TAX WEEK 1

Question 26 In 2021, a general professional partnership was organized. Solo contributed P600,000 for 40% interest. The partnership's net income in 2021 was P800,000, and in 2022 P400,000. The net income in 2021 was distributed to the partners while no distribution of income was made in 2022. In 2022, the partnership was dissolved, and Solo received P700,000 as his share in the liquidation. How much was the capital gain (loss) of Solo in 2022?

(30,000)

The power to tax is not without limitations. Such limitations may be constitutional (expressly found in the constitution or implied in its provisions) or inherent (restrict the power although they are not embodied in the constitution). Which of the following is an inherent limitation?

Exemption from taxation of government entities

The power to tax is not without limitations. Such limitations may be inherent (restrict the power not embodied in the constitution) or constitutional (expressly found in the Constitution or implied in its provisions). Which of the following is an inherent limitation?

Exemption from taxation of government entities

Statement 1: The power of taxation is comprehensive, plenary, unlimited and supreme and, therefore, not subject to inherent and constitutional limitations. Statement 2: Levying or imposition of tax is essentially administrative in character. Statement 3: Power of eminent domain may be exercised by public service companies and public utilities.

False, False, True

How broad is the power of the legislature to impose taxes? Ans 1- The legislature has limited discretion as to the person, property or occupations to be taxed, where there are no constitutional restrictions, provided the subject or object to be taxed is within the territorial jurisdiction of the State. Ans 2- The legislature has the right to finally determine the amount or rate of tax, in the absence of any constitutional prohibitions and it may levy a tax of any amount it sees fit

False, True

Question 2 Statement 1: Tax avoidance is not a legal way of not paying tax. Statement 2: Changing the terms of the sale like FOB shipping point in the Philippines to FOB destination abroad, so that the title passes abroad instead in the Philippines is not a scheme of shifting the incidence of taxation Statement 3: Where the statute granting the exemption provides for the liberal interpretation thereof tax exemptions must not be strictly construed

False, True, True

The Secretary of Finance is authorized to suspend the imposition of Minimum Corporate Income Tax on any corporation which suffers losses on account of:

Force Majeure

Selemene Dark Moon Order, a corporation registered in Iceland, has a 50 MW electric power plant in San Jose, Batangas. Aside from Selemene's income from its power plant, which among the following is considered as part of its income from sources within the Philippines?

Gains from the sale to an Ilocos Norte power plant of generators bought from the United States.

Question 9 The following are characteristics of special assessment, except

It is a personal liability of the persons assessed

Question 6 The municipality of San Isidro passed an ordinance imposing a tax on installation managers. At that time, there was only one installation manager in the municipality; thus, only he would be liable for the tax. Is the law constitutional?

It is constitutional as it applies to all persons in that class.

Question 41 PCAD Inc., a Philippine corporation, sold through the local stock exchange 1,000 BDO Unibank shares that it bought 3 years ago. PCAD sold the shares for P1 million and realized a net gain of P100,000.00. How shall it pay tax on the transaction?

It shall pay a tax of 6/10 of 1% of the P1 million gross sales.

Question 11 The power of taxation is basically legislative in character. Which of the following is a legislative function? A B C D Fix to certainty the amount of tax A-Yes B-No C-Yes D-Yes Identify who should collect the tax A-Yes B-Yes C-No D-Yes Determine who should be subject to tax A-Yes B-Yes C-Yes D-No

A; YES, YES,YES

A test applied in the realization of income and expenses by an accrual basis taxpayer

All events test

Question 15 The Philippines adopted the semi-global tax system, which means that

All income subject to final withholding taxes are liable to income tax under the schedular tax system, while all ordinary income as well as income not subject to final withholding taxes are liable to income tax under the global tax system

Statement 1: Tax is an enforced contribution levied by the State by virtue of the sovereignty on persons and property within its jurisdiction for the support of the government and all public needs. Statement 2: The basic community tax of P5.00 of an individual is a direct tax. Statement 3: Tax of fixed proportion to the value of the property with respect to which the tax Is assessed and requires the intervention of assessors or appraisers to estimate the value of such property before the amount due from each taxpayer can be determined is known as ad valorem tax.

