WABI QUIZLET TAXATION

Which statement is correct?

*A VAT-registered taxpayers must pay VAT on services subject to percentage tax *For purpose of the VAT threshold, both exempt sales and receipts from services subject to percentage tax must be included *Husband and wife are considered separate taxpayers for business tax purposes

Upon receipt of a preliminary assessment notice, the taxpayer must respond within

15 days

Compute the capital gains tax on shares of stock of a domestic corporation.

18,000

A taxpayer's motion for reconsideration may be acted upon by the BIR within

180 days from the filing of the protest

Z Inc., with net income before contribution expense of P1,000,000, made the following contributions during 2020: to government in non-priority activities, P60,000; to foreign charitable institutions P40,000; to accredited non-profit institution, P30,000; and to foreign organization with treaty exemption, P100,000. Compute the deductible contribution expense

180,000

Compute the improperly accumulated earnings tax.

180,200

B Inc. contributed P500,000 for its pension fund inclusive of P200,000 funding of current service cost. How much is the deductible pension expense?

230,000

Donor's tax is paid within

30 days after every donation

The accountant of Triniville Corporation provides for an allowance against unrecoverable accounts equivalent to 3% of Trinville's total receivables. The allowance for bad debts had a balance of P45,000 and P50,000 at the start and end of the year, respectively, while P30,000 of previous accounts were actually found to be worthless and were written-off. What is the deduction against gross income for purposes of taxation?

30,000

Bulwagan ng Katotohan Broadcasting Company, a non-vat holder of a franchise to operate a radio and television network reported the following gross receipts (net of any tax): Year Gross Receipts 2018 P9,000,000 2019 12,000,000 The business tax liability in 2019 is

360,000

How much is the income tax payable for the first quarter?

40,000

Flores, a Filipino, died on September 3, 2015 and her gross estate included a property she received on October 13, 2012 as a gift from her uncle who died on September 3, 2014. In computing the vanishing deduction on property received as a gift, the percentage of deduction to be applied on the gift previously taxed will be

60%

How much is the annual income tax payable of the corporation for the year end?

75,000

Booc Company had the following summaries of expenses: Expenses without supporting documents, P200,000; Expenses with supporting documents with withheld CWT, P600,000; Expenses with supporting documents without withheld CWT, 400,000; and Expenses with supporting documents not subject to CWT, P200,000. Determine the amount of deductions.

800,000

Withholding tax is an example of what principle of the sound tax system?

Administrative feasibility

Proceeds of life insurance included in the taxable gross estate

Amount receivable by a beneficiary revocably designated in the insurance policy

Which is not a legislative act?

Assessment of the tax

Tax rulings are issued by the

Commissioner of Internal Revenue

The seizure of personal property is

Distraint

Which of the following scenario will still require an adjustment return from the employee even if the employers correctly withheld the tax on their compensation payments?

Employees had successive employers during the year The employee earned income from the other sources Employee has concurrent employment

Juan owns shares of stock of domestic corporations which are actively traded in the local stock exchange. Due to unstable prices in the stock exchange, he decided to sell the shares in The data of which are as follows: Selling Price Cost Gain(Loss) MVUS Corp. P230,000 P220,000 P10,000 ABB Corp. P360,000 P320,000 P40,000 The sale is:

Exempt from income tax but subject to stock transaction tax of P3,540

An example of intangible personal property without the Philippines is

Foreign shares, certificate of stocks are kept in the Philippines

An employee who earned income from other sources shall use which annual return?

Form 1700

Which is a source of tax credit against the tax due under Form 1701

Form 1701Q Form 2307 Form 2316

Which of the following will not result to capital gains or losses?

Gains or losses from sale of office equipment

Not part of decedent's interest

Income accrued after death of the decedent.

Sale of real property by a real estate dealer, the initial payments of which do not exceed twenty-five percent (25%) of the gross selling price in the year of sale

Initial payments

An assessment made without the benefit of a complete or partial audit

Jeopardy assessment

The seizure of real property is

Levy

Which corporate taxpayer is not subject to regular tax?

Non-resident Foreign Corporation

Which of the following decedents is taxable on properties located within the Philippines only?

Non-resident aliens

Medical expenses totaled P1,500,000 of which 50% was incurred more than one year prior to the death of the decedent. How much medical expense is claimable?

None

Which is not application of a principle of a sound tax system?

None of these

Compute the income tax due.

Not given

Lolo Sot, a senior citizen went to Jollibee to treat his 4 grandchildren on account of his retirement. They consumed food and beverages with gross amount of P1,120, inclusive of VAT. How much is amount to be paid by Lolo Sot?

P1,056

Mr. Sagales donated his shares of stocks to his sister Mira. The financial statements of the company showed a book value of P50 per share and par value of P25 per share. However, if the assets are revalued, the book value would be P75 per share. Compute Donor's tax if the total shares of stocks donated is 10,000 shares.

