Banggawan 13-15b tf PDF

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Warning: TT: undefined function: 32 Warning: TT: undefined function: 32Chapter 13 TF page 461True or False 1 1 cost of investments and land are deductible against their proceeds in the year of sale. 2 entire cost of depreciable properties is deductible against their proceeds in the year of sale. 3 e...

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Chapter 13 TF page 461 True or False 1 1.The cost of investments and land are deductible against their proceeds in the year of sale. 2.The entire cost of depreciable properties is deductible against their proceeds in the year of sale. 3.Prepaid expenses are deductible upon payment consistent with the rule that advanced incomes are taxable upon receipt. 4.Capital expenditures are deductible against future income. 5.Personal expenses are deductible from gross income. 6.Losses on properties not used in business may be deducted but only to the extent of capital gains. 7.Expenses intended for the business and the personal use of the taxpayer must be allocated between the two. Only the portion pertaining to the business is deductible. 8.The expense of defending a patent is a business expense deductible in the current period. 9.The depreciation of the property revaluation gain is deductible. 10.Supplies and inventories are expensed using the inventory method.

True or False 2 1.So long as the expense relates to the generation of an income subject to any income tax, the same is deductible against gross income subject to regular tax. 2.The amount of expense between affiliated companies may be adjusted by the BIR to reflect their arm's length value. 3.The failure to deduct creditable withholding tax on income payments will render the expense non-deductible. 4.Immaterial expenditures must always be capitalized. 5.Repairs that increase property useful life are capitalized. 6.Repairs that increase property fair value are capitalized. 7.An unpaid expense may be deducted under the accrual basis of accounting. 8.The government should not enrich itself at the expense of the taxpayers. Losses between related parties are deductible in the same way gains between related parties are taxable. 9. Taxpayers opting to use the optional standard deduction must also maintain records of their expenses. 10. incentives are deductible because they are actual expense.

Chapter 13-A TF page 506 - 508 True or False 1 1. Interest incurred in the financing of petroleum operations may at the option of the taxpayer be capitalized or expensed. 2. Income tax is not an expense. 3. The arbitrage limit applies only when there is an intentional arbitrage. 4. The arbitrage limit applies to all taxpayers including individuals. 5.Interest expenses incurred with related parties are deductible. 6.Interest expenses are deductible in full amount if there is no interest income subject to final tax during the period. 7.Interest on a prescribed debt is deductible. 8.A deductible interest must not be incurred between related parties. 9.The allowable deduction for deductible taxes includes the basic tax, surcharge and interest. 10.Foreign taxes can be claimed as a deduction or tax credit. 11.Foreign corporations and aliens can claim deduction or tax credit for foreign taxes. 12.Capital loss is deductible to the extent of ordinary gain while ordinary loss is deductible in full. 13.Losses must be reported to the BIR within 45 days from the occurrence of the casualty, robbery, theft, or embezzlement giving rise to the loss. 14.Depreciation on revaluation surplus of properties can be deducted as part of depreciation expense. 15. the claim of the same loss in the income tax return of the estate and in the estate tax return is not allowed

True or False 2 1. Bad debt expenses representing loss of capital can be deducted by cash basis taxpayers. 2. Bad debt expenses between related parties can be deducted as long as these are adequately supported with documentary evidence. 3.The loss of capital investment in a business can be claimed as bad debt expense. 4. The subsequent recovery of bad debt expense must be reverted back to gross income to the extent of the tax benefit of the deduction in the year the deduction is made. 5. The loss on insured property cannot be deducted. 6. In total destruction of properties, restoration costs are treated as new acquisition of properties. 7.If the fair value of the property is not determinable, restoration costs are expensed to the extent of the basis of the original property. The excess over the basis is treated as an increase in fair value and is capitalized. 8. The loss in value of assets is deductible only when sustained and realized. 9.Losses on wagering transactions are deductible in full.

