Taxation Enhancement Exercises

TAXATION ENHANCEMENT EXERCISES

ATTY. MACMOD, CPA

BASIC PRINCIPLES OF TAXATION 1. Which is not a characteristic of o!er of Ta"ation# a. Po!er co$e"ists !ith the e"istence of the state %. It is a%so&'te&( &e)is&ati*e in character c. It is s'%+ect to inherent &iitations -. It is s'%+ect to &iitations fo'n- in the 1/0 Constit'tion .

5.

8.

Which of the fo&&o!in) stateents is correct# a. Ta" &a! is sti&& *a&i- !hen its theor( 'roses an%asis are -isre)ar-e%. There can %e ta" e"etion so&e&( on the )ro'nof e2'it( c. 3e*(in) or iosition of ta"es is 4no!n as ta" a-inistration -. The o!er to ta" )enera&&( inc&'-es the o!er to -estro( One is not aon) the canons of ta"ation6 a. 7isca& a-e2'ac( %. Pro)ressi*e ta"ation s(ste c. A-inistrati*e feasi%i&it( -. E2'a&it( in ta"ation As to s'%+ect atter, co'nit( ta" is6 a. Persona& ta" c. A-*a&ore ta" %. Direct ta" -. 3oca& ta"

9. One of the fo&&o!in) is not a *a&i- constit'tiona& &iitations on the o!er of ta"ation6 a. Non aroriation for re&i)io's 'roses %. Non iairent of +'ris-iction of Co'rt of Ta" Aea&s in Ta" cases c. Non irisonent for nona(ent of o&& ta" -. D'e rocess of &a! an- e2'a& rotection of &a! :.

One of the fo&&o!in) *io&ates the inherent &iitation on the o!er of ta"ation6 a. S'&ier of schoo&s s'&ies for Deartent of  E-'cation shifte- the ;AT a4in) the )o*ernent an in-irect ta"a(er of ;AT %. A re*en'e re)'&ation !as iss'e- %( Deartent of  7inance to aen- ista4e in a ta" &a! c. Incoe of '-icia& Re*ie! in Ta"ation. ?. O'r constit'tion -oes not contain an( ro*ision )rantin) ta" e"etion to the )o*ernent. a. Tr'e6 Tr'e c. 7a&se@ Tr'e %. 7a&se@ 7a&se -. Tr'e@ 7a&se /. 1st Stateent To %e e"et fro ta"ation 'n-er the Constit'tion &an-  %'i&-in)s 'st %e e"c&'si*e&( anact'a&&( 'se- for re&i)io's, e-'cationa& or charita%&e 'rose, e*en if not -irect&(. n- Stateent E"etions of non$rofit schoo&s are on&( &iite- to re*en'e an- assets -eri*e- fro strict&( schoo& oerations. a. Tr'e, Tr'e c. 7a&se, Tr'e %. 7a&se, 7a&se -. Tr'e, 7a&se

. O'r ta" &a!s are %oth6 a. Pro)ressi*e an- rosecti*e

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%. c. -.

Ci*i& an- rosecti*e Pena& an- re)'&ator( Persona& an- re)'&ator(

1B. 1st Stateent  Ta" iose- o'tsi-e the sit's of  Ta"ation is *oi-. n- Stateent  Internationa& Coit( is an e"cetion to the territoria&it( -octrine. a. Tr'e@ 7a&se %. 7a&se@ Tr'e c. Tr'e@ Tr'e -. 7a&se@ 7a&se 11. Which is not a characteristic of states o!er of ta"# a. It is %ase- on the ta"a(ers a%i&it( to a(   %enefits recei*e%. It is &e)is&ati*e in character c. It is an inherent o!er -. It is &iite- %( constit'tiona& an- inherent &iitations 1. In case of conf&ict %et!een the ta" co-e an- )enera&&( accete- acco'ntin) rinci&es FAAPG6 a.?oth ta" co-es an- FAAP sha&& %e enforce-@ %.FAAP sha&& re*ai& o*er ta" co-e@ c. Ta" co-e sha&& re*ai& o*er FAAP@ -.The iss'e sha&& %e reso&*e- %( the co'rts. 15. Which of the fo&&o!in) stateents is not correct# a. Ta"es a( %e iose- to raise re*en'es or to re)'&ate certain acti*ities !ithin the state@ %. The state can ha*e the o!er of ta"ation e*en if  the Constit'tion -oes not e"ress&( )i*e it the o!er to ta"@ c. 7or the e"ercise of the o!er of ta"ation, the state can ta" an(thin) at an( tie@ -. The ro*isions of ta"ation in the Phi&iines Constit'tion are )rants of o!er an- not &iitations on ta"in) o!ers. 18. 1st Stateent  Ta" e"etions are strict&( constr'ea)ainst the )o*ernent.  n-  Stateent  When the ta" &a! is not c&ear anthere is -o'%t !hether he is ta"a%&e or not, the -o'%t sha&& %e sett&e- a)ainst the )o*ernent. a. On&( the first stateent is correct. %. On&( the secon- stateent is correct. c. ?oth stateents are correct. -. ?oth stateents are incorrect. 19. One of the is not an essentia& characteristic of ta"6 a. Fenera&&( a(a%&e in one( %. Man-ator( in character c. Proortionate %'r-en -. Iose- on ersons or roerties 1:. The resent Phi&iine ?'-)et -eficit is a *io&ation of  !hat rinci&e6 a. A-inistrati*e feasi%i&it( an- co&iance %. Theoretica& +'stice or e2'a&it( c. 7isca& a-e2'ac( -. Consistenc( !ith econoic )oo-s