All of the statements are true.

Which of the following is a correct nature of restriction (limitation) to exercise taxation power? CONSTITUTIONAL INHERENT A. Territorial Jurisdiction Yes No B. International Comity No Yes C. Rule of Uniformity and Equity D. Due Process of Law Yes No Yes No

B; NO,YES

Question 29 Which of the following corporations is taxable?

Cemetery company owned and operated by a stock corporation

The process by which the government seizes private property for public use after giving an equitable payment.

Condemnation proceedings

Question 25 Capital assets include: a) The spare parts inventory of an automobile repair shop which are not sold separately to customers but are used for replacing defective parts of cars subject to repair. b) The parcel of land used as an off-site storage area of a manufacturer of plastic water bottles. c) The delivery truck of a newspaper publishing corporation. d) Land used in business e) Office equipment

None of the above

Question 50 The following were taken from the income statement of N Corporation for the taxable year 2022: Gross Profit from sales--2,000,000 Less: Business Connected Expenses--300,000 Provision for bad debts--100,000 Net Income before income tax--1,600,000 Additional Information: Accounts written off during the year and charge to allowance for bad debts--50,000 Recoveries on accounts receivable previously written off in 2021: --Allowed by BIR as deductions--80,000 --Disallowed by BIR as deductions—10,000 Refund of taxes paid in 2021: --Allowed by BIR as deductions—20,000 --Disallowed by BIR as deductions—40,000 The taxable income is

P1,750,000

Question 24 Rob Rob Tabachonk Corporation has the following data for the years 2021 and 2022: 2021 Gross Income--300,000 Business Expenses--200,000 Sale of shares in local stock exchange--20,000 Sales of shares directly to buyer--40,000 Capital loss (Capital asset was acquired on January 15,2021 and was sold on March 15, 2021)-- 40,000 Capital gain (Capital asset was acquired on January 15, 2019 and was sold on March 15, 2021)-- 30,000 2022 Gross Income--500,000 Business Expenses--300,000 Sale of shares in local stock exchange-- 20,000 Sales of shares directly to buyer--9,000 Sale of land not used in business--100,000 Capital gain (capital asset held for 12 months)-- 50,000 Capital loss (capital asset held for more than 12 months)-- 10,000 How much is taxable income for 2021?

P100,000

Question 44 Shino Corporation had the following items of income and expenses The dividends were received from a domestic corporation. The general and administrative expenses include cost of utilized facilities, the cost of supplies, depreciation of office equipment, and depreciation of equipment used in service of P75,000, P15,000, P30,000, and P40,000 respectively. What is the minimum corporate income tax if the fiscal year ends in February 2021?

P11,600

Question 56 Akatsuki Corporation earned a taxable income of 1,000,000 for the year 2021. During the year, it credited to its miscellaneous income the refund of taxes and recoveries of accounts written off. Refund of percentage tax 20,000 Refund of income tax 50,000 Refund of VAT 20,000 Refund of Special assessment 10,000 Bad debt recovered (allowed as deduction) 30,000 Bad debt recovered (not allowed as deduction) 15,000 How much would be the income tax payable of the Akatsuki corporation for the current year?

P262,500

Question 38 Akatsuki Corporation earned a taxable income of 1,000,000 for the year 2021. During the year, it credited to its miscellaneous income the refund of taxes and recoveries of accounts written off. Refund of percentage tax 20,000 Refund of income tax 50,000 Refund of VAT 20,000 Refund of Special assessment 10,000 Bad debt recovered (allowed as deduction) 30,000 Bad debt recovered (not allowed as deduction) 15,000 How much would be the income tax payable if the year is 2020?

P288,750

Question 45 Dentastix Corporation has the following data for the years 2020 and 2021 2020 Gross Income—3,750,000 Business expenses—540,000 Interest income, bank deposit—20,000 Royalty income, PH—80,000 Share of stock direct to buyer—65,000 Capital loss (Capital asset was acquired on January 15, 2020 and was sold on March 15, 2020)—150,000 Capital gain (capital asset was acquired on January 15, 2018 and was sold on March 31, 2020)--90,000 2021 Gross Income—1,500,000 Gain on sale of land, capital asset—300,000 Dividend income received—90,000 Business expenses—1,200,000 Capital gain (capital asset held for 12 months)—180,000 Capital loss (capital asset held for more than 12 months) --60,000 What is the taxable net income for 2020?

