TAXATION Additional Quizzer Income Taxation 1.
ATTY. MACMOD, C.P.A. 2017-Edition
Mr. Cortez, Filipino, single, has the following transactions for the current year: Business gross income P200,000 Allowable deductions (including bad debts of P10k, only ½ was written off) 60,000 Loss from gambling 10,000 Other transactions: Selling price, partnership interest 100,000 Investment in partnership in 2005 20,000 Gain on sale of capital asset held for 5 years 10,000 Loss on sale of capital asset held for 10 months 12,000 Loss on account of failure to exercise 3 month option to buy property 2,000 Liquidating dividend from Z Co. 150,000 Cost of investment in Z Co. in 2014 60,000
4.
Gross sales Sales returns and allowances Cost of goods sold Gain on sale of capital assets held for 7 months Loss on sale of capital assets held for 15 months Interest income (BPI) Allowable business expenses Income tax due is: a. P8,800 b. P 7,500
2.
c. P106,000 d. P101,000
7.
On January 1, 2015, lessor leased a lot with a building thereon for a period of 10 years. It was agreed that the lessee will pay the following: a) Rent of P240,000 per year b) Fire Insurance premium in the building of P16,000 per year c) Real property tax of P10,000 per year Lessee will also construct a warehouse on the land at a cost P3,600,000 with a useful life of 10 years completed on June 30, 2017, which shall belong to the lessor at the end of the lease.
440,000 60,000
36,000 96,000
Taxpayer, individual, married but legally separated, supporting his mother, has the following transactions for the current year: Sales Cost of sales Operating expenses Interest income from BDO Interest Expense Other transactions: a. Sale of office equipment held for 5 years: Selling price Cost Accumulated deprecation b. Sale of family van held for 3 years: Selling price Cost
P2,000,000 1,150,000 560,000 10,000 20,000
100,000 120,000 80,000 300,000 210,000
c. Sale of family car held for 18 months: Selling price
480,000
Cost
500,000
Taxpayer will report a taxable income of: a. P305,000 c. P360,000 b. P335,000 d. P318,300
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c. P12,000 d. P9,625
Lito an official of ABC Corporation asked for an earlier retirement because he was emigrating to Canada, he was paid to P2M separation pay in recognition of his valuable services to the corporation plus P300,000 13 th month pay, Nelson another official was separated due to his failing eyesight. He was given P1M separation pay. Rico was separated for violating company rules but was given P300,000 separation pay. Ben opted to retire at 55 years old after working for 10 years in the company. He received P1M. The total income subject to withholding tax on the above payment is : a. P 2,600,000 c. P3,300,000 b. P2,270,00 d. P2,518,000
The taxpayer will report a taxable net income of: a. P472,000 c. P445,400 b. P480,400 d. P278,400 3.
5,000 50,000 580,000
6.
P200,000 1,440,000 660,000
12,000 42,000
10,000
On October 1of current year, Dragon Girl Co. leased a residential house for the use of one of its executives, Mr. Kurukuru, a special alien employee. The rent agreed upon was P170,000 per month. The FBT monthly is: a. P 54,400 c. P40,000 b. P524,000 d. P15,000
A Taxpayer, married with a 2 year old child, has the following transactions for the current year: Salaries received as employee Sales Cost of goods sold Deductions: Operating Expenses Loss due to fire (properly reported) Contributions: To a government priority project in education To Quiapo church Other income: Rent Capital gain from sale of CAR Family held for 3 years
P1,100,000 200,000 300,000
5.
Note: Last year, Mr. Cortez had a net income of P65,000 and a net capital loss of P92,000. The taxable net income is: a. P196,000 b. P141,000
ABS Corporation, a domestic corporation now on its 5th year of operation provided the following data:
The Lessor shall report for year 2017, as income from lease the total amount of: a. P 336,000 c. P 326,000 b. P 366,000 d. P 1,296,000 8.
Based on the above problem the lessee can deduct the total rental expenses of: a. P 516,000 c. P 636,000 b. P 506,000 d. P 756,000
9.
Mr. X insured himself for P1M. After several months he died when he was able to pay a total amount of P100,000. His beneficiary, his brother received the P1M insurance proceeds. Mr. Y on the other hand insured himself for P1M. After 20 years he survived the insurance policy and received return on his premiums. He received P1M from the insurance company although he was only able to pay P700,000. The total income subject to tax is _______________? a. P 300,000 c. P 1,200,000 b. P 1,300,000 d. P 900,000
10. A tax payer was a victim of a vehicular accident who filed a case against the offender. The court awarded him the following;
P1.502A
a.