INCOME TAXATION 10. Which is not a correct rinci&e of in-i*i-'a& incoe ta"ation#

P1.502A

a.

Resi-ent 7i&iino citi=ens are ta"a%&e on a&& incoe fro so'rces !ithin  !itho't %. Non$resi-ent citi=ens are ta"a%&e on&( on incoe fro so'rces !ithin c. O*erseas contract !or4ers are ta"a%&e on&( on incoe fro so'rces !itho't the Phi&iines -. An a&ien in-i*i-'a& !hether resi-ent or not of the Phi&iines is ta"a%&e on&( on incoe fro !ithin 1/. Which is not a correct rinci&e of cororate incoe ta"ation a. Doestic Cororations are ta"a%&e on a&& incoe fro !ithin  !itho't %. Resi-ent Cororations annon$resi-ent cororations are ta"a%&e on a&& their incoe fro Phi&iine c. 7orei)n Cor. are s'%+ect to 19 on their reittance to their hea- office a%roa-. Non$ resi-ent Cor. are not co*ere- %( the r'&e on MCIT 1. On No*e%er /, B1, Mr.  Mrs. To&entino so&- their rincia& resi-ence in Ma4ati for P1B, BBB,BBB. The fo&&o!in) 'st %e et in or-er that the caita& )ains res'e- to ha*e %een rea&i=e- fro s'ch sa&e a( not %e s'%+ect to caita& ) ains ta", e"cet6 a. The( 'st 'se the rocee-s of the sai- sa&e to ac2'ire or constr'ct a ne! rincia& resi-ence !ithin  (ears fro -ate of sa&e. %. The( 'st infor the ?IR of that intention !ithin 5B -a(s fro the -ate of sa&e c. The( can on&( a*ai& of the sai- ri*i&e)e once e*er( ten 1BG (ears. -. The historica& cost or a-+'ste- %asis of the rea& roert( so&- sha&& %e carrie- to the ne! rincia& resi-ence %'i&t or ac2'ireB. Which is an incorrect rinci&e a%o't !ithho&-in) ta"es# a. Ret'rna%&e incoe are incoe 's'a&&( s'%+ect to cre-ita%&e !ithho&-in) ta" %. Passi*e incoe are s'%+ect to fina& non cre-ita%&e !ithho&-in) ta" c. Secia& incoe &i4e incoe s'%+ect to CFT are a&so s'%+ect to fina& non cre-ita%&e !ithho&-in) ta" -. 7rin)e %enefits are s'%+ect to fina& non cre-ita%&e !ithho&-in) ta" 1. The fo&&o!in) e"enses are not a&&o!e- as -e-'ctions fro )ross incoe e"cet6 a. Persona&, &i*in) or fai&( e"enses %. Ao'nts ai- o't for ne! %'i&-in)s or for eranent iro*eents or %etterents a-e to increase the *a&'e of the roert( c. Ao'nts e"an-e- in restorin) a roert( -. Prei's ai- %( a cororation or an( &ife ins'rance o&ic( co*erin) the &ife of an( of its officers or e&o(ees . 1st Stateent$ Mr. Y', Chinese, is a resi-ent ana)er of China Internationa& ?an4, a Chinese ?an4 !ith an offshore %an4in) 'nit in the Phi&iines. His sa&ar( in the Phi&iines fro the sai- 'nit is s'%+ect to 19 fina& ta". If 7i&iino is e&o(e- as a ana)er for the aforeentione- osition, he !i&& %e ta"e- %ase- on the 9$5 sche-'&ar ta" rates a'toatica&&(. n- Stateent$ A forei)n cororation !ith a %ranch office in the Phi&iines e&o(e- Mr. X, a ?ritish as its e"ec'ti*e to s'er*ise the coan(s oeration. He sta(e- in the Phi&iines for 8 onths in the (ear BB/. Then &eft a%roa-. His sa&ar( in the Phi&iines fro the sai- cororation !i&& %e ta"e- at 9. If a 7i&iino occ'ies the sai- osition, he !i&& %e ta"e%ase- on the 9$5, sche-'&ar ta" rates6 a. Tr'e@ Tr'e c. Tr'e@ 7a&se %. 7a&se@ 7a&se -. 7a&se@ Tr'e

