IncomeTax Banggawan2019 Ch6
IncomeTax Banggawan2019 Ch6
IncomeTax Banggawan2019 Ch6
TRUE OR FALSE 2
1. The annual capital gains tax return is simultaneously due with the
annual regular income tax return.
2. The basis of properties received by way of inheritance is the basis
in the hands of the last owner who did not acquire the same by
donation.
3. When specific identification is impossible, the cost of the stocks
sold is determined by the weighted average method.
4. The basis of the stocks received in tax-free exchanges is the basis
of the shares given.
5. The transactional capital gains tax return is required to be filed
within 30 days from the date of sale.
6. The gain on the sale of stocks for stocks pursuant to a plan of
merger and consolidation is exempt if it is resulted in the
transferor acquiring corporate control over the absorbed
corporation.
7. Installment payment of capital gains is allowed if the ratio of
downpayment over the selling price of the sale does not exceed 25%.
8. The spelling price is used to determine the propriety of using the
installment method but the contract price is used to determine the
capital gains tax payable in installment.
9. The excess of mortage over the basis assumed by the buyer
constitutes an indirect receipt which is part of the initial payment
and the selling price.
10. Wash sales occurs when there is a repurchase of shares within 30
days before and 30 days after the date of disposal of securities at
a loss.
11. Control means more than 50% ownership in the voting power of a
corporation.
12. The sale of delisted stock is subject to stock transaction tax and
not to capital received.
13. Gain and loss in a share-for-share swap pursuant to a plan of
merger or consolidation shall be recognized up to the extent of the
cash and other properties received.
14. The sale by the National Housing Authority of commercial lots is
subject to capital gains tax.
15. If the assesor’s fair value is lower than the selling price, then
the fair value of the property is the zonal value.
16. Title to a property shall not be registered by the Registry of
Deeds unless the Commissioner or his representatives has certified
that the tax on the transfer has been paid.
17. Domestic corporations are exempt from the capital gains tax on the
sale, exchange, and other disposition of real properties.
18. The sale of land pursuant to the Agrarian Reform Program is exempt
from capital gains tax.
19. Foreign corporations are required to pay capital gains tax on the
sale of domestic stocks and on the sale of property capital assets.
20. The alternative taxation on an expropriation sale is not applicable
to corporate taxpayers.
11. Statement 1: capital gains may arises from sale, exchange, and
other disposition of movable properties used in business.
Statement 2: ordinary gains may arises from sale, exchange, and
other disposition of real properties not used in business.
Which is true?
a. Statement 1 is correct
b. Statement 2 is correct
c. Both statements are false
d. Both statements are correct
15. Statement 1: Ordinary gains may arises from sale, exchange, and
other dispositions of real properties in business.
Statement 2: Capital gain may arise from sale, exchange, and other
dispositions of real properties not used in business.
Which is false?
a. Statement 1 is correct
b. Statement 2 is correct
c. Both statements are false
d. Both statements are correct
8. Which of the following when sold may be exempted from the 6% capital
gains tax?
a. Unused land to the government
b. Residential lot
c. Developed residential properties for sale
d. Principal residence
10. When the annualized capital gains tax exceeds the transactional
capital gains tax, the excess is a
a. Tax credit c. Tax refundable
b. Tax payable d. A or B
12. 1st statement: When realty businesses discontinue use of assets for
more than two years, the same shall be reclassified as capital
assets.
2nd statement: When realty businesses discontinue use of assets for
more than two years, the same shall be reclassified as capital
assets.
a. First statement is correct c. Neither statement is correct
b. Second statement is correct d. Both statements are correct
13. Which is an incorrect statement?
a. The capital gains tax on the disposition of capital stock
presumes the existence of gain on the sales transaction.
b. The buyer of real property capital asset shall with hold the tax
at source and remit the same to the government.
c. Capital gains tax is identified under the NIRC as a form of final
tax.
d. The capital gains tax on the disposition of real property
presumes the existence of gain on the sales transaction.
14. Which of these shall pay the two-tiered capital gains tax?
a. A real property developer
b. A dealer in stocks
c. A merchandiser or trader of goods
d. A or B
17. The sale of a principal residence is exempt from the capital gains
tax if all of the following conditions are met, except
a. The proceeds is fully utilized in acquiring a new principal
residence.
b. The reacquisition must be by purchase.
c. The reacquisition must have been made within 18 months from the
date of the sale.
d. The capital gains tax must be deposited in escrow.
