Transfer and Business Taxation 2014 by Ballada

TRANSFER AND BUSINESS TAXATION BY WIN LU BALLADA 2014 https://www.fa!"##$.#%/pa&!s/F'(a('a)*A#+(t'(&*B##$s*,a)'-*S#)+t'#(*a(+a)/211042345!f6"##$%a5$s

7hapt!5 2 True or  False 1. T 2. T 3. T 4. F 5. T  Multiple  Multiple Choice 1. D 2. A, B, D 3. C 4. C 5. B

6. 7. 8. 9. 10.

F F T F T

6. 7. 8. 9. 10.

11. 12. 13. 14. 15.

F F F T T

Multiple Choice 1. C 2. A 3. D 4. C 5. B

A D B C A

True or  False 1. F 2. T 3. T 4. T 5. T

6. 7. 8. 9. 10.

6. 7. 8. 9. 10.

Multiple Choice 1. B 2. B 3. D 4. C 5. B

A B D B B

T F T F T 6. 7. 8. 9. 10.

A D B B C

7hapt!5 / True or  False 1. T 2. T 3. T 4. T 5. F  Identificat  Identification ion Clas Classi sifi fica cati tion on 1. A 2. A 3. C 4. A 5. A

6. 7. 8. 9. 10.

True or  False 1. F 2. T 3. T 4. T 5. T

F T T T T

of  Property  Property 6. B 7. B 8. C 9. B 10. B

 Identificat  Identification ion  Kind  of  Transfer 1. A 2. B 3. B 4. D 5. C

6. 7. 8. 9. 10.

A C D A C

11. 12. 13. 14. 15.

C C C C C

6. 7. 8. 9. 10.

16. 17. 18. 19. 20. 21. 22. 23.

Problem Problem Adequacy of A. 0 B. P750 P750,0 ,000 00 C. P1.25M

T T T T F

B C A C C C B A

Multiple Choice 1. A 2. C 3. D 4. B 5. D

6. 7. 8. 9. 10.

Identifica Identification tion Classific Classification ation 1. A 2. A 3. C 4. C 5. A

of  Pro of  Propert pertyy 6. C 7. A 8. C 9. B 10. B

B D A C A

Multiple Choice 1. C 2. D 3. A 4. B 5. C

11. 12. 13. 14. 15.

C C C C C

6. 7. 8. 9. 10.

B B A C D

16. 17. 18. 19. 20. 21.

B C A C C A

Cons Consid ider erat atio ion n A. P900,000 B. P400,000 C. 0

 Essay  Essay 1. Proceeds shall form  ar! of  !he "ross es!a!e  #eca$se !he  #e%ef&c&ar'  #e%ef&c&ar' &s !he es!a!e. Th&s &s re"ardless of  (he!her  !he des&"%a!&o% &s re)oca#le o r  &rre)oca#le. 2. Proceeds shall form  ar! of  !he "ross es!a!e  #eca$se !he  #e%ef&c&ar'  #e%ef&c&ar' &s !he adm&%&s!ra!or  of  !he es!a!e. Th&s &s re"ardless of  (he!he r  !he des&"%a!&o% &s re)oca#le or &rre)oca#le. or  &rre)oca#le. 3. Proceeds shall form  ar! of  !he "ross es!a!e. *&%ce !he des&"%a!&o% of  !he #e%ef&c& !he  #e%ef&c&ar' ar' &s s&le%! as !o &!s re)oca#&l&!', &! &s  res$med  res$med  #' la( !o  # e re)oca#le. 4. Proceeds shall form ar! form  ar! of !he of  !he "ross es!a!e #eca$se es!a!e  #eca$se !he des&"%a!&o% of !he of  !he #e%ef&c  #e%ef&c&ar' &ar' &s re)oca#le. 5. Proceeds shall %o! form ar! form  ar! of !he of  !he "ross es!a!e  #eca$se !he des&"%a!&o% of !he of  !he #e%ef&c&ar  #e%ef&c&ar' ' &s &rre)oca#le.  Problem  Problem Claims 1. A 2. B 3. D 4. A 5. B 6. D

+

Valuation 1. P3M 2. P1.4M 3. P27 P272,00 2,000 0 4. P80,000 5. P550 P550,0 ,000 00+ +

Situs of  Prope of  Property rty 1. (&!h&% 2. (&!h&% 3. (&!h&% 4. (&!h&% 5. (&!ho$!

