Tax Chapter 6: Donor's Tax

All of the following are subject to donors tax in case there is a transfer for less than adequate and full consideration, except a. Real property classified as capital asset b. Personal property c. Intangible property d. Tangible Property

A

How much is the donor's tax payable on May 31? a. P300,000 b. P330,000 c. P450.000 d P464,000

A

How much was the total donor's tax payable of Mr. and Mrs. Mapagbigay on all donations a. P36,000 b. P33,000 c. P65,400 d. P66,000

A

A donation can be both part of the gross gift of the donor and a taxable income to the donee.

F

A donation on account of marriage will give the donor a deduction from the gross gifts made only if the donee is a legitimate child.

F

Agreement between the donor and the donee that the latter shall pay the donor's tax is binding on the BIR.

F

Any contribution in cash or in kind to a candidate, political party or coalition of parties for campaign purposes shall be subject to donor's tax.

F

Beginning Jan. 1, 2018, when the donee or the beneficiary is a stranger, the tax payable by the donor shall be 30% of net gift.

F

Contracts of donation between husband and wife are void in all cases.

F

Donation inter-vivos is subject to estate tax while donation mortis causa is subject to donor's tax.

F

Donation is a transfer of property for a consideration other than money.

F

Donation of a personal property worth 5,000 must be in writing.

F

Donation of real property worth 3,000 need not to be writing.

F

Donation on account of marriage is not taxable if the marriage did not take place.

F

Donor's tax is a liability of the donee.

F

Gift splitting is a form of tax evasion.

F

In donor's tax, exemption is P250,00 while in estate tax, the exemption is P100,000.

F

Minors can be a donor or a donee.

F

Prior to 2018, when the donee or beneficiary is a stranger, the tax payable by the donor shall be based on the graduated rates.

F

Reciprocity clause is applied to non-resident alien donating real property.

F

The pay as you file system is not followed in donor's taxation.

F

A person making a donation is required to file a tax return to BIR at a. The residence of the donee within 30 days from the date of donation. b. The residence of the donor within 30 days from the date of donation. c. The residence or the donor at the end of the year. d. The residence of the donee at the end of month when the donation was made

B

How much was the donor's tax payable of Mrs. Mapagbigay on her second donation? a. P0 b. P12,000 c. P24,000 d. P27,000

B

On February 2020, Mr. and Mrs. Mapagbigay donated a conjugal parcel of land to their son who was getting married within six (6) months after the date of donation. The fair market value of the property at the time of donation was P5,000,000. Its fair market vale at the time of marriage was P5,500,000. The donated property was subject to P1,000,000 mortgage which was not assumed by the donee. How much Is the net taxable net gift of Mr. Mapagbigay? a. P2,740,000 b. P2,250,000 c. P2,500,000 d. P2,490,000

B

Professor X, a renowned Filipino scientist, made the following donations during 2018: -February 29: Cash of 500,000 to Barangay Discovery. -April 1: -Car to his brother on account of marriage. The car has a FMV of P1,000,000 and is subject to mortgage of P500,000 to be assumed by his brother. -May 31: A land worth P 5,000,000 located in Belgium to his son How much is the donors tax payable on April 1? a. P0 b. P15,000 c. P300,000 d. P315.000

B

Statement 1: A receivable from a debtor can be a donation only if the creditor notifies the debtor that he is not collecting anymore and the debtor makes a positive act signifying his acceptance of the benevolence of the debtor. Statement 2: A donation inter vivos that had paid the donor's tax can still be reduced if the legitimes of the compulsory heirs were reduced, and there would be a resulting refundable donor's tax a. Statements I & 2 are false b. Statement 1 is true but statement 2 is false c Statement I is false but statement 2 is true. d. Statements 1 and 2 are true

B

Statement 1: Citizen or resident donor is subject to donor's tax regardless of where the gift was made or where the property donated is located Statement 2: Resident alien would be subject to donor's tax only on their donations or property located in the Philippines. a. Statements 1 & 2are false b. statement 1 is true but statement 2 is false c. statement 1 is false but statement 2 is true d. statements 1 & 2 are true

