Chapter 16 Documentary Stamp Tax

BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS Chapter 16: DOCUMENTARY STAMP TAXES

CHAPTER 16

DOCUMENTARY STAMP TAXES Problem 16 – 1 1. True 2. True 3. False – the transaction. 4. False – to be taxed against the party who is not exempt. 5. True 6. False – 10 days from the close of the month 7. True 8. True 9. True 10. True Problem 16 – 2 B Documentary stamp tax to be paid (P1,000/P200) x P10 x P2

P 100

Problem 16 – 3 A Documentary stamp tax to be paid ($5,000 x P40/P200) x P0.30

P 300

Problem 16 – 4 B DST on first P5,000 DST on excess of the first P5,000 = (P395,000/P5,000) x P10 Total documentary stamp tax

P 20 790 P810

Problem 16 – 5 C Documentary stamp tax (P800,000/P1,000) x P15 Problem 16 – 6 D DST on first P2,000 DST on excess of the first P2,000 = (P142,000/P1,000) x P1 Total Multiply by Total documentary stamp tax Problem 16 – 7 Face value of the bonds Divide by Multiply by documentary stamp tax Documentary stamp tax Problem 16 – 8 Par value of the stock (P100 x 1,000 shares) Divide by Multiply by documentary stamp tax Documentary stamp tax Problem 16 – 9 Par value (P100 x 100 shares) Divide by value Multiply by documentary stamp tax Documentary stamp tax

P12,000 P

3 142 P145 2 P290

P50,000 200 250 P 1.50 P 375 P100,000 200 500 P 2.00 P 1,000 P10,000 200 50 P 1.50 P 75

Problem 16 – 10 Face value of document Divide by Multiply by documentary stamp tax rate Documentary stamp tax Problem 16 – 11 Face value of document (P50 x $5,000) Divide by Multiply by documentary stamp tax rate Documentary stamp tax Problem 16 – 12 Insurance policy Divide by Multiply by documentary stamp tax rate Documentary stamp tax

P100,000 200 500 P 0.30 P 150 P250,000 200 1,250 P 0.30 P 375 P1,000,000 200 5,000 P 0.50 P 2,500

Problem 16 – 13 Annual insurance premium Divide by

P

Multiply by documentary stamp tax rate Documentary stamp tax

P P

5,000 4 1,250 0.50 625

Problem 16 – 14 The documentary stamp tax on the affidavit of loss is P15.00. Problem 16 – 15 The documentary stamp tax would be P10.00. Problem 16 – 16 Sales price Less: Unpaid mortgage balance Balance Less: Amount not subject to DST Balance Divide by Multiply by Documentary stamp tax Add: DST for the first P1,000 Total documentary stamp tax Problem 16 – 17 Documentary stamp (P1,000,000/ P1,000) x 15 Surcharge (P15,000 x 25%) Interest (from June 25 to July 25) (P15,000 x 20%) Total payable

P1,000,000 200,000 P 800,000 1,000 P 799,000 P 1,000 799 P 15 P 11,985 15 P 12,000

P15,000 3,750 250 P19,000

Problem 16 – 18 a. P – 0 – b. P – 0 – See page 503 of the textbook. Deeds of property donated to the government are exempt from documentary stamp tax.