9. Partial taxation under the 6% capital gains tax will result when
a. The proceeds from the sale of the old property exceeds both its
cost and the acquisition price of the new property.
b. The proceeds of the sale exceeds its zonal value and Assessor's
fair value.
c. The proceeds of the old property exceeds the acquisition price
of the new property regardless of the tax basis, zonal value, and
Assessor's fair value of the old property.
d. The zonal value is greater than the sales proceeds of the old
property
12. The documentary stamp tax on the sale of domestic stocks directly
to a buyer is based on
a. Selling price c. Par value
b. Fair Value d. Cost
15. Who shall file the capital gains tax return for the sale,
exchange, and other disposition of real property?
a. Seller c. Transfer agent
b. Buyer d. The registry of deeds
7. Digong Inc. exchanged its share investment from Bee Inc., as payment
of its P350,000 long outstanding loan from the latter. Digong
acquired the shares for P300,000. Ignoring documentary stamp tax,
compute the capital gains tax on the transaction.
a. P0 c. P5,000
b. P7,500 d. P2,500
Ignoring the documentary stamp tax, the capital gains tax payable
on the sale is
a. P0 c. P1,500
b. P1,000 d. P3,000
10. Assuming the moving method, compute the capita; gains on tax on
the sale.
a. P0 c. P500
b. P400 d. P1,440
11. Koron Company, a trading company, made the following transactions
during the year involving the stocks of Xurpas, a domestic
corporation:
a. P20,000 c. P12,800
b. P16,000 d. P0
13. Mr. Trinidad has the following transactions during the year on the
common stocks of Philippine Pines, a domestic non-listed company:
14. Mr. Kalibo shows the following transactions on the shares of Aklan
Corporation, a closely held corporation:
10. On June 20,2019, Mr. Lito filed the capital gains tax return
involving the sale of domestic stocks on February 20, 2019. The
net gain was P140,000. Compute the total amount due including
penalties except compromise penalty.
a. P26,880 c. P11,700
b. P21,500 d. P12,250
2. Assuming the same data in the preceding number except that the
property was not disposed of but the same was used as a sales after
which it became vacant for more than two years. What is the
classification of the property?
c. Ordinary asset, regardless of the taxpayer
d. Capital asset, regardless of the taxpayer
e. Ordinary asset, if taxpayer is not engage in real estate
business
f. Capital asset, if the taxpayer is not engaged in real estate
business
4. Puerto Princesa Company sold its parking lot for P2,000,000. The
lot has a zonal value of P2,500,000 and appraisal value of
P1,800,000. The capital gains tax on the sale of the lot is
a. P0 c. P120,000
b. P108,000 d. P150,000
7. How much is the capital gains tax will be released to the taxpayer?
a. P150,000 c. P120,000
b. P135,000 d. P15,000
8. On August 15,2020, Ms. Mones sold a 500-square meter residential
house and lot for P3,000,000. The house was acquired in 2005 at
P2,000,000. The Assessor’s fair market values of the house and lot,
respectively, were P1,500,000 and P1,000,000. The zonal value of
the lot was P5,000 per square meter.
If the proceeds of the sale were not invested in the new principal
residence but, instead, new funds of P15,000,000 were used to
construct it, the capital gains tax is
a. P0 c. P750,000
b. P660,000 d. P780,000
11. If Mr. Pepito utilized only P7,000,000 from the proceeds of the
sale in acquiring a new residence, the final tax due from him is
a. P720,000 c. P180,000
b. P216,000 d. P0
3. Mr. Eller exchanged his DEF shares for the shares of EFG pursuant
to a plan of merger. Mr. Eller bought his shares for P1,000,000.
The shares had a fair value of P1,500,000 on the date of exchange.
Mr. Eller received EFG shares with a fair value of P1,300,000 plus
cash of P200,000.
10. Mrs. Joson sold a residential lot in June 1,2019 for P2,000,000.
The property had a zonal value of P2,500,000 and a Assessor’s
market value of P1,000,000.
On July 1, 2020, Mrs. Joson was compelled to pay the capital gains
upon the request of the buyer. The compromise penalty was
determined to be P20,000.
11. Basic Company paid P9,000 documentary stamp tax on the sale of a
real property capital asset. Compute the capital gains tax on the
sale.
a. P9,000 c. P36,000
b. P16,000 d. P42,000
12. Mr. Bassit Unay sold a residential land P4,000,000. The land had
a fair value of P3,500,000 and an Assessor’s fair value of
P2,000,000. What is the total income tax and documentary stamp tax
due?
a. P0 c. P400,000
b. P300,000 d. P450,000