Name: ACT183 Quiz 4

Section: Score:
GENERAL INSTRUCTIONS. Wrile all vour answers On the nswer sheet provided in the next page. NO HEATING
AIIOWD. Anyone who will be caught cheating or
(zero score). No CRbreak. Allbags (including phones will NUSDeCled of cheating will tlomattcay be 3ve
be
and notes) mmust he placed in jronl.
Wrte yOur inal answer on the blank. Provide your clear solutions (with labels of the am ount) on a yellow papel.
. X and Y (both resident
citizens) are partncrs in the following partnerships.
Ordinary Partnership General Professional Partnership
Gross Income P 500,000 P 400.000
Deductible expenscs 300,000 180.000

Thev have the following income and cxpenscs for

2024:
X Y
Gross Income P 400.000 P 280.000
Deductible espenses 250.000 120.000

Partners agrecd to share partnership income and losses as follows: X = 40%; Y = 60%
a.
Being a partner n both an ordinary partncrship and a gepral professional partnership. compute the taxable
incomc of X in his ITR for 2024. 235,000
b
Beng a partner in both an ordinary partnership and a geroral professional partncrship, compute the taxable
income of Y in his ITR for 2024
2
A and B. domestic corporations, both inthe construction business, formed a joint venture to build houses for the poor.
a governmentprojcct, with an agreed equal sharing in net income. The joint venture, A Co., and B Co. are all licensed
by the PCAB. Data on income, expenses, and asscts for the ycar show:
Joint Venture A B
Gross ncomc P80,000,000 P2.000,000 P 3.000,000
Expenses 60,000,000 1,200,000 2.000.000
Total assets exclusive 90,000,000 100,000,000 50.000,000
of land

a Determine the income tax due of A Corporation. a,lo 000

b Determine the income tax due of B Corporation. 2,Q00
Bonus. Determine the income tax due of the joint venture.
{) onhy it wi explarchon
3. AB partnership, with A and B as partners (both resident citizens sharing profits and losses equally)^had a net
professional income amounting to P500,000 for 2024. Its other income included bank interest income of P8.000, net of
final withholding tax, and royalty income of P10,000, net ofthefinal withholding tax. The total assets of the partnership
is Pl50,000,000. including land of P5,000,000.
A is single and has his own separate catery business. In 2024, his busincss had net sales of Pi,000,000. cost of sales of
P600,000, and operating expenses of P200,000.

Assume that AB Partnership isa General Professional Partnershj:

a The total distributive sharc of A is as4,00D
b The total taxablc income of Ais: ASO,O00
C. The creditable withholding tax of Abeing a partner of a General Profossional Partncrship is: a5{0 )
Assume that AB Partncrship is a Busincss Partncrship:
d. The taxable incomc of thc partncrship is
c. The total distributive share ofB is
f. The final withholding tax of B is:
 Gros In come of CPP 400 0O
2-0. Ino Tax Dt a he Joint Venhre is 0
- Allowable Deduchi ons aecause Hhe Joint Ventur is formed to
undertala
(Iso o0o)
lianad underte PCAB,
con shuchim preesthusand itis is an Exempt Joint Ventre
Net Income
GPP
share of X in the net lnc of GPP: 3.
net ln com e 220 CO0

P/L ratio of X net Profcesional

Intcrest Inc net &00D
Shar in nl of CPP: Sy oo0 Inc net
Rrnyalhy
Total distibtabe Inc
net InCoMe - GPP P/L ratio of each partner so/.
PlL ratho d Y Total aishibuive shqre f each parner 25 oo0
Shae in nl af GPP a. Thus, patner As total aitatie shartissq 000
X b.
ct sales |m
Gros lncome Cost of Sals (Goo k )
(120 0oo) G from Operations
Allow able Deducions 250 05) 400 K
132 00 -Allowalole beduchons C100K
share in n of GP?
Taxabe lnc of each 42 c0D Met Inc from Opur 200 K
partnert3 0
t Share in nl of GPP:
¥ qnore Ordinany Barnership in the conputaion of tayable ine GPP net Ino from aocr SooK
of cacn partner snce the shart in the Odin any Parthnerships PlL ahio of A So.
Incone is treatd as di tend me' subect to tfnal Tax. Total Taxaole ncome of A
C. Total Digtilatve chare of A n Ge? 259 DO
a. Cross ln come of ine exempt Joint Venture
Allow able OecluGhos (uo m) x ONT . (sina &did not exed Pt10k)
net income tyempt Joint Venture ao m CNT 25 q00
SOO K
X PlL raio per int
vuntyrr 5o/. d. Taxable inc o the Par traoship
e. et Profeezi onal nc of Bus. Partnerhip SoK
Share of each joint venhre in the n of
ventyre - Inc Tax Due of the Met Prof. Inc
the exempt Join SOO K
125
K)
3m net Prot Inc. ¢ Bus. Parthrhip, net 35K
(ncome am
Gro t Interest Income net
Joint Ventye lom
+ Share in n of exempB Royalhy Inemt, net
Total Gross (ncovt Total aisthi huthve shaenssa lne o Buis.?. 345 K
Allowable Deduchons (12m) (2m)
YPraio of each pafmer
(0.Sm
Taxabk |ncome of tach Toint Venturr Y207 X267.
Total aisti butire share of each partmeN
Net
RCIT 7. Thås, total aisti buthve hare of Bis q0 00
2-2/m
Vs MGIT : f. Total aistnutire share of B 44500
Total Goss Inc (2 m XfT. (resident hn) lo.