Pa&d&% ca&!al -P4  800,000 shs/ e!a&%ed ear%&%"s *!ocholders e$&!' D&)&de #' D&)&de  #' o$!s!a%d&%" shares Boo )al$e Boo  )al$e er   er sshare M$l!&l' #' M$l!&l'  #' shares held al$e !o &%cl$de &% "ross es!a!e

6. 7. 8. 9. 10.

(&!h&% (&!ho$! (&!h&% (&!ho$! (&!h&%

P3,200,00 ,000 1,200,000 P4,400,000 800,000 P 5.50 100,000 P 550,000

11. 12. 13. 14. 15.

(&!ho$! (&!h&% (&!h&% (&!ho$! (&!ho$!

16. 17. 18. 19. 20.

(&!ho$! (&!h&% (&!h&% (&!h&% (&!ho$!

21. 22. 23. 24. 25.

(&!h&% (&!h&% (&!h&% (&!ho$! (&!ho$!

26. 27. 28. 29.

(&!h&% (&!h&% (&!ho$! (&!h&%

1

 Problem  Problem a, #, a,  #, a%d c. ross es!a!e  P31.2M P31.2M -All &!ems are added./ d. ross es!a!e  P10.025M -Co%s&der &!ems -Co%s&der  &!ems 4, 5, 7, 8, 9, 18, 19, 20 a%d 23./ e. ross es!a!e  P16.7M P16.7M -Co%s -Co%s&de &der  r &!ems &!ems 2, 4, 5, 7, 8, 9, 11, 14, 16, 17, 18, 19, 20, 21, 22 a%d 23./  Problem  Problem a, #, a,  #, a%d c. ross ross es!a!e  P31.025M -All &!ems are added./ d. ross es!a!e  P8.525M -Co%s&der  -Co%s&der &!ems &!ems 2, 3, 6, 7, 9, 10, 11, 19 a%d 21./ e. ross es!a!e  P18.725M -Co%s&der &!ems -Co%s&der  &!ems 2, 3, 6, 7, 8, 9, 10, 11, 13, 16, 18, 19, 20 a%d 21./  Problem  Problem a, #, a,  #, a%d c. ross ross es!a!e  P26,987,500 -All &!ems are added./ d. ross es!a!e  P7.6 P7.65M 5M -Co% -Co%ss&der  &der &!ems &!ems 3, 4, 5, 6, 8, 11 a%d 15./ e. ross es!a!e  P13.975 P13.975M M -Co%s& -Co%s&der  der &!ems &!ems 1, 3, 4, 5, 6, 8, 11, 13, 15, 16, 20, 21, 22, 23, 26, 28 a%d 29./

7hapt!5 4 True or  False 1. T 2. F 3. T 4. T 5. F

6. 7. 8. 9. 10.

T T F T T

 Multiple  Multiple Choice

1. 2. 3. 4. 5.

B B B D A

11. 12. 13. 14. 15.

True or  False 1. T 2. T 3. F 4. F 5. T

F F T F F

Multiple Choice

6. 7. 8. 9. 10.

D C A D D

1. 2. 3. 4. 5.

A D A D D

6. 7. 8. 9. 10.