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5. RENO ha- the fo&&o!in) transactions6 B11$ Ta"a%&e incoe fro her %'siness Di*i-en-s recei*e-6 7ro resi-ent cor. 7ro non$resi-ent cor. Interest fro %an4 -eosits Interest fro tra-e recei*a%&es Caita& )ains on assets he&- for / os. Caita& &oss on assets he&- for 1 os. B1$ Ta"a%&e incoe fro %'siness Caita& )ains on caita& assets he&- for 15 os. Caita& &oss on assets he&- for 0 os. Ao'nt recei*e- as &i2'i-atin) -i*i-en-s Cost  1BB, BBBG he&- for 1 os.

P B,BBB 5,BBB 1,BBB 1B.BBB 8,BBB 58,BBB 0B,BBB 18B,BBB 5B,BBB :,BBB 19B,BBB

The ta"a%&e Incoe %efore ersona& e"etion in B1 is6 a. P:, BBB c. P0, BBB %. P01, BBB -. P18:, BBB 8. If the ta"a(er is a cororation, the ta"a%&e incoe in B1B is6 a. P 0/, BBB c. P /:, BBB %. P 18,BBB -. P 8, BBB 9. The fo&&o!in) inforation are fro the recor- of  Centra& Min-anao aan ,9BB,BBB E"c&'si*e roerties, Phi&iines ,BBB,BBB Act'a& f'nera& e"enses 5BB,BBB >'-icia& e"enses BB,BBB Me-ica& e"enses -oc'ente- !Kin 1(r. %efore -eathG :BB,BBB Transfer for '%&ic 'rose Nationa& Fo*tG 9B,BBB 3e)ac( to 3oca& Fo*tG 0B,BBB Death %enefits recei*e fro e&o(er inc&'-e- a%o*eG 9BB,BBB The ta"a%&e net estate is6 a. P,:/B,BBB c. P1, 85B, BBB %. P5,:/B,BBB -. P8, 5/B, BBB :5. Which of the fo&&o!in) is incorrect6 a. The a&&o!a%&e -e-'ction for f'nera& e"enses can ne*er %e ore than the act'a& f'nera& e"enses ai-. %. ;anishin) -e-'ction -iinishes the estate h(sica&&( c. Ta"es in or-er to %e -e-'cti%&e 'st accr'e %efore the -ece-ents -eath -. C&ais a)ainst the estate e*en for e2'ita%&e reasons is not a&&o!e- as -e-'ction if not notari=e-. :8. A&& of the fo&&o!in) are incorrect e"cet6 a. Re*oca%&e transfer are on&( inc&'-i%&e if the )ross estate if the re*ocation !as act'a&&( e"ercise-.

P1.502A

%.

c.

-.

