208946383 s C Test Bank Income Taxation

8/20/2019 208946383 s C Test Bank Income Taxation

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TEST BANK-INCOME TAXATION

CHAPTER 1-GENERAL PRINCIPLES AND CONCEPTS OF

TAXATION

A.MULTIPLE CHOICE:

1. THE PROCESS BY WHICH THE SOVEREIGN RAISES INCOME TODEFRAY THE EXPENSES OF THE GOVERNMENT IS CALLED- (RPCPA)

A. SUBSIDYB. TARIFFC. TAXATIOND. TRIBUTE

2. ONE OF THE CHARACTERISTICS OF INTERNAL REVENUE TAX IS

THAT THEY ARE-(RPCPA)

A) CRIMINAL IN NATUREB) PENAL IN NATUREC) POLITICAL IN NATURED) GENERALLY PROSPECTIVE IN APPLICATION

3. IN CASE OF CONFLICT BETWEEN THE TAX LAWS AND GENERALLYACCEPTED ACCOUNTING PRINCIPLES (GAAP)-(RPCPA)

A) BOTH TAX LAWS AND GAAP SHALL BE ENFORCED

B) GAAP SHALL PREVAIL OVER TAX LAWSC) TAX LAWS SHALL PREVAIL OVER GAAPD) THE ISSUE SHALL BE RESOLVED BY THE COURT

4. WHICH OF THE FOLLOWING HAS NO POWER OF TAXATION(RPCPA)

A) PROVINCESB) CITIESC) BARANGAYSD) BARRIOS

!. "SCHEDULAR SYSTEM OF INCOME TAXATION# MEANS(RPCPA)

A) ALL TYPES OF INCOME ARE ADDED TOGETHER TO ARRIVE ATGROSS INCOME

B) SEPARATE GRADUATED RATES ARE IMPOSED ON DIFFERENTTYPES OF INCOME

C) CAPITAL GAINS ARE EXCLUDED IN DETERMINING GROSSINCOME


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D) COMPENSATION INCOME AND BUSINESS$PROFESSIONALINCOME ARE ADDED TOGETHER IN ARRIVING AT GROSSINCOME

%. ONE OF THE FOLLOWING IS A PRIMARY PURPOSE OF TAXATION

A)PROTECTION OF LOCAL INDUSTRIES AGAINST FOREIGNCOMPETITION THROUGH IMPOSITION OF HIGH CUSTOMS DUTIES ONIMPORTED GOODSB)REDUCTION OF INE&UALITIES IN WEALTH AND INCOME BYIMPOSING PROGRESSIVELY HIGHER TAX RATESC) TO SECURE REVENUE FOR THE SUPPORT OF THE GOVERNMENTD) STRENGTHENING OF ANEMIC ENTERPRISES BY GIVING TAXEXEMPTION

'. WHICH OF THE FOLLOWING IS NOT A SECONDARY PURPOSE OF

TAXATION

A) TO SERVE AS EY INSTRUMENT OF SOCIAL CONTROLB) TO EFFECT A MORE E&UITABLE DISTRIB UTION OF WEALTH

AMONG PEOPLEC) TO ACHIEVE SOCIAL AND ECONOMIC STABILITYD) TO RAISE REVENUE TO DEFRAY THE NECESSARY EXPENSE OF

THE GOVERNMENT

. WHICH IS THE BEST ANSWER A TAX REFORM AT ANY GIVEN TIMEUNDERSCORES THE FACT THAT-(RPCPA)

A) TAXATION IS AN INHERENT POWER OF THE STATEB) TAXATION IS ESSENTIALLY A LEGISLATIVE POWER C) TAXATION IS A POWER THAT IS VERY BROADD) THE STATE CAN AND SHOULD ADOPT PROGRESSIVE TAXATION

*. THE LEGISLATIVE BODY CAN IMPOSE A TAX AT ANYAMOUNT UNDERSCORES THE LEGAL DICTUM THAT TAXATION IS + (RPCPA)

A) AN INHERENT POWER OF THE TAXB) A VERY BROAD POWER OF THE STATEC) ESSENTIALLY A LEGISLATIVE POWER D) FOR PUBLIC PURPOSE

1,. ALL OF THE FOLLOWING EXCEPT ONE ARE BASICPRINCIPLES OF THE SOUND TAX SYSTEM

A) FISCAL ADE&UACY


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B) THEORETICAL USTICEC) ADMINISTRATIVE FEASIBILITYD) INHERENT IN SOVEREIGNTY

11. UNDER THIS BASIC PRINCIPLE OF SOUND TAX SYSTEM THE

GOVERNMENT SHOULD NOT INCUR A DEFICIT-(RPCPA)

A) THEORETICAL USTICEB) ADMINISTRATIVE FEASIBILITYC) FISCAL ADE&UACYD) NONE OF THE ABOVE

12. THE FOLLOWING EXCEPT ONE ARE BASIC PRINCIPLES OF A SOUNDTAX SYSTEM

A) IT SHOULD BE CAPABLE OF BEING EFFECTIVELY ENFORCED

B) IT MUST BE PROGRESSIVEC) SOURCES OF REVENUE MUST BE SUFFICIENT TO MEETGOVERNMENT EXPENDITURES AND OTHER PUBLIC NEEDS

D) IT SHOULD BE EXERCISED TO PROMOTE PUBLIC WELFARE

13. WHICH OF THE FOLLOWING IS NOT ONE OF THE CANONS OF ASOUND TAX SYSTEM

A) &UANTIFIABILITYB) E&UALITYC) CERTAINTYD) CONVENIENCE

14. THE POWER OF TAXATION CAN ONLY BE EXERCISED BY THELAWMAING BODY

A) SUBECT TO CONSTITUTIONAL AND INHERENT LIMITATIONSB) E&UALITY OR THEORETICAL USTICEC) LEGISLATIVE IN CHARACTER D) INHERENT IN SOVEREIGNTY

1!. THE PRESIDENT OF THE PHILIPPINES AND THE PRIME MINISTER OFAPAN ENTERED INTO AN EXECUTIVE AGREEMENTIN RESPECT OF ALOAN FACILITY TO THE PHILIPPINES FROM APAN WHEREBY IT WASSTIPULATED THAT INTEREST ON LOANS GRANTED BY PRIVATEAPANESE FINANCIAL INSTITUTIONS IN THE PHILIPPINES SHALL NOT BE SUBECT TO PHILIPPINE INCOME TAXES. WHAT BASICCHARACTERISTIC OF TAXATION HAS BEEN VIOLATED BY THISAGREEMENT


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A) INHERENT LIMITATIONB) THEORETICAL USTICEC) LEGISLATIVE IN CHARACTER D) ADMINISTRATIVE FEASIBILITY

1%. WHICH STATEMENT GIVES THE CORRECT ANSWER THAT AFEASIBILITY STUDY NEEDS OR NEED TO LOO INTO THE TAXES OFDIFFERENT POLITICAL SUBDIVISIONS OF GOVERNMENT WHICHMAY BE ALTERNATIVE SITES OF BUSINESS BECAUSE-(RPCPA)

A) PROVINCES CITIES AND MUNICIPALITIES MUST HAVE UNIFORMTAXES BETWEEN AND AMONG THEMSELVES

B) THE LOCAL TAXES OF A POLITICAL SUBDIVISION NEED NOT BEUNIFORM WITH THE LOCAL TAXES OF ANOTHER POLITICALSUBDIVISION

C) BUSINESSES THAT ARE SUBECT TO NATIONAL TAXES ARE

EXEMPTED FROM LOCAL BUSINESS TAXESD) LOCAL BUSINESS TAXES MAY BE CREDITED AGAINST NATIONALBUSINESS TAXES

1'. STATEMENT 1/THE POWER OF TAXATION IS INHERENT INSOVEREIGNTY BEING ESSENTIAL TO THE EXISTENCE OF EVERYGOVERNMENT. HENCE EVEN IF NOT MENTIONED IN THECONSTITUTION THE STATE CAN STILL EXERCISE THE POWER.

STATEMENT 2/IT IS ESSENTIALLY A LEGISLATIVE FUNCTION. EVENIN THE ABSENCE OF ANY CONSTITUTIONAL PROVISION TAXATIONPOWER FALLS TO CONGRESS AS PART OF THE GENERAL POWER OFLAWMAING.-(RPCPA)

A) FALSE FALSEB) FALSE TRUEC) TRUE TRUED) TRUE FALSE

1. THOSE RESTRICTIONS ON THE EXERCISE OF THE POWER OFTAXATION THAT AREW FOUND IN THE CONSTITUTION OR IMPLIEDFROM ITS PROVISIONS

A) THEORETICAL USTICEB) LEGISLATIVE IN CHARACTER C) INHERENT LIMITATIONSD) CONSTITUTIONAL LIMITATIONS


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1*. WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT-(RPCPA)

A) TAXES MAY BE IMPOSED TO RAISE REVENUE OR TO PROVIDEDISINCENTIVES TO CERTAIN ACTIVITIES WITHIN THE STATE

B) THE STATE CAN HAVE THE POWER OF TAXATION EVEN IF THE

CONSTITUTION DOES NOT NECESSARILY GIVE IT THE POWER TOTAXC) FOR THE EXERCISE OF THE POWER OF TAXATION THE STATE CAN

TAX ANYTHING AT ANY TIMED) THE POWER OF TAXATION IN THE PHILIPPINE CONSTITUTION ARE

GRANTS OF POWER AND NOT LIMITATIONS ON TAXING POWERS

2,. ONE OF THE FOLLOWING IS NOT AN INHERENT LIMITATION ON THEEXERCISE OF THE POWER OF TAXATION-

A) INTERNATIONAL COMITY

B) DOUBLE TAXATIONC) NON-DELEGATION OF THE LEGISLATIVE POWER TO TAXD) TERRITORIALITY

21. THE CITY COUNCIL PASSED AN ORDINANCE IMPOSING ANOCCUPATION TAX ON AN AIRCONDITIONING TECHNICIAN. CONDE ISTHE ONLY PERSON WITH SUCH OCCUPATION IN THE CITY. HECHALLENGED THE VALIDITY OF THE ORDINANCE AS BEINGDISCRIMINATORY SINCE HE IS THE ONLY ONE ADVERSELYAFFECTED.

A) THE CONTENTION OF CONDE IS TENABLEB) THE ORDINANCE IS UNCONSTITUTIONAL BECAUSE CONDE IS

DENIED OF HIS RIGHT TO E&UAL PROTECTION OF LAWC) THE CONTENTION OF CONDE IS NOT USTIFIED BECAUSE THE

RULE ON UNIFORMITY IS NOT VIOLATED CONSIDERING THATTHE ORDINANCE WOULD ALSO IMPOSE ON ALLAIRCONDITIONING TECHNICIAN WHO MAY COME WITHIN THEURISDICTION OF THE CITY

D) THE ISSUE ON VALIDITY OR INVALIDITY OF THE ORDINANCESHOULD BE SET ASIDE

22. TREATING PERSONS WHO ARE SIMILARLY SITUATED IN THE SAMEMANNER-

A) UNIFORMITY OF TAXATIONB) E&UALITY OF TAXATIONC) DUE PROCESS OF LAWD) NON-DELEGATION OF LEGISLATIVE POWER


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23. WHICH OF THE FOLLOWING IS VIOLATIVE OF THE UNIFORMITYRULE IN TAXATION

A) DIFFERENT TAX RATES ON BOARDING STABLES FORRACEHORSES AND BOARDING HORSES THAT ARE NOT FORRACING

B) WHOLESALE DEALERS IN OIL ARE SUBECT TO OCCUPATIONTAX WHILE WHOLESALE DEALERS IN OTHER ARTICLES SCU ASSUGAR BACON COAL IRON AND OTHER THINGS ARE NOT SOSUBECT

C) A ROAD USERS0 TAX IMPOSED ON ALL MOTOR VEHICLESREGISTERED AND OPERATING IN THE CITY OF MANILA BUTDOES NOT SUBECT VEHICLES NOT REGISTERED THEREIN BUT

ALSO OPERATING TEMPORARILY IN SAID CITYD) A TAX OF P2 PER S&M OR FRACTION THEREOF IS IMPSED ONEVERY BILLBOARD OR SIGN ANYWHERE IN THE COUNTRY

24. THE LUNG CENTER OF THE PHILIPPINES A CHARITABLEINSTITUTION IS ERECTED IN THE MIDDLE OF A 12-HECTARE LOT/

I. A BIG SPACE AT ITS GROUND FLOOR IS BEING LEASED TOPRIVATE PARTIES FOR CANTEEN AND SMALL STORE SPACESAND TO MEDICAL OR PROFESSIONAL PRACTITIONERS WHOUSE THE SAME AS THEIR PRIVATE CLINICS FOR THEIRPATIENTS WHOM THEY CHARGE FOR THEIR PROFESSIONALFEES.

II. THE REST OF THE PORTIONS OF THE BUILDING ARE USED FORITS PATIENTS WHETHER PAYING OR NON-PAYING

III. ALMOST OF THE ENTIRE AREA OF THE LOT ON THE LEFTSIDE OF THE BUILDING IS VACANT AND IDLE

IV. A BIG PORTION ON THE RIGHT SIDE IS BEING LEASED FORCOMMERCIAL PURPOSES TO A PRIVATE ENTERPRISE NOWNAS THE ELLIPTICAL ORCHIDS GARDEN CENTER

WHICH PORTION IS SUBECT TO REAL PROPERTY TAX

A) I ONLYB) I AND IIC) III AND IVD) I III AND IV


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2!. STATEMENT 1/THE CONSTITUTIONAL EXEMPTION ON INCOMETAXES PROPERTY TAXES AND CUSTOMS DUTIES IS ALLOWED ON NON-STOC NON-PROFIT EDUCATIONAL INSTITUTIONS ONLY.

STATEMENT 2/ A BUILDING BEING LEASED BY ITS OWNER TO A PRIVATE

EDUCATIONAL INSTITUTION FOR USE AS CLASSROOMS IS EXEMPT FROMPROPERTY YAX

STATEMENT 3/ INCOME OF A NON-STOC NON-PROFIT EDUCATIONALINSTITUTION RUN BY THE ARCHDIOCESE IS EXMEPT FROM TAX PROVIDEDTHAT INCOMES ARE ACTUALLY DIRECTLY AND EXCLUSIVELY USED FOREDUCATIONAL PURPOSES

WHICH OF THE STATEMENTS ARE CORRECT

A) STATEMENT 1 ONLY

B) STATEMENTS 1 AND 2C) STATEMENT 2 ONLYD) ALL OF THEM

2%. WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT-(RPCPA)

A) AN INHERENT LIMITATION OF TAXATION MAY BE DISREGARDED BYTHE APPLICATION OF A CONSTITUTIONAL LIMITATION

B) THE PROPERTY OF AN EDUCATIONAL INSTITUTION OPERATED BY ARELIGIOUS ORDER IS EXEMPT FROM PROPERTY TAX BUT ITSINCOME IS SUBECT TO INCOME TAX

C) THE PROHIBITION OF DELEGATION BY THE STATE OF THE POWER OFTAXATION WILL STILL ALLOW THE BIR TO MODIFY THE RULES ONTIME FOR FILING OF RETURNS AND PAYMENT OF TAXES

D) THE POWER OF TAXATION IS SHARED BY THE LEGISLATIVE ANDEXECUTIVE DEPARTMENTS OF GOVERNMENT

2'. ST. BARNABAS COLLEGE (SBC) IS A NON-STOC NON-PROFIT

EDUCATIONAL INSTITUTION. IT OWNS A !-HECTARE LOT OFWHICH IS BEING USED AS ITS SCHOOL CAMPUS WHILE THE OTHERHALF IS VACANT. TO COPE WITH THE INCREASING OPERATINGCOSTS AND TO UPGRADE ITS FACILITIES SBC PLANS TO DO THEFOLLOWING EFFECTIVE ANUARY 1 2,,% 1). RENT OUT TO AMARETING FIRM THE VACANT PORTION OF THE LAND 2)INCREASE TUITION FEES BY 1, IN ACCORDANCE WITHGOVERNMENT REGULATIONS.3)IMPORT 2, SETS OF COMPUTERSFOR USE IN ITS COMPUTER COURSES.


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WHICH OF THE FOLLOWING &UESTIONS IS ANSWERABLE BY "YES.#

A) IS SBC SUBECT TO REAL ESTATE TAX ON THE PORTION TOBE RENTED OUT TO A BUSINESS ESTABLISHMENT

B) WILL IT BE EXEMPT FROM INCOME TAX ON ITS RENTAL TO

THE MARETING FIRMC) WILL THE INCREASE IN TUITION FEES BE SUBECT TO INCOMETAX IF IT RESULTS TO NET INCOME FROM SCHOOLOPERATIONS

D) WILL IT BE SUBECT TO CUSTOMS DUTIES ON THEIMPORTATION OF THE COMPUTERS

2. THE &UE5ON SCHOOL OF BUSINESS AND ARTS A PROPRIETARYEDUCATIONAL INSTITUTION WHICH IS OFFERING PRIMARYSECONDARY AND TERTIARY EDUCATIONB IS REGISTERED ANDACCREDITED BY DEPED AND CHED.