240 K

Joint 2-2m
ncoMe ax due of eadh
Venturer ( hiqher amount
 UCTIONS. Write all your answers at the
Anyone who willbe caught cheating or will be suspected of anSwerwill Sheet prOVIded in the next page. NO CHEATING
ALLOWED.
Allbags (including phones and notes) must be cheating automatically be given a demerit (zeroscore). No CR break.
placed in front. There will be a demerit for not following
PART 1. THEORY. ldentifythe correct answer. Write the instructions .
each number. CAPITAL LETTER of your best choice on the blank provided before
C 1. Mr. CBDA, an Australian citizet
permanently residing in the
Which among the following is subject to Philippine income Philippines, received several items during the taxable year.
Dividends received from an Australian taxation?
b. Consultancy fees received for designingcorporation
a computer program and installing the
in an expanded foreigncurrency deposit system same
C. Interest from his Euro in China
deposits
d. Gains derived from the sale of his of Bank of the Philippine Islands
condominium unit located in
Sydney, Australia
C 2 The fringe benefit tax is
A. Filing is on or before the last day of the month
made
following the close of the taxable year during which withholding was
B. Withheld at source by employee
C. Imposed on the employee
D. Tax remitted by the employee to BIR
A3. Ms. CDBA, Filipino, resident of Quezon City, vacationed in New York
which she won in a supermarket raffle in New York. She proceeded to spendCity. She received a cash prize of $1 .000,000
$300,000 of on clothes and jewelry. She
deposited the rest in the Bank of New York before coming home to the Philippines to resume her
the following is subject to the 20% final tax? studies. Which among
a) None.
b) Only the interest income from her bank account.
c) Only the cash prize she won in the raffle.
d) Both the interest income from the bank deposit and the prize
which she won.
G 4. Afundamental rule in taxation is that the property of one
country may not be taxed by another country":
a.
International treaty c. International comity
b. Reciprocity d. Necessity
O5. Daily meal allowance for overtime pay is a
a. De minimis benefit if not exceeding l 0% of the basic minimum wage
b. De minimis benefit if not exceeding 20% of the basic minimum wage
C. De mininmisbenetit if not exceeding 25% of the basic minimum wage
d. Not a de mininmis benefit

The person in whom confidence is reposed as regards property for the benefit of another person
a. Trustor b. Trustee C. Beneficiary d. Heir

B7. Mr. BCDA (resident citizen) appoints the Trust Department of BDOPhilippines to manage his money pursuant to a trust
agreement. The Trust Depart1nent proceeds to invest the money in a 5-year corporate bond. If Mr. BCDA withdraws his
money from the trust account after 8 years, the interest income from the corporate bond is:
a) Exempt from income tax c) All of the above
b) Subject to the 20% final tax d) None of theabove

8 No law granting any tax exemption shall be passed without the concurrence of:
Majority of allmembers of Congress c. 2/3 vote of all members of Congress
b. %vote of all members of Congress d. Unanimous vote of all members of Congress

C 9. Facilities or privileges furnished or offered by an employer to his employees that are of relatively small value and are
offered or furnished by the employer merely as ameans of promoting the health, goodwill, contentment, or elficieney of his
employees.
a. Fringe benefit c. De minimis fringe benefit
b Fringe benefit tax d. Grossed-up monetary value

P 10. Which of the following is not an ordinary asset?

Stock in trade of the taxpayer or other property of a kind which would properly be ineluded in the inventory of the
taxpayer if on hand at the close of taxable year.
b. Property used in trade or business subject to depreciation
C Real property held by the taxpayer primarily for sale to customers in the ordinary course of trade or business
d. Real property used as the principalresidence by the taxpayer
C. In case of ambiguity. tax laws imposing atax shall be interpreted
a. Strictly against the taxpayer c. Liberally in favor of the taxpayer
b. Liberally in favor of the government d. Harmonized between the rights of the government and the taxpaver

Page 1 of 5
 A12. The following are the powers of the BIR excepl:
To compromise tax liabilities of taxpayers
a.

Issuance of receipts and clearances

C. Assignment of internal revenue officers and other employees to other duties
d. Provision and distribution of forms, reccipts, certilficates, stamps, etc. to proper ofliials
13. Enforced proportional contributions rom persons and property levied by the state by virtue of its sovereignty for the
support of the govenment and for all public needs.
a. Toll b. Licensc fee C. Taxes d. A ssessment

C14. Vhich of the following is a co-ownership under the Tax Code?

a. Mr. Aand Mr. B purchaseda factory for their businesses
b. Mr. Aand Ms. B purchased aresidential house and lot as their family home
c. Mr. Z andMs. Yinherited a commercial building from their friend, Mr. C
d. Mr. Z and Mr. Ydonated a farm house to their friend. Mr. D
NOT
qoD15. Which of the tollowing fringe benefits. paid by the employer, is subject to fringe benefit tax? ’ A:
Food andinland transportation of $1 50 per day for employees attending a3-day business meeting in Texas
a.

b. Salaries of household help and personaldriver of the employee

Traveling expenses of family members of employees with complete documentary evidence
d. 6-month temporary housing for employees
D l6. Mr. Kisa Filipino senior citizen, residing in the Philippines. He is aminimum wage earner and he also has his own
grocery store. Whiclh of the following is not correct?
a. Hecan avail 20% discount on his purchase of specifiedgoods and services
b. He is subject to income tax the same manner as an ordinary individual taxpayer.
C. He shall be exempted from income tax on the said minimum wage that he earns
d. He shall be exempted from income tax on his additional business income
A 17. Which of the following is a nature of taxation?
a. The power is exercised by legislative action c. It is generally payable in property
b. Itis essentially an administrative function d. The state can exist without it

C 18. Thefollowing concepts denotes exemption from the fringe benefits tax, except
a Convenience of the employer c. Welfare and benefit of the employees
b. Necessity to the business or trade of employer d. De minimis benefits