A transfer ortis ca'se of a rea& roert( in the Phi&iines he&- as caita& asset is not s'%+ect to estate ta" Procee-s of &ife ins'rance o&ic( !here the %eneficiar( is the e"ec'tor are inc&'-i%&e in the estate in a&& cases On&( arrie- -ece-ent can c&ai the -e-'ction for fai&( hoe

:9. Mr. ANACONDA -ie- &ea*in) the fo&&o!in) roerties6 E"c&'si*e rea& roert(, 7M;$P9BB,BBB !hen inherite- 5  (rs. a)o an- s'%+ect to a ort)a)e of P:9,BBB at that tie. 7M; at the tie of -eath is P0BB,BBB. Other -ata are6 Con+')a& roerties P 1,0BB,BBB '-icia& e"enses /9,9BB 7'nera& e"enses P 19,BBB ai- %( frien-sG 09,BBB Other o%&i)ations 1,9BB The net estate s'%+ect to ta" is6 a. P :,9BB c. P /9B,BBB %. P /:,BBB -. P /09,BBB ::. The fo&&o!in) are oti*es of ta"a(er that rec&'-e transfer in conte&ation of -eath, e"cet one6 a. To re&ie*e the ta"a(er of the %'r-en of   ana)eent %. To sa*e incoe an- roert( ta"es c. To a*oi- a(ent of estate ta". -. To a4e -een-ents financia&&( -een-ent :0. 1st Stateent$ 3ife Ins'rance rocee-s if the %eneficiar( is the e"ec'tor is inc&'-i%&e in the )ross incoe re)ar-&ess of the -esi)nation. n- Stateent$ 3ife Ins'rance rocee-s if the %eneficiar( is a thir- erson is inc&'-i%&e in the )ross estate if it is re*oca%&e. a. Tr'e@ Tr'e c. 7a&se@ Tr'e %. 7a&se@ 7a&se -. Tr'e@ 7a&se :/. 1st stateent6 Do!ries a-e %( non$resi-ent a&ien arents to their chi&-ren %efore arria)e are e"et fro )ift ta" ' to P 1B,BBB. n- stateent6 Donors can a&!a(s c&ai a ta" cre-it for -onors ta"es ai- to a forei)n co'ntr(. a. Tr'e, Tr'e c. 7a&se, Tr'e %. 7a&se, 7a&se -. Tr'e, 7a&se : to 0 are %ase- on the fo&&o!in) -ata6 On 7e%r'ar( 9, B1, Mr. an- Mrs. ?a(a%as -onate- their con+')a& &an- !orth P9BB, BBB to their three sons, %'t on acco'nt of arria)e to one of the !ho )ot arrie- 9 onths a)o. On >'ne , B1, the( a&so -onate- to the chi&- of Mrs. ?a(a%as %( first arria)e, +e!e&r( !orth P09, BBB on acco'nt of arria)e ore than a onth after the -onation. 7ina&&( on Dece%er 9, B1, the( -onate- to the nehe! of Mr. ?a(a%as a %'i&-in) !orth P09B, BBB, 8B of !hich !as co$o!ne- %( their L'are !ho a)reeto the -onation an- e"ec'te- the necessar( -oc'ents -onatin) his share :. The -onors ta"es -'e on the 7e%r'ar( 9, B1 -onation sho'&- %e6 a. P18, BBB for Mr.  Mrs. %. P5, :BB each for Mr.  Mrs. c. P8, BBB each for Mr.  Mrs. -. P9, 09B each for Mr.  Mrs. 0B. The -onors ta" -'e on the >'ne , B1 -onation is6 a. Mr.  B@ Mrs.  P1, /09 %. Mr.  11, 9B@ Mrs.  P8, 0BB c. Mr.  11, 9B@ Mrs.  P1, 1BB -. Mr.  11, 9B@ Mrs.  P1, /09