A D B A C

+ m#alm&%" char"es B$r&al aarel of !he of  !he decede%! Cos! of c of  coff&% Mo$r%&%" aarel d$r&%" #$r&al d$r&%"  #$r&al of !he of  !he s$r)&)&%" so$se Mo$r%&%" aarel o%e $%marr&ed m&%or  ch&ld *%acs a%d dr&%s d$r&%" !he (ae o%orar&a of  r&es!  r&es! for da&l' for  da&l' mass for !hree for  !hree da's: P500 a da' Telecomm$%&ca!&o% char"es !o &%form rela!&)es &% !he ro)&%ce !he  ro)&%cess Char"es for dea!h for  dea!h %o!&ce $#l&sh %o!&ce  $#l&shed ed &% a %e(saer Cos! of )&deo of  )&deo foo!a"e of !he of  !he #$r&al  #$r&al a%d &%!erme%! F$%eral car ser)&ce car  ser)&ce d$r&%" &%!erme%! o%orar&$m of  r&es!  r&es! (ho cele#ra!ed !he mass d$r&%" &%!erme%! Cos! of ! of  !om#s!o%e To!al Ac!$al f$%eral ee%ses -as com$!ed/ 5;  P1,800,000 Ma&m$m l&m&! Ded$c!&o% allo(ed

T F T T F

Problem ! A%s(er P78,800+

P 2,000 2,200 15,000 1,500 1,000 1,500 1,500 200 700 2,100 400 700 50,000 P78,800 P 78,800 90,000 200,000 P78,800

 Multiple  Multiple Choice 1. A 2. B 3. C 4. C 5. B

6. 7. 8. 9. 10.

C C A B C

11. 12. 13. 14. 15.

D C D C D

16. 17. 18. 19. 20.

B A B B D

31. 32. 33. 34. 35.

36. 37. 38. 39. 40.

B C C C B

41. 42. 43. 44. 45.

B C B D C

46. 47. 48. 49. 50.

C C C A A

B A C A C

Funeral  Expenses  Expe   nses  Problem  Problem  1. P50,000 2. P100,000 3. P175,000 4. P175,000 5. P200,000

6. 7. 8. 9. 10.

21. 22. 23. 24. 25.

A D C B B

26. 27. 28. 29. 30.

C D A D C

2

 Problem 

Problem !

eal a%d erso%al roer!&es

P3,500,000

eal a%d erso%al roer!&es

P4,250,000

Fam&l' ome

1,750,000

Fam&l' ome

1,500,000

ross s!a!e

P5,250,000

ross s!a!e

P5,750,000

e! Taa#le s!a!e

P2,100,000

 Problem "

Problem #

eal a%d erso%al roer!&es

P3,750,000

Fam&l' ome

900,000

ross s!a!e

P4,650,000

eal a%d erso%al roer!&es Fam&l' ome e! Taa#le s!a!e

P1,150,000

>e! Taa#le s!a!e

P

7hapt!5   Problem 1. eem! 2. P2,500 3. P7,500 4. P12,500 5. P19,000

6. 7. 8. 9. 10.

P59,000 P99,000 P190,000 P410,000 P690,000

11. 12. 13. 14. 15.

P990,000 P1,315,000 P1,915,000 P4,215,000 P5,215,000

7hapt!5   Problem 

ross es!a!e Parcel of la%d &% Cal&for%&a, ?.*.A. o$se a%d lo! &% @$eo% C&!' -fam&l' home/ *hares of s!oc &% a fore&"% corora!&o% (&!h off&ce &% Cal&for%&a, ?.*.A. Car &% Cal&for%&a, ?.*.A. Ba% deos&! Cla&m a"a&%s! a% &%sol)e%! erso% a!&o%al ed Cross a!&o%al ed Cross e! s!a!e Af!er Ded$c!&o%s -e! Taa#le s!a!e

To!al

1,500,000 3,000,000 400,000

4,900,000

4,900,000

500,000 5,400,000

-120,000/ -500,000/ -80,000/

-120,000/ -500,000/ -80,000/

-20,000/ -52,000/ 428,000

4,200,000

-20,000/ -52,000/ 4,628,000

428,000

-2,100,000/ -750,000/ -1,000,000/ 350,000

-2,100,000/ -750,000/ -1,000,000/ 778,000

500,000 500,000

8

s!a!e Ta D$e

Co%$"al

=%

500,000 278,000 778,000

a!

