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.EXCLUSION FROM GROSSINCOMESource: Income Taxation by Rex Banggawan(2015 edition)Submitted by: BLANCAVER, JO MARIE TExclusion from Gross IncomeMultiple Choice – Problems Mr. Chua collected the P 1,000,000 insurance proceeds of Mr. Sy which he bought from the latter for P 400,000. Before the death of...

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EXCLUSION FROM GROSS INCOME

Source: Income Taxation by Rex Banggawan (2015 edition)

Submitted by: BLANCAVER, JO MARIE T

Exclusion from Gross Income Multiple Choice – Problems 1. Mr. Chua collected the P 1,000,000 insurance proceeds of Mr. Sy which he bought from the latter for P 400,000. Before the death of Mr. Sy, Mr Chua paid a total premium of P 200,000. What is the exclusion in gross income and inclusion in gross income, respectively? a. P 1,000,000; P 0 b. P 600,000; P 400,000 c. P 400,000; P 600,000 d. P 0; P 1,000,000 2. Mr. Bisligo surrendered his life insurance policy and received a cash surrendered value of P 800,000 after contributing P 700,000 in annual premiums. Determine the total exclusion in gross income and the inclusion in gross income, respectively? a. P 800,000; P 0 b. P 700,000; P 100,000 c. P 100,000; P 700,000 d. P 0; P 800,000 3. Mr. Cateel died. His heirs collected the P 2,000,000 proceeds of his life insurance policy. Mr. Cateel previously paid a total payment of P 500,000 in premiums. What is the exclusion in gross income? a. P 3,000,000 b. P 500,000 c. P 2,000,000 d. P 0 4. Mr. Malalag collected the P 5,000,000 fire insurance proceeds of his buildings which was destroyed by fire. The building had a tax basis of P 4,500,000 at the occurrence of the fire. What is the total exclusion in gross income? a. P 5,000,000 b. P 4,500,000 c. P 0 d. P 500,000 5. Mr. Kabacan insured his crops for a P 1,000,000 insurance cover against calamities. He paid P 100,000 insurance premium. What is the amount to be included in gross income? a. P 1,000,000 b. P 900,000 c. P 100,000 d. P 0 6. Mr. Dimataling was one of the passengers who were hurt in a bus accident. He received a total indemnity of P 800,000 from the insurer of the bus. Mr. Dimataling paid P 250,000 in hospital bills due to the accident. Compute the total amount to be excluded in gross income. a. P 0 b. P 250,000 c. P 550,000 d. P 800,000 7. At the age of 54, Mrs. Reyes was awarded with a retirement gratuity of P 2,000,000 for his 30 years of service. The employer’s retirement benefit plan was with an employee participation feature where Mrs. Reyes contributed a total premium of P 800,000 in the fund. Mrs Reyes also received P 500,000 benefit from the SSS. Compute the total exclusion in gross income. a. P 800,000 b. P 1,300,000 c. P 1,700,000 d. P 2,500,000 8. Mrs. Canadoni retired for the government after 30 years of service at the age of 55. He received a total retirement pay of P 1,800,000 plus P 400,000 GSIS benefits. How much will be excluded in gross income? a. P 0 b. P 400,000 c. P 1,800,000 d. P 2,200,000 9. The Professional Regulation Commission collected a total sum of P 100,000,000 from professional license fees. It also collected P 5,000,000 from rentals at government properties. What is the total exclusion in gross income?

a. P 0 b. P 5,000,000 c. P 100,000,000 d. P 105,000,000 10. Mr. Alvarez had the following income during the year:

Gross compensation income Including P 25,000 13th month pay Less: Tardy or absences Net compensation income SSS Deductions PhilHealth deductions Pag ibig deductions Union dues Withholding tax

P 325,000 ( 10,000) P 315,000 P 12,000 P 9,000 P 10,000 P 5,000 P 40,000 P 239,000 Compute the total exclusions from gross income? a. P 36,000 b. P 61,000 c. P 66,000 d. 71,000 11. Mr. Henares received the following: Donated properties Income of donated property before donation Income of donated property after donation Inherited properties How much is taxable to Mr. Henares? a. P 380,000 b. 80,000 c. P 50,000 d. P 30,000