B

The donor's tax payable on the November 30 donation shall he a. P0 b. P11,250 c. P248,750 d. P345,000

B

Use The following data for the next four (4) questions: A donor gave the following donations during 2018. -Jan. 24- Land located in the Philippines valued at P2,000,000 to her uncle subject to the condition that the latter will pay the donors tax due and unpaid mortgage amounting to P500.000. -Nov.30- Building in U.S. valued at P4,500.000 to her sister. Donor's tax paid In U S. was P400,000. The donor's tax payable on the January 24 donation shall be: a. P0 b. P75,000 c. P90,000 d. P120,000

B

Which of the following is subject to donors tax? a. Cancellation of debt in exchange for services rendered b. Share of one of the heirs which was renounced in favor of another heir. c Transfer of property for less than adequate and full financial consideration. d. All of the above

C

All the following statements are correct, except one. If the donor is a nonresident, not citizen of the Philippines: a. Properly situated abroad, but donated to a citizen of the Philippines is exempt from donor's tax b. Property situated in the Philippines but donated to a donee abroad will pay the donor's tax c. Property in the Philippines with a value of P300,000, donated to a citizen of the Philippines, is subject to donor's tax. d. None of the above

D

In 2018, Lester made the following donations: -June 1 2018: To his best friend, Mr. Martin - P1,500,000 on account of marriage celebrated on May 1, 2017. -July 10, 2010: To Mr. Barrera his mentor - a parcel of land worth P1,800,000 subject to the condition that Mr. Barrera would assume the mortgage indebtedness of Lester in the amount of P400,000. -September 30, 2018: P1,500,000 dowry to his daughter on account of her scheduled marriage on December 25, 2018 and another wedding gift worth P200.000 on December 31, 2018 How much is the total net taxable gift for the year? a. P4,500,000 b. P4,570,000 c. P4,590,000 d. P4,350,000

D

In computing the donors tax on a subsequent donation, the donor must also consider a. Only the present donation b. All prior net gifts during his lifetime c The present and immediately subsequent donations d All prior net gifts during the Calendar year

D

Statement 1: When a donors tax return was filed and It was found out by the B!R to have errors which gave rise to a deficiency donor's tax, the donor may be required to pay the deficiency although he does not possess or own the property anymore. Statement 2: The government is not bound by any agreement between the donor and the donee that the latter shall pay the donor's tax instead of the former. a Statements 1 &2 are false b. Statement 1 is true but statement 2 is false c. Statement 1 is false but statement 2 is true d. Statements I and 2 are true

D

The reciprocity clause in the donor's tax law applies to: a. Juan Dela Cruz, a non-resident citizen b. Chrispa, a Korean citizen residing in the Philippines c. Mrs. Pedro, a Filipino citizen residing in Malaysia d. Mr G.I. Joe, a non-resident American

D

When a husband and wife make a donation to their legitimate child on account of marriage during 2020 taxable year, which of the following statements is correct? a. Each of them is entitled for dowry as a deduction from the gross gift b. There can only be deduction for dowry if the donation was made before or one year after the celebration of marriage c. Either of them can waive his/her right to claim dowry as deduction in favor of the other donor such that one of them may claim a total deduction of P20,000. d. None of the above.

D

Which of the following is not a deduction from the gross gifts? a. Unpaid mortgage on the donated property assumed by the donee b. unpaid real estate tax on donated property assumed by the donee c. Diminution on the property donated specifically provided by the donor. d. Unpaid donor's lax on the property assumed by the donee.

D

Which of the following statements is false? a. The donor's tax for each calendar year is computed on the basis of the total net gifts made during the calendar year. b. Gifts in property shall be valued at the fair market value of the properly at the date of donation. c. A gift to the International Rice Research Institute is exempt from gift d None of the above

D

The donation by Janet Lim to Ramon Bong Revilla in view of his public office is void in all cases.

T

The donor's tax return is filed within 30 days from the date of completion/perfection of the donation.

T

The gross gifts of citizens or resident donor will include all properties regardless of location.

T

With respect to the donor, a second cousin is a stranger under donor's tax law.

