Business Taxation
Business Taxation
Business Taxation
a. Proportional c. Regressive
a. Cash
b. Goodwill
c. Franchise
a. Orally
b. Writing
c. Either A or B
d. Neither A or B
b. 5,000 or less
c. 5,000 or more
Statement 2: The accrual period of donor’s tax is upon the death of the
decedent.
a. True, True
b. True, False
c. False, True
d. False, False
7. One of the following statements is wrong. When a donor with several
donations during the year fails to file the donor’s tax return for each of the
dates that donations were made:
a. Such failure can be cured by filing a donor’s tax return at the end of the
year reflecting all the donations made within the year and paying the taxes
shown in that one return
c. He can voluntarily file late the donor’s tax return for each date that
donations were made and make payments on the tax due shown on each
return, with penalties
d. If the different donor’s taxes were not paid on the original due gates
because of requests for extension seasonably filed with the Commissioner
of Internal Revenue, each required payment of tax shall have an extended
period of not more than six months.
a. Yes
b. No
c. Maybe
d. Either a or b
9. What happen if the value of the personal property exceeds 5,000 and the
donation and acceptance made orally?
10. In computing the donor’s tax on a subsequent donation, the donor must
also consider
a. The decedent
13. Jack had been working with an estate planner for several years prior to
his death. Accordingly, Jack made many transfers during his life in an
attempt to reduce his potential estate tax burden, and Jack's executor, Tom,
is thoroughly confused. Tom comes to you for clarification of which assets to
include in Jack's gross estate. Which of the following transactions will not be
included in Jack's gross estate?
a. Jack gave $40,000 to each of his three grandchildren two years ago. No
gift tax was due on the gifts.
b. Jack purchased a life insurance policy on his life with a face value of
$300,000. Jack transferred the policy to his son two years ago.
C. Jack and his wife owned their personal residence valued at $250,000 as
tenants by the entirety.
D. After inheriting a mountain vacation home from his mother, Jack and gifted
be a vacation home to his daughter to remove it from his gross estate. Jack
continued to use the property as a weekend getaway and continued all
maintenance on the property.
15. The maximum amount that a wife can inherit from her husband without
owing any federal estate tax is
a. $14,000
b. $850,000
c. $850,000 less excess gift tax
d. unlimited
PROBLEMS:
Mr. B made the donation worth in the year: (For items 16-17)
The donation is a car to his nephew during his birthday. It has already been
owned by Mr. B for two years and still has an unpaid mortgage amounting to
P400, 000 which will now be shouldered by his nephew.
16. How much is the taxable net gift?
a. 1,250,000
b. 1,400,000
c. 1,150,000
d. 1,800,000
a. 69,000
b. 60,000
c. 93,000
d. 84,000
18. Mr. Ley bought a brand-new car for his only daughter. The car was
purchased at an instalment price of P1, 560,000 payable in three equal
annual instalments of P520, 000. The cash price at the date of acquisition is
P1, 000.000. How much is the amount of gross profit?
a. 520,000
b. 1,000,000
c. 1,560,000
d. 1,040,000
To Odette, a building in France worth P2, 000, 000 mortgaged for P500, 000
assumed by the donee.
19. Determine the amount of gross gift subject to donor’s tax assuming the
donor is resident alien.
a. 11,900,000
b. 11,400,000
c. 6,700,000
d. 6,200,000
20. Determine the amount of gross gift subject to donor’s tax assuming the
donor is non-resident alien with reciprocity.
a. 11,900,000
b. 11,400,000
c. 6,700,000
d. 6,200,000
a. 500,000
b. 650,000
c. 300,000
d. 800,000
22. The donor’s tax still due, after credit for foreign donor’s tax paid is
___________________.
a. 24,000
b. 30,000
c. 21,000
d. 15,000
Jollibee married to McDo, died leaving the following: (For items 23-26)
Exclusive real properties inherited from his mother one and half years ago –
4,000,000.
Deductions claimed
a. 9,900,000
b. 23,000,000
c. 36,500,000
d. 32,500,000
a. 1,250,000
b. 3,450,000
c. 2,600,000
d. 3,250,000
a. 3,200,000
b. 2,680,219
c. 2,780,416
d. 2,960,000
a. 598, 187
b. 1,822, 186
c. 1,222, 187
d. 726, 000
27. Mr. Yin, a resident citizen of the Philippines, died on October 10, 2023,
leaving the following properties, rights obligations and charges:
a. 10,000,000
b. 7,500,000
c. 4,200,000
d. 5,000,000
28. Mr. Aldous transferred his property with 500,000 at that time to Mr. Chou.
The transfer was subject to revocation. On that date Mr. Aldous died the
value of the said property was 300,000. Mr. Chou paid 200,000 in
consideration of the property to. The amount to be included in the gross
estate on account of the above transfer is;
a. 500,000
b. 300,000
c. 200,000
d. 100,000
a. 11,000,000
b. 10,000,000
c 6,000,000
d. 13,000,000
30. Pedro died in 2021. The following claims against Pedro’s estate were
claimed by his heirs as deduction from the decedent’s gross estate.
a. 700,000
b. 650,000
c. 800,000
d. 750,000
Key to Correction
THEORIES
1. A
2. D
3. D
4. C
5. D Statement 2: The accrual period of donor’s tax is at the time of gift or donation is made.
6. B
7. A
8. A
9. A
10. D
11. D
12. A
13. A
14. C
15. D
(16-17)
Gross Gift 1,800,000
Less: Mortgage payable - 400,000
Net gift 1,400,000 16. B
Less: Exemption - 250,000
Taxable net gift 1,150,000
Donor's tax rate 6%
Donor's Tax Payable 69,000 17. A
Cash 500,000 -
11,900,000 6,700,000
19. A 20. C
(21).B
In the Philippines:
(22). B
Donor’s tax due
[(650k-250k)*.06] 24,000
Foreign Donor’s tax paid
15,000
Limitation
[(150,000/650,000)*24000]
6,000
Allowed
6,000 6,000
Still due
30,000
(23).C
(24). B
Exclusive Communal Total
Unpaid mortgage on real property 300,000 300,000
(25). B
Initial basis Total
none
FMV at the time of transfer given
(26). A
Exclusive Communal Total
(27). B
Family Home FMV 15,000,000
Divide 2 /2
Amount to be compared 7,500,000
Limit 10,000,000
Lower 7,500,000
(28). D
FV at the time of death 300,000
Less: Consideration 200,000
Gross Estate 100,000
(29).C
Gross Estate 13,000,000
Claims against the estate - 2,000,000
Standard Deduction - 5,000,000
Net Estate 6,000,000
(30). B
Notes payable (notarized) 500,000.00
Unpaid property taxes before death 300,000.00
Unpaid mortgage before death 50,000.00
Claim against the estate 850,000.00
Reference:
Source:
Tabag E., Garcia, E.(2023). Transfer & Business Taxation (2023 edition). Ane Booksop