Capital Gains Tax PDF

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Ella Marie P. Lopez FINMultiple Choices – Problems: Part 1 Mr. Dionisio sold domestic stocks directly to a buyer at a mark-up on cost of P200, 000. He paid P5, 000 broker’s commission and P8, 000 documentary stamp tax on the sale. Compute the capital gains tax. a. P28, 050 b. P6, 000 c. P14, 200 d. ...

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Ella Marie P. Lopez FIN195

Multiple Choices – Problems: Part 1 1. Mr. Dionisio sold domestic stocks directly to a buyer at a mark-up on cost of P200, 000. He paid P5, 000 broker’s commission and P8, 000 documentary stamp tax on the sale. Compute the capital gains tax. a. P28, 050 b. P6, 000 c. P14, 200 d. P13, 700 200,000 -5,000 -8,000= P18,700 18,700 x 15% = P28,050 2. Mr. Abdul, a non-resident alien, sold domestic stocks directly to a buyer at a net gain of P70,000. Compute the capital gains tax. a. P10, 500 b. P6, 000 c. P4, 000 d. P3, 500 70,000 x 15% = P10,500 3. Mr. Panay, a non-resident citizen, sold domestic stocks directly to a buyer at a net gain of P320, 000. Compute the capital gains tax. a. P30, 000 b. P25, 000 c. P27, 000 d. P48, 000 320,000 x 15% = P48,000

4. Mr. Digos sold shares of a resident foreign corporation directly to a buyer. The shares were purchased for P100, 000 and were sold at a net selling price of P210, 000. Compute the capital gains tax. a. P15, 000 b. P11, 000 c. P5,500 d. P 0 5. Grace sold domestic shares directly to buyer. The following relates to the sale:

Fair market value of shares

P400, 000

Selling price

300, 000

Cost

150, 000

Compute the capital gains tax. a. P7, 500 b. P9, 925 c. P15, 000 d. P22, 500 150,000 x 15% = P22,500 6. Texas Inc. exchanged its investments representing domestic shares for a piece of land owned by Eagle, Inc. Fair market value of shares

P400, 000

Fair market value of land

500, 000

Par value of shares

300, 000

Cost of shares

350, 000

Compute the capital gains tax. a. P22, 163 b. P15, 000 c. P11, 000

d. P9, 988 300,000 x 1.5/200 = 2,250 500,000 – 350,000 - 2,250 x 15% = P22,162.50 7. Digong Inc. exchanged its shares investments from Bee Inc., as payment of its P350, 000 long outstanding loan from the latter. Digong acquired the shares for P300, 000. Ignoring documentary stamp tax, compute the capital gains tax on the transaction. a. P 0 b. P7, 500 c. P5, 000 d. P2, 500 350,000 – 300,000 x 15% = P7,500 8. On January 5, 2020, Mercy, a stock dealer, disposed the following shares directly to a buyer:

Shares

Selling price

Cost

Stock rights

P200, 000

P170, 000

100, 000

110, 000

Common stocks

Ignoring the documentary stamp tax, the capital gains tax payable on the sale is a. P 0 b. P1, 000 c. P1, 500 d. P3, 000 9. Kidapawan, Inc., a domestic service company, has the following transaction on the sale of another domestic corporation:

Transaction

Quantity

Net price

Purchase

20, 000

P40, 000

Purchase

30, 000

63, 000

Sale

40, 000

92, 000

Assuming the first-in, first-out method, compute the capital gains tax on the sale. a. P 0 b. P480 c. P500 d. P6, 650 10. Assuming the moving average method, compute the capital gains tax on the sale. a. P 0 b. P400 c. P500 d. P1, 440 11. Koron Company, a trading company, made the following transaction during the year involving the stocks of Xurpas, a domestic corporation:

Date

Transaction

Shares

Net price

6/15/2020

Purchase

10,000

P30

9/30/2020

Sale

8,000

28

10/3/2020

Purchase

15,000

25

12/7/2020

Sale

10,000

32

Koron uses the FIFO method in costing the Xurpas stocks. Compute the taxable on the December 7 sale. a. P20, 000 b.P16, 000 c.P12, 800 d. P0 12. Compute the taxable gain on the December 7 sale. a. P64, 118 b. P60, 000

c. P51, 467 d. P44, 000 [P320,000 – (P2,000 x 30) – (P8,000 x 25)] = 60,000 13. Mr. Trinidad has the following transaction during the year on the common stocks of Philippine Pines, a domestic non-listed company: Date