A19. This refers to the person which was named by the deceased to
temporarily be in-charge of the administration of the estate
untilsuch time that the estate is finally distributed to the rightful heirs d. Beneficiary
Executor b. Administrator c. Fiduciary

1 20. The tax imposed should be proportionate to the taxpayer's ability to pay
c. Administrative feasibility
a Fiscal adequacy d. Economic consistency
b. Equality or theoretical justice
to which others are subject
C21. It is the privilege of notbeing imposed a financial obligationc. Tax exemption d. Tax credit
Tax incentive b. Tax amnesty
at any time during the taxable year to reside permanently in the
C 22. A non-resident citizen who arrives in the Philippines for the taxable year in which he arrives in the Philippines with
Philippines shall likewise be treated as a non-resident citizen
his arrival in the Philippines. This means that:
date of
respect to his income from sources abroad until the
income sourced
year untilthe date ofhis arrival in the Philippines only on
a) He/she willbe taxable from January I of the taxable
within the Philippines. sourced
the Philippines to December 31 of thetaxable year on income
b) He/she willbe taxable from the day after his arrival in
within and without the Phitippines.
c) All of theabove.
d) None of the above.
standard of weight or measurement, and which requires
A 3. Tax of fixcdamount imposed by the head or number or by some
objects to be taxed
no assesSment other than a listing or classification of the C. Excise d. Income
b. Ad-valorem
Specific
D 24. Which of the following is subject to the fringe benetit tax?
a
Compensation income of the rank and tile employees c. Compensation income of the managerial employees
d. Fringe benefit of managerial or supervisory employees
b. Fringe benefit of the rank and file enployces
B 25. Tax where the rate decreases as the tax base decreases
b. Progressive c. Regressive d. Indirect
a. Proportional
n 26 wWhich of the following cannot file the income tax return for an estate or trust?
Guardians c. Conservators

Page of 5
 b. Receivers
d. Allof which can file the income tax
return
G27. This is a demand of
License fec
ownership:
b. Tax C. Toll d. Customs duties
28. A citizen of the Philippines who works and derives income from
abroad is aresident citizen if he stayed outside the
Philippines during the taxable year
a. For 183 davs or less c. lor l83 days or more
b. For more than 183 davs d. For less than 83 days

C29, The person for whose benelit atrust has becn created
a. Trustor b. Fiduciary C. Beneficiary d. Trustee

A 30. Which of the followving constitutes an exempt co-ownership?

a
Notjustpreservation of the co-ownership, but also collection of the income therefrom.
b. Re-investment ofthe income from the co-ownership to abusiness for profit
C. Undivided common property for more than 10 years.
d. The income of the co-ownership is invested in other income-producing properties

D31. Statement 1: No perSon shall be imprisoned for debt or non-payment of tax.

Statenent 2: Tax lavws are civil and penal in nature because there are criminal penalties when they are violated.
Statement 1is true, Statement 2 is false c. Statemnent I is true, Statement 2 is false
b Statement 1 is false, Statement 2 is true d. Statement I is false, Statement 2 is false

P_32. Aninstrunment with maturity period of 10 years was held by Mr. X (a non-resident alien engaged in trade or business in
thePhilippines) for 3 years and transferred it to Mr. Y (a resident alien). Mr. Y held it for 2 years before subsequently
transferring it to Mr. Z (a nonresident alien not engaged in trade or business), whopre-terminated it after 4 years. Which of
the following is correct?
A. Mr. Y will be subjected to 12% Final tax C. Mr. Z will be subjected to 5% Final tax
B. Mr. Y willbe subjected to 5% Final tax D. Mr. Z will be subjected to 25% Final tax
b 33. Which of the following statements is correct?
a. Extra-judicial Administration refers to the settlement of the estate in a court-proceeding
b. The income tax rates for individual taxpayers apply to taxable estates and trusts.
C. The taxable year of estates and trusts may be calendar or fiscal year.
d. Income tax shall apply to employee's trust which forms part of a pension, stock bonus, or profit sharing plan of an
employer for the benefit of some or all of his employees.

D 34. The following are the powers of the CIR except: enforcement
a. To make an assessment and prescribe additional requirement for tax administration and
b To prescribe real property values
C. To conduct inventory taking or surveillance
its favor by the courts
d. Enforcement of all forfeitures, penalties and fines, and judgments in all cases decided in

35. The following are requisites of substituted filing, except:

during the taxable year
The individual earned purely compensation income
b The individual earned compensation income from asole employer
and complete
C The amount of tax withheld by the employer is correct
d The individual earned purely from self employment income
(with labels of the amounts) Write clearly vour final
PART 1. PROBLEMS. Show ALL your possible solutions eligiblyfinal
thenaswers will be marked wrong.
answer on the blank provided. If no solutions are submitted,
buyers as follows:
Mr. ACBD, acemetery lot dealer sold real properties to different BIR Commissioer's City Assessors
Selling price Independent
appraiser'svalue zonal valuation schedule of values

P2.000,000 P4,000,000 Pl,500,000 PL750,000

a.House and Lot
10,000.000 9,000,000 0.000,000
b.Farm Lot 8,000,000
50,000 55.000 40,000
c.Cemetery Lot 45,000
principal residence noting that
The house and Jot was Mr. ACBD's principal residence that was sold to reacquire a nev
a
since price of the new principal
all requisites for exemption are satistied except that the proceeds were not fully utilized
residence is Pl,000,000. What will be the capital gains tax for this sale?
b What is the capital gains tax for the farm lot?
C.
What is the capital gains tax for the cemetery lot? bdinany t hus not subiect to CáT.
60% of
2. During the year 2021, TUVCorp (domestic corporation)provided gas fee for Mr. Zin the amount of P62.000.
cOmpany's car for business purposes while the remaining is used for the personal car of Mr. Z.
the gas fee is used for the
Assuming that Mr. Z. is anon-resident alien not engaged in trade or business and a managerial emplovee of TUV Corp,
how much is the value of the fringe benefit lax?