WHICH OF THE FOLLOWING IS EXEMPT FROM TAX WHAT IND OFTAX

A) THE IMPORTATION OF LABORATORY E&UIPMENTS-FROMCUSTOMS DUTIES

B) THE SCHOOL BEING RENTED BY THE SCHOOL-FROM REALPROPERTY TAX

C) A PORTION OF THE SCHOOL BUILDING BEING LEASED TO AFASTFOOD CHAIN-FROM REAL PROPERTY TAX

D) THE INCOME FROM OPERATION-FROM INCOME TAX

2*. IN RELATION TO NO. 2 ABOVE ASSUMING THAT THESCHOOL IS A NON-STOC NON-PROFIT EDUCATIONALINSTITUTION WHICH OF THE FOLLOWING IS SUBECTTO TAX WHAT IND OF TAX

A) THE SCHOOL BUILDING OWNED BY THE SCHOOL-FROMREAL ESTATE TAX

B) THE SCHOOL BUILDING BEING RENTED BY THE SCHOOL-FROM REAL ESTATE TAX

C) A PORTION OF THE SCHOOL BUILDING BEING LEASED TO AFASTFOOD CHAIN-FROM REAL PROPERTY TAX

D) THE INCOME FROM OPERATION-FROM INCOME TAX

3,. THE MUNICIPALITY OF SAN FRANCISCO HAS A 1,-HECTARE CEMETERY OF 4 DIFFRRENT CEMETERIES WHICHARE OWNED BY DIFFERENT ENTITIES. WHICH OF THEFOLLOWING IS SUBECT TO REAL ESTATE TAX


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A) CEMENTERIO MUNICIPAL DEL SAN FRANCISCO-A GOV0TCEMETERY OWNED BY THE MUNICIPALITY WHICH WASESTABLISHED FOR THE PURPOSE OF USING IT AS BURIALGROUND OF THE PAUPERS OF SAN FRANCISCO

B) SAN FRANCISCO CATHOLIC CEMETERY-OWNED BY THECATHOLIC CHURCH PAYMENTS ARE REMITTED TO THECATHOLIC CHURCH AND FOR THE IMPROVEMENT OF THECEMETERY

C) LAST TRIP MEMORIAL PAR-OWNED BY A CORPOR!ATIONWHERE DIVIDENDS ARE DISTRIBUTED TO THE SHAREHOLDERSAT THE END OF THE YEAR

D) &UITA-&UITA MEMORIAL PAR-OWNED BY AN ASSOCIATIONCONSISTING OF 1,, DIFFERENT FAMILIES EACH FAMILY OWNSSEVERAL S&UARE METERS OF LOT NOT A SINGLE PORTION ISHELD FOR SALE TO EITHER MEMBER OR NON-MEMBERS OF

THE ASSOCIATION

31.ALL APPROPRIATIONS REVENUE OR TARIFF BILLS BILLSAUTHORI5ING INCREASE OF PUBLIC DEBT BILLS OF LOCALAPPLICATION AND BILLS SHALL ORIGINATE EXCLUSIVELY IN THE-(RPCPA)

A) OFFICE OF THE PRESIDENTB) HOUSE OF REPRESENTATIVESC) SENATED) SUPREME COURT

32 WHICH STATEMENT IS WRONG TAX LAWS-(RPCPA)

A) MUST ORIGINATE FROM THE HOUSE OF REPRESENTATIVES AND ONWHICH SAME BILL THE SENATE MAY PROPOSE AMENDMENTS

B) MAY ORIGINATE FROM THE SENATE AND ON WHICH SAME BILL THEHOUSE OF REPRESENTATIVES MAY PROPOSE AMENDMENTS

C) MAY HAVE A HOUSE VERSION AND SENATE VERSION APPROVEDSEPARATELY

D) MAY BE RECOMMENDED BY THE PRESIDENT TO CONGFRESS

33.CONGRESSMAN ERIN TANADA OF &UE5ON AND SENATOR UANPONCE ENRILE SPONSORED A BILL IN THE HOUSE OFREPRESENTATIVES AND THE SENATE RESPECTIVELY INCREASING THEPERSONAL EXEMPTIONS OF INDIVIDUAL TAXPAYERS AS WELL ASGRANTING TAX EXEMPTION TO MINIMUM WAGE EARNERS. WHICH OFTHE FOLLOWING IS CORRECT


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A) THE SENATE BILL SHOULD BE DISCUSSED AHEAD OF THE HOUSEBILL

B) THE SENATE AND HOUSE BILLS MAY BE DISCUSSED AT THE SAMETIME IN BOTH HOUSES

C) THE HOUSE BILL SHOULD BE DISCUSSED AHEAD NOF THE SENATE

BILLD) NO PRIORITY EACH BILL CAN BE DISCUSSED AHEAD OF THE OTHER

34.NO LAW GRANTING ANY TAX EXEMPTION SHALL BE PASSED WITHOUTTHE CONCURRENCE OF-(RPCPA)

A) MAORITY OF ALL MEMBERS OF THE CONGRESSB) 2$3 VOTE OF ALL MEMBERS OF THE CONGRESSC) 6 VOTE OF ALL MEMBERS OF THE CONGRESSD) UNANIMOUS VOTE OF ALL MEMBERS OF THE CONGRESS

3!.WHICH OF THE FOLLOWING STATEMENTS IS INCORRECT

A) NO PERSON SHALL BE IMPRISONED FOR NON-PAYMENT OF DEBT OR NON-PAYMENT OF TAXES

B) THE PASSAGE OF LAWS GRANTING TAX EXEMPTIONS RE&UIRES THECONCURRENCE BY A MAORITY OF ALL THE MEMBERS OFCONGRESS

C) THE SUPREME COURT0S URISDICTION OVER TAX CASES CAN NOTBE IMPAIRED

D) THE REVENUES AND ASSETS OF NON-STOC NON-PROFITEDUCATIONAL INSTITUTIONS AND DONATIONS FFOR EDUCATIONALPURPOSES ARE EXEMPTED FROM TAXES AND DUTIES

3%.THEY RESTRICT THE EXERCISE OF THE POWER OF TAXATIONALTHOUGH THEY ARE NOT EMBODIED IN THE CONSTITUTION

A) THEORETICAL USTICEB) LEGISLATIVE IN CHARACTER C) INHERENT LIMITATIONSD) CONSTUTIONAL LIMITATIONS

3'. A TAX MUST BE IMPOSED FOR PUBLIC PURPOSE. WHICH OF THEFOLLOWING IS NOT A PUBLIC PURPOSE-(RPCPA)

A) NATIONAL DEFENSEB) PUBLIC EDUCATIONC) IMPROVEMENT OF SUGAR INDUSTRYD) NONE OF THE ABOVE


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3. A FUNDAMENTAL RULE IN TAXATION IS THAT "THE PROPERTY OFONE COUNTRY MAY NOT BE TAXED BY ANOTHER COUNTRY#. THIS ISNOWN AS-(RPCPA)

A) INTERNATIONAL LAW

B) INTERNATIONAL COMITYC) RECIPROCITYD) INTERNATIONAL INHIBITION

3*.&UESTION 1/ CAN THE STATE TAX THE ARMED FORCES OF THEPHILIPPINES

&UESTION 2/ ARE GOVERNMENT-OWNED AND CONTROLLEDCORPORATIONS SUBECT TO TAX

A)YES NO

B)YES YESC)NO YESD)NO NO

4, DIPLOMATIC OFFICIALS SUCH AS HEADS OF STATES ANDAMBASSADORS ARE EXEMPT FROM TAXES AND DUTIES BECAUSE OF

A) INTERNATIONAL COMITYB) RECIPROCITY PROVISIONSC) PRINCIPLE OF TERRITORIALITYD) EXEMPTION IN THE TAX CODE

41. DEALS WITH THE PROVISION OF THE LAW WHICH DETERMINES THEPERSON OR PROPERTY TO BE TAXED THE SUM OR SUMS TO BE RAISEDTHE RATE THEREOF AND THE TIME AND MANNER OF LEVYINGMRECEIVING AND COLLECTING OF TAXES

A) COLLECTIONB) PAYMENTC) ENFORCED CONTRIBUTIOND) LEVY

42. CONSTITUTED OF THE PROVISIONS OF LAW WHICH PRESCRIBE THEMANNER OF ENFORCING THE OBLIGATION ON THE PART OF THOSE TAXEDTO PAY THE DEMAND THUS CREATED

A) COLLECTIONB) PROPORTIONATE IN CHARACTER C) ENFORCED CONTRIBUTIOND) LEVY


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43.THE AMOUNT RE&UIRED IS DICTATED BY THE NEEDS OF THEGOVERNMENT-(RPCPA)

A) LICENSE FEEB) TAX

C) TOLLD) TARIFF

44. ONE OF THE CHARACTERISTICS OF A TAX IS

A) A TAX IS A PECUNIARY BURDEN AND THE LAW MAY NOT ALLOWPAYMENT IN IND

B) IT IS DEPENDENT UPON THE WILL OR CONTRACTUAL ASSENTEXPRESS OR IMPLIED OF THE PERSON TAXED

C) IT IS LEVIED BY THE STATE BY VIRTUE OF ITS SOVEREIGNTYD) IT IS COLLECTED FOR PUBLIC AND PRIV ATE PURPOSE

4!. ONE OF THE CHARACTERISTICS OF A TAX IS THAT-(RPCPA)

A) IT IS GENERALLY BASED ON CONTRACTB) IT IS GENERALLY PAYABLE IN MONEYC) IT IS GENERALLY ASSIGNABLED) OPTIONAL

4%. WHICH IS NOT AN ESSENTIAL CHARACTERISTIC OF TAX-(RPCPA)

A) UNLIMITED AS TO AMOUNTB) PAYABLE IN MONEYC) PROPORTIONATE IN CHARACTER D) REGULAR IN PAYMENT

4'. NO PERSON SHALL BE IMPRISONED FOR NON-PAYMENT OF-(RPCPA)

A) PROPERTY TAXB) EXCISE TAXC) POLL TAXD) INCOME TAX

4. AN EXAMPLE OF A PROPERTY TAX IS

A) ADDITIONAL COMMUNITY TAX ON INCOME OF REAL PROPERTIESB) REAL ESTATE TAX ON REAL PROPERTIESC) ESTATE TAX ON INHERITED PERSONAL AS WELL AS REAL

PROPERTIESD) DONOR0S TAX ON DONATION OF PROPERTY


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4*. WHICH OF THE FOLLOWING IS NOT AN EXAMPLE OF EXCISE TAX

A) TRANSFER TAXB) SALES TAXC) REAL PROPERTY TAX

D) INCOME TAX

!,. SHARON A CPA HAS UST OBTAINED HER CPA LICENSE. BEFORE SHECAN LAWFULLY PURSUE HER OCCUPATION SHE SHOULD PAY-(RPCPA)

A) PRIVILEGE TAX(PTR)B) PERCENTAGE TAXC) CPA0S INCOME TAXD) VALUE-ADDED TAX

!1. A TAX THAT IS IMPOSED UPON A PERSON WHO IS DIRECTLY BOUNDTO PAY IT-

A) DIRECT TAXB) INDIRECT TAXC) EXCISE TAXD) POLL TAX

!2. ONE IS NOT A DIRECT TAX-(RPCPA)

A) IMMIGRATION TAXB) TRANSFER TAXC) INCOME TAXD) CONTRACTOR0S TAX

!3.THE BASIC COMMUNITY TAX OF P!.,, OF AN INDIVIDUAL IS A(AN)-7

A) PROPERTY TAXB) DIRECT TAXC) NATIONAL TAXD) AD VALOREM TAX

!4. STATEMENT 1/ THE VALUE-ADDED TAX IS A PROPERTRY TAX

STATEMENT 2/ THE ESTATE TAX IS A DIRECT TAX-(RPCPA)

A) THE 2 STATEMENTS ARE CORRECTB) THE 2 STATEMENTS ARE WRONGC) STATEMENT 1 IS CORRECT STATEMENT 2 IS WRONGD) STATEMENT 1 IS WRONG STATEMENT 2 IS CORRECT


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!!.FORMS PART OF THE PURCHASE PRICE OF THE COMMODITY ORSERVICE AND PASSED ON TO CUSTOMERS

A) DIRECT TAXB) INDIRECT TAX

C) PROPERTY TAXD) NONE OF THE ABOVE

!%. A TAX ON BUSINESS IS-(RPCPA)

A) DIRECT TAXB) INDIRECT TAXC) PROPERTY TAXD) NONE OF THE ABOVE

!'. FELIX IS A MINING OPERATOR. HIS MINERAL LANDS ARE NOT COVERED

BY ANY LEASE CONTRACT. THE TAX FELIX HAS TO PAY BASED ON THEACTUAL VALUE OF THE GROSS OUTPUT OR MINERAL PRODUCTSEXTRACTED IS-(RPCPA)

A) MINING TAXB) ROYALTIESC) RENTALD) AD VALOREM TAX

!.TAX THAT IS IMPOSED SOLELY TO RAISE REVENUE FOR GOV0TEXPENDITURES

A) REVENUE TAXB) REGULATORY TAXC) SPECIFIC TAXD) AD VALOREM TAX

!*.TAX LEVIED FOR PARTICULAR OR SPECIFIC PURPOSE IRRESPECTIVEOF WHETHER REVENUE IS ACTUALLY RAISED OR NOT

A) REVENUE TAXB) REGULATORY TAXC) SPECIFIC TAXD) AD VALOREM TAX

%,..TAX IMPOSED BY THE NATIONAL GOVERNMENT AND IS EFFECTIVEWITHIN THE ENTIRE URISDICTION THEREOF

A) NATIONAL TAXB) LOCAL TAX


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C) PROPORTIONAL TAXD) GENERAL TAX

%1. TAXES IMPOSED BY A POLITICAL SUBDIVISION OF THE STATE ANDIS EFFECTIVE ONLY WITHIN THE TERRITORIAL BOUNDARIES

THEREOF

A) NATIONAL TAXB) LOCAL TAXC) PROGRESSIVE TAXD) REGRESSIVE TAX

%2.THE FOLLOWING ARE INDS OF TAXES AS TO GRDUATION. WHICH ONEIS NOT-(RPCPA)

A) DIGRESSIVE

B) UNIFORMC) REGRESSIVED) PROGRESSIVE

%3.THE POWER OF THE STATE OR THOSE TO WHOM THE POWER HAS BEENDELEGATED TO TAE PRIVATE PROPERTY FOR PUBLIC USE UPON PAYINGTO THE OWNER A UST COMPENSATION

A) POWER OF EMINENT DOMAINB) POLICE POWER C) POWER OF TAXATIOND) PEOPLE POWER

%4.THERE CAN BE CLASSIFICATION OF THE SUBECT MATTER BEINGRE&UIRED TO SHOULDER THE BURDEN. WHICH IS THE EXCEPTION-(RPCPA)

A) TAXB) LICENSE FEEC) TOLLD) EMINENT DOMAIN

%!.THE POWER OF THE STATE TO ENACT SUCH LAWS IN RELATION TOPERSONS AND PROPERTY AS MAY PROMOTE PUBLIC HEALTH PUBLICMORALS PUBLIC SAFETY AND THE GENERAL WELFARE OF THE PEOPLE7

A) POWER OF EMINENT DOMAINB) POLICE POWER C) POWER OF TAXATIOND) PEOPLE POWER


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%%. THE FOLLOWING ARE SIMILARITIES OF THE INHERENT POWER OFTAXATION EMINENT DOMAIN AND POLICE POWER EXCEPT ONE-(RPCPA)

A) ARE NECESSARY ATTRIBUTES OF SOVEREIGNTYB) INTERFERES WITH PRIVATE RIGHTS AND PROPERTY

C) AFFECTS ALL PERSONS OR THE PUBLICD) ARE LEGISLATIVE IN THEIR IMPLEMENTATION

%'. WHICH STATEMENT REFERS TO POLICE POWER AS DISTINGUISHEDFROM TAXATION-(RPCPA)

A) IT CAN ONLY BE IMPOSED ON SPECIFIC PROPERTY OR PROPERTIESB) THE AMOUNT IMPOSED DEPENDS ON WHETHER THE ACTIVITY IS

USEFUL OR NOTC) IT INVOLVES THE TAING OF PROPERTY BY THE GOVERNMENTD) THE AMOUNT IMPOSED HAS NO LIMIT

%.POLICE POWER AS DISTINGUISHED FROM TAXATION

A) UST COMPENSATION IS RECEIVED BY THE OWNER OF THEPROPERTY

B) MAYBE EXERCISED BY PRIVATE INDIVIDUALSC) SUPERIOR TO THE NON-IMPAIRMENT CLAUSE OF THE

CONSTITUTIOND) PROPERTY IS TAEN BY THE GOV0T FOR PUBLIC PURPOSE

%* AFTER HAVING BEEN INFORMED THAT SOME MASSAGE PARLORS AREBEING USED AS FRONTS FOR PROSTITUTION THE SANGGUNIANGPANLUNGSOD OF MANILA PASSED A TAX ORDINANCE SUBECTINGMASSAGE PARLORS WITHIN ITS URISDICTION TO SUCH ONEROUS TAXESTHAT LEAVE THEM NO OTHER ALTERNATIVE BUT TO STOP OPERATING.THE PASSAGE OF THE ORDINANCE IS A VALID EXERCISE OF-

A) TAXATIONB) EMINENT DOMAINC) POLICE POWER D) POLICE POWER AND POWER OF TAXATION

',. STATEMENT 1/ THE CONGRESS CAN ENACT TAX LAWS EVEN IN THEABSENCE OF A CONSTITUTIONAL PROVISION GRANTING SAID BODY THEPOWER TO TAX.