P3,210,000

Question 47 Dentastix Corporation has the following data for the years 2020 and 2021 2020 Gross Income—3,750,000 Business expenses—540,000 Interest income, bank deposit—20,000 Royalty income, PH—80,000 Share of stock direct to buyer—65,000 Capital loss (Capital asset was acquired on January 15, 2020 and was sold on March 15, 2020)—150,000 Capital gain (capital asset was acquired on January 15, 2018 and was sold on March 31, 2020)--90,000 2021 Gross Income—1,500,000 Gain on sale of land, capital asset—300,000 Dividend income received—90,000 Business expenses—1,200,000 Capital gain (capital asset held for 12 months)—180,000 Capital loss (capital asset held for more than 12 months) --60,000 Assuming Dentastix was a general professional partnership, what is the taxable net income for 2020?

P3,210,000

Question 28 Akamaru Corporation provided the following data assuming that Akamaru Corporation employs a calendar year and is a domestic corporation with assets excluding land exceeding 100M. 2020 2021 Gross income 2,000,000 1,500,000 Net income 100,000 250,000 What is the income tax due for the taxable year 2020?

P30,000

Question 32 REO Corporation, registered with BIR in 2010, has the following data for the fiscal year 2020-2021 Gross receipts 4,500,000 Discounts given upon consummation of transaction 300,000 Returns and allowances 450,000 Salaries of personnel directly involved in the supply of services 900,000 Salaries of office personnel 750,000 Depreciation of office equipment 150,000 Fees directly in the supply of services 360,000 Other operating expenses 360,000 How much is the MCIT if the fiscal year ends on March 2021?

P31,125

Question 46 Kankuro Corporation has the following data for 2021: Gross income, Phil.-1,000,000 Gross income, USA-500,000 Gross income, China-500,000 Cost of Sales, Phil-500,000 Cost of Sales, USA -100,000 Cost of Sales, China-50,000 Expenses, Phil.-300,000 Expenses, USA-200,000 Expenses, China-100,000 Other income not included above: Dividend from San Miguel Corp.-70,000 (40% of operation in PH) Dividend from Ford Motors, USA-120,000 (40% of operation in PH) Gain on sale of San Miguel shares direct-150,000 Royalties, Phils-50,000 Royalties, USA-100,000 Interest on notes receivable, Phils-60,000 Rent Income, USA-250,000 Rent Income, PH (net of withholding)-95,000 Kankuro Corp also sold a land classified as capital asset for P2,000,000. The cost of the land is P1,000,000 while its Zonal Value is P3,000,000. If Kankuro is a non-resident foreign corporation and there is tax sparing, the total final taxes imposed is (ignoring the sale of land):

P342,167

Question 7 Which of the following is not a condition imposed by the Constitution in the exercise of the power of the eminent domain?

The consent of the private property owner to sell the property to the government

Question 1 The municipal council passed an ordinance imposing an occupation tax on profession or occupation of a "management accountant." A is the only person with such an occupation in the municipality. Which of the following is correct?

The ordinance is a valid exercise of the council's power to enact laws to raise revenue under the Local Government Code since the ordinance conforms to the uniformity clause.

Question 14 Which of the following statements is correct?

The power of taxation and police power rnay be exercised simultaneously

Which statement is wrong?

The power of taxation may be exercised by the government, its political subdivision and public utilities

Question 12 Which statement below expresses the lifeblood theory?

The underlying basis of taxation is government necessity for without taxation a government can neither exist nor endure

Question 20 Statement 1: Tax evasion (tax dodging) is the use by the taxpayer of Illegal means to defeat or lessen the payment of tax. Statement 2: Concurrence by a majority of all members of the Congress who are present during the deliberation is required for the passage of a law granting tax exemptions. Statement 3: All appropriation, revenue or tariff bills shall originate from either the House of Representatives or the Senate.

