.
EXCLUSION FROM GROSS INCOME
Source: Income Taxation by Rex Banggaan !"#$% e&ition'
Submitte& by: BL(NC()ER* +O M(RIE T
Exc,u-ion .rom Gro-- Income Mu,ti/,e C0oice 1 2rob,em$3 Mr3 C0ua co,,ecte& t0e 2 $*###*### in-urance /rocee&- o. Mr3 Sy 0ic0 0e boug0t .rom t0e ,atter .or 2 4##*###3 Be.ore t0e &eat0 o. Mr3 Sy* Mr C0ua /ai& a tota, /remium o. 2 "##*###3 50at i- t0e exc,u-ion in gro-- income an& inc,u-ion in gro-- income* re-/ecti6e,y7 a3 2 $*###*###8 2 # b3 2 9##*###8 2 4##*### c3 2 4##*###8 2 9##*### &3 2 #8 2 $*###*### "3 Mr3 Bi-,igo -urren&ere& 0i- ,i.e in-urance /o,icy an& recei6e& a ca-0 -urren&ere& 6a,ue o. 2 ##*### a.ter contributing 2 ;##*### in annua, /remium-3 i- 0eir- co,,ecte& t0e 2 "*###*### /rocee&- o. 0i- ,i.e in-urance /o,icy3 Mr3 Catee, /re6iou-,y /ai& a tota, /ayment o. 2 %##*### in /remium-3 50at i- t0e exc,u-ion in gro-- income7 a3 2 =*###*### b3 2 %##*### c3 2 "*###*### &3 2 # 43 Mr3 Ma,a,ag co,,ecte& t0e 2 %*###*### .ire in-urance /rocee&- o. 0i- bui,&ing- 0ic0 a- &e-troye& b y .ire3 T0e bui,&ing 0a& a tax ba-i- o. 2 4*%##*### at t0e occurrence o. t0e .ire3 50at i- t0e tota, exc,u-ion in gro-- income7 a3 2 %*###*### b3 2 4*%##*### c3 2 # &3 2 %##*### %3 Mr3 ?abacan in-ure& 0i- cro/- .or a 2 $*###*### in-urance co6er again-t ca,amitie-3 >e /ai& 2 $##*### in-urance /remium3 50at i- t0e amount to be inc,u&e& in gro-- income7 a3 2 $*###*### b3 2 @##*### c3 2 $##*### &3 2 # 93 Mr3 e recei6e& a tota, in&emnity o. 2 ##*### .rom t0e in-urer o. t0e bu-3 Mr3 e recei6e& a tota, retirement /ay o. 2 $*##*### /,u- 2 4##*### GSIS bene.it-3 >o muc0 i,, be exc,u&e& in gro-- income7 a3 2 # b3 2 4##*### c3 2 $*##*### &3 2 "*"##*### @3 T0e 2ro.e--iona, Regu,ation Commi--ion co,,ecte& a tota, -um o. 2 $##*###*### .rom /ro.e--iona, ,icen-e .ee-3 It a,-o co,,ecte& 2 %*###*### .rom renta,- at go6ernment /ro/ertie-3 50at i- t0e tota, exc,u-ion in gro-- income7 a3 2 # b3 2 %*###*### c3 2 $##*###*### &3 2 $#%*###*### $#3 Mr3 (,6are 0a& t0e .o,,oing income &uring t0e year:
Gro-- com/en-ation income Inc,u&ing 2 "%*### $= t0 mont0 /ay Le--: Tar&y or ab-enceNet com/en-ation income SSS ea,t0 &e&uction2ag ibig &e&uctionUnion &ue 5it00o,&ing tax
2 ="%*### ! $#*###' 2 =$%*### 2 $"*### 2 @*### 2 $#*### 2 %*### 2 4#*### 2 "=@*### Com/ute t0e tota, exc,u-ion- .rom gro-- income7 a3 2 =9*### b3 2 9$*### c3 2 99*### &3 ;$*### $$3 Mr3 >enare- recei6e& t0e .o,,oing: o muc0 i- taxab,e to Mr3 >enare-7 a3 2 =#*### b3 #*### c3 2 %#*### &3 2 =#*###
2 "##*## 2 %#*### 2 =#*### 2 $##*###