STATEMENT 2/ A TAX MAY BE VALIDLY IMPOSED IN THE EXERCISE OFPOLICE POWER AND NOT THE POWER TO TAX.


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A) FALSE FALSEB) FALSE TRUEC) TRUE TRUED) TRUE FALSE

'1. WHICH OF THE FOLLOWING MAY NOT RAISE MONEY FOR THEGOVERNMENT-(RPCPA)

A) POWER OF TAXATIONB) POLICE POWER C) POWER OF EMINENT DOMAIND) PRIVATI5ATION OF GOVERNMENT0S CAPITAL ASSETS

'2. IN THIS POWER OF THE STATE THE PERSON WHO IS PARTING WITH HISMONEY OR PROPERTY IS PRESUMED TO RECEIVE A BENEFIT-(RPCPA)

A) TAXATIONB) POLICE POWER C) EMINENT DOMAIND) FORFEITURE POWER

'3. WHICH OF THE INHERENT POWERS OF THE GOVERNMENT IS INFERIORTO THE NON-IMPAIRMENT CLAUSE OF THE CONSTITUTION

A) TAXATIONB) POLICE POWER C) EMINENT DOMAIND) NONE

'4. TAX IS DISTINGUISHED FROM LICENSE FEE-(RPCPA)

A) NON-PAYMENT DOES NOT NECESSARILY RENDER THE BUSINESSILLEGAL

B) A REGULATORY MEASUREC) IMPOSED IN THE EXERCISE OF POLICE POWER D) LIMITED TO COVER COST OF OBLIGATION

'!. THE DISTINCTION OF A TAX FROM PERMIT OR LICENSE FEE IS THAT ATAX IS-(RPCPA)

A) IMPOSED FOR REGULATIONB) ONE WHICH INVOLVES EXERCISE OF POLICE POWER C) ONE IN WHICH THERE IS GENERALLY NO LIMIT ON THE AMOUNT

THAT MAY BE IMPOSEDD) ANSWER IS NOT GIVEN


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'%. WHICH OF THE FOLLOWING TERMS DESCRIBES THIS STATEMENT"THAT THE STATE HAS COMPLETE DISCRETION ON THE AMOUNT TO BEIMPOSED AFTER DISTINGUISHING BETWEEN A USEFUL AND NON-USEFULACTIVITY#-(RPCPA)

A) TAXB) LICENSE FEEC) TOLLD) CUSTOMS DUTY

''. WHICH OF THE FOLLOWING IS NOT A DISTINCTION OR SIMILARITY OFLICENSE FEE FROM TAX-(RPCPA)

A) IMPOSED NFOR REGULATIONB) INVOLVES EXERCISE OF POLICE POWER C) NON-PAYMENT MAES THE BUSINESS ILLEGAL

D) LEGAL COMPENSATION OR REWARD OF AN OFFICER FOR SERVICES

'. ALL OF THE FOLLOWING EXCEPT ONE ARE CHARACTERISTICS OF ATOLL

A) DEMAND OF PROPRIETORSHIPB) COMPENSATION FOR THE USE OF ANOTHER0S PROPERTYC) MAY BE IMPOSED BY PRIVATE INDIVIDUALSD) LEVIED FOR THE SUPPORT OF THE GOVERNMENT

'*. THIS IS A DEMAND OF OWNERSHIP-(RPCPA)

A) LICENSE FEEB) TAXC) TOLLD) FRANCHISE

,. ONE OF THE FOLLOWING IS NOT A CHARACTERISTIC OF A SPECIALASSESSMENT

A) IT HAS SPECIAL APPLICATION ONLY TO A PARTICULAR TIME ANDPLACE

B) IT IS LEVIED ONLY ON LANDC) MAY BE LEVIED ON BUSINESSD) BASED WHOLLY ON BENEFITS

1. WHICH STATEMENT IS WRONG-(RPCPA)

A) A TAX IS A DEMAND OF SOVEREIGNTYB) A TOLL IS A DEMAND OF OWNERSHIP


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C) A SPECIAL ASSESSMENT IS A TAXD) CUSTOMS DUTY IS A TAX

2.WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF DEBT

A) GENERALLY ARISES FROM CONTRACTB) PAYABLE ONLY IN MONEYC) ASSIGNABLED) IMPRISONMENT IS NOT A SANCTION FOR NON-PAYMENT

3. ALL FUNDS OR INCOME DERIVED BY THE GOVERNMENT FROM ANYOTHER SOURC E

A) TAXB) CUSTOMS DUTYC) REVENUE

D) ORDINARY INCOME

4. IT COMPRISES ALL INDS OF FUNDS INCLUDING TAXES-(RPCPA)

A) LICENSE FEEB) INCOMEC) CUSTOMS DUTYD) REVENUE

!.WHICH OF THE FOLLOWING CONSTITUTE OBECTIONABLE DOUBLETAXATION-(RPCPA)

A) A LICENSE FEE AND A TAX IMPOSED ON THE SAME BUSINESS OROCCUPATION FOR SELLING THE SAME ARTICLES

B) A TAX IMPOSED BOTH ON THE OCCUPATION OF FISHING AND ONFISHPOND OPERATION

C) PERSONS ENGAGED IN LEASING OR SELLING REAL PROPERTY ARESUBECT TO REAL ESTATE DEALERS TAX AND THEIR SALES AREALSO SUBECT TO 12 VAT

D) A TAX OF 1 IS IMPOSED FOR BAN RESERVE DEFICIENCY WHILE APENALTY OF 1$1, OF 1 IS ALSO IMPOSED AS A CONSE&UENCE OFSUCH RESERVE DEFICIENCY

%. WHICH OF THE FOLLOWING IS NOT AN ELEMENT OF DIRECTDUPLICATE TAXATION WHICH IS VIOLATIVE OF THE E&UALPROTECTIONAND UNIFORMITY CLAUSES IN THE CONSTITUTION

A) SAME PROPERTY IS TAXED TWICEB) SAME TAXING AUTHORITYC) SAME AMOUNT


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D) SAME PURPOSE

'. THE FOLLOWING CONSTITUTE DOUBLE TAXATION EXCEPT ONE-(RPCPA)

A) BOTH TAXES ARE IMPOSED IN THE SAME AMOUNTB) BOTH TAXES ARE LEVIED FOR THE SAME PURPOSEC) BOTH TAXES ARE IMPOSED BY THE SAME TAXING AUTHORITYD) BOTH TAXES ARE IMPOSED UPON THE SAME PERSON

. STATEMENT 1/ OUR CONSTITUTION DOES NOT PROHIBIT DOUBLETAXATION

STATEMENT 2/ IF DOUBLE TAXATION OCCURS THE TAXPAYER MAY SEERELIEF UNDER THE UNIFORMITY CLAUSE OR THE E&UAL PROTECTIONGUARANTEE-(RPCPA)

A) CORRECT WRONGB) WRONG CORRECTC) WRONG WRONGD) CORRECT CORRECT

*. YOUR CLIENT OWNS A ROW OF APARTMENTS. HE COMPLAINS TO YOUTHAT HE IS BEING RE&UIRED TO PAY FOUR (4) INDS OF TAXES ON THISLINE OF BUSINESS ALONE. FROM THE LIST GIVEN BY YOUR CLIENTWHICH OF THE FOLLOWING TAXES HAS BEEN WRONGLY IMPOSED ONHIM

A) REAL ESTATE TAX ON THE LAND AND BUILDINGB) VALUE-ADDED TAX ON THE GROSS RECEIPTS FROM RENTC) COMMUNITY TAX BASED ON THE ASSESSED VALUE OF THE

APARTMENT HOUSED) INCOME TAX ON INCOME FROM RENT

*,. ONE OF THE FOLLOWING IS A FALSE STATEMENT ABOUT DOUBLETAXATION. WHICH IS IT

A) THERE IS NO CONSTITUTIONAL PROHIBITION ON DOUBLETAXATION

B) DIRECT DUPLICATE TAXATION IS A VALID DEFENSE AGAINST A TAXMEASURE IF IT IS VIOLATIVE OF THE E&UAL PROTECTION CLAUSE

C) ABSENCE OF ANY OF THE ELEMENTS OF DIRECT DOUBLE TAXATIONMAES IT INDIRECT DUPLICATE TAXATION

D) A 2, FINAL WITHHOLDING TAX ON INTEREST INCOME ON BANDEPOSITS AND A ! GROSS RECEIPTS TAX ON BANS IS A DIRECTDUPLICATE TAXATION


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*1. TRANSFER OF THE TAX BURDEN BY ONE ON WHOM THE TAX ISASSESSED TO ANOTHER

A) SHIFTINGB) CAPITALI5ATION

C) TRANSFORMATIOND) TAX EXEMPTION

*2. WHICH OF THE FOLLOWING IS NOT A SCHEME OF SHIFTING THEINCIDENCE OF TAX BURDEN-(RPCPA)

A) THE MANUFACTURER TRANSFERS THE TAX TO THE CONSUMER BYADDING THE TAX TO THE SELLING PRICE OF THE GOODS SOLD

B) THE PURCHASER ASS FOR A DISCOUNT OR REFUSE TO BUY ATREGULAR PRICE UNLESS IT IS REDUCED BY AN AMOUNT E&UAL TOTHE TAX HE WILL PAY

C) CHANGING THE TERMS OF THE SALE LIE FOB SHIPPING POINT INTHE PHILIPPINES TO FOB DESTINATION ABROAD SO THAT THETITLE PASSES ABROAD INSTEAD OF IN THE PHILIPPINES

D) THE MANUFACTURER TRANSFERS THE SALES TAX TO THEDISTRIBUTOR THEN IN TURN TO THE WHOLESALER TO THERETAILER AND FINALLY TO THE CONSUMER

*3. THE REDUCTION IN THE SELLING PRICE OF INCOME-PRODUCINGPROPERTY BY AN AMOUNT E&UAL TO THE CAPITALI5ED VALUE OFFUTURE TAXES THAT MAY BE PAID BY THE PURCHASER

A) SHIFTINGB) CAPITALI5ATIONC) TRANSFORMATIOND) TAX EXEMPTION

*4. THE METHOD BY WHICH THE MANUFACTURER OR PRODUCER UPONWHOM THE TAX IS IMPOSED PAYS THE TAX AND STRIVES TO RECOVERSUCH EXPENSE THROUGH LOWER PRODUCTION COST WITHOUTSACRIFICING THE &UALITY OF HIS PRODUCT

A) SHIFTINGB) CAPITALI5ATIONC) TRANSFORMATIOND) TAX EXEMPTION

*!. THE GRANT OF IMMUNITY TO PARTICULAR PERSONS OR CORPORATIONOR TO PERSONS OR CORPORATIONS OF A PARTICULAR CLASS FROM A TAXWHICH PERSONS AND CORPORATIONS GENERALLY WITHIN THE SAMETAXING DISTRICT ARE OBLIGED TO PAY


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A) TAX EXEMPTIONB) TAX EVASIONC) TAX AVOIDANCED) TAX AMNESTY

*%. STATEMENT 1/ A BIR RULING ISSUED BY A COMMISSIONER OFINTERNAL REVENUE WHICH GRANTS TAX EXEMPTION WOULD CREATEAPERPETUAL EXEMPTION IN FAVOR OF THE TAXPAYER

STATEMENT 2/ A TAX EXEMPTION MAY BE WITHDRAWN ANYTIME AT THEPLEASURE OF THE TAXING AUTHORITY

WHICH OF THE ABOVE STATEMENTS IS TRUE

A) STATEMENT 1 ONLYB) STATEMENTS 1 AND 2

C) STATEMENT 2 ONLYD) NEITHER OF THEM

*'. IT IS ALSO NOWN AS TAX DODGING

A) TAX EXEMPTIONB) TAX EVASIONC) TAX AVOIDANCED) TRANSFORMATION

*. IT IS ALSO NOWN AS TAX MINIMI5ATION

A) TAX EXEMPTIONB) TAX EVASIONC) TAX AVOIDANCED) TRANSFORMATION

**. WHICH OF THE FOLLOWING STATEMENTS CONSTITUTE TAXAVOIDANCE

A) DELIBERATE FAILURE OF A TAXPAYER TO PAY THE TAXES DUE TOTHE GOVERNMENT

B) CONNOTES FRAUD THROUGH THE USE OF PRETENSES ANDFORBIDDEN DEVICES TO LESSEN OR DEFEAT TAXES

C) PUNISHABLE BY LAWD) MAYBE CONTRARY TO THE INTENT OF THE LEGISLATURE BUT

NEVERTHELESS DO NOT VIOLATE THE LAW


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1,,. WHICH OF THE FOLLOWING FACTS PERTAIN$S TO TAX AVOIDANCE

I.AFTER STUDYING HIS TAX PROBLEMS MATALINO DECIDED TOWITHDRAW HIS BAN DEPOSITS AND TO BUY TAX-EXEMPT SECURITIESII.TUSO WHO WISHES TO AVOID THE PAYMENT OF TAXES ASSESSABLE

ON THE TRANSACTION MADE IT APPEAR ON THE DEED OF SALE THATTHE SELLING PRICE WAS ONLY P2,,,,, ALTHOUGH IT WAS ACTUALLYP3,,,,,III.REFRAINING FROM ENGAGING IN ACTIVITES SUBECT TO TAXIV.ABUSADO INSURANCE CORPORATION SOLD ITS OFFICE BUILDING TOADAN FOR P1,, MILLION WHO IN TURN SOLD THE SAME PROPERTY TODUGONG-BUGHAW INC. FOR P2,, MILLION. THESE 2 TRANSACTIONSWERE EVIDENCED BTY DEEDS OF ABSOLUTE SALE NOTARI5ED ON THESAME DAY BY THE SAME NOTARY PUBLIC.

