Donors TAX TEST BANK PDF

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CPA REVIEW CENTERTAX00 – Donor’s TaxTheories Donations that do not conform to legal formalities are a. Taxable under Donor’s tax notwithstanding absence for formalities b. Exempt from Donor’s tax c. Subject to Estate tax d. Subject to income tax Acceptance is essential for a valid donation to be sub...

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CPA REVIE REVIEW W CENTER

TAX00 – Donor’s Tax Theories 1. Donations that do not conform to legal formalities are a. Taxable under Donor’s tax notwithstanding absence for formalities b. Exempt from Donor’s tax c. Subject to Estate tax d. Subject to income tax 2. Acceptance is essential for a valid donation to be subject to donor’s tax, except transfers a. in trust by the donor in favour of a beneficiary b. of business interest by the donor in favour of an stranger c. for less than adequate consideration d. by Filipino residents to non-resident aliens 3. The donation of an immovable property shall be made a. In writing c. Either A or B b. In a public instrument d. Orally 4. Using the preceding number, acceptance by the donee may be made a. In the same deed of donation c. Either A or B b. In a separate document d. Neither A nor B 5. The donation of a movable property may be made a. Orally b. In writing

c. Either A or B

d. Neither A nor B

6. Using the preceding number, the donation and acceptance should be in writing if the value of the property donated is a. Less than P5,000 b. P5,000 or less c. P5,000 or more d. More than P5,000 7. A donation which takes effect upon the death of the donor a. Donation mortis causa b. Partakes of the nature of a testamentary disposition c. Shall be governed by the law on succession d. A, B and C 8. A donation which is intended by the donor to take effect during his lifetime a. Shall be subject to donor’s tax using the tax table for donation b. Shall be in writing if the value exceeds P5,000 c. Donation inter-vivos d. A, B and C 9. Which is incorrect concerning donation? a. Real property is transferred by donation only if made under a public instrument b. Donation of intangible personal property should be in writing c. Personal property amounting to more than P5,000 should be in writing d. No one can be forced to accept the generosity of another 10. Which is correct regarding transfer inter-vivos involving personal properties for less than an adequate and full consideration? a. The whole value of the property will be included in gross gift b. The difference in fair value and consideration is a gift subject to donor’s tax c. The whole value of the property will be included in gross estate d. The difference in fair value and consideration is part of gross estate 11. Contracts without the essential element of consideration is considered as a. Void c. Unenforceable b. Donation d. Rescissible

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12. All elements of donor’s tax must always concur for the donation to be valid. Except a. Acceptance c. Capacity b. Delivery d. Intent 13. Donor’s tax rate is at a. 6% b. 30% 14. Donor’s tax applies to gifts a. In excess of P250,000 b. In excess of P200,000

c. 2 – 15% d. 5% - 20% c. In excess of P100,000 d. All gifts

15. Dowries valued P10,000 made on account of marriage by parents to their children is subject to a. Donor’s tax c. Estate tax b. Exemption d. Income tax 16. Donor’s tax should be paid by the? a. Donor b. Donee