10.With the exception of domestic corporations and resident citizens, expenses incurred abroad cannot be deducted unless incurred in connection with the: Philippine business. 11.Contributions are valued at the fair value of the property donated: 12.The recovery of bad debts by cash basis taxpayers must always be reverted back to gross income. 13.The recovery of bad debts by accrual basis taxpayers may be reverted back to gross income. 14.Capital assets can be depreciated for tax purposes. 15. The depreciation expense on properties held under life tenancy is computed as if the life tenant were the absolute owner of the property.

True or False 3 1. Petroleum operations are not subject to the limit on the deduction of intangible exploration and development costs after the commencement of commercial production. 2.Contribution expenses are deductible if the donee is a domestic institution. 3.Donations to foreign institutions covered by treaty exemptions are fully Deductible. 4. Contribution expenses are measured at the fair value of the property donated. 5. Private educational institutions are allowed to deduct capital expenditures. 6. The depreciation on properties held in trust is apportioned between the income Beneficiaries and the trustees in accordance with the provision of the instrument creating the trust or on the basis of the income allowable to each. 7.The depreciation of revaluation surplus is not deductible in taxation. 8.No depreciation expense is allowable for helicopters, yachts, airplanes or aircraft and land vehicles which exceeds P2,400,000 in value unless the main line of business of the taxpayer is transport or lease of transportation equipment. 9.Tangible development costs in wasting assets are capitalized and depreciated. 10.Intangible exploration and development costs incurred before commercial production in a wasting asset operation are capitalized as cost of the wasting asset. 11.After commencement of commercial production, intangible exploration and development costs incurred on nonproducing wells or mines are deductible in the period paid or incurred. 12.After commencement of commercial production, intangible exploration and development costs incurred on producing wells or mines are always capitalized and amortized using the cost-depletion method. 13.The threshold on partially deductible contributions of corporate taxpayers is 10% of the net income before the contribution. 14.The funding of past service cost is amortized over 10 years or the actual vesting period whichever is longer. 15.The overfunding of defined benefit plans is treated as funding of past service cost and is amortized over 10 years. 16.The employee counterpart in a contributory pension plan is deductible by the employer. 17.Research and development costs related to land must be capitalized.

18.Research and development costs not related to capital accounts are either deducted outright or deferred and amortized over a period of not less than 60 months. 19.The EAR expense on the sale of goods is subject to a limit of 0.5%of gross sales. 20.The EAR expense on the sale of services is subject to a limit of 1%of net revenue. 21.Purely employed individuals can claim deductions for donations made.

Chapter13-B TF page 545-546 True or False 1 1.The employers are allowed additional deduction of 15% on the compensation paid to persons with disability. 2.An adopting private entity of a public school is-entitled to a deduction incentive equivalent to double the amount donated to a public school. 3.Taxpayers who installed improvements in their facilities to accommodate persons with disability are allowed an additional 50%deduction incentive based on the value of such-improvement. 4. The distribution of the corpus of a taxable estate or trust is an item of special deduction against the gross income of th e estate or trust. 5.The transfer to the reserve fund of insurance companies is a special deduction, but the release from the reserve fund is an item of gross income. 6. Dividends are non-deductible by any taxpayer except real estate investment trusts. 7. The transfers to all reserve funds of the cooperative including mandatory and discretionary funds are deductible from the gross income of cooperatives. 8. Persons with disability are mandatorily allowed a discount of 20% from all establishments. 9. Senior citizens are mandatorily allowed a discount of 25% from certain establishments. 10.The employer of senior citizens can claim additional deductions equivalent to 50% of the compensation paid to senior citizens who have income below the Poverty line. 11.Expenses incurred to comply with the requirement of the Expanded Breastfeeding Act are allowed an additional incentive equivalent to the amount of the expense incurred. 12.Attorneys are entitled to the value of their pro-bono services to indigent clients as deduction from gross income. 13.The allowable incentives to lawyers for pro-bono services shall not exceed 10% of the gross income from the actual performance of the legal profession. 14.Employers are entitled to an additional deduction of 50%of the productivity incentive bonus paid to their employees. 15.The amount of NOLCO shall not include the amount of deduction incentives allowed by law. 16.A small business was merged to a larger business. Even after the merger, the NOLCO of the small business is deductible by the larger business. 17.NOLCO is valid for 3 years. 18.NOLCO always exist when there is a net operating loss.