A) I ONLY

B) I AND III ONLYC) I AND IVD) I III AND IV

1,1. IN CASE OF AMBIGUITY TAX LAWS SHALL BE INTERPRETED

A) STRICTLY AGAINST THE TAXPAYER B) LIBERALLY AGAINST THE POWER C) LIBERALLY IN FAVOR OF THE TAXPAYER D) LIBERALLY IN FAVOR OF THE GOVERNMENT

1,2. IN CASES OF DEDUCTIONS AND EXEMPTIONS ON INCOME TAXRETURNS DOUBTS SHALL BE RESOLVED-(RPCPA)

A) STRICTLY AGAINST THE TAXPAYER B) STRICTLY AGAINST THE GOVERNMENTC) LIBERALLY IN FAVOR OF THE TAXPAYER D) LIBERALLY AGAINST THE GOVERNMENT

1,3. THE FOLLOWING EXCEPT ONE ARE EXCEPTIONS TO THE RULE THATTAX EXEMPTIONS MUST BE STRICTLY CONSTRUED AGAINST THETAXPAYER

A) WHERE THE STATUTE GRANTING THE EXEMPTION PROVIDES FORLIBERAL INTERPRETATION THEREOF

B) IF THE TAXPAYER DOES NOT FALL WITHIN THE PURVIEW OF THEEXCEPTION BY CLEAR LEGISLATIVE INTENT

C) IN CASE OF SPECIAL TAXES RELATING TO SPECIAL CASES ANDAFFECTING ONLY SPECIAL CLASSES OF PERSONS

D) IF EXMPTIONS REFER TO PUBLIC PROPERTY


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1,4. A FRANCHISE CAN BE AMENDED BY-(RPCPA)

A) AN AMENDMENT OF SPECIAL LAW WHICH GRANTED THEFRANCHISE

B) AN AMENDMENT OF A LAW OF GENERAL APPLICATION

C) AN AMENDMENT OF A REVENUE REGULATIOND) AN AMENDMENT OF TAX LAWS

1,!. SOME FRANCHISE HOLDERS WHO ARE PAYING THE FRANCHISE TAXARE BEING RE&UIRED BY AN AMENDATORY LAW TO PAY THE VALUE-ADDED TAX WHILE OTHERS REMAIN SUBECT TO FRANCHISE TAX. WHICHOF THE FOLLOWING CONSTITUTIONAL PROVISION MAES THE LAWUNCONSTITUTIONAL-(RPCPA)

A) NO LAW SHALL BE PASSED IMPAIRING THE OBLIGATION OFCONTRACT

B) THE RULE OF TAXATION SHALL BE UNIFORMC) NO PERSON SHALL BE DEPRIVED OF PROPERTY WITHOUT DUEPROCESS OF LAW

D) NONE OF THE ABOVE

1,%. STATEMENT 1/ THE POINT ON WHICH A TAX IS ORIGINALLY IMPOSEDIS IMPACT OF TAXATION

STATEMENT 2/ AS A RULE TAXES ARE SUBECT TO SET-OFF ORCOMPENSATION

A) TRUE TRUEB) FALSE TRUEC) FALSE FALSED) TRUE FALSE

1,'. WHICH OF THE FOLLOWING IS NOT CONSIDERED AS A STEP INMAING A REVENUE REGULATION EFFECTIVE

A) RECOMMENDATION BY THE COMMISSIONER OF INTERNALREVENUE TO THE SECRETARY OF FINANCE

B) APPROVAL BY THE SECRETARY OF FINANCEC) LEGISLATION BY CONGRESSD) PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION

1,. STATEMENT 1/ IN CASE OF CONFLICT BETWEEN A REVENUEREGULATION AND THE PROVISIONS OF THE NATIONAL INTERNALREVENUE CODE THE LATTER SHALL PREVAIL


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STATEMENT 2/ THE REVOCATION OF A REVENUE REGULATION CAN NOTBE MADE RETROACTIVE EVEN IF THE REASON FOR ITS REVOCATION ISTHAT IT IS ERRONEOUS OR CONTRARY TO LAW

A) CORRECT WRONG

B) CORRECT CORRECTC) WRONG CORRECTD) WRONG WRONG

1,*. ALL OF THE FOLLOWING EXCEPT ONE ARE SOURCES OF TAX LAWS-

A) LEGISLATIONS TAX TREATIES AND TAX ORDINANCESB) UDICIAL DECISIONSC) OPINIONS OF AUTHORSD) ADMINISTRATIVE RULES AND REGULATIONS

11,. THE LEAST SOURCE OF TAX LAW IS-

A) STATUTESB) COURT DECISIONSC) CONSTITUTIOND) BIR RULINGS

111. WHEN THE REFUND OF A TAX SUPPOSEDLY DUE TO THE TAXPAYERHAS ALREADY BEEN BARRED BY PRESCRIPTION AND THE SAIDTAXPAYER IS ASSESSED WITH A TAX AT PRESENT THE TWO CASES MAYBE SET-OFF WITH EACH OTHER. THIS DOCTRINE IS CALLED

A) SET-OFF DOCTRINEB) DOCTRINE OF RECIPROCITYC) TAX SPARING DOCTRINED) E&UITAB LE RECOUPMENT

112. STATEMENT 1/ THE DOCTRINE OF E&UITABLE IS APPLICABLE IN THEPHILIPPINES

STATEMENT 2/ WHERE TAXES AND THE CLAIM OF THE TAXPAYER AREFULLY LI&UIDATED DUE AND DEMANDABLE SET-OFF OR LEGALCOMPENSATION MAY TAE PLACE BY OPERATION OF LAW

A) CORRECT WRONGB) CORRECT CORRECTC) WRONG CORRECTD) WRONG WRONG


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113. THE PLACE OR AUTHORITY THAT HAS THE RIGHT TO IMPOSE ANDCOLLECT TAXES-

A) TERRITORIALITYB) INTERNATIONAL COMITY

C) SITUS OF TAXATIOND) TRANSFORMATION

114. DOMICILE OR RESIDENCE OF THE OWNER IS NOT THE SITUS OFTAXATION IN

A) INCOME TAXB) COMMUNITY TAXC) ESTATE TAXD) BUSINESS TAX

11!. WHICH OF THE FOLLOWING IS NOT CORRECT WITH RESPECT TO ATAXPAYER0S SUIT

A) IT MUST PERTAIN TO ILLEGAL DISBURSEMENT OF PUBLIC FUNDSB) IT PERTAINS TO THE PASSAGE OF A SEEMINGLY

UNCONSTITUTIONAL MEASUREC) THE FUNDS SOUGHT TO BE DISBURSED MUSTB HAVE BEEN RAISED

THROUGH TAXATIOND) IT MUST NOT REFER TO AN ENACTMENT OF A TAX LAW

B. TRUE OR FALSE

1. NO PERSON SHALL BE IMPRISONED FOR DEBT OR NON-PAYMENT OFPOLL TAX

2. CONGRESS MAY AUTHORI5E THE PRESIDENT TO FIX WITHINSPECIFIED LIMITS TARIFF RATES IMPORT AND EXPORT DUTIESTONNAGE AND WHARFAGE DUES AND OTHER DUTIES OR IMPOSTSWITHIN THE FRAMEWOR OF THE NATIONAL DEVELOPMENTPROGRAM OF THE GOVERNMENT.

3. A LAW GRANTING TAX EXEMPTION SHOULD BE CONCURRED IN BY A

MAORITY OF ALL MEMBERS OF THE CONGRESS PRESENT.

4. THE PRESIDENT CAN VETO ANY PARTICULAR ITEM IN A REVENUE ORTARIFF BILL BUT THE VETO SHALL NOT AFFECT THE ITEMS OR ITEMSTO WHICH HE DOES NOT OBECT

!. THE POWER TO TAX CAN BE DELEGATED TO LOCAL GOVERNMENTUNITS SUBECT TO LIMITATIONS THAT MAY BE SET BY LAW.


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%. THE POWER OF TAXATION CAN BE DELEGATED TO THE PRESIDENT OFTHE PHILIPPINES.

'. THE PRESIDENT OF THE PHILIPPINES IS EMPOWERED TO GRANT TAXEXEMPTION ON CERTAIN CLASS OF TAXPAYERS.

. NON-PAYMENT OF TAX AND DEBT IS GROUND FOR IMPRISONMENT.

*. THE POWER TO TAX MAY INCLUDE THE POWER TO DESTROY.

1,. PROVISIONS IN THE PHILIPPINE CONSTITUTION ARE GRANTS OFPOWER.

11. LANDS AND BUILDINGS BEING USED ACTUALLY DIRECTLY ANDEXCLUSIVELY FOR RELIGIOUS AND CHARITABLE PURPOSES BYCHURCHES AND CHARITABLE INSTITUTIONS ARE EXEMPT FROM

INCOME AND PROPERTY TAXES.

12. A PORTION OF A SCHOOL BUILDING WHICH IS BEING LEASED TO AMARETING FIRM FOR COMMERCIAL PURPOSES IS EXEMPT FROMPROPERTY TAX.

13. A NON-STOC NON-PROFIT EDUCATIONAL INSTITUTION IS EXEMPTFROM INCOME TAX ON ITS REVENUES AND FROM REAL PROPERTYTAX ON ASSETS USED ACTUALLY DIRECTLY AND EXCLUSIVELY FOREDUCATIONAL PURPOSES.

14. TAX LAWS CAN NEVER HAVE A RETROACTIVE EFFECT.

1!. THE GOVERNMENT CAN NOT TAX ITS AGENCIES ANDINSTRUMENTALITIES.

1%. A TAXPAYER0S SUIT CAN BE FILED BY ANY TAXPAYER IN ANYINSTANCE AGAINST THE GOVERNMENT.

1'. IN THE PHILIPPINES THERE MAY BE DOUBLE TAXATION.

1. A TAX IS GENERALLY UNLIMITED BECAUSE IT IS BASED ON THE NEEDS OF THE STATE.

1*. AS A RULE TAXES ARE SUBECT TO SET-OFF OR COMPENSATION.

2,. RECIPROCITY RULE APPLIES TO CITI5ENS OF THE PHILIPPINES ANDRESIDENT ALIEN ONLY.


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21. THE INHERENT POWERS ARE EXERCISED PRIMARILY BY THELEGISLATURE.

22. THE RULE OF TAXATION SHALL BE UNIFORM AND E&UITABLE.

23. TAXATION MAY BE USED TO IMPLEMENT THE POLICE POWER OF THESTATE.

24. POLICE POWER IS SUPERIOR TO THE NON-IMPAIRMENT CLAUSE OFTHE CONSTITUTION.

2!. THE THREE INHERENT POWERS ARE METHODS BY WHICH THE STATEINTERFERES WITH PRIVATE RIGHT.

2%. THE SALARY OF THE PRESIDENT OF THE PHILIPPINES AND OF THEUSTICES OF THE SUPREME COURT IS EXEMPT FROM INCOME TAX.

2'. OPINIONS OF LEGAL LUMINARIES ARE SOURCES OF TAX LAWS.

2. THE CONSTITUTION GRANTS EXEMPTION FROM ALL INDS OF TAXESTO RELIGIOUS AND CHARITABLE ORGANI5ATIONS.

2*. BECAUSE THE POWER TO TAX IS UNLIMITED COMPREHENSIVEPLENARY AND SUPREME THE POWER TO TAX CAN REACH OVER INTOANY URISDICTION TO SEI5E UPON PERSON OR PROPERTY.

3,. A PERSON CAN OBECT OR RESIST THE PAYMENT OF TAXES SOLELYBECAUSE NO PERSONAL BENEFIT TO HIM CAN BE POINTED ASARISING FROM THE TAX.

31. THE "BENEFIT-PROTECTION THEORY# IS THE SOURCE OF THE"DOCTRINE OF SYMBIOTIC RELATIONSHIP#.

32. A TAXPAYER COMMITS TAX AVOIDANCE WHEN HE DELIBERATELYOMITS TO DECLARE ALL HIS TAXABLE INCOME.

33. THE THEORY OF TAXATION IS BASED ON THE LIFEBLOOD DOCTRINE.

34. A DIRECT TAX CAN BE SHIFTED DIRECTLY TO THE CONSUMERS.

3!. A TAX IS A VOLUNTARY PAYMENT OR DONATION TO THEGOVERNMENT.

3%. TAXES ARE CONTRACTUAL DEBTS HENCE A TAXPAYER CANNOT BEIMPRISONED FOR NON-PAYMENT THEREOF.


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3'. AS A POWER TAXATION REFERS TO THE INHERENT POWER OF THESTATE TO DEMAND ENFORCED CONTRIBUTION FOR PUBLIC PURPOSEOR PURPOSES.

3. THE GOVERNMENT CANNOT SURVIVE WITHOUT TAXATION.

3*. INCOME TAX IS A PROGRESSIVE TAX.

4,. TAX LAW CANNOT BE IMPOSED FOR A SPECIAL PURPOSE FOR ITSHOULD ALWAYS BE AIMED AT REVENUE COLLECTION.

41. THE POWER OF THE STATE TO TAX EXISTS BY VIRTUE OF AN EXPRESSPROVISION OF THE CONSTITUTION.

42. AN EXEMPTION FROM TAXATION IS TRANSFERABLE.

43. ADMINISTRATIVE FEASIBILITY MEANS ALSO THAT THE TAX MUST NOT BE DISCOURAGING TO BUSINESS ACTIVITY.

44. FISCAL ADE&UACY MEANS THAT REVENUE SHOULD ALWAYS MEETTHE DEMANDS OF PUBLIC EXPENDITURE EVEN DURING ADVERSEECONOMIC CONDITION.

4!. STATUTORY TAX EXEMPTIONS MAY BE REVOED BY THE CONGRESS.

4%. TAX EVASION IN ONE YEAR CAN BE OFFSET BY PAYING MORE TAXESTHE FOLLOWING YEAR.

4'. NON-PAYMENT OF ADDITIONAL COMMUNITY TAX IS A GROUND FORIMPRISONMENT.

4. IN CASE OF CONFLICT BETWEEN A TAX LAW AND A REVENUEREGULATION THE LATTER SHALL PREVAIL.

4*. A REVENUE REGULATION CAN EXPAND THE PROVISION OF LAW BYIMPOSING A PENALTY EVEN IF THE LAW THAT IT IMPLEMENTS DOES NOT IMPOSE A PENALTY.

!,. REVENUE BILLS SHALL ORIGINATE EXCLUSIVELY FROM THE SENATE.


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CHAPTER 11-INCOME TAX OF INDIVIDUALS

1.WHO AMONG THE FOLLOWING IS A NON-RESIDENT ALIEN-(RPCPA)

A) AN ALIEN WHO COMES TO THE PHILIPPINES FOR A DEFINITE

PURPOSE WHICH IN ITS NATURE MAY BE PROMPTLYACCOMPLISHED

B) AN ALIEN WHO COMES TO THE PHILIPPINES FOR A DEFINITEPURPOSE WHICH IN ITS NATURE WOULD RE&UIRE AN EXTENDEDSTAY

C) AN ALIEN WHO HAS AC&UIRED RESIDENCE IN THE PHILIPPINESD) AN ALIEN WHO LIVES IN THE PHILIPPINES WITH NO DEFINITE

INTENTION AS TO HIS STAY

2. ARCHIE A STAFF AUDITOR OF SGV CO. TOO AND PASSED THEEXAMINATION FOR CERTIFIED INTERNAL AUDITOR (CIA). THE FOLLOWING

YEAR HE RESIGNED FROM HIS OB AND LEFT THE PHILIPPINES ON APRIL1, 2,,% TO WOR AS AN INTERNAL AUDITOR IN A BIG ESTABLISHMENT INMELBOURNE AUSTRALIA. FOR INCOME TAX PURPOSES WHICH OF THEFOLLOWING STATEMENTS IS CORRECT WITH RESPECT TO ARCHIE0SCLASSIFICATION

A) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITI5EN FOR THEWHOLE YEAR OF 2,,%

B) HIS CLASSIFICATION AS A NON-RESIDENT CITI5EN WILL START IN2,,'

C) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITI5EN FOR THE YEAR

2,,% WITH RESPECT TO HIS INCOME DERIVED FROM SOURCESWITHOUT FROM APRIL 1, 2,,%

D) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITI5EN FOR THE YEAR2,,% WITH RESPECT TO HIS INCOME DERIVED FROM SOURCESWITHOUT FROM APRIL 112,,%

3. WHO AMONG THE FOLLOWING INDIVIDUAL TAXPAYERS IS TAXABLE ONINCOME WITHIN AND WITHOUT THE PHILIPPINES

A) ALEX A NATIVE OF GENERAL SANTOS CITY WORING ASOVERSEAS CONTRACT WORER IN IRA&

B) PHILANDER RODOLFO NATURALI5ED FILIPINO CITI5EN ANDMARRIED TO A FILIPINA. HE HAD BEEN LIVING IN OLONGAPO CITYSINCE 1*',

C) ALDREDO DE LA HOYA SPANISH CITI5EN A RESIDENT OF MADRIDSPAIN SPENT A ONE WEE VACATION TRIP IN BORACAY

D) MING HONG TAIWANESE SINGER HELD A 3-DAY CONCERT INMANILA


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4. WHICH OF THE FOLLOWING TAXPAYERS WHOSE PERSONAL EXEMPTIONIS SUBECT TO THE LAW ON RECIPROCITY UNDER THE TAX CODE-(RPCPA)

A) NON-RESIDENT CITI5EN WITH RESPECT TO HIS INCOME DERIVEDFROM OUTSIDE THE PHILIPPINES

B) NON-RESIDENT ALIEN WHO SHALL COME TO THE PHILIPPINES ANDSTAY HEREIN FOR AN AGGREGATE PERIOD OF MORE THAN 1,DAYS DURING ANY CALENDAR YEAR

C) RESIDENT ALIEN DERIVING INCOME FROM A FOREIGN COUNTRYD) NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS IN THE

PHILIPINES WHOSE COUNTRY ALLOWS PERSONAL EXEMPTION TOFILIPINOS WHO ARE NOT RESIDING BUT ARE DERIVING INCOMEFROM SAID COUNTRY

!. THE PERSONAL EXEMPTION OF THE NON-RESIDENT ALIEN ENGAGED INTRADE OR BUSINESS IN THE PHILIPPINES IS E&UAL TO THAT ALLOWED

BY-(RPCPA)

A) THE INCOME TAX LAW OF HIS COUNTRY TO A RESIDENT CITI5EN OFTHE PHILIPPINES NOT RESIDING THERE

B) THE INCOME TAX LAW OF HIS COUNTRY TO A CITI5EN OF THEPHILIPPINES NOT RESIDING THERE OR THE AMOUNT PROVIDED BYTHE NIRC TO A CITI5EN OR RESIDENT WHICHEVER IS LOWER

C) THE NATIONAL INTERNAL REVENUE CODE TO A CITI5EN ORRESIDENT

D) THE INCOME TAX LAW OF HIS COUNTRY ALLOWS TO A CITI5EN OFTHE PHILIPPINES NOT RESIDING THERE OR THE AMOUNT PROVIDEDBY THE NIRC TO A CITI5EN OR RESIDENT ALIEN WHICHEVER ISHIGHER