P 200,00 P 50,000 P 30,000 P 100,000

12. Mr. Tacurong has the following data during the year: Basic Salary P 400,000 Income tax withheld P 50,000 13TH month pay P 40,000 SSS P 2,000 PhilHealth p 1,800 Pag – Ibig P 1,700 Union dues P 500 Capital contribution P 2,000 Compute the total exemtions and exclusions from gross income: a. P 56,000 b. 46,000 c. 38,000 d. 36,000 13. Mang Antonio collected P 2,000,000 from the fire insurance company that insured his building which has a tax basis of P 1,800,000 when the fire occurred. During the same period, he also collected P 300,000 crop insurance proceeds pertaining to his crop destroyed by frost. The total item of gross income is a. P 2,300,000 b. P 500,000 c. P 300,000 d. P 200,000 14. The policy holder of a life insurance contract outlived his insurance policy. He was paid P 300,000 upon maturity of the policy. He paid P 250,000 total premium. What is the inclusion I gross income? a. P 300,000 b. P 250,000 c. P 50,000 d. P 0 15. Ms. Henson retired from her job after 25 years of service. She joined the company at the age of 23 and was promoted from a clerk to VP Finance. She was paid P 2,000,000 total retirement pay from the employes’s contributory pension plan. Out of the total proceeds, Ms Henson contributed P 600,000. This was Ms Henson’s first retirement from employment. How much is excluded in gross income? a. P 2,000,000 b. P 1,400,000 c. P 600,000 d. P 0 16. The following related to the compensation income of Ms. Lamitan in 2015.: Compensation P 2,400,000 Contribution to SSS, Philhealth, HDMF: - Mandatory contributions P 125,000 - Voluntary contributions P 150,000 Creditable withholding taxes P 190,000 Employer’s share in SSS, PhilHealth, HDMF P 105,000 What is the total exclusion in gross income? a. P 125,000

b, P 230,000 c. P 275,000 d. P 465,000 17. The following income related to a proprietorship registered as BMBE: Gross income from sales

P 400,000

Dividend income – domestic P 9,000 Interest on deposits P 6,800 Compute the total exclusion in gross income subject to regular tax? a. P 415,000 b. P 400,000 c. P 15,800 d. P 0 18. Compute the total inclusion in gross income subject to final tax. a. P 0 b. P 9,000 c. P 6,800 d. P 15,800 19. KKB, a credit cooperative, had the following: Income from related activities Income from unrelated activities - Dividends from stocks - Income from time deposits - Rent income Compute the total exclusion in gross income. a. P 0 b. P 38,000 c. P 400,000 d. P 438,000

P 400,000 P 20,000 P 18,000 P 60,000

20. In the immediately preceding problem, compute the total inclusion in gross income subject to regular tax. a. P 460,000 b. P 98,000 c. P 60,000 d. P 38,000 21. A charity received the following: Contributions from the public P 1,400,000 Income for the sale of merchandise P 500,000 Gain on sale of properties P 300,000 What is the total exclusion in gross income? a. P 2,200,000 b. P 1,900,000 c. P 1,400,000 d. P 1,300,000 22. Mr. Santiago purchased a life annuity For P 100,000 which will pay him P 10,000 a year. The life expectancy of Mr Santiago is 12 years. Which of the following will Mr. Santiago be able to exclude from his gross income? a. P 10,000 B. p 20,000 c. P100,000 d. P 120,000 23. A non profit organization received the following during 2015 Contributions from the public P 1,900,000 Income for the sale of merchandise P 500,000 Gain on sale of properties P 300,000 What is the total exclusion in gross income? a. P 2,200,000 b. P 1,900,000 c. P 1,400,000 d. P 1,300,000 24. Mr. Ketchum collected the P 1,000,000 fire insurance proceeds of Mr. Brock which he bought from the latter for P 400,000. Before the death of Mr. Brock, Mr Ketchum paid P 300,000 for the premium. What is the exclusion in gross income? a. P 7,000,000 b. P 300,000 c. P 400,000 d. P 0 25. Team Rocket surrendered their life insurance policy and received a cash surrendered value of P 800,000 after contributing P 900,000 in annual premiums. Determine the total exclusion in gross income? a. P 800,000 b. P 900,000 c. P 100,000 d. P 0...