Page 3 of 5
 VIS. ACDB, apart-time exercise trainer, also operates a shoe store while offering her services to clients living in Metro
Manila. In 2023, the gross sales of her shoe store amounted to Pl,100,000 while her receipts from her training services
amounted to P400.000. Her total cost of sales and opcrating expenses amounted to Pl 50,000 and P35,000, respectively.
Her non-operating income amounted to P300,000, inclusive of PS0,000 which is subject to final tax. She has no income
subject for capitalgains tax for the year. She signified in her "Quarterly ITR her intention to be taxed at the 8% income
tax rate. Compute her income tax due for 2023.
4. Ms. Gcreated twvo trusts, Trust Iand T'rust 2 with different trustees but with a common beneficiary. The following
data pertain to the trusts and the beneficiary's own account:
Trust1 Trust 2
Gross Income P450,000 PI,090,000
Allowable Deductions 75,000 125,000
Income tax paid I50,000 175,000

If the BIR decides to consolidate the taxable income of the 2 trusts,compute the income tax payable of Trust 2?

5 Mr. Tdisposed his shares ofa domestic corporation, costing P400,000 directly to abuyer for P840,000. He paid on the sale
P7.000 and P4000, respectively. for a broker's commission and documentary stamp tax expense. The stocks have afair
value of Pl.000,000 at the date of sale.
a. How much is the Capital Gains tax? G4 35D
b. Bonus. How much is the gross gift? Transachn lat
C. Bonus. 1f the shares were sold directly to a local stock exchange, what type of tax will it be subjected to? toek
6. Inof 2018, adomestic corporation purchased aresidential house and lot for P2,300,000. The property was sold to the President
the corporation, Mr. A, who is a resident citizen, for P1.980.000. The fair market value per BIR and per Assessor's Office
were P2,500,000 and P2,607,000respectively. How much is the fringe benefit tax?
7. Ms. BACD, VAT-registered, had the folowing data for the taxable year (All in Philippine Pesos):
Gross sales, Phils. P1,250,000 Gross sales, USA Pl,680,000
Cost of sales, USA 860,000
Cost of sales, Phils. 450,000
45,000 Operating expenses, USA 85,000
Operating expenses, Phils.
Non-operating income, Phils. 95,000

due is:
a. If the taxpayer is a resident citizen, her tax 223 7SD
b. If the taxpayer is a non-resident alien not engaged in trade or business, her tax due is:

a 3-month time deposit and P5,000 from along-term bank

8. A resident citizen received a P80,000 interest income from much is the final tax due?
Philippines, how
deposit. Assume all instruments were from Land Bank of the
the
a P600 daily rate, receives the following benefits during
9 Ms. CBDA, a resident citizen private employee who is paid
year 2023:
Monetizedunused vacation leave credits 9 days
Monetized unused sick leaye credits 9 days
Rice subsidy (P2,500 per month) P30,000
PI3,000
Benefits by a Collective Bargaining Agreement P7,000
Medical assistance to the employee
P6,000
Laundry allowance P72,000
13th month pay 40 0o
benefits
Compute its tax-exempt de minimis
pay and other benefits
b. Compute the total taxable 13" month
income (All sources are from Philippines)
10. Ataxpayer earned the following passive
Dividends from ABC Corp. - Php 100,000
Cash Prizes- Php 10,000
Royalties from books - P20,000
system -Pl0.000
Interest income from adepositary bank under expanded foreign currency deposit
Other winnings - PI0,000
PCSO Winnings -Pl0,000
holding the instrument
Interest Income from Long-term bank deposit which was pre-terminated by the taxpayerafter
for 3 years and 8 months - PIO,000
Compute the total final tax due if the taxpayer is a resident citizen.
b. Compute the total final tax due if the taxpayer is a nonresident alien engaved in trade or business.
 . Ms.DACB owns a store specializing in rare trinkets which is her only source ofincome. She signified her intention to be
taxed at 8% of gross sales in her | Quarterly ITR ofthetaxable year. Her sales, cost of sales, operating expenses, and non
operating income for the 4 quarters are as follows:
Ist Quarter 2nd Quarter 3rdQuarter 4th Quarter
Sales 400,000 600,000 2,000,000 3,500,000
Cost of sales (100,000) (200,000) (600,000) (800,000)
Gross income 300,000 400,000 1,400,000 2.700,000

Operating expenses (170,000) (190,000) (500,000) (820.000)

Income from operations 130,000 210,000 900,000 1,880,000

Non-operating income 35,000 65,000 50,000 75.000

Net income 165,000 275,000 950,000 1,955,000

Compute her income tax payable in her Annual ITR. SSG D00

Ms. B. The properties are income

12. Ms. D, whodied on July 2021, left P55,000,000 worth of properties to her heirs: Ms. A and estate earned P6.I75.000 (net of
producing properties deriving rental income. During the settlement period of the estate, the
S% creditable withholding tax on rent) and incurred operating expenses of P3,850,000.
of the estate. The heirs, who are all engaged in
During 2022, Ms. A and Ms. B both received P350,000 each from the income
businesses in their own individual capacity, provided the following data for 2022 taxable year:

Ms. A |Ms. B
2022 P2.500.000
Gross Business Income P1.000,000
P550,000 P1,000,000
Business expenses
B continued to collect the rental income from the
undivided properties. The
A fter the settlemnent period (in 2023), Ms. A and Ms. expenditures necessary to carry out the operations was
properties earned gross rentals amounting to P15,000,000 while
P6,000,000.
data:
businesses as well and in 2023. they provided the following
Ms. A and Ms. Bare stilloperating their own Ms. B
Ms. A
2023 P4,500.000
Gross Business Income P2.000,000
P2.600,000
Pl.950,000
Business expenses

citizens, determine the following amounts:

