Allowable-Deductions-Pretest PDF

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MALAYA ALLOWABLE DEDUCTIONS PRETESTWhich of the following cannot claim deductions from gross income despite actual engagement inbusiness? - Resident alien - Non-resident citizen - Resident citizen - Non-resident alien not engaged in trade or businessWhich of the following taxpayers cannot claim dedu...

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MALAYA ALLOWABLE DEDUCTIONS PRETEST Which of the following cannot claim deductions from gross income despite actual engagement in business? • Resident alien • Non-resident citizen • Resident citizen • Non-resident alien not engaged in trade or business Which of the following taxpayers cannot claim deductions from gross income? • Non-resident foreign corporation • Domestic corporation • General professional partnership • Resident foreign corporation Which of the following can be claimed as deduction? • Transportation allowance of the taxpayer's dependents • Depreciation of the residence of the taxpayer • Losses from destruction of the taxpayer's residence • Transportation allowance of employees of the taxpayer Which of the following can be deducted by an individual taxpayer not engaged in business? • Communication expenses • Transportation expenses • None of these • Internet expense 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; and Expenses with supporting documents not subject to CWT, P200,000. Determine the amount of deductions. • P1,400,000 • P1,000,000 • P800,000 • P1,200,000 • Answer is not given. The taxpayer withheld 5% creditable withholding tax on rental payments to various VATregistered lessors. The total taxes withheld were P5,600. What is the deductible amount of rental expense? • P100,000 • P56,000 • P112,000

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P0

A taxpayer paid P45,000 property insurance having a 12-month coverage starting March 1, 2018. Compute the deductible insurance expense in 2018. • P0 • P45,000 • P37,500 • P75,00 Which of the following can treat capital expenditures as outright deduction? • Private educational institutions • All of these • Public schools or universities • Non-profit schools or universities On September 30, 2020, a taxpayer borrowed P1,000,000 at 10% annual interest to finance his acquisition of a luxury car. Compute the deductible interest expense in 2020. • P50,000 • P0 • P25,000 • P75,000 The following relates to a taxpayer: Interest expense, P400,000; and Interest income - time deposit, P100,000. Compute the deductible interest expense. • P300,000 • P367,000 • P333,000 • P400,000 Which is deductible tax expense against gross income? • Donor's tax • Estate tax • Documentary stamp tax • Foreign income tax claim as tax credit Which is a deductible tax expense? • Surcharges and penalties • Real property tax on business properties • Special assessment • Stock transaction tax Wagering losses are deductible • are treated as deferred charge subject to amortization over 60 months. • up to the extent of gains on wagering transactions

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in full to the extent of capital gains

Which is not a requisite of a deductible loss? • It must pertain to a property connected to the trade, business or profession of the taxpayer. • It must be reported to the BIR within 45 days from the occurrence of the loss. • It must be compensated by insurance or indemnity contracts. • It must be sustained by the taxpayer in the current year. 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? • P0 • P25,000 • P50,000 • P30,000 Which of the following ordinary assets cannot be depreciated? • Machineries • Office equipment • Building and its improvements • Land On July 1, 2018, a taxpayer purchased equipment for P500,000 which was estimated to be useful until July 1, 2023, with an expected P100,000 residual value. Compute the 2018 depreciation expense using the straight line method. • P40,000 • P80,000 • P50,000 • P0 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. • P180,000 • P130,000 • P190,000 • P230,000

A taxpayer paid for research and development expenses that are not chargeable to capital account. The taxpayer wished to amortize the same over its expected period of benefits. If the R&D is expected to benefit the taxpayer for 6 years, what is the correct amortization period for the R&D expenses? • 72 months • 60 months • 30 months • 36 months 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? • P500,000 • P200,000 • P230,000 • P300,000...