15,000 22,240 37,240

8;

*ched$le of a%&sh&%" Ded$c!&o% al$e !ae%, F&sho%d e! Taa#le s!a!e

-675,000/ -1,000,000/ 95,500

600,000

-675,000/ -1,000,000/ 695,500

s!a!e Ta D$e =%

500,000 195,500 695,500

a!

15,000 15,640 30,640

8;

 Problem ' 

cl$s&)e Co%$"al Proer!&es eal Proer!&es cl$s&)e Proer!&es Fam&l' ome =!her cl$s&)e Proer!&es ross s!a!e e! s!a!e e! s!a!e e! s!a!e e! Taa#le s!a!e

1,575,000

7hapt!5 8 True or  False 1. T 6. 2. T 7. 3. T 8. 4. T 9. 5. T 10.

T T T T F cl$s&)e

 Problem 

Comm$%al Proer!&es e! s!a!e Af!er  Ded$c!&o%s -e! Taa#le s!a!e

4,000,000 300,000 200,000

4,500,000

4,500,000

2,000,000 6,500,000

-200,000/ -80,000/ -35,000/

-200,000/ -80,000/ -35,000/

-200,000/ -736,615/ 1,063,385

4,185,000

-200,000/ -736,615/ 5,248,385

1,063,385

-2,092,500/ -1,000,000/ -1,000,000/ 92,500

-2,092,500/ -1,000,000/ -1,000,000/ 1,155,885

2,000,000 2,000,000

s!a!e Ta D$e =%

500,000 655,885 1,155,885

*ched$le of a%&sh&%" Ded$c!&o% al$e !ae%, Proer!' &%her&!ed o! co)ered P50,000  12;  P6,000 P50,000  12;  P6,000 To!al =$!$! Ta  P72,000 3. P2,525,000  12G112  P270,535.71 -a/ P1,701,080  12;  P204,129.60 -#/ P270,000  12;  P32,400 -c/ AT D$e  --a/ I -c// L --#/ I P18,500/  P80,306.11 Pro#lem 1 *ales *cheme %o reser)a!&o%, 10G40G50 *ell&%" Pr&ce er Co%!rac! -ecl$d&%" AT/, a%. 5, 2012 Do(%a'me%!, a%. 15, 2012 Bala%ce Bala%ce !o #e a&d as follo(s 40; &% e$al mo%!hl' amor!&a!&o%s 50; $o% !$r%o)er

 

3,199,200 319,920 2,879,280

 

Given Given 10; 90;

1,279,680 1,599,600 2,879,280

40; 50; 90;

19

o%al al$e Term -&% mo%!hs/ Mo%!hl' Amor!&a!&o% To!al Mo%!hl' Amor!&a!&o%s -a%. 31 !o Dec. 31, 2012/ %&!&al Pa'me%!s -DP a%d MA d$r&%" !he 'ear/ D&)&ded #' *P -see &f fa&r  )al$e &s lo(er/ Tes! -(he!her sale &s o% &%s!allme%! or o% deferreda'me%!/ Nha! (&ll #e !he #as&s of ATO o( m$ch &s !he do(%a'me%! #efore ATO Nha! &s !he amo$%! !o #e a&d -eAT/  #efore !$r%o)erO o( m$ch (&ll !he mo%!hl' amor!&a!&o% -eAT/  #eO

2,800,000 36   35,546.67 426,560.00 746,480.00 3,199,200.00 23.33;

 

Given Given

12

d&d %o! eceed 25;

sell&%" r&ce er co%!rac! 319,920.00 1,599,600.00 35,546.67

Nha! &s !he !o!al amor!&a!&o%s -AT &%cl$s&)e/ d$r&%" !he 'ear  of saleO Nha! &s !he &%&!&al  a'me%!sO s !h&s sale o% &%s!allme%! or o% deferreda'me%!  #as&sO o( m$ch &s !he o$!$! !a rela!ed !o !he e)e%! o% a%. 15, 2012O o( m$ch &s !he o$!$! !a rela!ed !o !he e)e%! o% a%. 31, 2012O o( m$ch &s !he !o!al o$!$! !a rela!ed !o !h&s sale for 2012O Pro#lem 2 *ales *cheme %o reser)a!&o%, 10G50G40 *ell&%" Pr&ce er Co%!rac! -ecl$d&%" AT/, a%. 5, 2012 Do(%a'me%!, a%. 15, 2012 Bala%ce Bala%ce !o #e a&d as follo(s 50; &% e$al mo%!hl' amor!&a!&o%s 40; $o% !$r%o)er