Transaction

Gain (Loss)

5/8/2020

Sale

P120,000

8/5/2020

Sale

(10,000)

9/8/2020

Sale

250,000

Compute the annual capital gains tax due for 2020. a. P54,000 b. P29,000 c. P22,000 d. P3,000 120,000-10,000+250,000 x 15% = P54,000 14. Mr. kalibo shows the following transaction in the shares of Aklan Corporation, a closely held corporation; Date

Transaction

Quantity

Price

2/8/2020

Buy

10,000

P120,000

4/5/2020

Sell

10,000

100,000

5/1/2020

Buy

20,000

240,000

What is the tax basis of the shares acquired on May 1, 2020? a. P300,000 b. P260,000 c. P240,000 d. P220,000 120,000-100,000+240,000 = P260,000

15. Mrs. Aurora, a resident citizen, purchased 100,000 shares of Philhotdogs, a domestic listed company. The shares were acquired at P200,000. She disposed the shares through the Philippine Stock Exchange at a fair value of P250,000. Compute the capital gains tax. a. P 0 b. P2,500 c. P7,500 d.P10,000 16. Mr. Bosun disposed various stocks at a total consideration of P400,000 and paid thereon stock transactions tax of P2,000. Aggregate gains realized totaled P98,000 after the stock transaction tax. What is the capital gains tax? a. P 0 b. P4,900 c. P9,800 d. P14,700

Multiple Choice – Problems: Part 2 1. A certain tax payer shows the following over the counter transaction in the shares of a domestic corporation: Date

Transaction

Quantity

Net price

3/8/2020

Purchase

10,000

P112,000

4/5/2020

Sale

10,000

100,000

5/1/2020

Purchase

8,000

80,000

6/7/2020

Sale

5,000

60,000

Compute the capital gain on June 7, 2020 that is subject to capital gains tax. a. P4,000 b.P5,000 c.P10,000 d.P12,000

[(P112,000 – P100,000) x 8/10] = P89,600 P89,600/P8,000 = 11.2 [P60,000 –(P5,000 x 11.2)] = P4,000 2. An investor sold domestic stocks directly to a buyer on October 1, 2019 under the following terms: Selling price

P500,000

Cost

200,000

Down payment

10%

Installments in 2019

50,000

Compute the total capital gains tax in 2019. a. P45,000 b.P25,000 c.P9,000 d.P6,250 [(P50,000 dp + P50,000 inst.)/ P500,000] x P45,000 = P9,000 3. ABC realized the following gains or losses in selling various securities: Gain on sale of domestic stocks

P300,000

Par value of domestic stocks sold

200,000

Gain on the sale of interest in a partnership

200,000

Gain on the sale of stocks of foreign corporation

150,000

Compute the capital gains tax. a. P45,000 b.P44,775 c.P35,000 d.P25,000 [(300,000 – P1,500) x .15 =P44,775 4. Compute the documentary stamp tax in the preceding problem.

a. P1,500 b.P1,125 c.P562.50 d.P750 [(P1.5/200) x P200,000] = P1,500 5. A wash sale of domestic shares wherein 20,000 shares were disposed at a loss of P40,000 were subsequently covered up within the 30-day period by a purchase of 15,000 shares for P12/share. The deductible capital loss against capital gain on the wash sale is a. P 0 b. P13,333 c. P10,000 d. P20,000 5,000/20,000= 2.5 x 40,000= 10,000 6. What is the cost of the 15, 000 shares acquired in the preceding problem? a. P150,000 b. P160,000 c. P180,000 d. P190,000 [(40,000 x 15,000/20,000)+ 160,000] = 190,000 7. Isidro sold 1,500 shares of stocks of Achievers Corporation directly to a buyer. The share’s par value per shares was P85. Isidro purchased the shares for P90 each. On the date of sale, the shares had a selling price of P120 per share. What is the capital gains tax on the sale? a. P2,625 b. P2,250 c. P6,607 d. P11,375