Assuming that all taxpayers are residenthow much is the taxable income of the estate in 20222
a. During the settlement period. income of Ms. A in 2022?
the settlement period, how much is the taxable income of the co-ownership in
b. During
the settlement period, how much is the taxable preservahm colkchn ¢ income fom he
BONUS. if is just for
C.
2023?
Afes the co-Ownrship S exmpt be cauK
is the taxable income of Ms. B in 2023?
undivided proper
net income of
settlement period, how much due on Ms. A's share in the
After the taxable co-ownership, how much is the
tax
Assume that the co-ownership is a
called for taxation
the co-ownership?
is a taxable co-ownership, what type of entiiy will it be
f BONUS. Assume that the co-ownership
purposes? Partnrsnip
TAX DUE
RANGE OF ANNUAL
TAXABLE INCOME

Not over PHP250,000.00 Exempted from personal income tax

but not
Over PHP250,O00.00
over PHP400,000.00
not
Over PHP400,000.00 but
over PHP800,000.00
Over PHP800,000.00 but not
over PHP2,000,000.00
Over PHP2,000,000.00 but not
over PHP8,000,000.00
Over PHP8,000,000.00
PHP250,000.00
15% of the excess over
PHP22,500.00 + 20% of the excess over
PHP400,000.00
PHP102,500.00+ 25% of the excess Over
PHPSo0,000.00
PHP402,500.00+ 30% of the excess
over PHP2,000,000.00
PHP2,202.500.00 + 35% of the excess
over PHP8,000,000.00
 ACTI83- PRELIMS
GENERAL. INSTRUCTIONS. \OCW2177G ZLONTD .Imone wlho will be cutcht ceatine r will be susected of cheatiig W
automaticallv be givena ero NcOre. NoKbreak. .1/ bags (inclnlng plhnesandoles) Dust he placed nfront Tere wl bea ienert
for not following insoctions
PART I THEORY. ldentify the correct answer, Write the CAPITAL LETIER of your best choice on the blank provided beore
cach nunmber.

C1 Mr CBDA, an Australan cilizen permancntl, resdng n the Philippncs, recervcd scv cral itcms durng the taxable yea
Which among, the following issubject to Philippinc incometavation)
Dividends received lronm an Australiancoporation
b. Consultancy (ees reevedfor designing a computer propranm and install1ng the same in (hna
lnterest rom his Euro deposits in an cypanded forcnn curency deposit syslcm of Bank of thc Philppmc Islands
d Gains derived romn the sale of his condonmum unt localed in Sydncy. Australta
C 2. 1hich of the following is aco-on nership under the Tax Code?
Mr. A and Mr. B purehascd a laciory for tlheir businesses
b Mr A and Ms. B purchascd arcsidential housc and lot as tlhcir famil home
Mr. Zand Ms. Yinherilcd acomnereial building from their fricnd, Mr. C
d. Mr 2 and Mr. Ydonatcd a farm house to their fricnd. Mr. D
The lollow ing concepts denoles excmption Irom the fringe benclits lax, CXCCpl
c. Wellarc and bcncfit of thc cmplovcCs
Convenicncc of'the cmploycr
b. Necessity tothe business or trade of cmploycr d. De nminimis bcncfits

A fundamental rulc in taxation is that "the propcrty of onc country mav not bc taxcd bv anothcr country
International treaty c. International comity
b. Reciprocity d. Neccssity
C5. lt is the privilege of' not being inposed a financial obligation lo which others arc subjcct
d. Tax crodit
Tax incentive b. Tax amnesty c. Tax excmption

C6. This is a demand of ownership: d. Customs dutics

a License fee b. Tax c. Toll

another person
P7. The person in whom confidence is reposed as regards propcrty for the bencfit of d. Hcir
a Trustor b. Trustee c. Beneficiary
benefit tax? - A.
P8 Which of the following fringe benefits, paid by the employer, is subject to fringe
transportation of $I50 per day for employees attending a 3-day busincss mecting in Texas
a. Food and inland
b. Salaries of household help and personal driver of the cmployee documentary evidence
C. Traveling expenses of family members of employecs with complete
d. 6-month temporary housing for cmployees
Philippines. He is a minimum wage earner and he also has his own
P9. Mr. K is a Filipino senior citizen, residing in the
not correct?
grocery store. Which of the following is
He can avail 20% discount on his purchase of
specified goods and services
Heis subject to income tax in the same manncr as an ordinary individual taxpaver.
b carns
said minimum wage that lhe
C He shall be exempted from income tax on the business income
tax on his additional
d. He shall be exempted from income
trade or business in
ycars was held by Mr. X (a non-resident alicn cngaged in
V 10. An instrument with maturity period of 10 resident alicn). Mr. Y held it for 2 vears before subscquentl
Mr. Y(a
the Philippines) for3 ycars andtransferrcd it to cngagcd vears Which ot
transferring it to Mr. Z (a nonresidcnt alicn not in lrade or business), who pre-teminated it after 4
the following is corrcct? Final tax C. Mr, Z will be subjcctcd to 3°% Fnal lax
A. Mr. Y will be subjcctcd to 12% D. Mr. Z will be subjccted to 25°% Final tax
Final tax
B. Mr.Y will be subjcctcd to 5%
corrcct?
p ||. Which of thcfollowing slatcmcnts is the scltlcmcnt of' he cstate in a court-procecedine
Extra-judicial Administration refcrs to
apply lo taxable cstales and trusts.
a

b. The incomctax rales for individual taxpaycrscalendar or fiscal vear.