$"3 Mr3 Tacurong 0a- t0e .o,,oing &ata &uring t0e year: Ba-ic Sa,ary 2 4##*### Income tax it00e,& 2 %#*### $=T> mont0 /ay 2 4#*### SSS 2 "*### 20i,>ea,t0 / $*## 2ag 1 Ibig 2 $*;## Union &ue2 %## Ca/ita, contribution 2 "*### Com/ute t0e tota, exemtion- an& exc,u-ion- .rom gro-- income: a3 2 %9*### b3 49*### c3 =*### &3 =9*### $=3 Mang (ntonio co,,ecte& 2 "*###*### .rom t0e .ire in-urance com/any t0at in-ure& 0i- bui,&ing 0ic0 0a- a tax ba-io. 2 $*##*### 0en t0e .ire occurre&3 e a- /ai& 2 =# #*### u/on maturity o. t0e /o,icy3 >e /ai& 2 "%#*### tota, /remium3 50at i- t0e inc,u-ion I gro-- income7 a3 2 =##*### b3 2 "%#*### c3 2 %#*### &3 2 # $%3 M-3 >en-on retire& .rom 0er ob a.ter "% year- o. -er6ice3 S0e oine& t0e com/any at t0e age o. "= an& a- /romote& .rom a c,erD to )2 Finance3 S0e a- /ai& 2 "*###*### tota, retirement /ay .rom t0e em/,oye-A- contributory /en-ion /,an3 Out o. t0e tota, /rocee&-* M- >en-on contribute& 2 9##*###3 T0i- a- M- >en-onA- .ir-t retirement .rom em/,oyment3 >o muc0 i- exc,u&e& in gro-- income7 a3 2 "*###*### b3 2 $*4##*### c3 2 9##*### &3 2 # $93 T0e .o,,oing re,ate& to t0e com/en-ation income o. M-3 Lamitan in "#$%3: Com/en-ation 2 "*4##*### Contribution to SSS* 20i,0ea,t0* >ea,t0* >
2 4##*###
2 4##*### 2 "#*### 2 $*### 2 9#*###
"#3 In t0e imme&iate,y /rece&ing /rob,em* com/ute t0e tota, inc,u-ion in gro-- income -ubect to regu,ar tax3 a3 2 49#*### b3 2 @*### c3 2 9#*### &3 2 =*### "$3 ( c0arity recei6e& t0e .o,,oing: Contribution- .rom t0e /ub,ic 2 $*4##*### Income .or t0e -a,e o. merc0an&i-e 2 %##*### Gain on -a,e o. /ro/ertie2 =##*### 50at i- t0e tota, exc,u-ion in gro-- income7 a3 2 "*"##*### b3 2 $*@##*### c3 2 $*4##*### &3 2 $*=##*### ""3 Mr3 Santiago /urc0a-e& a ,i.e annuity For 2 $##*### 0ic0 i,, /ay 0im 2 $#*### a year3 T0e ,i.e ex/ectancy o. Mr Santiago i- $" year-3 50ic0 o. t0e .o,,oing i,, Mr3 Santiago be ab,e to exc,u&e .rom 0i- gro-- income7 a3 2 $#*### B3 / "#*### c3 2$##*### &3 2 $"#*### "=3 ( non /ro.it organiation recei6e& t0e .o,,oing &uring "#$% Contribution- .rom t0e /ub,ic 2 $*@##*### Income .or t0e -a,e o. merc0an&i-e 2 %##*### Gain on -a,e o. /ro/ertie2 =##*### 50at i- t0e tota, exc,u-ion in gro-- income7 a3 2 "*"##*### b3 2 $*@##*### c3 2 $*4##*### &3 2 $*=##*### "43 Mr3 ?etc0um co,,ecte& t0e 2 $*###*### .ire in-urance /rocee&- o. Mr3 BrocD 0ic0 0e boug0t .rom t0e ,atter .or 2 4##*###3 Be.ore t0e &eat0 o. Mr3 BrocD* Mr ?etc0um /ai& 2 =##*### .or t0e /remium3 50at i- t0e exc,u-ion in gro-income7 a3 2 ;*###*### b3 2 =##*### c3 2 4##*### &3 2 # "%3 Team RocDet -urren&ere& t0eir ,i.e in-urance /o,icy an& recei6e& a ca-0 -urren&ere& 6a,ue o. 2 ##*### a.ter contributing 2 @##*### in annua, /remium-3 er 0eir- co,,ecte& t0e 2 ;*###*### /rocee&- o. 0er ,i.e in-urance /o,icy3 Mi-ty /re6iou-,y /ai& a tota, /ayment o. 2 $*%##*## # in /remium-3 50at i- t0e exc,u-ion in gro-- income7 a3 2 %*%##*### b3 2 $* %##*### c3 2 ;*###*###