%. THE TAXPAYER IS A MARRIED NON-RESIDENT ALIEN ENGAGED INBUSINESS IN THE PHILIPPINES WITH TWO &UALIFIED DEPENDENTCHILDREN. HIS COUNTRY GIVES A NON-RESIDENT FILIPINO WITH INCOMEFROM THEREFROM A BASIC PERSONAL EXEMPTION (IF MARRIED) OFP2,,,, AND ADDITIONAL EXEMPTION OF P4,,,. HE IS ENTITLED TO APERSONAL EXEMPTION OF-(RPCPA)

A) P2,,,B) P2%,,,C) P24,,,D) P2,,,,


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'. THE FOLLOWING EXCEPT ONE MAY CLAIM PERSONAL EXEMPTIONS-(RPCPA)

A) NONRESIDENT ALIENS NOT ENGAGED IN TRADE OR BUSINESS INTHE PHILIPPINES

B) NONRESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS IN THEPHILIPPINESC) RESIDENT ALIEND) CITI5EN

. AN EXEMPTION PROVIDED BY LAW TO TAE CARE OF PERSONALLIVING AND FAMILY EXPENSES OF THE TAXPAYER AND THE AMOUNT OFWHICH IS DETERMINED ACCORDING TO THE STATUS OF THE TAXPAYERSARE/-(RPCPA)

A) OPTIONAL STANDARD DEDUCTION

B) PERSONAL EXEMPTIONC) ADDITIONAL EXEMPTIOND) SPECIAL ADDITIONAL EXEMPTION

*. AN EXEMPTION ALLOWED TO A TAXPAYER WHO HAS &UALIFIEDLEGITIMATE ILLEGITIMATE OR LEGALLY ADOPTED CHILDFREN-(RPCPA)

A) ADDITIONAL EXEMPTIONB) SPECIAL ADDITIONAL PERSONAL EXEMPTIONC) OPTIONAL STANDARD DEDUCTIOND) PERSONAL EXEMPTION

1,.A MAN HAS THREE WIVES UNDER HIS TRIBAL CUSTOMS AND PRACTICE.HE IS ENTITLED TO PERSONAL EXEMPTION APPERTAINING TO-(RPCPA)

A) A SINGLE INDIVIDUALB) A MARRIED INDIVIDUALC) A MARRIED INDIVIDUAL PLUS ADDITIONAL EXEMPTION FOR

DEPENDENTS PERTAINING TO EACH OF THE 2 EXTRA WIVESD) A HEAD OF THE FAMILY PLUS ADDITIONAL EXEMPTION FOR

DEPENDENTS PERTAINING TO EACH OF HIS THREE WIVES

11. AS A RULE WHO OF THE SPOUSES IS THE PROPER CLAIMANT OF THEADDITIONAL EXEMPTION WITH RESPECT TO ANY OF THE DEPENDENTCHILDREN

A) THE HUSBAND IF HIS INCOME IS HIGHER THAN THE INCOME OF THEWIFE

B) THE SPOUSE WHO HAS A HIGHER INCOMEC) THE HUSBAND


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D) THE WIFE

12. THE WIFE CAN CLAIM ADDITIONAL EXEMPTION IF-(RPCPA)

A) THE HUSBAND0S INCOME IS LOWER THAN HER INCOME

B) THE HUSBAND IS A NONRESIDENT CITI5EN WITH INCOME FROMWITHIN AND WITHOUT THE PHILIPPINESC) THE HUSBAND IS A PURE BUSINESS INCOME EARNER D) THE HUSBAND HAS NO INCOME OF HIS OWN

13. THE HUSBAND CAN WAIVE HIS RIGHT TO CLAIM THE ADDITIONALEXEMPTION IN FAVOR OF HIS WIFE IF-

A) HE IS A NONRESIDENT CITI5EN WHOSE INCOME IS PURELYWITHOUT THE PHILIPPINES

B) HE HAS NO INCOME OF HIS OWN

C) HE IS A COMPENSATION INCOME EARNER IN THE PHILIPPINESD) HIS INCOME IS PURELY SUBECT TO FINAL WITHHOLDING TAX

14. WHO AMONG THE FOLLOWING &UALIFIES AS A DEPENDENT FORPURPOSES OF ADDITIONAL EXEMPTION

A) SISTER-IN-LAWB) STEPMOTHER C) GRANDFATHER D) ILLEGITIMATE DAUGHTER

1!. NENA AGED ', YEARS OLD WHO LIVES WITH HER UNMARRIED SONMARIO RECEIVED P%,,,, WHICH WAS USED FOR HER SUPPORT DURINGTHE YEAR. THE SOURCES OF HER SUPPORT WERE AS FOLLOWS/

SOCIAL SECURITY BENEFITS P24,,,MARIO 2,,,,CAROLINE UNRELATED FRIEND 4,,,DOUGLAS SON OF NENA !,,,LALAINE NENA0S SISTER ',,,TOTAL %,,,,

WHO CAN CLAIM HEAD OF FAMILY STATUS BASED ON NENA0SDEPENDENCY EXEMPTION

A) MARIOB) DOUGLASC) LALAINED) NONE


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1%. WHO OF THE FOLLOWING IS NOT A &UALIFIED DEPENDENT FORPURPOSES OF CLAIMING ADDITIONAL EXEMPTION

A) ILLEGITIMATE CHILDB) LEGALLY ADOPTED CHILD

C) LEGITIMATE CHILDD) CHILD BY NATURAL ADOPTION

1'. MR. MAASIASO SINGLE HAS THE FOLLOWING DEPENDENTS WHOARE LIVING WITH AND ENTIRELY DEPENDENT UPON HIM FOR CHIEFSUPPORT/

ANDREA CHILD WITH HIS EX-GIRLFRIENDBARBARA LEGITIMATE CHILD OF HIS SISTER LEGALLY ADOPTED BY MR.MAASIASOCARIDAD MOTHER ! YEARS OLD WIDOW BEDRIDDEN

DONATA GODMOTHER , YEARS OLD

MR. MAASIASO CAN CLAIM ADDITIONAL PERSONAL EXEMPTION ON-

A) ANDREA ONLYB) ANDREA AND BARBARAC) ANDREA BARBARA AND CARIDADD) ANDREA BARBARA CARIDAD AND DONATA

1. A NATIVE OF LUCENA CITY SUPPORTING HIS BROTHER 1 YEARS OLDUNMARRIED NOT GAINFULLY EMPLOYED STUDYING BS ACCOUNTANCYAT ASIA PACIFIC COLLEGE AT MAATI CITY IS ENTITLED TO BASICPERSONAL EXEMPTION OF-

A) P2,,,,B) 2!,,,C) !,,,,D) '!,,,

1*. THE ADDITIONAL PERSONAL EXEMPTION ON EVERY &UALIFIEDDEPENDENT CHILD IS-

A) P,,,B) 32,,,C) 2!,,,D) !,,,,


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2,. REMY MARTIN SINGLE SUPPORTING THE FOLLOWING/

OHNNY WALER ILLEGITIMATE SON 1% YEARS OLD STUDYING IN THEUNIVERSIDAD DE ERE5 CADI5 SPAIN LIVING WITH REMY MARTIN0SDIPLOMATIC BROTHER IN ANDALUCIA SPAIN.

TORRES FATHER LIVING WITH HIM. REMY MARTIN IS GIVING %, OF THEENTIRE SUPPORT NEEDED THE OTHER 4, IS BEING FURNISHED BY HISSISTER CHEVAS REGAL.

REMY MARTIN CAN CLAIM A TOTAL EXEMPTION OF-

A) P2,,,,B) '!,,,C) 33,,,D) 41,,,

21. TAXPAYERS ARE HUSBAND AND WIFE. THE GROSS COMPENSATION OFTHE WIFE IS P2%,,,, WHILE THE GROSS BUSINESS INCOME OF THEHUSBAND IS P2,,,,,. THEY HAVE SIX &UALIFIED DEPENDENT CHILDRENBUT WITHIN THE YEAR ONE CHILD DIED. THEIR TOTAL EXEMPTIONS IS-(RPCPA)

A) P2,,,,,B) *%,,,C) %4,,,D) NONE

22. LI5A0S HUSBAND DIED IN APRIL 2,,* HAVING SEVEN(') UNMARRIEDCHILDREN LIVING WITH AND WHOLLY DEPENDENT ON LI5A FORSUPPORT. THE AGES OF THE CHILDREN ARE AS FOLLOWS/

CHILDREN AGES STATUSA 24 OBLESSB 22 MENTALLY RETARDEDC 1* STUDYING IN MANILAD 1, STUDYING IN THEIR HOMETOWNE STUDYING IN THEIR HOMETOWNF % STUDYING IN THEIR HOMETOWNG 3 TAEN BY THE GRANDPARENTS

AFTER THE DEATH OF THE FATHER

FOR PURPOSES OF TAXABLE YEAR 2,,* HOW MUCH EXEMPTION WOULDLI5A BE ENTITLED TO-(RPCPA)


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A) P1!,,,,B) !',,,C) %4,,,D) '3,,,

NUMBERS 23 AND 24 ARE BASED ON THE FOLLOWING INFORMATION:

23. IN 2,,* PIDOL0S WIFE DIED OF A CAR ACCIDENT. HIS DEPENDENTS AREAS FOLLOWS/

CHILDREN STATUSA 22 Y$O EMPLOYED ON ULY 12 2,,*B 21 Y$O ON ANUARY 2 2,,*C 1 Y$O MARRIED ON ANUARY 31 2,,*D 1' Y$O GAINFULLY EMPLOYED ON OCTOBER 1 2,,*

E 1! Y$O AFFLICTED WITH SORE EYES ON MAY % 2,,*F 13 DIED OF AN ACCIDENT IN 2,,*G BROTHER 2 Y$O PARALYTIC

FOR TAXABLE YEAR 2,,* PIDOL CAN CLAIM ADDITIONAL EXEMPTIONSOF-

A) P'!,,,B) 12!,,,C) 1,,,,,D) 32,,,

24. FOR THE YEAR 2,1, PIDOL CAN CLAIM ADDITIONAL EXEMPTIONS OF-

A) P,,,B) 1%,,,C) 2!,,,D) 1,,,,,

2!. ANGIE WIDOW EARNING AN ANNUAL GROSS COMPENSATION INCOMEOF P3,,,,, HAS THE FOLLOWING DEPENDENT CHILDREN IN 2,,*/

AUBREY- BABY BORN ON ANUARY 31BARBARA- CELEBRATED HER 21ST BIRTHDAY LAST UNE 12CRISTETA- MARRIED ON ANUARY 1DIANA- GAINFULLY EMPLOYED EFFECTIVE ULY 1ELI5A- DIED OF DENGUE FEVER ON SEPTEMBER 3,

ASSUMING ANGIE HAS TWO EMPLOYERS HER TAXABLE INCOME IN 2,,*IS-


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A) P32,,,B) %3,,,C) 1!,,,,D) 1,,,,,

2%. THE TAXABLE INCOME OF ANGIE IN 2,1, IS-

A) P12,,,,B) 22!,,,C) *!,,,D) ',,,

2'. WHICH OF THE FOLLOWING INCOME DERIVED FROM WITHIN THEPHILIPPINES BY A RESIDENT ALIEN IS NOT SUBECT TO THE RATES INSECTION 24(A) OF THE NIRC-(RPCPA)

A) SALARY RECEIVED BY A MANAGING PARTNER OF A GENERALPROFESSIONAL PARTNERSHIP

B) A PASSIVE INCOME IN THE FORM OF A PRI5E WON IN A RAFFLEAMOUNTING TO P4,,,

C) A GAIN FROM SALE OF A MOTOR VEHICLE AS ANOTHER INCOME OFA TAXPAYER WHO IS A COMPENSATION INCOME EARNER

D) A GAIN ON SALE OF A REAL PROPERTY FOR PRIVATE USE OF THEFAMILY OF THE TAXPAYER

2. WHICH OF THE FOLLOWING INCOME IS SUBECT TO FINAL TAX IFRECEIVED BY AN INDIVIDUAL TAXPAYER

I. SHARE OF A PARTNER IN THE NET INCOME OF A BUSINESSPARTNERSHIP

II. CASH DIVIDEND RECEIVED BY A STOCBROER FROM ADOMESTIC CORPORATION

III. WINNINGS IN LOTTOIV. RAFFLE PRI5ES AMOUNTING TO P%,,,

A) I AND IIB) III AND IVC) I II AND IVD) I II III AND IV

2*. WHICH OF THE FOLLOWING IS NOT A RE&UISITE FOR DEDUCTIBILITYOF HEALTH INSURANCE


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A) THE TOTAL FAMILY INCOME IS NOT MORE THAN P2!,,,,B) THE MAXIMUM AMOUNT OF PREMIUM DEDUCTIBLE DURING THE

YEAR IS P24,, PER FAMILY OR P2,, A MONTHC) IN THE CASE OF MARRIED INDIVIDUAL THE SPOUSE CLAIMING THE

ADDITIONAL EXEMPTION SHALL BE ENTITLED TO CLAIM THE

INSURANCE PREMIUMS PAIDD) THE TAXPAYER MUST BE A HEAD OF FAMILY

3,.STATEMENT 1/ HEALTH AND$OR HOSPITALI5ATION INSURANCEPREMIUMS PAID BY AN INDIVIDUAL IS DEDUCTIBLE ONLY IF THETAXPAYER IS A PURE COMPENSATION INCOME EARNER

STATEMENT 2/ A TAXPAYER WHO HAS PAID A MONTHLY HEALTHINSURANCE OF P4,, FOR SIX MONTHS IN A YEAR CAN CLAIM TOTALDEDUCTIBLE AMOUNT OF P24,,

A) TRUE FALSEB) TRUE TRUEC) FALSE TRUED) FALSE FALSE

31. MAX SINGLE SUPPORTING HIS !-YEAR OLD MOTHER IS ACOMPENSATION INCOME EARNER. DURING THE YEAR HIS NETINCOME WAS P1!,,,,. HE ALSO PAID A TOTAL PREMIUM OF P3,,,TO AN INSURANCE COMPANY FOR HIS HEALTH INSURANCE. HOWMUCH IS HIS TAXABLE INCOME

A) P*'%,,B) *',,,C) 122,,,D) 122%,,

32. ALL OF THE FOLLOWING EXCEPT ONE ARE TAXABLE ON INCOMEWITHIN ONLY/

A) RESIDENT ONLYB) NON-RESIDENT CITI5ENC) RESIDENT CITI5END) NON-RESIDENT ALIEN

33. IN 2,,* RUSTOM FILIPINO LEGALLY SEPARATED FROM HIS WIFEMINA LEFT FOR THE UNITED STATES WITH HIS DAUGHTERROBINA TO PERMANENTLY RESIDE THEREIN. IN 2,,* HE EARNEDP2 MILLION AS INCOME FROM HIS BEAUTY APRLON IN THATCOUNTRY.


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WHICH OF THE FOLLOWING STATEMENTS IS CORRECT

A) FOR PHILIPPINE INCOME TAX PURPOSES RUSTOM MAYDEDUCT FROM HIS GROSS INCOME HIS PERSONAL EXEMPTIONOF P!,,,, OR THE AMOUNT ALLOWED IN THAT COUNTRY

WHICHEVER IS LOWER B) FOR PHILIPPINE INCOME TAX PURPOSES RUSTOM0S GROSSINCOME IS SUBECT TO A CREDITABLE WITHHOLDING TAX OF1,

C) RUSTOM0S GROSS INCOME OF P2 MILLION IS NOT TAXABLE INTHE PHILIPPINES

D) FOR PHILIPPINE INCOME TAX PURPOSES HE IS NO LONGERENTITLED TO CLAIM ADDITIONAL EXEMPTION ON ROBINABECAUSE HE IS ALREADY CLASSIFIED AS A NON-RESIDENTALIEN ENGAGED IN BUSINESS IN FOREIGN COUNTRY

34. CASE 1/ PEPE A CPA HAD SIGNED A LEGALLY ENFORCEABLEAGREEMENT WITH HIS WIFE PILAR THAT THE EARNINGS FROM THEEXERCISE OF HIS PROFESSION WOULD BE SHARED E&UALLYBETWEEN THEM FOR PURPOSES OF COMPUTING THE INCOME TO BEREPORTED IN THEIR RESPECTIVE INDIVIDUAL INCOME TAXRETURN. IS THE AGREEMENT VALID

CASE 2/ LOREN5O ADVISED HIS DAUGHTER LORENA THAT THE RENTINCOME ON THE DORMITORY OWNED BY LOREN5O WILL ACCRUE TO THELATTER. LORENA COLLECTED THE INCOME AND REPORTED IT ON HEROWN RETURN. WERE THE ACTIONS TAEN BY LOREN5O AND LORENAVALID

A) YES NOB) YES YESC) NO YESD) NO NO

ITEMS 35 TO 3 ARE BASED ON THE FOLLOWING INFORMATION:

BUSINESS INCOME PHILIPPINES P3,,,,,BUSINESS INCOME UNITED STATES 2!,,,,EXPENSES PHILIPPINES 2,,,,,EXPENSES UNITED STATES 12!,,,INTEREST ON DEPOSIT WITH METROBAN 3,,,INTEREST ON DEPOSIT IN U.S.(819P4,) 8!,,CASH PRI5E WON IN A LOCAL CONTEST P%,,,CASH PRI5E WON IN A CONTEST IN U.S. 1,,,,WINNINGS IN LOTTO 2,,,,


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WINNINGS IN LOTTO IN U.S. !,,,,DIVIDENDS FROM SMC A DOMESTIC COMPANY 2!,,,

3!. THE TAXABLE INCOME IF SHARON IS A RESIDENT CITI5EN SINGLEIS-

A) P2%1,,,B) 334,,,C) 2*1,,,D) 3,%,,,

3%.THE TAXABLE INCOME IF SHARON IS A NON-RESIDENT ALIEN ETBMARRIED WITH FIVE(!) DEPENDENT CHILDREN-

A) P243,,,B) !%,,,

C) '4,,,D) NONE

3'. THE INCOME TAX DUE ON SHARON ASSUMING SHE IS A NON-RESIDENT ALIEN NETB SINGLE IS-

A) P3!,,B) %3!,,C) 1!,,D) 334,,,

NUMBERS 3! TO 4" ARE BASED ON THE FOLLOWING INFORMATION:

ELVIS AND MADONNA HUSBAND AND WIFE HAVE THE FOLLOWING DATAIN 2,,*/

ELVIS MADONNACOMPENSATION INCOME P12!,,, P%,,,,RENT INCOME(NET OF ! WHT) '%,,,ROYALTIES ON BOOS ',,,,DEPENDENT CHILDREN %WHT ON COMPENSATION 1,,,,

DURING THE YEAR THE SPOUSES HAD AN INCOME OF P12,,,, ANDEXPENSES OF P%!,,, WHICH CANNOT BE IDENTIFIED AS SOLELY ESRNEDBY THE WIFE OR THE HUSBAND.