True, False, False

Question 17 Statement 1: Taxation is the act of laying a tax, i.e. the process or means by which the sovereign, through its lawmaking body, raises income to defray the necessary expenses of government. . Statement 2: Power of eminent domain is the power of the State or those to whom the power has been delegated to take private property for public use upon paying the owners a just compensation to be ascertained according to law. Statement 3: To implement the police power of the State to promote the general welfare is a compensatory purpose of taxation.

True, True, False

Question 19 Mautak seller sold a capital asset to Mabait Buyer where the capital gains tax is shouldered by the buyer. Is the stipulation valid? And will this result in a valid shifting of taxes?

Yes, No

Question 57 DEF Corporation organized in 2022 had the following: In 2021 Gross Income-- P 20,000,000 Allowable deductions: 1. Itemized allowed by the NIRC--15,000,000 2. Special allowed by the NIRC--6,000,000 3. Incentives allowed by special laws--3,000,000 Net Operating Loss--(4,000,000) In 2022 Gross Income-- P 35,000,000 Allowable deductions 1. Itemized allowed by the NIRC--24,000,000 2. Special allowed by the NIRC--4,000,000 3. Incentives allowed by special laws—2,000,000 Net Income—5,000,000 How much is the taxable income in 2022?

[ P 4,000,000

A tax is invalid in all of the following, except:

lt results to double taxation

Question 16 Congress passed a sin tax law that increased the tax rates on alcoholic products by 1,000%. The law was meant to eradicate these sinful businesses and was questioned in court by a large alcoholic beverage manufacturer that is on the brink of bankruptcy because it would not be able to pay the increased tax. The company is _

wrong because the law recognizes that the power to tax is the power to destroy

Question 3 Which of the aspects of taxation is (are) administrative in nature? I. Levy II. Assessment III. Collection

II and III

Consider the following statements: 1) A special assessment is an enforced proportional contribution from the owners of real property especially or peculiarly benefited by public instruments 2) The power of eminent domain maybe exercised even by private individuals while the power of taxation and police power maybe exercised only by the government. 3) Like tax, a debt draws interest, if stipulated 4) The police power, power of taxation and power of eminent domain being fundamental powers of the State maybe exercised by the government even without any constitutional grant

II and IV are correct.

A test applied to determine whether the accumulation of after tax profits by a domestic or resident foreign corporation is really for the reasonable needs of the business

Immediacy test

Question 8 The BIR, through the Commissioner, instituted a system requiring taxpayers to submit to the BIR a summary list of their sales and purchases during the year, indicating the name of the seller or the buyer and the amount. Based on these lists, he BIR discovered that in 2021, Consonants Corp. purchased from Vowels Corp. goods worth P5,000,000. Vowels Corp. did not declare these for income tax purposes as its reported gross sales for 2021 was only P1,000,000. Which of the following defenses may Vowels Corp. raise in an assessment against it by the BIR?

None, the NIRC authorizes the Commissioner to assess the property tax due from a taxpayer when he believes that the report the taxpayer submitted is false, incomplete, or erroneous.

Question 30 Income from dealings in property (real, personal, mixed) is the gain or loss derived:

Only from sale of property

Statement 1: The inherent powers of the State can never be taken away. Statement 2: No laws are necessary to confer the inherent powers of the State upon any government exercising sovereignty. Statement 3: The inherent limitations are superior to the constitutional limitations

Only statement 3 is wrong.

Question 57 REO Corporation, registered with BIR in 2010, has the following data for the fiscal year 2020-2021 Gross receipts 4,500,000 Discounts given upon consummation of transaction 300,000 Returns and allowances 450,000 Salaries of personnel directly involved in the supply of services 900,000 Salaries of office personnel 750,000 Depreciation of office equipment 150,000 Fees directly in the supply of services 360,000 Other operating expenses 360,000 How much is the taxable income if the corporation uses optional standard deduction?