&3 2 # "@3 ?irito a- one o. t0e /a--enger- 0o ere 0urt in a /,ane cra-03 >e recei6e& a tota, in&emnity o. 2 "*##*### .rom t0e in-urer o. t0e /,ane3 ?irito /ai& 2 "%#*### in 0o-/ita, bi,,- &ue to t0e acci&ent3 Com/ute t0e tota, amount to be exc,u&e& in gro-- income3 a3 2 # b3 2 "%#*### c3 2 %%#*### &3 2 "*##*### =#3 C0erry 2ie retire& a.ter =# year- o. -er6ice a- a Nur-e at t0e age o. %%3 S0e recei6e& a tota, retirement /ay o. 2 $*##*### /,u- 2 %##*### GSIS bene.it-3 >o muc0 i,, be exc,u&e& in gro-- income7 a3 2 # b3 2 %##*### c3 2 $*##*### &3 2 "*=##*### =$3 T0e Securitie- an& Exc0ange Commi--ion co,,ecte& a tota, -um o. 2 "##*###*### .rom /ro.e--iona, ,icen-e .ee-3 It a,-o co,,ecte& 2 %*###*### .rom renta,- at go6ernment /ro/ertie-3 50at i- t0e tota, exc,u-ion in gro-- income7 a3 2 # b3 2 %*###*### c3 2 "##*###*### &3 2 "#%*###*### ="3 Mr3 Rex 0a& t0e .o,,oing income &uring t0e year:
SSS ea,t0 &e&uction2ag ibig &e&uctionUnion &ue 5it00o,&ing tax
2 $"*### 2 @*### 2 $#*### 2 %*### 2 4#*###
Com/ute t0e tota, exc,u-ion- .rom gro-- income7 a3 2 =9*### b3 2 $%*### c3 2 %#*### &3 ;9*### ==3 )o,&emort recei6e& t0e .o,,oing &ata .or t0e year "#$9: Income o. &onate& /ro/erty before &onation 2 %#*### Income o. &onate& /ro/erty after &onation 2 =#*### In0erite& /ro/ertie2 $##*### >o muc0 i- taxab,e to )o,&emort7 a3 2 $#*### b3 #*### c3 2 %#*### &3 2 =#*### =43 2iDac0u 0a- t0e .o,,oing &ata: $=T> mont0 /ay SSS 20i,>ea,t0 2ag 1 Ibig Union &ue-
2 4#*### 2 "*### / $*## 2 $*;## 2 %##
Com/ute t0e tota, exemtion- an& exc,u-ion- .rom gro-- income: a3 2 4#*### b3 49*### c3 4"*%## &3 $*;## =%3 Gerry co,,ecte& 2 $"*###*### .rom t0e .ire in-urance com/any t0at in-ure& 0i- bui,&ing 0ic0 0a- a tax ba-i- o. 2 $$*##*### 0en t0e .ire occurre&3 ea,t0 &e&uction2 @*### 2ag ibig &e&uction2 $#*### Union &ue2 %*### 5it00o,&ing tax 2 4#*###
Gro-- income .rom -a,e2 4##*### ea,t0* >
2 "##*### 2 $%#*### 2 $@#*### 2 $#%*###