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01. The -onors ta" -'e on the Dece%er 9, B1 for Mr.  Mrs. are6 a. Mr.  , /09@ Mrs.  P15, 9BB %. Mr.  :0, 9BB@ Mrs.  P:0, 9BB c. Mr.  , BBB@ Mrs.  P15, 9BB -. Mr.  , BBB@ Mrs.  P:0, 9BB 0. The -onors ta" -'e on the Dece%er 9, B1 for their L'are is6 a. PB, BBB c. PB %. P:, BBB -. P5B, BBB 05. Mat'%o Cor. -onate- P1BB,BBB for the 'rose of  ceentin) a ?aran)a( roa- !here its factor( is &ocate-. 1st stateent6 The -onation is e"et fro -onors ta". n- stateent6 The cororation a( c&ai a f'&& -e-'ction for incoe ta" 'roses. a. ?oth stateents are incorrect %. On&( 1st stateent is correct c. ?oth stateents are correct -. On&( n- stateent is correct 08. A -onor )a*e the fo&&o!in) -onations in (ear B1 >an. 8$ 3an- &ocate- in the Phi&iines *a&'e- at P,BBB,BBB to her 'nc&e s'%+ect to the con-ition that 'nc&e !i&& a( the -onors ta" -'e an- ort)a)e to !hich she a)ree- to a( the ort)a)e ao'ntin) to P9BB,BBB. No*.5B$?'i&-in) in an. 1$ PBB, BBB 7e%. 19$ 19B, BBB P'rchase- of caita& )oo-s, ;AT e"c&'-e9B,BBB P'rchase- of ateria&s, net of ;AT 8B,BBB ;a&'e of in*entor( as of >an .1 of the (ear P'rchase- fro ;AT Re)istere- Person P8B,BBB P'rchase- fro non$;at Re)isterePerson 9B,BBB P'rchase- of ;AT E"et )oo-s 1B,BBB ;AT ai- on the a%o*e in*entor(G 8,BBB E2'ient 'rchase-, March B1 'sef'& &ife 1B (rs.G PM The ;AT -'e is6 a. P50, BBB c. P91, 8BB %. P5/, BBB -. P99,BB 00. One of the fo&&o!in) acti*ities is not s'%+ect to ;AT6 a. Mo*ie ho'se oerators %. Pa!nsho c. Dr')stores -. Par4in) &ot oerators 0/. A %'i&-in) contractor ro*i-e- the fo&&o!in) -ata a&& fi)'res are net of ;ATG

P1.502A

Ao'nt recei*efro %'i&-in) A-*ances recei*e- fro %'i&-in) Ao'nt recei*efro %'i&-in) net of PBBt retention costG Recei*a%&e fro %'i&-in) Dis%'rseent6 Ser*ices of S'%contractors Materia&s for constr'ction Iorte- ateria&s, &an-ecost Other )enera&  oeratin) e"enses

$1

P/BB, BBB

$

8BB, BBB

$5

/BB, BBB

$8

1,BBB,BBB 9BB,BBB 0BB,BBB   BB,BBB 1BB,BBB

Note6 The iorte- ateria& !as a&so s'%+ecte- to PB, BBB e"cise ta"es6 The ;AT -'e is6 a. P9/, BBB %. PB, BBB

c. P5, :BB -. P:, :BB

0. 1st  stateent6 The in't ta" on 'rchases of caita& )oo-s is srea- o't !hen the ac2'isition cost e"cee-e- P1.9M. n- stateent6 The res'ti*e in't ta" is a&so ca&&e;AT act'a&&( aia. Tr'e, Tr'e c. Tr'e, 7a&se %. 7a&se, 7a&se -. 7a&se, Tr'e /B. 1st  Stateent$ a erson !hose ann'a& )ross sa&es or receits -o not e"cee- P1BB, BBB is not consi-ereen)a)e- in tra-e or %'siness. n- Stateent$ A ;AT re)istere- erson is s'%+ect to ;AT re)ar-&ess of his ann'a& )ross sa&es or receits ro*i-e- he -oes not  a( the 5 OPT. a. Tr'e@ Tr'e c. 7a&se@ Tr'e %. 7a&se@ 7a&se -. Tr'e@ 7a&se /1. CROCODI3E TRANS is a coon carrier %( &an-. D'rin) a artic'&ar 2'arter its receits consists of the fo&&o!in)6 7i)'res are net of an( %'siness ta"esG Transort of assen)ers Transort of )oo-s Transort of car)oes

P8, BBB,BBB 9, BBB,BBB :, BBB,BBB

The tota& %'siness ta"es a(a%&e is6 a. P1,9BB,BBB c. P1,/BB,BBB %. P98B,BBB -. P1,88B,BBB