3. THE INCOME TAX PAYABLE$OVERPAYMENT OF ELVIS IS-


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A) P3,,,B) 1,2,,C) (P!!,,)D) ',,

3*. THE TAXABLE INCOME OF MADONNA IS-A) P2'!,,B) 3'!,,C) 11%,,D) NONE

4,. THE FINAL TAX ON THE PASSIVE INCOME IS-

A) P14,,,B) ',,,

C) NONED) NO ANSWER

41. THE OPTIONAL STANDARD DEDUCTION ON INDIVIDUAL IS-

A) 4, OF TAXABLE INCOMEB) 4, OF BUSINESS AND$OR PROFESSIONAL INCLUDING

COMPENSATION INCOMEC) 4, OF BUSINESS AND$OR PROFESSIONAL INCOMED) 1, OF BUSINESS AND$OR PROFESSIONAL EXCLUDING

COMPENSATION INCOME

42.OPTIONAL STANDARD DEDUCTION IS ALLOWED TO

A) RESIDENT ALIENB) NON-RESIDENT ALIEN ENGAGED IN TRADE OR BUSINESSC) NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESSD) NON-RESIDENT FOREIGN CORPORATION

NUMBERS 43 AND 44 ARE BASED ON THE FOLLOWING INFORMATION:

ROD MARRIED WITH TWO DEPENDENT CHILDREN HAD THE FOLLOWINGINCOME AND EXPENSES IN 2,,*/

SALARY NET OF WHT OF P!,,, P!!,,,13TH MONTH PAY !,,,GROSS RECEIPTS FROM PROFESSION NET OF WHT OF P',,, 3,,,RENT INCOME NET OF ! WHT !',,,GROSS RECEIPTS FROM BUSINESS 12!,,,


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PROFESSIONAL AND BUSINESS EXPENSES !%!,,PREMIUMS ON HEALTH INSURANCE %,,,

43. THE INCOME TAX PAYABLE BY ROD IF HE AVAILED OF THE ITEMI5EDDEDUCTIONS-

A) P212!B) 1'12!C) 44!,,D) 413%,

44. THE INCOME TAX PAYABLE BY ROD IF HE AVAILED OF THE OPTIONALSTANDARD DEDUCTIONS-

A) P4!,,B) !,22!

C) !1,!,D) !1%!,

NUMBERS 45 TO 4# ARE BASED ON THE FOLLOWING INFORMATION:

SPOUSES CARLOS AND IRENE GOVERNMENT EMPLOYEES HAD THEFOLLOWING DATA IN 2,,*/

CARLOS IRENE13TH MONTH PAY AND OTHER BENEFITS 1*4*.,, %,!.,,SSS PHIC AND PAG-IBIG 14!4*.'% 4!!*.'!BASIC SALARY 21,43.24 %4%!.2!REPRESENTATION AND TRAVEL ALLOWANCE *%,,,.,, -PERSONNEL ECONOMIC RELIEF ALLOWANCE - %,,,.,,OVERTIME PAY 24!,.3! 44!'.,4HOLIDAY PAY - 1'3.2!HA5ARD PAY - %,,,.,,ADDITIONAL EXEMPTIONS !,,,,.,, -TOTAL AMOUNT OF TAXES WITHHELD 1',4%.4, -

4!. THE INCOME TAX PAYABLE BY CARLOS IS-

A) P31.32B) 12''.'2C) 3%3.1%D) %'.!

4%. THE INCOME TAX PAYABLE ON IRENE IS-

A) P44.2*


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B) 1431.4!C) (P*3.1*)D) NONE

4'. MRS. EVAN OWNS A PARCEL OF LAND WORTH P!,,,,, WHICH SHE

INHERITED FROM HER FATHER IN 2,,% WHEN IT WAS WORTH P3,,,,,. HERFATHER PURCHASED IT IN 1*% FOR P1,,,,,. IF MRS. EVAN TRANSFERSTHIS PARCEL OF LAND FOR HER WHOLLY OWNED CORPORATION INEXCHANGE FOR SHARES OF STOCS OF SAID CORPORATION WORTHP4!,,,,. MRS. EVAN0S TAXABLE GAIN IS-(RPCPA)

A) 5EROB) P!,,,,C) 1!,,,,D) 3!,,,,

4. MR. OHNNY DELA CRU5 TRANSFERRED HIS COMMERCIAL LAND WITHA COST OF P!,,,,, BUT WITH A FAIR MARET VALUE OF P'!,,,, TO DCCORPORATION IN EXCHANGE OF THE STOCS OF THE CORPORATION WITHPAR VALUE OF P1,,,,,,. AS A RESULT OF THE TRANSFER HE BECAMETHE MAOR STOCHOLDER OF THE CORPORATION.-(RPCPA)

AS A RESULT OF THE TRANSFER/

A) THE RECOGNI5ED GAIN IS THE DIFFERENCE BETWEEN THE FAIRMARET VALUE OF THE SHARES OF STOCS AND THE COST OF THELAND

B) THE RECOGNI5ED GAIN IS THE DIFFERENCE BETWEEN THE PARVALUE OF THE STOCS AND THE FAIR MARET VALUE OF THELAND

C) NO RECOGNI5ED GAIN BECAUSE THE LAND WAS IN EXCHANGE OFPURELY STOCS AND MR. OHNNY DELA CRU5 BECAME THEMAORITY STOCHOLDER

D) NO RECOGNI5ED GAIN BECAUSE THE LAND WAS IN EXCHANGE OFSTOCS OF THE CORPORATION.

4*. MR. SANTOS PURCHASED A LIFE ANNUITY FOR P1,,,,, WHICH WILLPAY HIM P1,,,, A YEAR. THE LIFE EXPECTANCY OF MR. SANTOS IS 12YEARS. WHICH OF THE FOLLOWING WILL MR. SANTOS BE ABLE TOEXCLUDE FROM HIS GROSS INCOME-(RPCPA)

A) P1,,,,,B) 1,,,,C) 2,,,,D) 12,,,,


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!,.IF AN INDIVIDUAL PERFORMS SERVICES FOR A CREDITOR WHO INCONSIDERATION THEREOF CANCELS THE DEBT THE CANCELLATION OFINDEBTEDNESS MAY AMOUNT-(RPCPA)

A) TO A GIFT

B) TO A CAPITAL CONTRIBUTIONC) TO A DONATION INTER VIVOSD) TO A PAYMENT OF INCOME

!1. MR. AGUILA AN EMPLOYEE OF FUERTE CORPORATION IS RECEIVINGA MONTHLY SALARY (NET OF 1, WHT) OF P1,,,. DUE TO ANOUTSTANDING ACCOMPLISHMENT IN ULY 2,, THE CORPORATIONGAVE HIM 2,, SHARES OF STOC OF THE CORPORATION WITH A PARVALUE OF P1,, PER SHARE AND A FAIR MARET VALUE OF P1!,. THEFAIR VALUE AT THE TIME OF RECEIPT IS P1!2 PER SHARE.

HOW MUCH IS THE INCOME OF MR. AGUILA IN 2,,

A) P!,,,,B) 2',4,,C) 2',,,,D) 24,,,,

!2. CARANCHO IS INDEBTED TO DACUYCUY. DUE TO HIS INABILITY TOPAY THE DEBT HE WAS ASED TO CLEAN THE PIGGERY OF THELATTER FOR THREE MONTHS. THEREAFTER DACUYCUY GAVE HIMP!,,, AND CONDONED THE DEBT AMOUNTING TO P1,,,,.

HOW MUCH INCOME SHOULD BE DECLARED BY CARANCHO

A) P!,,,B) 1,,,,C) 1!,,,D) NONE

!3. REWARDS GIVEN TO PERSONS INSTRUMENTAL IN THE DISCOVERY OFVIOLATION OF THE NATIONAL INTERNAL REVENUE CODE ARESUBECT TO-

A) FINAL TAX OF 1, ON REWARDS COLLECTEDB) FINAL TAX OF 1, OF P1,,,,,,C) FINAL TAX OF 1, OF REWARDS COLLECTED OR P1,,,,,,

WHICHEVER IS HIGHER D) FINAL TAX OF 1, OF REWARDS COLLECTED OR P1,,,,,,

WHICHEVER IS LOWER


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!4. IN 2,, ALMONTE RECEIVED FROM HIS EMPLOYER A PROMISSORY NOTE WITH A FACE VALUE OF P!,,,, FOR SERVICES RENDERED. THE NOTE WILL MATURE IN 2,,*. HOWEVER IT CAN BE SOLD TO A BANAT A DISCOUNT OF 2!. THE EMPLOYER PAID THE PROMISSORY NOTEIN 2,,*. HOW MUCH TAXABLE INCOME IS TO BE DECLARED BY

ALMONTE ON THE PROMISSORY NOTE IN 2,, AND 2,,*RESPECTIVELY

A) P!,,,, !,,,,B) 12!,, 3'!,,C) 3'!,, 12!,,D) NONE !,,,,

!!. USING THE SAME DATA IN NUMBER !4 ABOVE EXCEPT THAT !, OFTHE FACE VALUE OF THE NOTE IS PAYABLE IN 2,,* WHILE THEREMAINING !, IS PAYABLE IN 2,1,

HOW MUCH INCOME IS TAXABLE TO ALMONTE IN 2,, 2,,* AND IN2,1, RESPECTIVELY

A) P!,,,, NONE NONEB) 3'!,, %2!, %2!,C) 12!,, 1'!, 1'!,D) , 2!,,, 2!,,,

!%.

2,, CASE1 CASE2 CASE3 CASE4 NET INCOME BEFOREWRITE-OFF OFBAD DEBT ',,,, ',,,, ',,,, ',,,,LESS/ BAD DEBTWRITTEN OFF 4,,,, ,,,, !!,,, !,,, NET INCOME AFTER BAD DEBT 4,,,, (1,,,,) 1!,,, (1!,,,)

2,,*AMOUNT RECOVERED 4,,,, 3,,,, 4,,,, !,,,

THE TAXABLE AMOUNT ON THE RECOVERY OF BAD DEBT PREVIOUSLYDEDUCTED RESPECTIVELY IS +

A) 4,,,, 3,,,, 4,,,, !,,,B) 4,,,, 2,,,, 4,,,, ',,,,C) 3,,,, 3,,,, !!,,, !,,,D) 3,,,, %,,,, 2!,,, ',,,,


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!'.WHICH OF THE FOLLOWING STATEMENTS IS CORRECT WITH RESPECTTO A LEASEHOLD CONTRACT

STATEMENT I/ SECURITY DEPOSITS ARE REPORTABLE AS INCOME OF THE

LESSOR IN THE YEAR OF RECEIPT

STATEMENT II/ THE DEPRECIATION ON THE IMPROVEMENT IS TO BECOMPUTED BY DIVIDING THE COST BY THE LIFE OF THE ASSET OR THEREMAINING TERM OF THE LEASE WHICHEVER IS LONGER

STATEMENT III/ PREPAYMENT OF RENTALS BY THE LESSEE ARE TO BERECORDED BY THE LESSOR USING CASH METHOD EVEN IF IT ISORDINARILY USING ACCRUAL METHOD OF ACCOUNTING

A) I ONLY

B) I AND IIC) II AND IIID) III ONLY

NUMBERS 5! TO #2 ARE BASED ON THE FOLLOWING INFORMATION:

BRYAN LEASED A LAND TO OSE FOR A PERIOD OF 11 YEARS STARTINGANUARY 1 2,,% AT AN ANNUAL RENTAL OF P12,,,. OBSERVING THEPROVISIONS OF THE CONTRACT OSE CONSTRUCTED A BUILDING WHICHSHALL BECOME THE PROPERTY OF BRYAN AT THE EXPIRATION OF THELEASE. THE CONSTRUCTION WAS COMPLETED ON ANUARY 1 2,,* AT ACOST OF P1,,,,,, WITH AN ESTIMATED USEFUL LIFE OF 2, YEARS.

IT IS ALSO STIPULATED IN THE CONTRACT THAT THE LESSEE WILL PAYTHE P1!,, ANNUAL REAL PROPERTY TAX ON THE LAND.

!. ASSUMING THAT ON ANUARY 1 2,,% OSE PAID P24,,, TO BRYANCOVERING THE LEASE CONTRACT FOR 2 YEARS HOW MUCH INCOME IS TOBE REPORTED BY BRYAN IN 2,,%

A) P12,,,B) 13!,,C) 24,,,D) 2!!,,

!*. HOW MUCH INCOME IS TO BE REPORTED BY BRYAN IN 2,,* UNDER THEOUTRIGHT METHOD

A) P13!,,


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B) 1!,,C) 1,13!,,D) 1,,,,,,

%,. HOW MUCH INCOME IS TO BE REPORTED BY BRYAN IN 2,,* UNDER THE

SPREAD-OUT METHOD

A) P13!,,B) 1!,,C) 1,13!,,D) !,,

%1. HOW MUCH IS THE DEDUCTIBLE EXPENSE OF THE LESSEE IN 2,,*

A) P13!,,B) %3!,,

C) 12!,,,D) 13!,,

%2. ASSUMING THAT DUE TO THE FAULT OF THE LESSEE THE LEASECONTRACT WAS TERMINATED ON ANUARY 1 2,11 HOW MUCHINCOME IS TO BE REPORTED BY THE LESSOR IN 2,11

A) P'%3!,,B) '!,,,,C) !,,D) 1,13!,,

NUMBERS #3 TO #$ ARE BASED ON THE FOLLOWING INFORMATION:

ARTURO LEASED A 21%-S&UARE METER OF IDLE LAND TO LEI55IECOLLEGE OF BUSINESS (LCB) A PROPRIETARY EDUCATIONALINSTITUTION FOR A PERIOD OF 2, YEARS EFFECTIVE ANUARY 1 2,,%.THE LEASE CONTRACT PROVIDES THAT LCB WILL ERECT A BUILDINGTHEREON TO BE USED AS A CLASSROOM WHICH IT DID ON THE LOT OFARTURO. THE AGREEMENT PROVIDES ALSO THAT THE BUILDING SHALLBECOME THE PROPERTY OF THE LESSOR AT THE END OF THE LEASE. THEBUILDING WAS COMPLETED ON UNE 3, 2,, AT A COST OF P1,,,,,.THE ESTIMATED LIFE OF THE LEASEHOLD IMPROVEMENT IS 3, YEARS.

IT WAS FURTHER AGREED THAT LCB WILL PAY THE REAL ESTATE TAX ONTHE LAND ASSESSED AT P3,,, ANNUALLY. ON ANUARY 2 2,,% LCB PAIDARTURO P12,,,, CONSISTING OF RENTAL COVERING THE 2 YEARSPERIOD(24 MONTHS) FROM 2,,% TO 2,,'.