Thclaxable vcar of cstatcs and trusts may be
lorns part of apensIon, siock bous. or profit sharine plan of an
d. Income tax shall apply lo cniployce s trusl which
cmploycr for the bcncfitof sOmc or all of his caplovces,

V 12. The following are the powers of the CIR eNCept: rcquircncnt for tav administration and cnlorcemcnt
Tomakc an assessncntand prcscribe additional
b. To prcscribc rcal propcrly valucssurveillancc
Toconduct invcntory lakng or
d Enforccmcnt of' all forlcilures, pcnaltics and luncs, and judgmcnts in all
cases decided in its favor bv thecorts

Page 1 of 5
V13. The
•ollowing arc
a. The individual requisitcs of substitutcd filng, cxCcpt:
carmed
b. The individual carncd purcl compensation income during the taxable vcar
C. The amountof ax compcnsation incomc lronn a
withhcld by the cnnployer is corroctsoleandcmploycr
d. The individual caned
purclk from sclf cnployment incomccompletc
A |4. Which of the
following is analure of taxation'?
The powcr is cxereiscd bv legIslative action
I is esscntiallk an c I is gcncrallk pavablc in propcrty
adinistrative unction d. Thc statc can cxIst without it
A I5, No law granting any ax cxemplion shallbe
a Majority of all nmenbers of Congress
passcd vwithout the concurrencc of
c. 2/3 \ote of all mcmbcrs of Congrcss
b. 0le of all mcmbers of Congress d Unanimous votec of all mcmbcrs of Congress
lo. Facilitics or privileges urnishcd or oflercd bv an cmplover to his
oflered or fumished bv the cnplover merely as a mcans of promoting thccmplovcos
that arc of rclativcly small valuc and arc
Cmployccs hcalth. goodwill. contcntmcnt. or cllicicncy ol his
a. Fringe benefit c. De minimis fringc bcncfit
b. Fringc bencfit tax d. Grosscd-up monctary valuc
D17. Which of the follow ing is not an ordinary assct?
a. Stock in (rade of the
taxpavcr or other property of akind which would propcrly bc included in the invcntors of thc
taxpaver if on hand at the close of laxable year.
b. Property uscd in trade or business subjcct to
depreciation
Real propcrty hcld bv the taxpayer primarily for sale to customers in the ordinarv coursc of tradc or
d. Real property used as the principal residence by the taxpayer busincss

C18. In case of ambiguity. tax laws imposing a tax shall be

a. Strictly against the taxpayer
interpreted
c. Liberally in favor of the taxpaycr
b. Liberally in favor of the government d. Harmonized between the rights of the
government and thc taxpaycr
D 19. A citizen of the Philippines whoworks and derives income from abroad is a resident citizen if he
stay cd outsidce the
Philippines during the taxable year
a For 183 days or less c. For 183 days or more
b. For more than 183 days d. For less than 183 days

20. The person for whose benefit a trust has bcen crcated
a. Trustor b. Fiduciary c. Beneficiary d Trustee

21. Which of the following constitutes an exempt co-ownership?

Not just preservation of the c0-ownership, but also collection of the income therefrom.
b Re-investment of the income from the c0-ownership to a business for profit
C. Undivided common property for more than 10 ycars.
D d. The income of the co-ownership is invested in other income-producing properties
22. Statement 1: No person shall be imprisoned for debt or non-payment of tax.
Statement 2: Tax laws are civil and penal in nature because there are criminal penalties when thev are violated.
a Statement l is truc, Statemcnt 2 is false c. Statemcnt l is true, Statement 2 is false
b. Statement 1 is false, Statement 2 is truc d. Statement Iis false. Slatement 2 is false
23. The following arc the powers of the BIR except:
a To compromisc lax liabilities of taxpayers
Issuance of reccipts and clcarances
Assignmcnt of internalrevenuc oflicors and otlher employces to other duties
d. Provision and disribution of forms, reccipts, certilicates, stamps, cte. to proper ofticials
C 24 Enforced proportional contributions from persons and propcrty levied by the state by virtue of its sovereignty for the
supportof the govcmment and for all public nccds.
a Toll b. Liccnsc fce c. Taxes d AssesSment

25. Mr. BCDA(residcnt cilizcn)appoints the Trust Departncnt of BD0Philippines tomanage his money pursuant to a trust
a4recnmcnt. TheTrust Departncntprocccds to invest the monoy in a -yer corporate bond If Mr BCDA withdraws his
moncy from the trust account aficr 8 ycars, the interest income from the corporate bond is
a) Excmpt Srom income ax c) All ol the above
b) Subjcctto the 20% fnal tax d) None of the above

26. Thc Sringc benclit lax is

A. Filing is on or before the last dav of the month following the close of the taxalble ycar during which withholding was
made
B. Wihhcld al sourcc by cmplovce
C. Imposcd on the cmployce
Page 2 of 5
 D. Tax remitted by the cnplovce to BIR
A
21. Thisrelers to the personwhich as named by thedeccascd to tcnporailk hc in-charc of the
until such time that the cstate Is fnallk distibuted to the rphtful hcrs
adunistration of the cslale
a Exccutor b Administrator c IiduciarN d Bcnciciars