P1,494,000

Question 31 Oni Chan, a non-resident foreign corporation has the following income items for the 2021: Stock Dividend from a domestic corporation (no tax sparing credit) P 400,000 Property Dividend from foreign corporation 600,000 Interest income received from a depositary bank under FCDS 150,000 Rent Income, net of withholding taxes 75,000 Interest Income from a debt instrument not within coverage of a deposit substitute, Philippines 80,000 Interest Income from a debt instrument not within coverage of a deposit substitute, USA 90,000 Prizes 10,000 Sales 900,000 Cost of Sales 500,000 Operating Expenses 100,000 Interest on foreign loans 50,000 How much is the total final withholding taxes of Oni Chan?

P157,500

Question 59 A corporation has the following income for 2022 Interest income derived from depository bank under Expanded Foreign Currency Deposit System (EFCDS) 200,000 Interest on government debt instrument and securities in which the number of lenders at time of origination is thirty (30) 150,000 Interest on government debt instrument and securities in which the number of lenders at time of origination is ten (10) 500,000 Prizes and Winnings (10,000 of which came from prizes) 60,000 Royalties 10,000 Interest from overdue accounts and notes receivable (30% of which are from accounts receivable) 80,000 How much is the final tax on the passive income assuming the corporation is a resident foreign corporation?

P162,000

Question 33 Tabachingching, a non-resident foreign corporation had the following: Rent from lease of aircraft to a domestic corporation 800,000 Royalty from the use of patent in the Philippines 500,000 Interest on US dollar deposit with a domestic Bank operating as foreign currency depository unit US $ 30,000 Interest on US dollar loan to a domestic corporation Engaged in design and construction US $ 20,000 The final withholding tax is

P185,000 and US $ 4,000

Question 43 Rob and Shan formed a business partnership where Rob was assigned a 25% share. For 2021, the recorded gross income of the partnership was 3,000,000 and the operating expense was 800,000. In addition to the operating expenses, it also earned interest from bank deposit worth 50,000 and incurred interest related to revenue expenditures worth 100,000 How much is the taxable income of the partnership?

P2,110,000

Question 39 SAD Corporation used accrual basis yearly since it was organized. On March 1, 2021 it purchased an equipment P2,240,000, VAT inclusive. The equipment was estimated to have a life of 5 years. The equipment was financed through a one-year loan with Banko de Pilipino with interest at the rate of 18% per annum beginning January 16, 2021, which was discounted in full. During the same year, the corporation also paid interest on business-related taxes amounting to 60,000. In 2021, AJD had interest income from its bank deposit in the amount of P200,000. AID decided to expense outright the interest incurred to acquire the equipment. Assuming SAD Corporation decided to capitalize the interest incurred to acquire the equipment, how much would be the total cost of the equipment?

P2,403,200

Question 58 A corporation has the following income for 2022: Interest income derived from depository bank under Expanded Foreign Currency Deposit System (EFCDS) 200,000 Interest on government debt instrument and securities in which the number of lenders at time of origination is thirty (30) 150,000 Interest on government debt instrument and securities in which the number of lenders at time of origination is ten (10) 500,000 Prizes and Winnings (10,000 of which came from prizes) 60,000 Royalties 10,000 Interest from overdue accounts and notes receivable (30% of which are from accounts receivable) 80,000 How much is the final tax on the passive income assuming the corporation is a non- resident foreign corporation?

P200,000

Question 21 Akatsuki Corporation earned a taxable income of 1,000,000 for the year 2021. During the year, it credited to its miscellaneous income the refund of taxes and recoveries of accounts written off. Refund of percentage tax 20,000 Refund of income tax 50,000 Refund of VAT 20,000 Refund of Special assessment 10,000 Bad debt recovered (allowed as deduction) 30,000 Bad debt recovered (not allowed as deduction) 15,000 How much is the income tax payable if the total asset of Akatsuki Corporation is less than 100,000,000 in 2021.

P210,000

Question 56 Kankuro Corporation has the following data for 2021: Gross income, Phil.-1,000,000 Gross income, USA-500,000 Gross income, China-500,000 Cost of Sales, Phil-500,000 Cost of Sales, USA -100,000 Cost of Sales, China-50,000 Expenses, Phil.-300,000 Expenses, USA-200,000 Expenses, China-100,000 Other income not included above: Dividend from San Miguel Corp.-70,000 (40% of operation in PH) Dividend from Ford Motors, USA-120,000 (40% of operation in PH) Gain on sale of San Miguel shares direct-150,000 Royalties, Phils-50,000 Royalties, USA-100,000 Interest on notes receivable, Phils-60,000 Rent Income, USA-250,000 Rent Income, PH (net of withholding)-95,000 Kankuro Corp also sold a land classified as capital asset for P2,000,000. The cost of the land is P1,000,000 while its Zonal Value is P3,000,000. What is the total final income taxes including capital gains tax?