c. Administrator d. Executor

17. This are considered void donations, except a. Between husband and wife b. Made to public officer or his/her family on account of his/her office c. Any physician, health officer, priest who took care or extended spiritual care to the donor during his last illness d. Donation to an unborn child 18. Jerwin, a surviving spouse, renounced his share in the conjugal partnership a. Renunciation is subject to donor’s tax b. Renunciation is subject to estate tax c. Renunciation is exempt from donor’s tax d. Renunciation is void 19. Sonly renounced his inheritance in the estate a. Renunciation is subject to donor’s tax b. Renunciation is subject to estate tax c. Renunciation is exempt from donor’s tax d. Renunciation is void 20. Statement 1: Corporations are allowed to donate inter-vivos Statement 2: Corporations are allowed to donate mortis-causa a. Both are correct c. Only 1 is correct b. Both are incorrect d. Only 2 is correct 21. The following transfers are taxable under donor’s tax, except? a. Transfers made by the donor to relieve himself of the burden of management of his properties b. Transfers made by the donor to settle family disputes c. Transfers made by a parent to see his children enjoy his properties while he still lives d. Transfers under power of general appointment 22. Which is incorrect? a. Donations of non-resident aliens involving properties located abroad to residents of the Philippines is exempt from donor’s tax b. Renunciation of inheritance by an heir to another is not subject to donor’s tax c. Donation by a non-resident citizen to a non-resident alien is exempt from donor’s tax d. Gifts are reckoned on an annual basis; the tax is determined for the whole gift throughout the year; hence, a computation is made every time a donation is made 23. Which of the following donation may be exempt? a. Donation of a resident alien of its properties located abroad to a non-resident alien b. Donation of a non-resident alien of real properties located in the Philippines to a resident alien c. Donation of non-resident alien of intangible properties located in the Philippines to a non-resident alien d. Donation of a intangible properties located in the Philippines by resident aliens

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24. Which of the following is not included in gross gift? a. Transfers to non-profit non-stock charitable institution b. The portion of the fair value of a property transferred adequately paid for in transfer for less than an adequate consideration c. The portion of the donation representing dowry exemption d. Donation to the government for public use 25. Donation to the following entities is exempt from Donor’s taxation, except a. Accredited national professional organization of certified public accountant (PICPA) b. Integrated Bar of the Philippines c. International Rice Research Institute d. Ramon Magsaysay Award Foundation 26. I. Dowries or gifts made on account of family celebration, on or before its celebration, or within one year thereafter, by parents to each of their legitimate, recognized natural or adopted children, to the extent of the first P10,000 shall be exempt from the donor’s tax II. Donations in favour of an educational and or charitable, religious, cultural or social welfare corporation, institution, accredited non – government organization, trust or philanthropic organization or research institution or organization provided that no amount of said gifts shall be used by the donee for administration purposes shall be exempt from donor’s tax a. True, true b. True, False c. False, True d. False, False 27. A. If the value of the movable property donated is P5,000 or more the donation and the acceptance shall be made in writing, otherwise the donation shall be void B. Regardless of the value of the immovable property donated, the donation and the acceptance shall be made in writing, otherwise the donation shall be void. a. True, True b. True, False c. False, True d. False, False 28. I. The gift is perfected from the moment the donor effects the delivery either actually or constructively of the property donated II. Donor’s tax is a property tax imposed on the property transferred by the way of gift inter-vivos a. True, True b. True, False c. False, True d. False, False 29. I. Where property is transferred during lifetime for less than adequate and full consideration in money or money’s worth, then the amount by which the value of the property exceeded the value of the consideration shall for the purpose of the donor’s tax, be deemed a gift II. Gifts of conjugal property made by both spouses shall be considered as having been made one – half by the husband and the other half by the wife and is taxable ½ to each donor spouse a. True, True b. True, False c. False, True d. False, False

30. I. For purpose of the donor’s tax, second degree cousins are strangers to each other. II. Encumbrance on the property donated, if assumed by the donor is deductible for donor’s tax purposes. a. True, True b. True, False c. False, True d. False, False 31. I. As a rule, donation between husband and wife during the marriage is void. II. Donation can be made to conceived or unborn children. a. True, True b. True, False c. False, True

d. False, False

32. 1st Statement: When the donee is a stranger, the tax payable by the donor shall be 30% of the net gifts. 2nd Statement: When the donee is a relative the tax payable by the donor shall be based on the scheduler rates of donor’s tax provided in Section 99 of the Tax Code. a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct 33. For purposes of donor’s tax, a “stranger: is a person who is not a: I – brother, sister (whether by whole of half blood), spouse, ancestor, and lineal descendant; or II – relative by consanguinity in the collateral line within the fifth degree of relationship a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct

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