b 8 The tax imposed should be proportionate to the tavpaver s abil1tv lo pav

Fiscal adequacv c Administratne fcastbilty
b Equalty or theoretical justice conomic consIstencv
A
29, Ms CDBA, Flpno. resdent of Quezon Citv, \acaioncd n New York Cit Sheroccivcd a cash prizeof S1,000.000
which she won in a supermarket ralle n Ne York Shc procccdedlo spend $00 000 of on clothes and jewclry She
deposited he est in thec Bank of Nen York before comng homc to the Plulppnes to reune her studres Whch amon
the lollon ing is subjcct (o the 20"% nal tax"
a) None
b) Onl the interest income from her bank account
c) Onlh thecash prize she won in the rafle.
d) Boththe interest income rom the bank deposi and the prize which shc won
C30Philippnes
Anon-tesident citizcn sho aries in the Philippines at any tine during the taxable ycar to rostde permancntly n the
shall likew ise bc trcatcd as a non-rcsident citizcn for the taxable vcar in which hc arrives in thc Philippncs with
respvct to his incomc from sources abroad until the datc of his arrival in the Philippincs. This mcans that
a) He she will be taxablc from January I ofthe taxable ycar until the date of hisarrival in thc Philippincs only on incomesourcod
ithin the Philippincs.
b) He she willbe taxable from the da aler his arrival inthe Philippincs to Deccmber 3| of the taxable ycar on income sourcod
within and wihout the Philippines.
c) All of the above.
d) None of the above.

A 31. Tax of fixed amount imposcd by the head or nun1ber or by some standard of weight or mcasurcment. and which requres
no assessment other than a listing or classification of the objccts to be taxed
Specific b. Ad-valorem c. Excisc d. Income

D 32. Which of the following is subject to the fringe bencfit tax?

Compensation income of the rank and file cmployees c. Compcnsalion income of the managerial cmplovces
b. Fringe benefit of the rank and file employces d. Fringe bencfit of managcrial or supervisor cmployces

533 Tax where the rate decreases as the tax base decrcases d. Indirect
a. Proportional b. Progressive c. Regressive
V 34. Which of the following cannot filec the income tax rcturn for an estate or trust?
a Guardians c. Conservators
Receivers d. Allof which can file the income tax retum

C35. Dail meal allowance for overtime pay is a

a De minimis benefit if not excceding 10% of the basic minimum wagc
b. De minimis benefit if not exceeding 20% of the basic minimum wage
wage
C. De minimis bcncfit if not cxceeding 25% of the basic minimum
d. Not a de minimis bencfit
Write clearly vour final
PART I. PROBILEMS. Show ALL vour possible solutions cligibly (with labels of the amounts)
marked wrong.
will be
answer on the blank provided. If no solutions are sulbmitted, then final answers
amount of Po2,000. 60% of
During thc vear 2021, TUV Corp (donmcstic corporation) provided gas lee for Mr. Z in the the personal car of Mr Z
is uscd for the company scar for business purposcs whle the remaming is uscd for
the gas ec that
Assuming Mr. Z is a non-resident alhen not cngagcd in trade or business and a managerial emplovee o! TUV Corp.
how much is the valuc of the fringc benclit tax? 8 246t
2 Mr. ACBD. a ccmctcry lot dcaler sold real propcrties to dillerent buvers as lollows: Assessor s
Selling price Independent BIR Commissioners Citv
appraisers valuc /0nal valualion sehedule ofvalues
P2,000,000 P4.000.000 PLS00 000 PI,750,000
a.Housc and Lot
8.000.000 10,000,000 ) 000.000 o,000.000
b.Farm Lot
c.Cemetery Lot 45,000 50.000 55000 40,000

Thehousc and lot was Mr ABD Sprncipal residence thal was sold to rcacqure a new principal residcnce noting that
all rcquisites for cxCmplion are sal1sicd except that the procecds wee not lull ulilized siice price of the new principal
residencc is PL.000,000. Whal will bc the capital gans tas for this sale? G0 o00
b What is thecapital gains tax for thefarm lo?
What is the capilal gains tax for the cemetery lot? -’ Not subË to CaT
Since it is an Drdiray Assct
Page 3 of 5
3. Aresident cilizen recived a P&O,000 interest income lrom a3-month timc deposit and P5,000 fronm along-ternm bank
dcposit. Assumc allinstruments were from Land Bank of the Philippines, how much is the final tax duc? 40 000
4. Ms. ACDB, a part-time cxercisc traincr, also operates a shoc storc whilc oflering her serviccs to clicnts living in Mctro
Manila. In 2023. the gross sales of her shoc storc amountcd to Pl100,000 while her reccipts Irom her Iraning scr iccs
amounted (o P400,000, Her totalcost of sales and opcrating cxpenscs anounted to Pl 50,000 and P35,000. respcctivcBy. Hor
no-operating income amountcd to P300.000, inclusive of P50,000 xhich is subjct lo final tax Shc has no income subjcct
lor capilal gains tax for the vcar. She significd in her | Quarterly ITRher intcntion to bc laxcd at the8% incomc tax ratc
Computc her inconme tax due for 2023. 20 000
5. Mr. T disposcd his shares ofa domestic corporation, costing P400,000 dircctly to a buvcr for P840,000 Hc paid on thc sale
P7.000 and P4000, respcctively. for abroker's comnission and documcntary stamp tax cxpcnsc Thc stocks havc a lair
1alue of PL,000,000 at the date of sale, 4350
How much is the Capital Gains tax?
b. Bonus. How much is the gross gil? Stock Tra sachn
c. Bomus. l'the shares were sold dirctlhy lo alocal slock cxchange. what type of tax will it be subjcctcd to" Tas

Ms. G crcalcd two trusts, Trust I and Truat 2 with diffcrcnt trustccs but with a con1mon bencficiarv. The following data
pertaim to thetrusts and the bencficiarv s own account:

Trust 1 Trust 2
Gross Income P450,000 P.090,000
Allowable Deductions 75,000 125,000
Income tax paid 150,000 175,000

I BIR decides to consolidate the taxable income of the 2trusts, compule the income tax payablc of Trust 2? 9104-sS
7. In 2018. adomestic corporalion purchased arosidential house and lot for P2,300,000. The property was sold to thc President
of the corporation. Mr. A. who is aresident citizcn, for P1,980,000. The fair markct value per BlR and pcr Asscssor's Office
1were P2.500,000 and P2,607,000respectivcly. How much is the fringe bencfit tax? 237 G15.33