P212,500

Question 53 IDK Corporation had the following income in 2022: Interest on bank deposit in PNB Business connected expenses Philippine peso deposit, gross Php 300,000 US dollar deposit, gross US $10,000 Royalty Philippines Php 400,000 USA US $20,000 Rate of exchange 1 US $= P50.00 The final withholding tax if IDK corporation is a domestic corporation is

P215,000

In 2021, Hyuga Corporation contributed P60,000 to a qualified charitable organization. Hyuga's 2021 net income was P420,000. In 2021, what amount can Hyuga Corp deduct as charitable contributions?

P24,000

Question 48 Rob Rob Tabachonk Corporation has the following data for the years 2021 and 2022: 2021 Gross Income--300,000 Business Expenses--200,000 Sale of shares in local stock exchange--20,000 Sales of shares directly to buyer--40,000 Capital loss (Capital asset was acquired on January 15,2021 and was sold on March 15, 2021)-- 40,000 Capital gain (Capital asset was acquired on January 15, 2019 and was sold on March 15, 2021)-- 30,000 2022 Gross Income--500,000 Business Expenses--300,000 Sale of shares in local stock exchange-- 20,000 Sales of shares directly to buyer--9,000 Sale of land not used in business--100,000 Capital gain (capital asset held for 12 months)-- 50,000 Capital loss (capital asset held for more than 12 months)-- 10,000 How much is taxable income for 2022?

P240,000

Question 37 Dentastix Corporation has the following data for the years 2020 and 2021 2020 Gross Income—3,750,000 Business expenses—540,000 Interest income, bank deposit—20,000 Royalty income, PH—80,000 Share of stock direct to buyer—65,000 Capital loss (Capital asset was acquired on January 15, 2020 and was sold on March 15, 2020)—150,000 Capital gain (capital asset was acquired on January 15, 2018 and was sold on March 31, 2020)--90,000 2021 Gross Income—1,500,000 Gain on sale of land, capital asset—300,000 Dividend income received—90,000 Business expenses—1,200,000 Capital gain (capital asset held for 12 months)—180,000 Capital loss (capital asset held for more than 12 months) --60,000 Assuming Dentastix was a general professional partnership, what is the taxable net income for 2021?

P345,000

Question 54 Kankuro Corporation has the following data for 2021: Gross income, Phil.-1,000,000 Gross income, USA-500,000 Gross income, China-500,000 Cost of Sales, Phil-500,000 Cost of Sales, USA -100,000 Cost of Sales, China-50,000 Expenses, Phil.-300,000 Expenses, USA-200,000 Expenses, China-100,000 Other income not included above: Dividend from San Miguel Corp.-70,000 (40% of operation in PH) Dividend from Ford Motors, USA-120,000 (40% of operation in PH) Gain on sale of San Miguel shares direct-150,000 Royalties, Phils-50,000 Royalties, USA-100,000 Interest on notes receivable, Phils-60,000 Rent Income, USA-250,000 Rent Income, PH (net of withholding)-95,000 Kankuro Corp also sold a land classified as capital asset for P2,000,000. The cost of the land is P1,000,000 while its Zonal Value is P3,000,000. If Kankuro is a non-resident foreign corporation and there is no tax sparing, its total final taxes imposed is (ignoring the sale of land):

