UNIVERSITY OF SAN JOSE – RECOLETOS

School of Business and Management

Accountancy and Finance Department

QUALIFYING EXAMINATIONS REVIEW

Joey Raine L Jamero, CPA

DONOR’S TAX

1. Donations that do not conform to legal formalities are

a. Taxable under Donor’s tax notwithstanding absence for formalities

b. Exempt from Donor’s tax
c. Subject to Estate tax
d. Subject to income tax

2. Acceptance is essential for a valid donation to be subject to donor’s tax, except transfers

a. in trust by the donor in favor of a beneficiary

b. of business interest by the donor in favor of a stranger
c. for less than adequate consideration
d. by Filipino residents to non-resident aliens

3. The donation of an immovable property shall be made

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

4. Using the preceding number, acceptance by the donee may be made

a. In the same deed of donation c. Either A or B

b. In a separate document d. Neither A nor B

5. The donation of a movable property may be made

a. Orally b. In writing c. Either A or B d. Neither A nor B

6. Using the preceding number, the donation and acceptance should be in writing if the value of the
property donated is

a. Less than P5,000 b. P5,000 or less c. P5,000 or more d. More than P5,000

7. A donation which takes effect upon the death of the donor

a. Donation mortis causa

b. Partakes of the nature of a testamentary disposition
c. Shall be governed by the law on succession
d. A, B and C

8. A donation which is intended by the donor to take effect during his lifetime

a. Shall be subject to donor’s tax using the tax table for donation
b. Shall be in writing if the value exceeds P5,000
c. Donation inter-vivos
d. A, B and C

9. Which is incorrect concerning donation?

a. Real property is transferred by donation only if made under a public instrument

b. Donation of intangible personal property should be in writing
c. Personal property amounting to more than P5,000 should be in writing
d. No one can be forced to accept the generosity of another

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10. Which is correct regarding transfer inter-vivos involving personal properties for less than an adequate
and full consideration?

a. The whole value of the property will be included in gross gift

b. The difference in fair value and consideration is a gift subject to donor’s tax
c. The whole value of the property will be included in gross estate
d. The difference in fair value and consideration is part of gross estate

11. Contracts without the essential element of consideration is considered as

a. Void c. Unenforceable
b. Donation d. Rescissible

12. All elements of donor’s tax must always concur for the donation to be valid, except

a. Acceptance c. Capacity
b. Delivery d. Intent

13. Donor’s tax rate is at

a. 6% c. 2 – 15%
b. 30% d. 5% - 20%

14. Donor’s tax applies to gifts

a. In excess of P250,000 c. In excess of P100,000

b. In excess of P200,000 d. All gifts

15. Dowries valued P10,000 made on account of marriage by parents to their children is subject to

a. Donor’s tax c. Estate tax

b. Exemption d. Income tax

16. Donor’s tax should be paid by the?

a. Donor c. Administrator
b. Donee d. Executor

17. This are considered void donations, except

a. Between husband and wife

b. Made to public officer or his/her family on account of his/her office
c. Any physician, health officer, priest who took care or extended spiritual care to the donor during
his last illness
d. Donation to an unborn child

18. Statement 1: Corporations are allowed to donate inter-vivos

Statement 2: Corporations are allowed to donate mortis-causa

a. Both are correct c. Only 1 is correct

b. Both are incorrect d. Only 2 is correct

19. The following transfers are taxable under donor’s tax, except?

a. Transfers made by the donor to relieve himself of the burden of management of his properties
b. Transfers made by the donor to settle family disputes
c. Transfers made by a parent to see his children enjoy his properties while he still lives
d. Transfers under power of general appointment

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20. Which is incorrect?

a. Donations of non-resident aliens involving properties located abroad to residents of the

Philippines is exempt from donor’s tax
b. Renunciation of inheritance by an heir to another is not subject to donor’s tax
c. Donation by a non-resident citizen to a non-resident alien is exempt from donor’s tax
d. Gifts are reckoned on an annual basis; the tax is determined for the whole gift throughout the
year; hence, a computation is made every time a donation is made

21. Which of the following donation may be exempt?

a. Donation of a resident alien of its properties located abroad to a non-resident alien

b. Donation of a non-resident alien of real properties located in the Philippines to a resident alien
c. Donation of non-resident alien of intangible properties located in the Philippines to a non-
resident alien
d. Donation of an intangible properties located in the Philippines by resident aliens

22. Which of the following is not included in gross gift?

a. Transfers to non-profit non-stock charitable institution

b. The portion of the fair value of a property transferred adequately paid for in transfer for less
than an adequate consideration
c. The portion of the donation representing dowry exemption
d. Donation to the government for public use

23. Donation to the following entities is exempt from Donor’s taxation, except

a. Accredited national professional organization of certified public accountant (PICPA)

b. Integrated Bar of the Philippines
c. International Rice Research Institute
d. Ramon Magsaysay Award Foundation