/. Which is incorrect a. A ta"a(er !hose ann'a& )ross receitsKsa&es e"cee- P 1,1,9BB sha&& a( ;AT e*en if not ;AT re)istere%. A ta"a(er !hose ann'a& receitsKsa&es -o not e"cee- P 1,1,9BB %'t !ho is ;AT re)istere- sha&& a( ;at. c. The sae transaction a( %e s'%+ecte- to %oth incoe ta" an- ;AT -. Mar)ina& incoe earners are %oth e"et fro ;AT an- incoe ta". /5. IMIC Cor. iorte- an artic&e fro '&( 5B, B1 c. Ari& 19, B15 %. >'ne 5B, B19 -. Ari& 19, B19 1B9. If his rotest a%o*e !as -enie- %( the ?IR Coissioner an- he recei*e- the sai- -ecision on A')'st 51, B1, his ree-( is6 a. Aea& to the Co'rt of Ta" Aea&s on or %efore Sete%er 5B, B1. %. Aea& to the Co'rt of Aea&s on or %efore Sete%er 19, B1. c. Aea& to the Office of the Presi-ent on or %efore Sete%er 5B, B1. -. Aea& to the 7inance Secretar( on or %efore Sete%er 5B, B1. 1B:. Miraars incoe ta" for B1B !as P09, BBB, as sho!n in her incoe ta" ret'rn ITRG. She fi&e- her ret'rn on&( on >'&( 19, B1 an- ai- the tota& ao'nt 'on fi&in) the ret'rn. The tota& ao'nt a(a%&e ass'in) there !as fra'- sho'&- %e6 a. P151, 9B c. P/, 09B %. P11, 9BB -. P0, 9BB 1B0. Ta"a(er !as assesse- -eficienc( incoe ta" of  PBB, BBB a(a%&e on or %efore >'ne 19, B1. Within the erio- ho!e*er, he !as on&( a%&e to a( P1BB, BBB an- the %a&ance on&( on A')'st 5B, B1. The tota& ta" -'e that he is &ia%&e sho'&- %e6 a. P1, 199 c. P9/, 555.55 %. P19, BBB -. P 9B, BBB MISCELLANEOUS 1B/. 7&o(- an officia& of A?S Cororation as4efor an ear&ier retireent %eca'se he !as ei)ratin) to Cana-a, he !as ai- PM searation a( in reco)nition of his *a&'a%&e ser*ices to the cororation &'s P1BB,BBB 15th onth a(, Ne&son another officia& !as searate- for his fai&in) e(esi)ht. He !as )i*en P1M searation a( &'s P19B,BBB 'nai- sa&aries. Rico !as searate- for *io&atin) coan( r'&es %'t !as )i*en P5BB,BBB searation a(. ?en ote- to retire at 99 (ears o&after !or4in) for 1B (ears in the sae coan(. He recei*e- P1M. A&& of the fore)oin) are not co*ere- %( ?IR aro*e- Retireent P&an e"cet for ?en. The tota& incoe s'%+ect to !ithho&-in) ta" on the a%o*e a(ent is6 a. P ,9B,BBB c. P 5,8BB,BBB %. P ,50B,BBB -. P 5,89B,BBB 1B. A %'i&-in) contractor ro*i-ethe fo&&o!in) -ata a&& fi)'res are net of ;ATG Ao'nt recei*e- fro ?'i&-in) 1 P /BB,BBB A-*ances recei*e- fro ?'i&-in)  8BB,BBB Ao'nt recei*e- fro ?'i&-in) 5 net of P8BBT retention costG /BB,BBB Recei*a%&e fro ?'i&-in) 8 1,BBB,BBB Dis%'rseents6 Ser*ices of contractors 9BB,BBB Materia&s for constr'ction 0BB,BBB Iorte- ateria&, &an-e- cost BB,BBB Other )enera& an- oeratin) e"enses 1BB,BBB