Com/ute t0e tota, exc,u-ion in gro-- income -ubect to regu,ar tax7 a3 2 "##*### b3 $%#* ### c3 $@#*### &3 $#%*### =@3 Mr3 Barac0o on 2 %##*### in a ,oca, c0e-- com/etition t0at a- -anctione& by a -/ort- organiation3 I- t0e 2 %##*### /rie con-i&ere& an item o. gro-- income7 a3 e-* becau-e a,, /rie- are -ubect to income tax3 b3 No* becau-e t0e c0e-- i- not an internationa, organiation c3 e-* becau-e t0e organier i- not an accre&ite& -/ort- organiation &3 No* becau-e t0e -/ort- com/,etion i- a ,oca, com/etition 4#3 ( c0urc0 ,ocate& in Tanay* Ria, recei6e& t0e .o,,oing: Cre&itab,e it00o,&ing taxe2 $@#*### Contribution- .rom t0e /ub,ic 2 "*4##*### Income .or t0e -a,e o. merc0an&i-e 2 %##*### Gain on -a,e o. /ro/ertie2 =##*### 50at i- t0e tota, exc,u-ion in gro-- income7 a3 2 ##*### b3 2 $*@##*## c3 2 "*4##*### &3 2 =##*###
Mu,ti/,e C0oice 1T0eory $3 50ic0 i- true it0 t0e regu,ar income tax7 a3 Tax i- /ayab,e at regu,ar inter6a,3 b3 Certain item- o. income are -ubect to .ina, it00o,&ing tax3 c3 Income tax return i- not reuire&3 &3 (,, o. t0e-e3 "3 50ic0 i- not a .eature o. regu,ar income tax7 a3 It genera,,y a//,ie- to a,, item- o. gro-- income not -ubect to .ina, tax3 b3 Gro-- income tax c3 (ccounting /erio& &3 Cre&itab,e it00o,&ing tax =3 Statement $: Item- o. /a--i6e income .rom abroa& are -ubect to regu,ar income tax3 Statement ": Item- o. /a--i6e income .rom t0e 20i,i//ine- are genera,,y -ubect to .ina, income tax3 50ic0 -tatement i- genera,,y correct7 a3 Statement $ b3 Statement " c3 Bot0 -tatement- are correct3 &3 Neit0er -tatement i- correct3 43 2rogre--i6e income tax &oe- not a//,y to a3 re-i&ent citien b3 re-i&ent a,ien c3 non 1 re-i&ent citien &3 -/ecia, a,ien %3 50ic0 i- not inc,u&e& un&er t0e term cor/orationH7 a3 bu-ine-- /artner-0i/ b3 oint 6enture c3 non 1 /ro.it c0aritab,e in-titution &3 co 1 oner-0i/ 93 T0e 0ig0e-t margina, tax rate .or in&i6i&ua, income tax/ayer- ia3 "% b3 =# c3 =" &3 =% ;3 50ic0 cor/orate tax/ayer i- not -ubect to regu,ar income tax7 a3 bu-ine-- /artner-0i/ b3 &ome-tic cor/oration c3 re-i&ent .oreign cor/oration &3 non 1 re-i&ent cor/oration 3 50ic0 i- correct it0 re-/ect to exc,u-ion- .rom gro-- income7 a3 T0ey are inc,u&e& a- /art o. gro-- income but are -ub-euent,y &e&ucte&3 b3 T0ey are not inc,u&e& in gro-- income but are a&&e& to t0e taxab,e income3 c3 T0ey are -ynonymou- it0 &e&uction-3 &3 T0ey are not con-i&ere& in t0e com/utation o. taxab,e income3 @3 50ic0 con-titute a taxab,e item o. gro-- income7 a3 com/en-ation .or /er-ona, inurie b3 gain .rom -a,e o. go6ernment bon&c3 income exem/t un&er treaty &3 gain .rom -a,e o. -0are- in mutua, .un&$#3 50ic0 i- correct it0 re-/ect to &e&uction- .rom gro-- income7 a3 T0ey are exc,u&e& .rom t0e &etermination o. taxab,e income3 b3 T0ey are inc,u&e& a,, ex/en-e- incurre& in t0e generation o. any income3 c3 T0ey inc,u&e /er-ona, exem/tion-3 &3 T0ey /ertain to ex/en-e- o. generating item- o. bu-ine-- or /ro.e--iona, gro-- income3