T

One of the following statements is wrong. When a donor with several donations during the year fails to file the donor's tax return for each of the dates that donations were made: a. Such failure shall be cured by filing a donors tax return at the end of the year reflecting all donations made within the year and paying the taxes shown in that one return. b. Each failure is subject to penalties for nonfiling of return and nonpayment of the tax on time. c. He can voluntarily file late the donor's tax return for each date that donations were made and make payments on the tax due shown on each return, with penalties. d. If the different donor's taxes were not paid on the original due dates because of requests for extension seasonably filed with the Commissioner of Internal Revenue, each required payment of tax shall have an extended period or not more than six months.

A

The donation of personal (movable property may be made: I. Orally if the value is P5,000 or less requiring simultaneous delivery II. In writing if the value is more than P5,000 a. Both I and II are correct b. both statements are incorrect c. Only I is correct d. Only II is correct

A

The next three (3) question are based or the following data: Mr. and Mrs. Mapagbigay resident citizens, made the following donations out of their conjugal properties. Date Amount Mar 1, 2020 P500.000 May 1, 2020 P400,000 July 1, 2020 P200.000 Donee Adel, legitimate daughter Belle, legitimate daughter, on account of marriage on June 1, 2020 Cindy, legitimate daughter How much was the donor's tax payable of Mr. Mapagbigay on his first donation? a. P0 b. P15,000 c. P30,000 d P60,000

A

When the donee is a stranger, the tax payable by the donor for a donation made in 2018 shall be: a. 6% of net gifts in excess of P250,000. b. 30% of net gifts. c Based on the graduated rates d. Based on the graduated rates or 30% of the net gifts, at the option of the donor.

A

Which of the following constitutes a taxable gift a. Creditor's gratuitous discharge of a debtor's obligation. b. One day rent free use of another's property c. A gratuitous transfer by an incompetent d. An agreement to make a future transfer which is not supported by a consideration.

A

Which of the following statements is false? I. Contracts of donation between husband and wife are void in all cases. II. The Donation by CJ Sereno to Digong in view of his public office is void in all cases. III. Donations between persons guilty of adultery or concubinage are void. IV. Donations to conceived or unborn children are valid. a. I only b. II only c. I and II only d. II, III and IV only

A

A resident alien made the following donations in 2018. Which is exempt from donor's tax? a. Gifts made on account of marriage and before its celebration by parents to each of their legitimate, recognized natural, or adopted children in the amount of P10,000. b, Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government c. Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, trust or philanthropic organization or research institution or organization, where more then 30% of said gifts were used by such donee for administration purposes. d. All of the above.

B

ABC Corporation donated P100,000 to the barangay for the purpose of cementing a barangay road where its factory is located. Statement I: The donation Is exempt from donor's tax Statement 2: The corporation may claim full deduction for income tax purposes a Statements 1 & 2 are false b. Statement 1 is true but statement 2 is false c. Statement 1 is false but statement 2 is true d. Statements 1 and 2 are true

B

Du30 sold his car to CJ Sereno. The cost of the car was P800,000 and has a fair market value of P600,000 at the time of sale. The sale was considered fictitious as the consideration was valued for P5,000 only. For donor's tax purposes, which of the following statements is correct? a. There is a taxable gift of P800,000 b. There is a taxable gift of P600.000 c. There is a taxable gift of P595,000 d. The transfer is for insufficient consideration, hence, not subject to gift tax.

B

For the donation to be valid, acceptance of the donation must be made. a. during the lifetime of the donor only b. during the lifetime of the donee only c. during the lifetime of the donor and donee d. None of the above.

C

In 2018, spouses Romeo and Juliet, both Filipino citizens are owners of a residential house and lot in Quezon City. After the recent wedding of their son (Pedro) to Clara, the spouses donated the said real property to Item. At the time of donation, the real property has a fair market value of P2,000,000. The property was mortgage for P200,000 not assumed by the donees. Which of the following statements is correct? a. Pedro and Clara are subject to income tax based on the fair market value o the real property donated to them b. Romeo's taxable gift is P500,000 c. Juliet's taxable gift is P750,000 d. Romeo's taxable gift Is P1,000,000

C

Which of the following donation is required to be in public document? a. donation of personal property worth more than 5,000 b. donation of personal property c. donation of real property d. donations required to be in writing.