8. Mr. Palangdan purchased domestic stocks which were priced at 150% aboved their par values. After two years, he sold the stocks when their fair value doubled. He paid P7,500.00 documentary stamp and P10,000 in commission expenses on the sale. Compute the selling price of the stocks. a. P3,000,000 b. P2,500,000 c. P1,500,000 d. P1,000,000 9. Compute the capital gains tax. a. P143,625 b. P152,750 c. P153,725 d. P222,375 10. On June 20, 2019, Mr. Lito filed the capital gains tax return involving the sale of domestic stocks on February 20, 2019. The net gain was P140,000. Compute the total amount due including penalties except compromise penalty. a. P26,880 b. P21,500 c. P11,700 d. P12,250

Multiple Choice – Problems: Part 3 1. A taxpayer purchased a building to be used as a future plant site. The building remained unused for 3 years due to a significant decline in customer’s demand in product of the taxpayer. The taxpayer eventually disposed the property. What is the classification of the property? a. Ordinary asset b. Capital asset c. Either A or B at the discretion of the BIR

d. Either A or B depending on the intent of the buyer 2. Assuming the same data in the preceding number except that the property was not disposed of but the same was used as a sales outlet after which it became vacant for more than two years. What is the classification of the property? a. Ordinary asset, regardless of the taxpayer b. Capital asset, regardless of the taxpayer c. Ordinary asset, if taxpayer is not engage in real estate business d. Capital asset, if the taxpayer is not engaged in real estate business 3. Anderson disposes a vacant lot for P3,000,000. The lot has an Assessor’s fair value of P2,800,000, a zonal value of P3,200,000, and an appraisal value of P3,500,000. What is the capital gains tax? a. P 0 b. P 180,000 c. P192,000 d. P210,000 (P3,200,000 x .06) =P192,000 4. Puerto Princesa Company sold its parking lot for P2,000,000. The capital gains tax on the sale of the lot is a. P 0 b. P108,000 c. P120,000 d. P150,000 parking lot- ordinary asset (exempted) 5. Mr. Antonio disposed hid principal residence for P2,000,000 and immediately acquired a new one for P1,8000,000. The old residence cost Mr. Antonio P1,000,000 and had a fair market value of P2,500,000 on the date of sale. Compute the capital gains tax to be deposited in escrow. a. P 0 b. P 60,000

c. P120,000 d. P150,000 (P2,500,000 x .06) = P150,000 6. What would be the tax basis of Mr. Antonio’s new residence? a. P1,800,000 b. P1,000,000 c. P900,000 d. P800,000 (P1,000,000 x P1,800,000/ P2,000,000) = P900,000 7. How much of the capital gains tax will be released to the taxpayer? a. P150,000 b. P135,000 c. P120,000 d. P15,000 (P150,000 x P1,500,000/P2,000,00) = 135,000 8. On August 15, 2020, Ms. Mones sold a 500-square meter residential house and lot for P3,000,000. The house was acquired in 2005 at P2,000,000. The Assessor’s fair market values of the house and lot was P5,000 per square meter. What is the capital gains tax? a. P180,000 b. P 120,000 c. P150,000 d. P240,000 (P5,000 x 500 + 1,500,000) x .06 = P240,000 9. Manny, a resident Filipino citizen, sold his principal residence (house and lot) at its original purchase price of P11,000,000. The property had a P13,000,000 fair value at that time. If the proceeds of the sale were not invested in the new principal residence but, instead, new funds of P15,000,000 were used to construct it, the capital gains tax is

a. P 0 b. P660,000 c. P750,000 d. P780,000 (13,000,000 x .06) = P780,000 Numbers 10 through 12 are based on the following information: Mr. Pepito sold his residential land in Manila with fair market value of P12,000,000 for P10,000,000. 10. If Mr. Pepito utilized all of the P10,000,000 in buying a house and lot to be used as his new principal residence, the final tax due from him is a. P720,000 b. P600,000 c. P120,000 d. P 0 (12,000,000 x .06) = P720,000 11. Mr. Pepito utilized only P7,000,000 from the proceeds of the sale in acquiring a new residence, the final tax due from him is a. P720,000 b. P216,000 c. P180,000 d. P 0 12. The documentary stamp tax due on the sale is a. P179,895 b. P180,000 c. P149,985 d. P150,000...