477,747.20 746,480.00 o% &%s!allme%! 38,390.40 4,265.60 89,577.60  

2,700,000 270,000 2,430,000

 

Given Given 10; 90;

1,350,000 1,080,000 2,430,000

o%al al$e

2,525,000

Term -&% mo%!hs/ Mo%!hl' Amor!&a!&o% To!al Mo%!hl' Amor!&a!&o%s -a%. 31 !o Dec. 31, 2012/

36   37,500.00 450,000.00

%&!&al Pa'me%!s -DP a%d MA d$r&%" !he 'ear/ D&)&ded #' *P -see &f fa&r  )al$e &s lo(er/ Tes! -(he!her sale &s o% &%s!allme%! or o% deferreda'me%!/

720,000.00 2,700,000.00 26.67;

Nha! (&ll #e !he #as&s of ATO o( m$ch &s !he do(%a'me%! #efore ATO Nha! &s !he amo$%! !o #e a&d -eAT/  #efore !$r%o)erO o( m$ch (&ll !he mo%!hl' amor!&a!&o% -eAT/  #eO Nha! &s !he !o!al amor!&a!&o%s -AT &%cl$s&)e/ d$r&%" !he 'ear  of saleO Nha! &s !he &%&!&al  a'me%!sO s !h&s sale o% &%s!allme%! or o% deferreda'me%! #as&sO o( m$ch &s !he o$!$! !a rela!ed !o !he e)e%! o% a%. 2012O o( m$ch &s !he o$!$! !a rela!ed !o !he e)e%! o% Fe#. 28, 2012O

50; 40; 90;  

Given Given

12

eceeded 25;

sell&%" r&ce er co%!rac! 270,000.00 1,080,000.00 37,500.00 504,000.00 720,000.00 o% deferreda'me%! 324,000.00 ero

7hapt!5 18  Multiple Choice 1. B 2. A 3. D 4. D 5. C

20

7hapt!5 20  Multiple Choice 1. B 2. B 3. D 4. C 5. A

6. D 7. C

7hapt!5 2/  Multiple Choice Theory 1. B

1. A

6. B

11. D

Multiple Choice 1. B

6. D

11. B

2. 3. 4. 5.

B B B C

2. 3. 4. 5.

D C A B

7. 8. 9. 10.

D D D D

12. 13. 14. 15.

C B B C

2. 3. 4. 5.

D B C B

*ales

al$e

=$!$!

%$!

AT

Taa'er 

Pr&ce

Added

Ta

Ta

Pa'a#le

Co%cess&o%a&re

100

100

10

0

10

Ma%$fac!$rer

250

10

2

10

15

Nholesaler 

40

200

 

45

25

20

e!a&ler

700

250

 

0

4

2

o$sehold -P$rchase Pr&ce/

700

70

7. 8. 9. 10.

C C D D

12. D 13. A

 Multiple Choice Multiple Choice  Problem Problem 1. B 6. B 11. C 16. D 1. A 6. C 2. A 7. A 12. D 17. B 2. B 3. D 8. B 13. A 3. B 4. B 9. B 14. B 4. D 5. C 10. C 15. A 5. C

*B Corora!&o% To!al amo$%! er &%)o&ce

"oods

P270,000 12,000+ P542,000 17,000 P525,000 12; P 63,000

Add Deemed sales"oods !ae% for  erso%al $se ross !aa#le salesGrece&!s Ded$c! Allo(a#le sales re!$r%s  allo(.  >e! !aa#le salesGrece&!s M$l!&l' #' =$!$! !a