19.Net capital loss carry over cannot be carried over together with NOLCO. 20.An acquirer in a business combination sustained a net operating loss before the business combination. The acquirer is allowed to carry-over its net operating loss in prior years.

Chapter13-C TF page 570

True or False 1 1.Unlike individual taxpayers, corporations opting for OSD can claim deduction for cost of goods sold or cost of services. 2.OSD is in lieu of all deductions against gross income including personal exemptions. 3.Individuals can claim OSD up to 40% of gross sales or receipts or gross income. 4. Taxpayers opting to use the OSD are not required to submit financial statements. 5.Taxpayers may use the OSD for quarterly returns, then use the itemized deductions for the annual return. 6.The optional standard deduction is presumed unless the taxpayer signified in his return his intention to claim itemized deductions. 7. The taxable net income of individuals is 60%of their gross sales or receipts 8.Corporate taxpayers opting to use OSD will have taxable income equivalent to 60% of their gross income. 9. “Gross sales” is net of sales returns, allowances and discounts. 10. "Gross receipts” include other receipts incidental to the primary operations of the business. 11.Gains in dealings in properties are included in gross sales or receipts. 12. Corporate OSD is 40% of operating and non-operating gross income excluding only those subject to final tax or capital gains tax and exempt income. 13.For taxpayers using the accrual basis in the sales of services, gross receipts shall mean revenue. 14.Administrative and selling expenses are included in "cost of services.” 15.A partner can claim itemized deduction against his share in the net income of a general professional partnership provided the partnership is using the OSD. 16.A partner can claim OSD out of his share in the net income of a general professional partnership. 17.A partner can claim OSD out of his share in the net income of a general professional partnership provided the partnership is not using the OSD. 18.No deduction of whatever nature is allowed against compensation income, except mandatory deductions and exempt benefits. 19.Net operating loss carry-over and net capital loss carry-over are items of deductions hence; both are not claimable simultaneously with OSD. 20. The option to elect OSD may result into a net operating loss carry over.

Chapter 14 TF True or False 1.A revocable trust does not pay income tax. 2.Estates under judicial administration are considered individual taxpayers. 3.Non-resident persons shall file their tax return to the Office of the Commissioner of Internal Revenue. 4.The income distribution by a taxable estate or trust is a special deduction to the estate or trust, but is an item of gross income to the recipient heir or beneficiary. 5.The income of minors from properties received as donations from parents is taxable to the minor if the donation is exempt from the donor's tax. 6.The husband and the wife are treated as separate taxable units. Each spouse shall compute his or her taxable income, but both of them shall file a single return to include the income of both spouses. 7. The income of minors from properties received as donations from parents is taxable to the parents if the donor's tax on the donation is not paid. 8. A disabled person need not file a return by virtue of his disability. 9.The taxpayer's signature in the income tax return is presumed prima facie correct. 10.Large taxpayers shall e-file their tax returns through the BIR Electronic Filing and Payment System. 11.Two or more trusts are consolidated as a single trust when both are designated for the same beneficiary without regard to their grantor. 12.When the grantor reserved for himself part of the income of the trust, the sale shall be treated as income of the grantor. 13.A trusteed employee pension fund does not pay income tax. 14.The substituted filing of tax returns does not apply when there is concurrent or successive employment of the employee during the year. 15.An employee trust fund must be managed by the employer to be tax-exempt.