8. Ms. BACD, VAT-registered, had the following data for the taxable ycar (All in Philippine Pesos):
Gross sales. Phils. PI250,000 Gross sales, USA Pl.680,000
Cost of sales. Phils. 450.000 Cost of sales, USA 860.000
Operating expenses, Phils. 45.000 Opcrating expenses, USA 85.000
Non-operating income, Phils. 95.000

If the taxpayer is a resident citizen, her tax duc is:

b. If the taxpayer is a non-resident alien not engaged in trade or business, her tax due is: 223 7SD

9. Ms.CBDA, aresident ciizen privale employec who is paid aP600 daily rate, receives the folowing benefitsduring the
Jear 2023:
Monctized unused vacation leave credits 9 davs
Monctized unused sick leave credits 9davs
Rice subsidy (P2,500 per month) P30,000
Bencfits by a Collective Bargaining Agrecment P13.000
Medical assistancc to the cmployee P7,000
Laundry allowance P6.000
13th month pay P72,000
Compute its tax-cxcmpt dc minimis bencfits 40 000
a.
b. Conputc thc total taxablc 13" month pay and other bencfits

10. Ataxpaycr carncd the following passivc income (Allsources are from Philippincs)
Dividends from ABCCorp. - Php 100,000
Cash Prizes- Php I0,000
Rovaltics from books - P20,000
Intcrest incomc froma deposilary bank under expanded loreign currencv deposit sv stem - PlO,000
Oher winnings - PIO,000
PCSOWinnings - P|0,000
Interest Income •rom Long-lerm bank depositwhich was pre-lcrminatcd by the taNpayer alier holding the instrumcnt
for 3 vcars and 8 nonhs Pl0,000
a Computc thc total final tax duc if' the taxpaycr is a residcnt citiven.
b. Compute the total inal tax duc if the (axpaycr is a nonresident alien engaged in trade or busincss
1. iaxcd
Ms. PACB owns astore spccializing in rarc trinkets which is her only source ol income. She signilicd her intention to be
at 8% of gross sales in hcr |" Quarlerly ITRof the taxable ycar. Her sales. cost of sales, operating cxpcnses, and non
opcratiag comc for he 4 quarlers are as follows:
 Sales Ist Quarter 2nd Quarter 3rdQuarter 4th Quarter
Cost of sales 400,000 600.000 2.000,000 3.500,000
Gross income (I00,000) (200,000) (600.000)
300,000 (800.000)
400,000
Opcraling expenses (170,000) (190,000)
I400,000 2.700.000
Income from operations 130,000 210,000
(500.000) (820,000)
O00,000 L880.000
Non-operating
Net income
income 35,000 65,000 50,000 75,000
165,000 275,000 950.00) 1955.000
Compute her income tax pav able in her Annual lTR.
12. Ms. D. who dicd on Jul 2021. lcli
P55.000,.000 worth of properlics lo hcr
producmg propertics derivig rental incomc. During the scttlcmcnt pcriod hcirs:
of the
Ms. A and Ms. B. Thc propcrtics are income
cstatc. thc cstatc carncd P6.175.000 nct of
$°o creditable witlhholding tax on rent) and
incurod opcrating cxpcnscs of P3.850.000.
During 2022. Ms. A and Ms. B both received P350,000 cach rom the
businesses in their own individualcapacitv. provided tlhe following data incomc of the cstalc. Thc hcirs. who arc all cngagcd in
for 2022 taxable ycar:
2022
Ms. A Ms. B
Gross Busincss Income
PI.000.000 P2.500.000
Business cxpenses P550,000 Pl.000,000
After the setlemcnt period (in 2023), Ms. A and Ms. B continucd to collect the
properties carned gross rentals amounting to PI5,000,000 while expenditures rental income from thc undividcd properties. The
P6.000,000. necessary to carry out the operations was

Ms. A and Ms. Bare still operating their ownbusinesses as well and in 2023,
2023
thev provided the following data:
Ms. A Ms. B
Gross Business Income P2,000,000 P4.500,000
Business expenses PI, 950,000 P2.600.000
Assuming that all taxpavers arc resident citizens, determinc the following amounts:
a. During the settlement period. how much is the taxable incomc of the estate in 2022?
b. During the settlement period, how much is the taxable income of Ms. A in 2022?
c. BONUS. After the settlement period, how much is th¹ taxable income of the co-ownership in
2023?
’Ch-8NNip is erempt becasc itis juGt fu
After the settlement period, how much is the taxable income of Ms. B'inpresevahn
2coichnf inAne fun e undivdel aup.
2023?
Assume that the co-ownership is a iaxable co-0wnership, how nuch is the tax due on Ms. A's share in the net income of
the co-ownership?
BONUS. Assumc that the co-ownership is a taxable co-ownership, what type of entity will it be called for taxation
purposes?
Partnership
RANGE OF ANNUAL TAX DUE
TAXABLE INCOME

Not over PHP250,000.00 Exempted from personal income tax

Over PHP250,000.00 but not
over PHP400,000.00
Over PHP400,000.00 but not
over PHP800,000.00
Over PHP800,000.00 but not
over PHP2,000,000.00
Over PHP2,000,000.00 but not
Over PHP8,000,000.00
Over PHP8,000,000.00
15% of the excess over PHP250,000.00
PHP22,500.00 + 20% of the excess over
PHP400,000.00
PHP102,500.00 +25°% of the excess over
PHP8O0,000.00
PHP402,500.00 +30%of the excess
over PHP2,000,000.00
PHP2,202,500.00 +35% of the excess
Over PHPS,000,000.00