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%3. THE RENT INCOME TO BE REPORTED BY ARTURO IN 2,,%-

A) P%,,,,B) 123,,,C) 12,,,,

D) %3,,,

%4. THE RENT INCOME TO BE REPORTED BY ARTURO IN 2,, UNDEROUTRIGHT METHOD-

A) P%,,,,B) %3,,,C) 1%,,,,D) 1%3,,,

%!. THE INCOME TO BE REPORTED BY ARTURO UNDER SPREAD-OUTMETHOD-

A) P442*B) 1,!!'C) 142*D) 2142*

%%. WHICH OF THE FOLLOWING STATEMENTS IS CORRECT

A) EFFECTIVE ANUARY 1 2,,% THE LAND SHALL BE EXEMPT FROMREAL ESTATE TAX

B) EFFECTIVE UNE 3, 2,, THE LAND SHALL BE EXEMPT FROM REALESTATE TAX

C) EFFECTIVE ANUARY 1 2,,* THE LAND AND THE BUILDING SHALLBE EXEMPT FROM REAL ESTATE TAX

D) EFFECTIVE UNE 3, 2,, THE LAND AND THE BUILDING SHALL BEEXEMPT FROM REAL ESTATE TAX

%'. THE DEDUCTIBLE EXPENSE OF LCB IN 2,,*-

A) P1%!!'B) 1%2!'C) 114 42*D) 442*

%. THE INCOME TO BE REPORTED BY ARTURO IN 2,,* UNDER SPREAD-OUT METHOD IS-

A) P1,!!'B) 1,2!'C) 11442*


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D) 442*

%*. SUPPOSE THE LEASE CONTRACT WAS TERMINATED ON APRIL 1 2,12DUE TO THE FAULT OF THE LESSEE THE INCOME TO BE REPORTEDBY ARTURO UNDER SPREAD-OUT METHOD ON 2,12 IS-

A) P1443,,,B) 14!!'C) 144,,,,D) 142!'

',. ON ANUARY 1 2,,% ATO LEASED A LOT TO BENGBENG WITH ABUILDING ERECTED THEREON FOR A PERIOD OF 1, YEARS. THELEASE CONTRACT PROVIDED THAT BENGBENG WILL PAY THEFOLLOWING/

I. MONTHLY RENTAL OF P1,,,,II. FIRE INSURANCE PREMIUM OF P1!,,, PER YEAR III. REAL PROPERTY TAX OF P!,,, PER YEAR

THE LESSEE WILL CONSTRUCT A CONCRETE FENCE SURROUNDING THELOT AT A COST OF P12,,,,, WITH A USEFUL LIFE OF 2, YEARS WHICHSHALL BELONG TO THE LESSOR AT THE EXPIRATION OF THE LEASE. THEFENCING WAS FINISHED ON UNE 3, 2,,.

IN 2,, ATO SHALL REPORT AS INCOME FROM LEASE (SPREAD-OUTMETHOD) AN AMOUNT OF-

A) P'!,,,B) '4,,,,C) 14,,,,D) 1*,,,,

'1. IN NUMBER ', ABOVE THE LESSEE CAN CLAIM A DEDUCTIBLEEXPENSE IN 2,, OF-

A) P21!,,,B) 22,,,,C) 22!,,,D) 1*,,,,

'2. PROCEEDS OF INSURANCE TAEN BY A CORPORATION ON THE LIFEOF AN EXECUTIVE TO INDEMNIFY IT AGAINST LOSS IN CASE OF HISDEATH IS-(RPCPA)


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A) EXEMPT FROM INCOME TAXB) PART OF TAXABLE INCOMEC) SUBECT TO FINAL TAXD) PARTLY EXEMPT PARTLY TAXABLE

'3. CORCOR CORPORATION TOO TWO LIFE INSURANCE POLICIES ONTHE LIFE OF ITS EVP MRS. LOPE5. IN ONE POLICY THE BENEFICIARYIS THE CORPORATION AND THE OTHER DESIGNATES HER HUSBANDAS THE REVOCABLE BENEFICIARY. THE INSURANCE PREMIUM PAIDBY CORCOR CORPORATION IS-(RPCPA)

A) TAX DEDUCTIBLE INSOFAR AS THE FIRST POLICY IS CONCERNEDB) TAX DEDUCTIBLE FOR BOTH POLICIESC) NOT DEDUCTIBLE FOR BOTH POLICIESD) FIRST POLICY IS NOT DEDUCTIBLE SECOND POLICY IS DEDUCTIBLE

'4. MRS. LUCAS WAS INSURED UNDER AN ENDOWMENT POLICY WITH AVALUE OF P!,,,,,. TOTAL PREMIUMS PAID BY HER DURING THETERM OF PREMIUM PAYMENTS ON THE POLICY WAS P4*,,,, FROMTHERE WAS A RETURN OF PREMIUMS OF P4,,,,.AT THE MATURITYOF THE POLICY MRS. LUCAS RECEIVED P!,,,,,. THE INCOME OFMRS. LUCAS UNDER THE POLICY IS-(RPCPA)

A) 5EROB) P!,,,,,C) 1,,,,D) !,,,,

NUMBERS 5 AND # ARE BASED ON THE FOLLOWING INFORMATION:

SOFIA TOO A LIFE INSURANCE FROM SUNSTAR INSURANCE COMPANYWITH HER HUSBAND NOLI AS THE BENEFICIARY. UNDER THE POLICYSUNSTAR WILL PAY SOFIA THE AMOUNT OF P!,,,,, WHEN THE POLICYMATURES OR TO HER BENEFICIARY HUSBAND IN CASE SHE DIES BEFORETHE MATURITY. SOFIA WILL PAY P1,,,, ANNUALLY FOR 2, YEARS.

'!. ASSUMING THAT THE POLICY MATURED WHEN SOFIA REACHED !,YEARS OLD AND SHE RECEIVED THE ENTIRE P!,,,,, FROM THEINSURER HOW MUCH INCOME SHOULD SHE REPORT

A) P!,,,,,B) 2,,,,,C) 3,,,,,D) NONE


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'%. ASSUME THAT SOFIA DIED AFTER 1, YEARS OF PAYING PREMIUM.HOW MUCH INCOME SHOULD BE REPORTED TO THE BIR

A) P!,,,,,

B) 1,,,,,C) 4,,,,,D) NONE

NUMBERS TO $ ARE BASED ON THE FOLLOWING INFORMATION:

PAUL INSURED HIS LIFE WITH AN INSURANCE COMPANY . UNDER THECONTRACT HE WILL PAY A MONTHLY PREMIUM OF P2,,, FOR 1, YEARS.IN CASE OF DEATH BEFORE THE 1,TH YEAR HIS BENEFICIARY WILLRECEIVE AN INDEMNIFICATION IN THE AMOUNT OF P1!,,,,. IF HE IS STILL

LIVING ON THE 1,

TH

YEAR HE WILL RECEIVE THE FACE VALUE OF P!,,,,,.

''. IF PAUL DIES ON THE !TH YEAR HIS BENEFICIARY WILL REPORT ANINCOME OF-

A) P!,,,,,B) 1!,,,,C) 2%,,,,D) EXEMPT

'. SUPPOSE PAUL DIES ON THE !TH YEAR AND HIS BENEFICIARY WASOFFERED TO RECEIVE P1!,,,, IN LUMP SUM OR TO RECEIVE IT ATP2,,,, A MONTH FOR TEN(1,) MONTHS AND THE BENEFICIARYCHOSE THE 2 ND OPTION HE WILL REPORT AN INCOME OF-

A) P!,,,,,B) 1!,,,,C) !,,,,D) EXEMPT

'*. SUPPOSE PAUL SURVIVED THE POLICY AND WAS ABLE TO RECEIVEP!,,,,, HE WILL REPORT AN INCOME OF-

A) P!,,,,,B) 2%,,,,C) 1!,,,,D) NONE

,. ANDRES IS THE OWNER AND BENEFICIARY OF A P!,,,,, POLICY ONTHE LIFE OF HIS FATHER. ANDRES SELLS THE POLICY TO HIS


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BROTHER ROLLY FOR P1!,,,,. ROLLY SUBSE&UENTLY PAYSPREMIUMS OF P!,,,,. UPON HIS FATHER0S DEATH ROLLY MUST

A) INCLUDE P!,,,,, IN HIS GROSS INCOMEB) EXCLUDE THE ENTIRE PROCEEDS IN HIS GROSS INCOME

C) INCLUDE P3,,,,, IN HIS GROSS INCOMED) INCLUDE P3!,,,, IN HIS GROSS INCOME

1. MR. BASIL INSURED HIS LIFE WITH HIS ESTATE AS BENEFICIARY.IN2,, AFTER MR. BASIL HAD PAID P%!,,, IN PREMIUM HE ASSIGNEDTHE POLICY TO MR. OSE LLAMADO FOR P%,,,, AND MR. LLAMADOCONTINUED PAYING THE PREMIUMS. MR. BASIL DIED AND MR.LLAMADO COLLECTED THE TOTAL PROCEEDS OF P2,,,,,. MR.LLAMADO AFTER THE ASSIGNMENT AND BEFORE MR. BASIL0SDEATH PAID TOTAL PREMIUMS OF P,,,,. AS A RESULT OF THEABOBE TRANSACTION MR. LLAMADO-(RPCPA)

A) MAY CONSIDER THE PROCEEDS OF P2,,,,, AS EXEMPT FROM TAXB) DERIVED A TAXABLE INCOME OF P!!,,,C) DERIVED A TAXABLE INCOME OF P%,,,,D) ANSWER NOT GIVEN

2. BINATA REYES WON THE INTERNATIONAL BILLIARDCHAMPIONSHIP HELD IN MADRID SPAIN. THE TOURNAMENT WASSANCTIONED BY A NATIONAL SPORTS ASSOCIATION WHICH ISRECOGNI5ED BY THE PHILIPPINE OLYMPIC COMMITTEE. HE WASAWARDED U.S.8%,,,, BY THE SPONSOR OF THE TOURNAMENT. HEWAS ALSO GIVEN P2!,,,, CASH BY SAN MIGUEL CORPORATION ASPRI5E OR AWARD.

IN THE SAME YEAR HE ENTERED INTO A CONTRACT WITH THE SAMECOMPANY TO ADVERTISE THEIR PRODUCT FOR P1!,,,,,.

IF THE EXCHANGE RATE OF EVERY U.S. 81 IS P4! BINATA REYES SHOULDREPORT AN INCOME OF +

A) P4'!,,,,B) 1!,,,,,C) 1'!,,,,D) 32!,,,,

3. WHILE CROSSING ALONG THE INTERSECTION OF LEGARDA ANDRECTO AVENUE MISS MINA MALAS WAS BUMPED BY A PASSENGEREEPNEY. AS A CONSE&UENCE OF THE ACCIDENT SHE WASHOSPITALI5ED FOR 2, DAYS. THE DRIVER AND THE OPERATOR OF


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THE PASSENGER EEPNEY PAID HER A TOTAL AMOUNT OF P13!,,,FOR THE FOLLOWING EXPENSES THAT SHE INCURRED/

HOSPITAL BILLS P%,,,,COST OF MEDICINES 1!,,,

MORAL DAMAGES FOR MENTALANGUISH AND OTHERS %,,,,

SHE ALSO RECEIVED P2,,,, AS SETTLEMENT OF A LIBEL CASE THAT SHEFILED AGAINST A TV STATION WHICH ANNOUNCED THAT SHE WASPREGNANT AT THE TIME OF THE ACCIDENT AND THAT THE FETUS WASABORTED.

THE INCOME TO BE REPORTED BY MINA IS-

A) 5ERO

B) P2,,,,C) %,,,,D) 1!!,,,

4. MR. MONTES WAS INURED IN A VEHICULAR ACCIDENT IN 2,,. HEINCURRED AND PAID MEDICAL EXPENSES OF P2,,,, AND LEGALFEES OF P1,,,, DURING THE YEAR. IN 2,,* HE RECEIVED P',,,, ASSETTLEMENT FROM THE INSURANCE COMPANY WHICH INSUREDTHE CAR OWNED BY THE OTHER PARTY INVOLVED IN THEACCIDENT. FROM THE ABOVE PAYMENTS AND TRANSACTIONS THEAMOUNT OF TAXABLE INCOME OF MR. MONTES IN 2,, IS-(RPCPA)

A) 5EROB) P4,,,,C) ',,,,D) !,,,,

!. AN ACCIDENT ATTRIBUTED TO THE NEGLIGENCE OF THE DRIVER OFSUPERMAN LINES RESULTED IN THE DEATH OF RICHARD0S WIFEPHYSICAL INURIES TO RICHARD THAT PREVENTED HIM FROMWORING FOR TWO(2) MONTHS AND THE TOTAL WREC OF HISBRAND NEW CAR WHICH HE HAD BOUGHT FOR P4!,,,,.

IN AN ACTION FOR DAMAGES THE COURT AWARDED TO RICHARD THEFOLLOWING/

P4,,,,- INURIES TO RICHARD CONSISTING MAINLY IN THE LOSS OFTHE LEFT LEG

4,,,,- TWO MONTHS SALARY OF RICHARD,,,,- FOR THE DEATH OF HIS WIFE


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1,,,,,- MORAL DAMAGES FOR THE PHYSICAL SUFFERING ANDMENTAL ANGUISH

%,,,,,- FOR THE LOSS OF HIS CAR THE VALUE OF WHICH HADINCREASED

BASED ON THE FOREGOING RICHARD SHOULD REPORT INCOME OF-

A) P1*,,,,B) %,,,,C) 3,,,,D) 24,,,,

%. LYDIA WAS HIT BY A WAYWARD BUS WHILE ON HER WAY HOME.SHE SURVIVED BUT HAD TO PAY P1!,,,, FOR HERHOSPITALI5ATION. SHE WAS UNABLE TO WOR FOR SIX(%) MONTHSWHICH MEANT THAT SHE DID NOT RECEIVE HER USUAL SALARY OF

P1,,,, A MONTH OR A TOTAL OF P%,,,,. SHE SUED THE BUSCOMPANY AND WAS ABLE TO OBTAIN A FINAL UDGMENTAWARDING HER P1!,,,, AS REIMBURSEMENT FOR HERHOSPITALI5ATION P%,,,, FOR THE SALARIES SHE FAILED TORECEIVE WHILE HOSPITALI5ED AND P2!,,,, AS MORAL DAMAGESFOR HER PAIN AND SUFFERING. SHE WAS ABLE TO COLLECT INFULL FROM THE UDGMENT.

HOW MUCH INCOME DID SHE REALI5E WHEN SHE COLLECTED FROM THEUDGMENT

A) P4%,,,,B) 2!,,,,C) %,,,,D) 4,,,,,

'. SAMSONA WAS INURED IN A VEHICULAR ACCIDENT IN 2,,'. SHEINCURRED AND PAID HOSPITAL EXPENSES OF P3,,,, AND LEGALFEES OF P1!,,, DURING THAT YEAR. IN 2,, SHE RECEIVED P4,,,,AS SETTLEMENT FROM THE INSURANCE COMPANY WHICH INSUREDTHE CAR OWNED BY DIMAR THE OTHER PARTY INVOLVED IN THEACCIDENT. FROM THE ABOVE PAYMENTS AND TRANSACTIONS THEAMOUNT OF INCOME TAXABLE TO SAMSONA IS-

A) P4,,,, IN 2,,B) !,,, IN 2,,C) !,,, IN 2,,'D) NONE


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. WHICH OF THE FOLLOWING IS A TAXABLE INCOME-(RPCPA)

A) INCOME FROM &UALIFIED PENSION PLANB) COMPENSATION FOR PERSONAL INURIESC) MORAL DAMAGES

D) INTEREST ON MORAL DAMAGES

*. MISS TUA5ON HAD RECENTLY OINED MMC AS SALES EXECUTIVE.SHE WAS ADVISED TO BE RETRENCHED BECAUSE THE COMPANYWAS LOSING HEAVILY BUT THAT SHE WOULD BE GIVEN ASUBSTANTIAL SEPARATION PAY. THE GENERAL MANAGERHOWEVER SUGGESTED TO MISS TUA5ON TO FILE A LETTER OFRESIGNATION FROM THE COMPANY INSTEAD OF HAVING BEENINVOLUNTARILY SEPARATED AS THE LATTER WOULD HAVEIMPLICATIONS OF INEFFICIENCY ON HER PART. MISS TUA5ONCHOSE TO RESIGN FROM THE COMPANY AND RECEIVED THE SUM

OF P1,,,,, AS SEPARATION PAY. THE ABOVE AMOUNT IS-(RPCPA)

A) EXEMPT FROM INCOME TAXB) TAXABLE IN FULLC) NON-DEDUCTIBLE EXPENSE ON THE PART OF THE COMPANYD) PARTIALLY TAXABLE

*,. LETTY AN OFFICIAL OF SAMPAGUITA CORPORATION ASED FORAN EARLIER RETIREMENT BECAUSE SHE WAS EMIGRATING TOCANADA. SHE WAS PAID P1 MILLION AS A SEPARATION PAY INRECOGNITION OF HER VALUABLE SERVICES TO THE CORPORATION.