Page 10 of 13

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Note6 The iorte- ateria& !as a&so s'%+ecte- to PB,BBB e"cise ta"es. The ;AT -'e is6 a. P9/,BBB c. P:,:BB %. PB,BBB -. P110,:BB 11B. D')on) Trans, is a coon carrier %( sea. D'rin) a artic'&ar 2'arter its receits consist of  the fo&&o!in)6 7i)'res are net of an( %'siness ta"esG Transort of assen)ers P 8,BBB,BBB Transort of )oo-s 9,BBB,BBB Transort of car)oes :,BBB,BBB The tota& %'siness ta"es a(a%&e is6 a. P1, 9BB,BBB c. P1,/BB,BBB %. P89B,BBB -. P1,88B,BBB 111. TONY, 7 i&iino, sin)&e, has the fo&&o!in) transactions in B16 ?'siness )ross incoe PBB,BBB ?'siness e"enses :B,BBB Wa)erin) )ains 1B,BBB Wa)erin) &osses 9,BBB Se&&in) rice, artnershi interest 1BB,BBB In*estent in artnershi in BB1 B,BBB Fain in sa&e of caita& asset he&- for 1B,BBB 8 (ears 3oss on sa&e of caita& asset he&for / onths 1,BBB 3oss on acco'nt of fai&'re to e"ercise  onth otion to %'( roert( ,BBB 3i2'i-atin) -i*i-en- fro  Co. 19B,BBB Cost of in*estent in  Co. in BB1 :B,BBB Note6 In B11, Ton( ha- a net incoe of P:9,BBB an- a net caita& &oss of P,BBB. The ta"a(ers ta"a%&e net incoe is6 a. P1:,BBB c. P1B:,BBB %. P181,BBB -. P 191,BBB 11. Mr. Cor's, arrie- !ith  inor chi&-ren, has the fo&&o!in) transactions in B16 Coensation Incoe P BB,BBB Sa&es 1,88B,BBB Cost of )oo-s so&::B,BBB De-'ctions6 Oeratin) E"enses 88B,BBB 3oss -'e to theft roer&( reorte-G :B,BBB Contri%'tions6 To a )o*ernent riorit( ro+ect in e-'cation 1,BBB To St. >'-e ch'rch 8,BBB Other incoe6 Rent 5:,BBB Caita& )ain fro sa&e of ersona& car he&- for  (ears :,BBB The ta"a(er !i&& reort a ta"a%&e net incoe of6 a. P80,BBB c. P8B,8BB %. P8/B,8BB -. P9BB,8BB Qu!t"o#! $$%&$$' are %ase- on the fo&&o!in) inforation6 Cororation A has the fo&&o!in) transactions -'rin) the (ear B116 Fross Incoe, Phi&iine %'siness P,8BB,BBB Fross Incoe, >aan %'siness :BB,BBB ?'siness e"enses, Phi&iines 1,59B,BBB ?'siness e"enses, >aan 19B,BBB Other e"enses connecte- !ith the Phi&iine %'siness B,BBB Other e"enses connecte- !ith the >aan %'siness :B,BBB Other e"enses connecte- !ith the %'siness in the Phi& an- >aan 19B,BBB

P1.502A

Other %'siness e"enses !hich cannot %e a&&ocateIntercororate -i*i-en-s fro P3DT

%( the %'(er 1/B,BBB 1BB,BBB

115. If the ta"a(er is a -oestic cororation, its incoe ta" -'e is6 a. P5B:,BBB c. P5:,8BB %. P590,BBB -. P8B5,BB 118. If the ta"a(er is a resi-ent forei)n cororation, an- it reitte- 8B of its rofit to i+i co'&- c&ai each in their resecti*e incoe ta" ret'rns is6 a. P9B,BBB c. P1BB,BBB %. P09,BBB -. PB 15B. Aose Car ac2'ire- %efore arria)e %( Mrs. >ose Ho'se an- &ot ac2'ire- -'rin) arria)e >e!e&ries of Mrs. >ose Persona& roerties inherite- %(6 Mr. >ose -'rin) arria)e ?enefits fro SSS Retireent %enefits fro a ri*ate fir Procee-s of )ro' ins'rance ta4en %( his e&o(er 3an- inherite- %( the !ife -'rin) arria)e Incoe earne- fro the &an- inherite- %( !ife 9 of !hich !as earne- after -eathG

P 5BB,BBB 89B,BBB 1,9BB,BBB 1BB,BBB

189. The co'nit( ta" for in-i*i-'a& is %asic ta" of  P9.BB &'s6 a. P1.BB for e*er( P1,BBB )ross sa&es %. P1.BB for e*er( P1,BBB )ross receits c. P1.BB for e*er( P1,BBB net incoe -. P1.BB for e*er( P1,BBB )ross incoe

9B,BBB 9B,BBB 19B,BBB   09,BBB 1,BBB,BBB

The a"i' co'nit( ta" for in-i*i-'a& sha&& %e6 P9BB c. P1,BBB P9,BBB -. P1B,BBB

BB,BBB a. %.

The )ross estate 'n-er con+')a& artnershi of )ain is6 a. P,:BB,BBB %. P5,:BB,BBB c. P1,9B,BBB -. P,BB,BBB

180. The fo&&o!in) entities or association are &ia%&e to a( co'nit( ta", e"cet6 a. A&& -oestic cororations %. A&& forei)n cororations en)a)e- in %'siness in the Phi&iines. c. A&& artnershis for rofit. -. A&& +oint *ent'res en)a)e- in ener)( oerations !ith the Phi&iine Fo*ernent.

18B.