Chapter 15 A True or False 1 1.Foreign and domestic banks may have an EFCDU. 2.The income of FCDU, OBU, and EFCDU from residents other than depositary banks in the EFCDS or FCDS is subject to a 10%final tax. 3.The income of FCDU or EFCDU from foreign sources is subject to regular income tax. 4.Corporations subject to a rate below 30%are referred to as special corporations. 5.Corporation includes joint ventures,associations,and partnerships. 6.Joint ventures formed for the purpose of undertaking construction projects or engaging in energy operations are taxable as corporations. 7.Exempt corporations are never subject to corporate income tax. 8.Government-owned and controlled corporations are subject to corporate income tax. 9.A non-profit hospital is an exempt corporation taxable only on income from unrelated activities. 10.PEZA-registered enterprises are exempt from tax. 11.BOI-registered enterprises enjoy income tax holiday for 20 years. 12.FCDU and OBU are divisions of a foreign bank. 13.The income of OBU from foreign sources is exempt from income tax. 14.International carriers are subject to a tax of 2.5%on taxable income. 15.A domestic carrier is subject to 30%tax on Philippine taxable income. 16.Special corporations can claim optional standard deduction. 17.Exempt corporations are not required to file income tax returns because they do not pay tax. 18.Exempt corporations and special corporations are mandated to use the itemized deductions. 19.Exempt corporations who filed late are not subject to penalties because they have no tax due. 20.Exempt corporations filing BIR Form 1702-EX will not pay tax as a rule.

True or False 2 I. The classification rule is applied to private schools and non-profit hospitals. 2.The dominance test is applied to non-proflt schools and private hospitals. 3.A government school is exempt from income tax. 4.A non-resident owner or lessor of vessel is subject to tax at 7.5% of the gross rental. 5.A regional area headquarters is exempt from tax because it does not derive income. 6.A regional operating headquarter of a multinational company is subject to 10%on world income. 7.A non-resident cinematographic film owner,lessor,or distributor is subject to 25%tax on taxable income. 8.A non-resident owner or lessor of aircraft,machineries and other equipment is subject to tax at 4.5%of gross rentals. 9.A farmers'or fruit growers'association is exempt from income tax. 10.Exempt corporations are subject to income tax on their income from unrelatedactivities. 11.A non-stock,non-profit institution must be organized for religious,charitable,scientific,athletic,cultural,or for the rehabilitation of veterans. 12.To be exempt,all of the net income or asset of a non-profit corporation or association must be devoted to its purposes,and no part of its net income or asset accrues to benefit any member or a specific person. 13.The unrelated income of non-profit corporations is exempt from income tax if the same is diverted to its non-profit purpose. 14.The exemption of non-stock and non-profit corporations or associations shall commence when they secure their tax exemption ruling. 15.The certificate of tax exemption ruling is valid for one year and renewable every year thereafter.

True or False 3 1.The FCDUs,OBUs and EFCUs are never subject to regular income tax. 2.Persons and service establishments inside an ECOZONE are subject to the regular tax. 3.The Gross Philippine Billings of international carriers includes receipts from outgoing voyage or flights which must be billed in the Philippines. 4.Expenses of an exempt corporation not directly traceable to either related or unrelated operations are allocated based on the ratio of gross income. 5.Local water districts are exempt from income tax. 6.Cooperatives that transacts business with non-members are taxable on income allocated to interest on members'capital when their accumulated reserve exceeds P10,000,000. 7.All cooperatives,regardless of classification,are subject to income tax on their income from unrelated activities. 8.The expenses of exempt corporations from exempt operations are deductible to its gross income from unrelated operations.

9.When the income from related activities constitutes at least 50%of total income, private schools are subject to tax at 10% of taxable income from related and unrelated activities. 10.When the income from unrelated activities exceeds 50%of total income,only the income from unrelated activities of private schools and non-profit hospitals is subject to 30%tax. 11.Refunded tickets and tickets of non-revenue passengers are excluded in the Gross Philippine Billings. 12.The gross receipts from transient passengers are excluded from Gross Philippine Billings if they depart from the Philippines through the same carrier within 48 hours from their arrival. 13.The 48-hour rule does not apply when another carrier continued the flight or voyage of transient passengers. 14.The 48-hour rule may be extended by force majeure. 15.Domestic film owners,lessors or distributors shall be subject to 25%tax on gross income from all sources within....