24. I. Dowries or gifts made on account of family celebration, on or before its celebration, or within one
year thereafter, by parents to each of their legitimate, recognized natural or adopted children, to the
extent of the first P10,000 shall be exempt from the donor’s tax

II. Donations in favour of an educational and or charitable, religious, cultural or social welfare
corporation, institution, accredited non – government organization, trust or philanthropic organization
or research institution or organization provided that no amount of said gifts shall be used by the
donee for administration purposes shall be exempt from donor’s tax

a. True, true b. True, False c. False, True d. False, False

25. A. If the value of the movable property donated is P5,000 or more the donation and the acceptance
shall be made in writing, otherwise the donation shall be void

B. Regardless of the value of the immovable property donated, the donation and the acceptance shall
be made in writing, otherwise the donation shall be void.

a. True, True b. True, False c. False, True d. False, False

26. I. The gift is perfected from the moment the donor effects the delivery either actually or
constructively of the property donated

II. Donor’s tax is a property tax imposed on the property transferred by the way of gift inter-vivos

a. True, True b. True, False c. False, True d. False, False

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27. I. Where property is transferred during lifetime for less than adequate and full consideration in
money or money’s worth, then the amount by which the value of the property exceeded the value of
the consideration shall for the purpose of the donor’s tax, be deemed a gift

II. Gifts of conjugal property made by both spouses shall be considered as having been made one –
half by the husband and the other half by the wife and is taxable ½ to each donor spouse

a. True, True b. True, False c. False, True d. False, False

28. I. For purpose of the donor’s tax, second degree cousins are strangers to each other.

II. Encumbrance on the property donated, if assumed by the donor is deductible for donor’s tax
purposes.

a. True, True b. True, False c. False, True d. False, False

29. I. As a rule, donation between husband and wife during the marriage is void.

II. Donation can be made to conceived or unborn children.

a. True, True b. True, False c. False, True d. False, False

30. 1st Statement: When the donee is a stranger, the tax payable by the donor shall be 30% of the net
gifts.

2nd Statement: When the donee is a relative the tax payable by the donor shall be based on the
scheduler rates of donor’s tax provided in Section 99 of the Tax Code.

a. Both statements are correct c. Only the first statement is correct

b. Both statements are incorrect d. Only the second statement is correct

31. For purposes of donor’s tax, a “stranger: is a person who is not a:

I – brother, sister (whether by whole of half blood), spouse, ancestor, and lineal descendant; or
II – relative by consanguinity in the collateral line within the fifth degree of relationship

a. Both statements are correct c. Only the first statement is correct

b. Both statements are incorrect d. Only the second statement is correct

32. 1st Statement – A legally adopted child is entitled to all the rights and obligations provided by law to
legitimate children, and therefore, donation to him shall not be considered as donation made to
stranger

2nd Statement – Donation made between business organization and those made between an
individual and a business organization shall be considered as donation made to a stranger

a. Both statements are correct c. Only the first statement is correct

b. Both statements are incorrect d. Only the second statement is correct

33. 1st Statement – Any contributions in cash or in kind to any candidate, political party or coalition of
parties for campaign purposes, shall be governed by the Election Code, as amended

2nd Statement – Any provision of law to the contrary notwithstanding, any contribution in cash or in
kind to any candidate or political party or coalition of parties for campaign purposes duly reported to
the COMELEC shall not be subject to the payment of any gift tax

a. Both statements are correct c. Only the first statement is correct

b. Both statements are incorrect d. Only the second statement is correct

34. The donor’s tax is a

a. Property tax on the property transferred

b. Personal tax on the person who transferred the property
c. Tax imposed on the transfer of property by way of gift inter vivos
d. Tax imposed on the transfer of property by way of gift mortis causa

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35. 1st Statement – The donor’s tax shall not apply unless and until there is a completed gift.

2nd Statement – The law in force at the time of the perfection/completion of the donation shall
govern the imposition of the donor’s tax

a. Both statements are correct

b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

36. When is the donation perfected?

a. The moment the donor knows of the acceptance by the donee

b. The moment the donated property 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

37. When is the donation completed?

a. The moment the donor knows of the acceptance by the donee

b. The moment the donated property 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

38. A gift that is incomplete because of reserved powers, becomes complete when either:

I – the donor renounces the power; or

II – the right to exercise the reserved 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. True in both I and II c. True in I only

b. Not true in both I and II d. True in II only

39. Which of the following renunciations shall be subject to donor’s tax?

I – 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

II – General renunciation by an heir, including the surviving spouse, of his/her share in the
hereditary estate left by the decedent;

III – 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;

a. I, II and III c. I and III only

b. I and II only d. I only

40. 1st Statement – Where property, other than a real property that has been subjected to final capital
gains tax, is transferred for less than an adequate and full consideration in money or money’s worth,
then the amount by which the fair market value of the property at the time of the execution of the
Contract to Sell or execution of the Deed of Sale which is not preceded by a Contract to Sell
exceeded the value of the agreed or actual consideration or selling price shall be deemed a gift, and
shall be included in computing the amount of gifts made during the calendar year