P349,167

Question 52 The following are the revenue items of a domestic corporation for the year: Sales--2,000,000 Cost of Sales--1,500,000 Gain from sale of an office equipment--100,000 Gain from sale of building used in business (selling price P200,000)-- 200,000 Gain from sale of land not used in business (selling price 500,000)-- 300,000 Gain from sale of listed shares through local stock exchange--50,000 Gain from sale of stock directly to buyer not through local stock exchange--70,000 Yield from debt instrument (50 % of which within coverage of deposit substitute, Philippines)-- 80,000 Interest Income received from depositary bank under EFCDS, Philippines--90,000 Interest Income from bank deposit, USA--50,000 Interest income from long-term deposit, Philippines--40,000 Rent Income, Philippines--60,000 Royalties on books, Philippines--80,000 Royalties, USA--70,000 Property Dividend from domestic corporation--80,000 Stock dividend from foreign corporation--46,000 Refund of Philippine Income Tax--80,000 Prizes and Winnings (20,000 from PCSO winnings)-- 100,000 How much is the total final withholding taxes assuming it is a non-resident foreign corporation?

P385,000

Question 27 REO Corporation, registered with BIR in 2010, has the following data for the fiscal year 2020-2021 Gross receipts 4,500,000 Discounts given upon consummation of transaction 300,000 Returns and allowances 450,000 Salaries of personnel directly involved in the supply of services 900,000 Salaries of office personnel 750,000 Depreciation of office equipment 150,000 Fees directly in the supply of services 360,000 Other operating expenses 360,000 How much is the regular corporate income tax if the fiscal year ends on March 2021?

P392,175

Question 34 DEF Corporation organized in 2022 had the following: In 2021 Gross Income-- P 20,000,000 Allowable deductions: 1. Itemized allowed by the NIRC--15,000,000 2. Special allowed by the NIRC--6,000,000 3. Incentives allowed by special laws--3,000,000 Net Operating Loss--(4,000,000) In 2022 Gross Income-- P 35,000,000 Allowable deductions 1. Itemized allowed by the NIRC--24,000,000 2. Special allowed by the NIRC--4,000,000 3. Incentives allowed by special laws—2,000,000 Net Income—5,000,000 How much is the taxable income in 2022?

P4,000,000

Rob and Shan formed a business partnership where Rob was assigned a 25% share. For 2021, the recorded gross income of the partnership was 3,000,000 and the operating expense was 800,000. In addition to the operating expenses, it also earned interest from bank deposit worth 50,000 and incurred interest related to revenue expenditures worth 100,000. How much is the distributive income of Rob from the business partnership?

P405,625

SAD Corporation used accrual basis yearly since it was organized. On March 1, 2021 it purchased an equipment P2,240,000, VAT inclusive. The equipment was estimated to have a life of 5 years. The equipment was financed through a one-year loan with Banko de Pilipino with interest at the rate of 18% per annum beginning January 16, 2021, which was discounted in full. During the same year, the corporation also paid interest on business-related taxes amounting to 60,000. In 2021, AJD had interest income from its bank deposit in the amount of P200,000. SAD decided to expense outright the interest incurred to acquire the equipment. How much was the deductible interest?

P406,400

Question 23 Dentastix Corporation has the following data for the years 2020 and 2021 2020 Gross Income—3,750,000 Business expenses—540,000 Interest income, bank deposit—20,000 Royalty income, PH—80,000 Share of stock direct to buyer—65,000 Capital loss (Capital asset was acquired on January 15, 2020 and was sold on March 15, 2020)—150,000 Capital gain (capital asset was acquired on January 15, 2018 and was sold on March 31, 2020)--90,000 2021 Gross Income—1,500,000 Gain on sale of land, capital asset—300,000 Dividend income received—90,000 Business expenses—1,200,000 Capital gain (capital asset held for 12 months)—180,000 Capital loss (capital asset held for more than 12 months) --60,000 What is the taxable net income for 2021?

P420,000

Question 22 Kankuro Corporation has the following data for 2021: Gross income, Phil.-1,000,000 Gross income, USA-500,000 Gross income, China-500,000 Cost of Sales, Phil-500,000 Cost of Sales, USA -100,000 Cost of Sales, China-50,000 Expenses, Phil.-300,000 Expenses, USA-200,000 Expenses, China-100,000 Other income not included above: Dividend from San Miguel Corp.-70,000 (40% of operation in PH) Dividend from Ford Motors, USA-120,000 (40% of operation in PH) Gain on sale of San Miguel shares direct-150,000 Royalties, Phils-50,000 Royalties, USA-100,000 Interest on notes receivable, Phils-60,000 Rent Income, USA-250,000 Rent Income, PH (net of withholding)-95,000 Kankuro Corp also sold a land classified as capital asset for P2,000,000. The cost of the land is P1,000,000 while its Zonal Value is P3,000,000. What is the income tax payable if Kankuro Corp is a domestic corporation?