C

On June 1, 2019, Pedro, a resident citizen, donated a parcel of land to a relative in Makati and a real property located in Canada to a friend. In taking a credit for the foreign donor's tax paid, the credit shall be against the Philippines donors tax on the a. Donation to a friend b. Donation to a relative c. Donation to the relative and to a friend d. None of the above

C

Since a donation to a charitable Institution has a deduction without any ceiling. Statement 1. The net gift will be zero, so that in computing the donors tax, the donation may be omitted in gross gifts as if it is likewise omitted in the deductions. Statement 2: The gross gifts should be reported and the deduction shall be claimed. a. Statements I & 2 are false b. Statement 1 is true but statement 2 is false c. Statement 1 is false but statement 2 is true d. Statements 1 and 2 are true

C

Statement 1: Tax credit for donor's tax paid to a foreign country is allowed only if the donor is a citizen or resident of the Philippines. Statement 2: There can be a donor's tax paid to a foreign country even if the citizen or resident donor had no donation of property in the Philippines a. Both statements are correct b. Only first statement is correct c. Both statements are incorrect d. Only first statement incorrect

C

Statement 1: When the donee is tax exempt, the donation of a taxable individual is also tax exempt Statement 2: Donors tax shall be paid within 30 days after the donation is made. a. Statements 1 & 2 are false b. Statement 1 is true but statement 2 is false c. Statement 1 is false but statement 2 is true d. Statements 1 and 2 are true

C

When a property is donated, the basis of the donors tax is a. The cost of acquisition if acquired by purchase or the fair market value at acquisition date, whichever is higher. b. The agreed value by the donor and the donee.. c. The fair market value at the time of donation. d. Any of the above

C

On February 14. 2018, Clifford donated a property located in Manila and cash as follows: -Land with a fair market value of P680,000. To a legitimate daughter on account of marriage, subject to a mortgage of P80,000 assumed by the daughter. -Cash of P150,000: To a legitimate son. on account of marriage. What is the correct amount of net gifts made? a. P700,000 b. P730,000 c. P740,000 d. P750,000

D

Reciprocity clause is applied to which of the following? a. Non-resident alien donating real properly b. A donation of tangible property by a non-resident alien c. When a resident alien donates intangible property d. A donation by a non-resident alien of intangible property

D

Statement 1: Donation made to a legally adopted child shall be considered as donation made to a relative, subject to 6% donor's tax rate in excess of P250 000. Statement 2: For donor's tax purposes. donations to the children of the first cousin of the donor are considered donations to strangers, subject to 6% donors tax rate in excess of P250.000. a. Statements 1 & 2 are false b. Statement I is true but statement 2 is false c Statement I is false but statement 2 is true d. Statements I and 2 are true

D

Statement 1: If the gift is made in properties, it shall be appraised at its fair market value as of the time of donation. Statement 2: In valuing properties for donor's tax, the principles in valuation of properties for estate tax purposes shall apply. a. Statements I & 2 are false b. Statement I is true but statement 2 is false c. Statement 1 is false but statement 2 is true d. Statements 1 and 2 are true

D

Statement 1: The computation of the donor's tax is on a cumulative basis over a period of one calendar year. Statement 2: Husband and wife are considered as separate and distinct taxpayers for purposes of the donors tax. a. Statements I & 2 are false b. Statement I is true but statement 2 is false c. Statement I is false but statement 2 is true d. Statements I and 2 are true

D

A donation in which the donor's tax is not paid is a valid donation.

T

A donation may be exempt from donor's tax but not necessarily a deduction from the donor's gross income.

T

Any person making a donation, unless the donation is specifically exempt under Tax Code or other special laws, is required, for every donation, to accomplish under oath a donor's tax return.

T

As a general rule, all persons who may contract to dispose of their property may donate.

T

Donation between persons guilty of adultery or concubinage are void.

T

Donation to conceived or unborn children are valid.

T

Donor's tax is imposed to all natural and artificial persons.

T

Donor's tax shall apply, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible, even if the transfer is merely in trust.

T