2nd – The law in force at the time of the completion of the donation shall govern the imposition of
donor’s tax

a. Both statements are correct c. Only the first statement is correct

b. Both statements are incorrect d. Only the second statement is correct

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41. The following donations were made by Don Lopot during the taxable year:
Donation to TESDA- priority project P900,000
Revocable donation of car to his son 800,000
Inadequate consideration of real property sold to his friend 700,000
Donation to his wife 300,000
Donation to his unborn grandchild 200,000

How much is the amount of donation subject to donor’s tax?

a. P2,000,000 b. P1,800,000 c. P900,000 d. P200,000

42. How much is the amount of gift subject to donor’s tax if X, a Filpino citizen, made a general
renunciation of his P2,000,000 inheritance in favor of his siblings and the inheritance was taken from
the conjugal property of the parents?

a. P -0- b. P500,000 c. P1,000,000 d. P2,000,000

43. How much is the amount of the net gifts of each donor of a conjugal real property donation (costing
P2,000,000 but with fair market value of P3,500,000 at the time of donation) if such gift is given on
account of the donor’s child’s marriage within a year but with attached mortgage loan amounting to
P1,000,000 assumed by the child?

a. P1,250,000 b. P1,240,000 c. P500,000 d. P490,000

44. A resident alien, made the following gifts, during the year:

Wedding gift to her son given during the celebration held in PH P 500,000
A car given to her daughter here in the Philippines 500,000

For the above gifts, the total Philippine donor’s tax would be

a. P43,400 b. P44,000 c. P270,000 d. P300,000

45. Mr. and Mrs. Asiong Salonga, spouses and citizens of the Philippines donated to their legitimate
daughter on account of marriage the following properties at fair market values:

Vacation house (conjugal property) in Hong Kong P500,000

Car in the Philippines (conjugal property) 240,000
Jewelry (exclusive property of Mrs. Salonga) 20,000

The donation was made within one year of their daughter’s marriage. What would be the donor’s tax
of Mr. and Mrs. Salonga?

a. P8,400 and P9,200, respectively

b. P4,800 and P9,600, respectively
c. P5,200 and P9,200, respectively
d. P5,600 and P8,800, respectively

46. Mr. A and Miss B are sweethearts. If A gave to B, P250,000 worth of diamond ring, how much is the
amount subject to donor’s tax?

a. P-0- b. P125,000 c. P150,000 d. P250,000

47. Rom and Mea are not married but living together as husband and wife. On account of Mea’s love to
Rom, she gave him a house and lot with a fair value of P10,000,000. The house, is subject to a
mortgage loan of P2,000,000. How much is the donor’s tax?

a. P-0- b. P404,000 c. P764,000 d. P1,004,000

48. H made a donation of property with a FMV of P1,000,000 to his legitimate daughter I and to J on
December 25, 2018 on account of I's marriage to J to be celebrated on February 14. 2020. Determine
the donor's tax due.

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 Mrs. Catherine Castro donated the following gifts to her recognized natural daughter on account of
marriage to be held on January 5, 200B:

Date of Donation Donated Property FMV of Donation

December 29, 200A Cash P 6,000
January 1, 200B House and Lot 300,000

49. How much is the donor’s tax in year 200B?

a. P None b. P6,000 c. P5,600 d. P5,840

50. For a net gift of P 150, 000 to a younger sister, the donor’s tax is

a. P45,000 b. P30,000 c. P1,000 d. Exempt

51. How much is the donor’s tax for a P 200, 000 donation made to the Filipino donor’s 2nd cousin?

a. P-0- b. P2,000 c. P30,000 d. P60,000

Vangie, a widow, has three (3) sons: Jimmy, 27 years old, Joseph, 25 years old; and James, 23 years old.
On August 15, 200A, she donated two (2) lots, each with FMV of P 150, 000, one (1) each to her sons
Jimmy and Joseph. On November 15, 200A, she gave cash of P 150, 000 to her son James as dowry on
account of James forthcoming marriage on December 22, 200A.

52. The donor’s tax due for the donation made on August 15, 200A is

a. Exempt b. P5,200 c. P6,000 d. P12,000

53. The donor’s tax due for the donation made on November 15, 200A is

a. P11,600 b. P6,000 c. P9,600 d. P5,600

54. If Mr. B, a non-resident Filipino, donated P 100, 000 each to his son and daughter-in-law, how much
is the donor’s tax?

a. P-0- b. P10,000 c. P30,000 d. P60,000

55. In 2019, a citizen taxpayer made the following gifts to his relatives:
PHILIPPINES USA UK ITALY
Gross Gift P 750,000 P 500,000 P 250,000 P 500,000
Deduction 250,000 200,000 150,000 150,000
Tax Paid 25,000 12,000 10,000
How much is the donor's tax payable after Tax Credit?

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