SHANE ANOTHER OFFICIAL OF THE SAME COMPANY WAS SEPARATEDFOR OCCUPYING A REDUNDANT POSITION. SHE WAS GIVEN P!,,,,, ASSEPARATION PAY.

SHEILA WAS SEPARATED DUE TO HER FAILING EYESIGHT. SHE WAS GIVENP2!,,,, AS SEPARATION PAY.

ALL OF THE THREE(3) WERE NOT &UALIFIED TO RETIRE UNDER THE BIR-APPROVED PENSION PLAN OF THE CORPORATION.

&1/ IS THE SEPARATION PAY GIVEN TO LETTY SUBECT TO INCOME TAX

&2/ HOW ABOUT THE SEPARATION PAY RECEIVED BY SHANE

&3/ HOW ABOUT THE SEPARATION PAY RECEIVED BY SHEILA

A) YES TO ALL &UESTIONSB) YES TO 2 ND &UESTION


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C) NO TO ALL &UESTIONSD) NO TO 2 ND AND 3RD &UESTIONS

*1. DURING THE YEAR BEN RECEIVED A COCONUT LAND FROM HISMOTHER BY WAY OF AN INTER-VIVOS DONATION. THE LAND HAD A

MARET VALUE OF P',,,,, AND EARNING AN AVERAGE ANNUALINCOME OF P!,,,,.

IN THE SAME YEAR HIS MOTHER DIED. HE INHERITED A PASSENGER BUSVALUED AT P4,,,,, AND A RESIDENTIAL HOUSE WORTH P2,,,,,,. THEBUS EARNED A TOTAL INCOME OF P3,,,, IN THE HANDS OF BEN.

AS A CONSE&UENCE OF HIS MOTHER0S DEATH HE RECEIVED P4,,,,,FROM AN INSURANCE COMPANY AS PROCEEDS OF AN INSURANCE POLICYTAEN BY HIS MOTHER WHO APPOINTED HIM AS THE BENEFICIARY. THETOTAL PREMIUMS PAID WAS P1!,,,,.

THE INCOME SUBECT TO TAX IS-

A) P3!,,,,,B) 33!,,,,C) 33,,,,D) ,,,,

*2. AFTER WORING FOR 3, YEARS AT STO. DOMINGO CORPORATIONMISS TAPIA RETIRED FROM EMPLOYMENT AT THE AGE OF %,. SHERECEIVED P%,,,,, AS RETIREMENT PAY FROM THE PRIVATERETIREMENT PLAN MAINTAINED BY THE EMPLOYER.

OTHER THAN HER RETIREMENT BENEFITS SHE ALSO RECEIVED HERENDOWMENT INSURANCE POLICY IN THE AMOUNT OF P4,,,,, WHICH SHEWAS PAYING FOR 2, YEARS AT AN ANNUAL PREMIUM OF P!,,,.

HOW MUCH INCOME MUST BE REPORTED BY MISS TAPIA

A) P3,,,,,B) 4,,,,,C) %,,,,,D) NONE

*3. ANTONY WAS HIRED AS STAFF AUDITOR OF RGF AND COMPANY IN1**1. IN DECEMBER 1** HE TRANSFERRED TO BAYAN ANDASSOCIATES. IN 2,,, HE RETURNED BAC TO RGF AND COMPANYUNTIL HIS RETIREMENT IN 2,,% AT THE AGE OF !!.


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&UESTION 1/ ARE THE RETIREMENT BENEFITS TAXAB LE TO ANTONY&UESTION 2/ SUPPOSE HE WAS TERMINATED FROM EMPLOYMENT DUE TO

DISHONESTY. IS THE SEPARATION PAY TAXABLE TO ANTONY&UESTION 3/ SUPPOSE HE WAS TERMINATED FROM EMPLOYMENT DUE TO

THE MERGER OF THE TWO AUDIT FIRMS. WILL THE

SEPARATION PAY TAXABLE TO ANTONY

A) NO YES NOB) NO YES YESC) YES NO NOD) YES NO YES

*4. ON OCTOBER 1 2,,* GILDA INHERITED PROPERTIES WORTHP3,,,,,, FROM HER MOTHER. THE PROPERTIES ARE EARNINGINCOME OF P*,,,, A MONTH.

HOW MUCH INCOME IS TO BE REPORTED BY GILDA IN 2,,*

A) P3,*,,,,B) 3,,,,,,C) 32',,,,D) 2',,,,

*!. VILLAMOR AN EMPLOYEE OF A COOPERATIVE WAS REGULARLYRECEIVING A MONTHLY SALARY AND ALLOWANCE OF P3!,, ANDP1,,, RESPECTIVELY. ON UNE 1 2,, HE WAS RETRENCHED BYTHE COOPERATIVE PAYING HIM A SEPARATION PAY OF P12!,,,. HEDECIDED TO USE THIS MONEY IN BUYING TRIMOBILE. FOR SIX(%)MONTHS HE EARNED A NET INCOME OF P24,,,.

HOW MUCH INCOME SHOULD VILLAMOR DECLARE IN 2,, FOR INCOMETAX PURPOSES

A) P4'!,B) 4%!,,C) 1'3'!,D) 1'1,,,

*%. RAMONA MONTERO WAS RETIRED BY HER EMPLOYER-CORPORATION IN 2,, AND PAID P2,,,,,, AS A RETIREMENTGRATUITY WITHOUT ANY DEDUCTION OF WITHHOLDING TAX. THECORPORATION BECAME BANRUPT IN 2,,'. CAN THE BIR SUBECTTHE P2,,,,,, RETIREMENT GRATUITY TO INCOME TAX-(RPCPA)

1ST ANSWER/ NO IF THE RETIREMENT GRATUITY WAS PAID BASED ON AREASONABLE PENSION PLAN WHERE MONTERO WAS %, YEARS OLD


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AND HAS SERVED THE CORPORATION FOR * YEARS.

2 ND ANSWER/ YES IF MONTERO WAS FORCED BY THE CORPORATION TORESIGN DUE TO RETRENCHMENT.

A) BOTH ANSWERS ARE WRONGB) BOTH ANSWERS ARE CORRECTC) FIRST ANSWER IS CORRECT THE SECOND IS WRONGD) FIRST ANSWER IS WRONG THE SECOND IS CORRECT.

*'. WHICH OF THE CEILINGS ON THE FOLLOWING DE MINIMIS BENEFITSIS CORRECT

RICE SUBSIDY UNIFORM ALLOWANCEA) P1,,, P3,,,B) 1,,, 4,,,

C) 1!,, 3!,,D) 1!,, 4,,,

*. 1ST STATEMENT// LAUNDRY ALLOWANCE NOT EXCEEDING P3,, PERMONTH IS NOT EXEMPT DE MINIMIS BENEFIT IFGIVEN TO RAN-AND-FILE EMPLOYEES

2 ND STATEMENT/ RICE SUBSIDY OF P1!,, PER MONTH IS AN EXEMPT DEMINIMIS BENEFIT REGARDLESS OF WHETHER THERECIPIENT EMPLOYEE IS OCCUPYING A MANAGERIALPOSITION OR NOT

A) BOTH STATEMENTS ARE WRONGB) BOTH STATEMENTS ARE CORRECTC) THE FIRST STATEMENT IS CORRECT THE SECOND STATEMENT IS

WRONGD) THE FIRST STATEMENT IS WRONG SECOND STATEMENT IS CORRECT

**. AFTER WORING FOR 3O YEARS AND DUE TO OLD AGE RAFFYRETIRED FROM HIS EMPLOYMENT ON DECEMBER 31 2,, AS ARAN-AND-FILE EMPLOYEE OF TUMAGAY CORPORATION. AS ACONSE&UENCE OF HIS RETIREMENT HE RECEIVED THE FOLLOWINGFROM HIS EMPLOYER/

SALARY FOR 2,, P2!,,,,CHRISTMAS GIFT 2!,,,ANNIVERSARY BONUS 2!,,LOYALTY AWARD 1,,,,RETIREMENT PAY '!,,,,


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BASED ON THE ABOVE DATA THE AMOUNT SUBECT TO TAX OF RAFFY IS-

A) P2!,,,,B) 2!'!,,C) 2!2!,,

D) 1,3'!,,

NUMBERS 1"" AND 1"1 ARE BASED ON THE FOLLOWING INFORMATION:

RICY HAD THE FOLLOWING DATA FROM HIS EMPLOYMENT IN 2,,/

MONTHLY SALARY P12,,,TAXES WITHHELD ,,,PAG-IBIG CONTRIBUTIONS 1!,,UNION DUES 24,,

PHILHEALTH CONTRIBUTIONS '2,SSS PREMIUMS 4,13TH MONTH PAY 12,,,MID-YEAR BONUS 12,,,LOYALTY AWARD !,,,

1,,. THE PORTION OF COMPENSATION WHICH IS EXCLUDED FROMTHE GROSS COMPENSATION INCOME IF RICY IS A RAN-AND-FILEEMPLOYEE IS-

A) P!1,,B) 341,,C) 2*,,,D) NONE

1,1. THE GROSS COMPENSATION INCOME OF RICY IN 2,, IS-

A) P144,,,B) 1!,,,,C) 1,**,,D) 13*,,

1,2. WHICH OF THE FOLLOWING COMPENSATION PAYMENTS TO AMINIMUM WAGE EARNER IS SUBECT TO INCOME TAX

A) HOLIDAY PAYB) OVERTIME PAYC) NIGHT SHIFT DIFFERENTIAL PAYD) NONE OF THE ABOVE


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1,3. THREE(3) TAXPAYERS HAVE THE FOLLOWING DATA/

ALCAN5O BARRIENTOS CORPORAL2,,* BASIC PAY P**,4 P1,11'2 P43%MONTHLY BASIC PAY 2!4 431 1,!4%

HOLIDAY PAY 43! - -OVERTIME PAY 12!% 14!* 2!43HA5ARD PAY - - 1,,, NIGHT SHIFT DIFF PAY - 1%% -TOTAL PAYFOR THE MONTH **4! 11!'% 14,*

WHO OF THE ABOVE TAXPAYER(S) IS$ARE EXEMPT FROM INCOME TAX

A) ALCAN5O ONLYB) ALCAN5O AND BARRIENTOS

C) ALCAN5O BARRIENTOS AND CORPORALD) BARRIENTOS AND CORPORAL

CHAPTER 12- INCOME TAX OF CORPORATIONS

MULTIPLE CHOICE

1,4. FOR PURPOSES OF INCOME TAXATION WHICH OF THEFOLLOWING IS NOT CONSIDERED AS A CORPORATION

A) GENERAL PROFESSIONAL PARTNERSHIPB) BUSINESS PARTNERSHIPC) UNREGISTERED PARTNERSHIPD) OINT STOC COMPANIES

1,!. WHICH OF THE FOLOWING BUSINESSES IS NOT TAXABLE AS ACORPORATION

A) ANDREA BARBIE AND CRISSY CONTRIBUTED P!,,,,, EACH ANDOPENED UP A DEPARTMENT STORE IN THE DOWNTOWN. THEYAGREED THAT WHATEVER NET PROFIT IS EARNED WILL BE

DISTRIBUTED E&UALLY TO THEM. THEY DID NOT BOTHER TOREGISTER THE BUSINESS WITH THE SECURITIES AND EXCHANGECOMMISSION

B) GIGI AND AYAY TWO SENIOR STAFF AUDITORS OF A BIGACCOUNTING AND AUDITING FIRM RESIGNED FROM THEIR OBAND ORGANI5ED A NEW FIRM WHICH THEY NAMED AS GIGI AYAYAND COMPANY CPA:.


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C) LAVINIA DORINA ROSA MIA AND CAPICAT FORMED A BUSINESSORGANI5ATION WITH THE FOLLOWING AGREED FEATURES/ 1) THEYARE DEPRIVED OF THEIR GENERAL AGENCY TO ACT ON BEHALF OFTHEIR VENTURES 2) THE POWERS OF MANAGEMENT ARE VESTEDON THE BOARD OF TRUESTEES 3) THE OWNERSHIP IS REPRESENTED

IN TRANSFERABLE CERTIFICATES 4) THE BUSINESS CONTINUES FORA FIXED TERM NOTWITHSTANDING THE DEATH OR DISABILITY OFONE OF THEM AND !) THE LIABILITY OF THE PARTNERS IS NOTLIMITED TO THEIR CONTRIBUTIONS

D) A GROUP OF FIVE(!) ENTREPRENEURS HAD ORGANI5ED FILED ANDREGISTERED THE ARTICLES OF INCORPORATION OF COANGUHACORPORATION. IT HAS AN AUTHORI5ED CAPITAL STOC OF P1,MILLION DIVIDED INTO 1,,,,, SHARES EACH SHARE HAVING A PARVALUE OF P1,,

1,%. WHICH OF THE FOLLOWING IS SUBECT TO INCOME TAX

A) SSS AND GSISB) PHILIPPINE HEALTH INSURANCE CORPORATION(PHIC)C) PROFESSIONAL REGULATION COMMISSION(PRC)D) PHILIPPINE AMUSEMENT AND GAMING CORPORATION(PAGCOR)

1,'. "TAXABLE NET INCOME RECEIVED DURING EACH YEAR FROMALL SOURCES# IS THE TAX BASE FOR INCOME PURPOSES OF THISCLASS OF TAXPAYERS-(RPCPA)

A) DOMESTIC CORPORATIONSB) RESIDENT CORPORATIONSC) RESIDENT FOREIGN CORPORATIONS ENGAGED IN TRADE OR

BUSINESS IN THE PHILIPPINESD) RESIDENT FOREIGN CORPORATION NOT ENGAGED IN TRADE OR

BUSINESS IN THE PHILIPPINES

1,. ONE OF THE FOLLOWING IS TAXED ON GROSS INCOME-

A) DOMESTIC CORPORATIONB) RESIDENT FOREIGN CORPORATIONC) NON-PROFIT CEMETERYD) NON-RESIDENT FOREIGN CORPORATION

1,*. RGF CORPORATION A DOMESTIC CORPORATION HAS THEFOLLOWING RECORDS OF INCOME AND EXPENSES IN 2,,*/

GROSS INCOME NET OF 1 WHT P143!!,,EXPENSES '!%,,,RENT INCOME NET OF ! WHT 13%,,


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EXPENSES ON RENT 34%,,DIVIDEND FROM DOMESTIC CORPORATION 2!,,,ROYALTY ,,,,INTEREST FROM BAN DEPOSIT WITH PNB GROSS OF TAX 1!,,,

THE INCOME TAX PAYABLE BY RGF CORPORATION IS-

A) P241,2,B) 21*32,C) ,34,,D) 2!*4*,

11,. BASED ON THE DATA IN NUMBER 1,* ABOVE THE TOTALFINAL TAXES PAYABLE ON RGF CORPORATION IS-

A) P1*,,,

B) 21!,,C) 332!,D) 3,,,

111. LCY CORPORATION A CORPORATION ENGAGED IN BUSINESSIN THE PHILIPPINES AND ABROAD HAS THE FOLLOWING DATA IN2,,*/

GROSS INCOME PHILIPPINES P*'!,,,EXPENSES PHILIPPINES '!,,,,GROSS INCOME USA '',,,,EXPENSES USA %3,,,,INTEREST ON BAN DEPOSIT 2!,,,

THE INCOME TAX DUE IF THE CORPORATION IS-

DOMESTIC RESIDENT NON-RESIDENTFOREIGN FOREIGN

A) P11%,, P'2,,, P32,,,,B) 12''!, ''!, 3!,,,,C) 312,,, !1!!, 11%,,D) 1,*.!,, %'!,, 3,,,,,

112. FLT CORPORATION A DOMESTIC CORPORATION HAS THEFOLLOWING RECORD OF INCOME AND EXPENSES DURING THEYEAR/


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GROSS INCOME P1!4,,,,EXPENSES %!4,,,DIVIDEND FROM A RESIDENT FOREIGN CORPORATION *!,,,ROYALTIES PHILIPPINES 23,,,,ROYALTIES USA 1'!,,,

INTEREST ON TIME DEPOSIT WITH METROBAN 1,,,INTEREST ON MONEY MARET PLACEMENT 2!,,,

THE TAXABLE INCOME ON FLT CORPORATION IS-

A) P%,,,B) 11!%,,,C) %41,,,D) %1%,,,

113. THE TOTAL FINAL WITHHOLDING TAX ON FLT CORPORATION

IS-

A) P!14'!B) '2%,,C) 1,312,D) 141,,

NUMBERS 114 TO 11 ARE BASED ON THE FOLLOWING INFORMATION:

GCF CORPORATION WHICH STARTED WITH ITS OPERATIONS IN 1**, HASTHE FOLLOWING RECORDS IN 2,,*/

IST &TR 2 ND &TR 3RD &TR 4TH &TR GROSS PROFIT P!,,,,, P!,,,, P,,,,

208946383 s C Test Bank Income Taxation

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Transcript of 208946383 s C Test Bank Income Taxation