P502,500

Question 40 Rob and Shan formed a business partnership where Rob was assigned a 25% share. For 2021, the recorded gross income of the partnership was 3,000,000 and the operating expense was 800,000. In addition to the operating expenses, it also earned interest from bank deposit worth 50,000 and incurred interest related to revenue expenditures worth 100,000 How much is the income tax payable of the partnership?

P527,500

Question 49 The following are the revenue items of a domestic corporation for the year: Sales--2,000,000 Cost of Sales--1,500,000 Gain from sale of an office equipment--100,000 Gain from sale of building used in business (selling price P200,000)-- 200,000 Gain from sale of land not used in business (selling price 500,000)-- 300,000 Gain from sale of listed shares through local stock exchange--50,000 Gain from sale of stock directly to buyer not through local stock exchange--70,000 Yield from debt instrument (50 % of which within coverage of deposit substitute, Philippines)-- 80,000 Interest Income received from depositary bank under EFCDS, Philippines--90,000 Interest Income from bank deposit, USA--50,000 Interest income from long-term deposit, Philippines--40,000 Rent Income, Philippines--60,000 Royalties on books, Philippines--80,000 Royalties, USA--70,000 Property Dividend from domestic corporation--80,000 Stock dividend from foreign corporation--46,000 Refund of Philippine Income Tax--80,000 Prizes and Winnings (20,000 from PCSO winnings)-- 100,000 How much is the final withholding taxes on passive income?

P53,500

Question 36 Akamaru Corporation provided the following data assuming that Akamaru Corporation employs a calendar year and is a domestic corporation with assets excluding land exceeding 100M. 2020 2021 Gross income 2,000,000 1,500,000 Net income 100,000 250,000 What is the income tax due for the taxable year 2021?

P60,000

Question 51 Kankuro Corporation has the following data for 2021: Gross income, Phil.-1,000,000 Gross income, USA-500,000 Gross income, China-500,000 Cost of Sales, Phil-500,000 Cost of Sales, USA -100,000 Cost of Sales, China-50,000 Expenses, Phil.-300,000 Expenses, USA-200,000 Expenses, China-100,000 Other income not included above: Dividend from San Miguel Corp.-70,000 (40% of operation in PH) Dividend from Ford Motors, USA-120,000 (40% of operation in PH) Gain on sale of San Miguel shares direct-150,000 Royalties, Phils-50,000 Royalties, USA-100,000 Interest on notes receivable, Phils-60,000 Rent Income, USA-250,000 Rent Income, PH (net of withholding)-95,000 Kankuro Corp also sold a land classified as capital asset for P2,000,000. The cost of the land is P1,000,000 while its Zonal Value is P3,000,000. If Kankuro Corp. is a resident foreign corporation, what is the taxable net income? (Ignore the sale of land)

P860,000

Question 42 Shino Corporation had the following items of income and expenses Gross Receipts P2,000,000 Cost of services, salary of personnel directly engaged in business 1,000,000 Dividends received 50,000 The dividends were received from a domestic corporation. The general and administrative expenses include cost of utilized facilities, the cost of supplies, depreciation of office equipment, and depreciation of equipment used in service of P75,000, P15,000, P30,000, and P40,000 respectively. What amount should be reported as gross income for minimum corporate income tax purpose?

P870,000

Question 35 NFJPIA Corporation paid the following during the year 2022: Interest for late payment of income tax for 2021--6,000 Surcharge and compromise penalty for late payment of income tax for 2021--8,500 Interest on bonds issued by REO Corporation--90,000 Interest on money borrowed by the Corporation from Wency Giron, 70 % owner of REO Corporation--70,000 Interest on preferred stock which in reality is a dividend--20,000 How much is the deductible interest?

P94,000

Question 10 A test applied to gauge the constitutionality of an assailed law in the face of an equal protection challenge

Rational basis test