c. income Tax
d. transfer tax

2. One of the following is not a distinction between donation inter vivos and donation mortis
causa.
a. Donation inter vivos takes effect during the lifetime of the grantor while donation mortis causa
takes effect after the death of the grantor.
b. Donation inter vivos is subject to donor's tax while donation mortis causa is subject to estate
tax.
c. Donation inter vivos requires a public document while donation mortis causa may not require
a public document.
d. Donation inter vivos is valued at fair market value at the time the property is given while
donation mortis causa is valued at the fair market value at the time of the death of the grantor.

3. Donor’s tax is:

a. A property tax
b. A personal tax
c. A business tax
d. An excise tax

4. The following are the requisites of a donation for purposes of the donor’s tax, except one.
a. Capacity of the donor
b. Capacity of the donee
c. Delivery of the subject matter or gift
d. Donative intent

5. Which of the following is subject to donor’s tax?

a. Those made between persons who were guilty of adultery or concubinage at the time of the
donation.
b. Those made to conceived but yet to be born children.
c. Those made to a public officer by reason of his office.
d. Those made between husband and wife during their marriage.

6. Which of the following is not subject to donor’s tax?

a. Donation mortis causa.
b. Donation which will take effect upon birth of the donee.
c. A creditor who, out of his affection, cancelled the debt of the debtor.
d. A parcel of land in U.S.A. donated by a nonresident Filipino to a foreigner.
7. Which of the following donations inter vivos may not require that it be in writing?
a. Donation of personal (movable) property, the value of which exceeds P5,000.
b. Donation of personal (movable) property, the value of which is P5,000.
c. Donation of real (immovable) property, the value of which is less than P5,000.
d. Donation of real (immovable) property, the value of which exceeds P5,000.

8. For the donation to be considered valid, acceptance of the donation must be made:
a. During the lifetime of the donor only.
b. During the lifetime of the donee only.
c. During the lifetime of the donor and the donee.
d. None of the choices.

9. When is the donation perfected?

a. The moment the donor knows of the acceptance by the donee
b. The moment the thing donated is delivered, either actually or constructively, to the donee
c. Upon payment of the donor’s tax
d. Upon execution of the deed of donation

10. The donation of an immovable property shall be made

a. In writing
b. In public instrument
c. Either A or B
d. Orally

11. Using the preceding number, acceptance by the donee may be made:
a. In same deed of donation
b. In a separate document
c . Either A o r B
d. Neither A o r B

12. A non-resident citizen donor is taxed on his donation of properties:

a. Situated in the Philippines only.
b. Wherever situated.
c. Situated outside the Philippines only.
d. Situated in the Philippines only subject to the rule of reciprocity.

13. Which of the following is taxable only with respect to properties donated within the
Philippines?
a. Resident citizen
b. Non-resident citizen
c. Resident alien
d. Non-resident alien
14. Which of the following statements is correct?
I. A donation by a nonresident alien of shares of stock of a domestic corporation is subject to
donor’s tax if such corporation have acquired business situs in the Philippines.
II. A donation by a resident alien of shares of stock of a foreign corporation will only be subject
to donor’s tax if at least 85% of the business of such corporation is located in the Philippines.
III. A donation by a nonresident alien of bonds of a foreign corporation (90% of the business of
such corporation is located in the Philippines) is subject to donor’s tax.
IV. A donation by a nonresident citizen of a franchise is subject to donor’s tax even if such
franchise is exercised outside of the Philippines.
a. III only
b. IV only
c. III and IV only
d. II, III and IV only

15. If a donor is a non-resident alien and the reciprocity rule of applies, which of the following
properties will not form part of his gross gift?
a. Real properties in the Philippines
b. Tangible personal properties within the Philippines
c. Intangible personal properties within the Philippines
d. All of the choices

16. X, a multinational corporation not doing business in the Philippines, donated 100 shares of
stock of said corporation to Mr. “Y”, a Filipino citizen. What is the tax liability, if any, of “X”
corporation?
a. The donation is not subject to donor’s tax.
b. The donation is subject to 30% donor’s tax based on net gift.
c. The donation is subject to graduated rates based on net gift.
d. The donation is subject to 30% donor’s tax based on gross gift.

17. A gift that is incomplete because of reserve powers becomes complete when:
I. The donor renounces the power
II. His right to exercise the reserve power ceases because of the happening of some event or
contingency or the fulfillment of some condition other than because of the donor’s death.
a. I only
b. II only
c. Either I or II
d. Neither I nor II

18. Which of the following is subject to donor’s tax?

I. Pedro donated a house and lot to Ana. Pedro reserved the right to live in the house and lot
until he dies.
II. Stanley donated a commercial complex apartment to Wendy. Stanley reserved the right to the
rentals for five years from the date of donation. Stanley died on the third year.
III. Angelica donated a mango farm to Sergio. Angelica reserved the right to the fruits for five
years from the date of donation. Angelica died on the seventh year.
a. II only
b. III only
c. I and II only
d. None of the above

19. When an indebtedness is cancelled without any service rendered by the debtor in favor of
the creditor, the forgiveness of debt will result to:
a. taxable income
b. distribution of dividend
c. taxable donation
d. taxable estate

20. If an individual performs services for a creditor who in consideration thereof cancels the
debt, the cancellation of indebtedness may amount to a
a. Gift
b. Capital contribution
c. Donation inter vivos
d. Payment of income

21. What is the tax implication if a corporation condones the debt of a shareholder because of a
good thing done by the latter to the corporation?
a. The condonation is based on the liberality of the corporation, therefore, it is subject to donor’s
tax.
b. The condonation is subject to donor’s tax on the corporation because it is based on its
liberality. Moreover, it is equivalent to a payment of dividend income on the shareholder, which is
therefore, subject to a final withholding tax on income of 10%.
c. It is tantamount to a declaration of dividend. Therefore, it is an income which is subject to
10% final withholding tax on the shareholder. However, it is not subject to donor’s tax on the
corporation.
d. It is just a simple case of extinguishment of an obligation which is neither subject to income
tax on the part of the shareholder nor a donor’s tax on the corporation.

22. Which of the following renunciations shall not be subject to donor’s tax?
a. Renunciation by the surviving spouse of his/her share in the conjugal partnership or absolute
community after the dissolution of the marriage in favor of the heirs of the deceased spouse or
any other person/s
b. General renunciation by an heir, including the surviving spouse, of his/her share in the
hereditary estate left by the decedent
c. Renunciation by an heir, including the surviving spouse, of his/her share in the hereditary
estate left by the decedent categorically in favor of identified heir/s to the exclusion or
disadvantage of the other co-heirs
d. None of the choices
23. Which of the following events is not subject to donor’s tax?
a. A Filipino citizen donated a parcel of land located in the United States to B, non-resident
alien.
b. A resident alien made a gift of P200,000 to his daughter on account marriage.
c. A non-resident citizen gives his girlfriend a diamond ring worth P100,000 as a birthday gift.
d. A and B are the only heirs of C. A renounces his share of inheritance in favor of B.

24. Jay sold his car to Jana for P200,000. Jay’s car costs P500,000, and had a fair market value
of P400,000 at the time of sale. What is the tax consequence of the sale?
a. There is a taxable gift of P300,000
b. There is a taxable gift of P200,000.
c. There is a taxable gift of P50,000.
d. The transfer is for insufficient consideration, hence, not subject to donor’s tax

25. Cito Yu has a building located in Shorthorn Quezon City currently leased to various tenants.
Since he is old already and wants to retire from active business, he sold the same to Janjan, his
son, for 20 million pesos. The value of the building at the
No Answer because there are no choices stated below