P15,000

Virgin Corporation, a closely held corporation offered for the first time its own shares of stock at par of P20 per share. The corporation's authorized capital stock is P5,000,000, with a P2,000,000 outstanding capital stock before the IPO. The gross receipts at its initial public offering was P600,000. The percentage tax for the initial public offering is:

P24,000

Kalibo Company purchased a residential unit for P3,000,000 and transferred ownership to its supervisory employee. The property has a zonal value of P3,500,000

P3,500,000

The gross estate if the decedent was a non-resident alien (with reciprocity)

P3,700,000

In 2020, Mr. Guerero donated a condominium unit with a value of P4,000,000 to his first cousin, Mr. Alfonso. Compute Net gift subject to tax.

P3,750,000

The following relates to a taxpayer: Interest expense, P400,000; and Interest income - time deposit, P100,000. Compute the deductible interest expense.

P367,000

Mr. Sagales donated his shares of stocks to his sister Mira. Information from the Philippine Stock Exchange at the time of donation showed the following: opening price P100; Highest price P150; Closing price is P120. The financial statements of the company showed a book value of P50 per share. Compute Donor's tax if the total shares of stocks donated is 10,000 shares.

P45,000

The following sales and purchases were taken from the books of accounts of a VAT taxpayer: April May June Sales 625,000 400,000 600,000 Purchases 400,000 420,000 200,000 What is the VAT payable in June?

P45,600

Tolosa Company paid or furnished the following in behalf of a supervisory employee for the quarter ended March 2016: Membership dues in golf course P10,000 One-year P200,000 interest free loan due December 2016 Free vacation sponsored by Tolosa 12,000 Compute the monetary value.

P46,000

Ofelia died leaving the following properties: Condominium unit, Manila..............P3,000,000 House, Australia...............................P 2,500,000 Car, Philippines.................................P700,000 Appliances, Australia.........................P650,000 Shares of stock, domestic corp..........P350,000 Shares of stock, foreign corp.............P225,000 The gross estate if the decedent was a resident citizen

P7,425,000

Included in the estate is a Family Home valued at P1,500,000. If the said Family Home is owned in common by the decedent and his surviving spouse, how much can be claimed as a deduction to gross estate?

P750,000

Hinete has the following winnings (losses) during the year: Cockfighting P90,000 Philippine Charity Sweepstakes 2,000,000 Lotto (PAGCOR) 1,000,000 Horseracing winnings 100,000 Cost of tickets, P1,000 pertains to winning tickets ( 30,000) Billiard losses (400,000) Casino losses (300,000) The business tax on winnings is

P9,900

Which of the following government-owned and controlled corporations is subject to income tax?

PCSO

Which is an incorrect statement?

The capital gains tax on the disposition of capitol stock presumes the existence of gain on the sales transaction.

In cases where a lessor in 2018 taxable year has several residential units for lease, some are leased out for a monthly rental per unit not exceeding P15,000 while others are leased out for more than P15,000 per unit, his tax liability will be:

The gross receipts from rentals not exceeding P15,000 per month per unit shall be exempt from vat regardless of the aggregate annual gross receipts

Rosal Corporation had the following sales in the past 12-month period: Home office sales 2,000,000 Branch 1 sales 1,200,000 Branch 2 sales 1,000,000 Total company sales 4,200,000 Which is correct?

The home office and branches shall all pay VAT.

Which is not a requisite of exemption of a retirement benefit plan?

The retiree must be a senior citizen.

A taxpayer had the following sales or receipts in the past 12 months: Exempt sales 1,500,000 Services subject to percentage tax 500,000 Other sales 1,200,000 Total 3,200,000 Which is correct?

The taxpayer is subject to percentage tax on taxable sales other than exempt sales.

If the owner of the property decided to directly obtain fire insurance from a non-resident foreign insurance company, which of the following statements is correct?

The transaction is subject to 5% premiums tax payable by the owner of the property.

What is the primary purpose of taxation?

To raise revenue

To freeze bank accounts and interests, the government shall issue a

Warrant of garnishment

The following are the national taxes collected by the Bureau of Internal Revenue, except:

Withholding Tax

Termination benefits are exempt from income tax provided that the reason for termination is

beyond the employee's control

Must have been incurred after death to be deductible?

casualty losses

Constructive distraint is least likely to be made on a property of a taxpayer who is

changing business address with due notice given to the BIR

Philippine tax laws are, by nature,

civil

Corporations are allowed to report their income on

either a fiscal year or calendar year

Which will not reduce the distributable estate?

funeral expenses

A person who inherits a personal property by will is called

legatee

Notice of death must be filed

not required

Where a VAT-registered person purchases or imports capital goods prior to January 1, 2022, which are depreciable assets for income tax purposes, the aggregate acquisition cost of which (exclusive of VAT) exceeds P1,000,000 in a calendar month regardless of the acquisition cost of each capital good, shall be claimed as credit

over a period of 60 months unless the estimated life is less than 5 years in which case over the actual number of months comprising the estimated life

A taxpayer who concedes to a BIR assessment must

pay the tax

Donor's tax is not a (an)

progressive tax

Estate tax is not a (an)

progressive tax

The time of valuation of gift is, EXCEPT:

upon the death of the donor