Actual damages for expenses paid in the hospital P 200,000 b. Attorney’s fee he paid to his lawyer 50,000 c. Actual damages for lost arm 250,000 d. Moral damages 100,000 e. Exemplary damages 100,000 f. Salaries for 6 months when the tax payer was in theHospital, absent from his job w/ a monthly salary of P 50,000 300,000 The total income subject to tax is _______________? a. P 300,000 c. P 700,000 b. P 500,000 d. P 100,000 11. A tax payer provided the following data Sales Sales returns & discounts COGS Operating expenses
P P P P
12M 2M 4M 2M
Using Optional Standard Deduction, the taxable net income if the taxpayer is a corporation is _______________. a. P 3,600,000 c. P 5,900,000 b. P 5,850,000 d. P 6,000,000
15. His Taxable Net Income is ________________ a. P350,000 c. P340,000 b. 320,000 d. P300,000 16. If he has no commission income, his Taxable Net Income is ___________ a. P150,000 c. P120,000 b. 270,000 d. P100,000 17. If he has no commission income & professional income, his Taxable Net Income is_______________ a. P70,000 c. P120,000 b. 50,000 d. P 0 18. Which is a taxable fringe benefit? a. those given to rank and file employees b. contribution of employer to health and hospitalization and vacation expenses of employee c. those exempted under special and laws. d. De minimis benefits
12. Based on the same data above, using OSD, the taxable net income if the taxpayer is individual, married w/5 minor children is ____________________. a. P 5,900,000 c. P 3,600,000 b. P 5,100,000 d. P 5,050,000
19. Which of the following statements is incorrect? a. To be subject to final tax passive income must be from Philippine sources. b. An income which is subject to final tax is excluded from the computation of income subject to Section 24 (A). c. Lotto winnings in foreign countries are exempt from income taxation in the Philippines. d. An income which is subject to non creditable withholding tax is excluded in the computation of income subject to Section 24 (A).
13. Mr. X provided the following data: Salaries Fringe benefits as Vice Pres. Rice Subsidy for 1 yr(P2k x 12 mos.) 13th month pay& other bonuses Representation and travel allowance (RATA) Int. inc. from BPI (30% longterm) Royalty income (10% books)
20. Which of the following statements is not correct? a. Interest income from long term deposit is exempt from income tax. b. Winnings from Philippine Charity Sweepstakes are exempt from income tax. c. Royalties on books, literary works and musical composition are subject to 10% creditable withholding tax. d. A prize of P10,000 is subject tobasic tax.
P450,000 75,000 24,000 100,000 20,000 200,000 100,000
The salaries are net ofP50,000 withholding tax but gross of P10,000 SSS, union dues &Pag-ibig contributions. Mr. Mr. X is married with 5 minor children. The Taxable Net Income is _____________. a. P364,000 c. P664,000 b. P314,000 d. P382,000 14. The Final Tax (total) on Passive Income a. P47,000 c. P50,000 b. P60,000 d. P48,000 Mr. Bayabas provided the following data. Salary for the year (P10,000 for 12 months, MWE-P10,000/mo.) Overtime pay Hazard pay Holiday pay Commission income as additional compensation income from the same company Professional income as dentist Prof. expenses
P120,000 20,000 20,000 10,000 50,000 250,000 50,000
Tax payer is single with legally adopted child.
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21. Which of the following income of an individual taxpayer is subject to final tax? a. P10,000 prize in Manila won by a resident citizen. b. Dividend received by a resident citizen from a resident corporation. c. Shares in the net income of a general professional partnership received by a resident alien. d. Dividend received by a non-resident alien from a domestic corporation. 22. A Corp. prov. the following data: Sales P10,000,000 COGS 4,000,000 Other income Rent 1,000,000 Int. Income, BPI 2,000,000 Royalty Income 500,000 Oper. Exp. 6,900,000 Compute: a. NIT b. MCIT c. Income tax due excluding Final taxes d. Total taxes due Including final taxes e. Is your answer for Income Tax due (c) Same if the Corp. is a hospital? Why?
P1.502A
