Income taxation practice Q&A PDF

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ASSIGNMENT NO 2 A operate a business with principal address in Manila. Bulk of his sales transactions are in Batangas. His warehouse with no sales transactions is in Bataan. Where should A register his business? Answer: BIR Manila A, Sole proprietor, buy and sells product X. The taxable period of A ...

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INCOME TAX REVIEWER QUIZZES

ASSIGNMENT NO 2 1. A operate a business with principal address in Manila. Bulk of his sales transactions are in Batangas. His warehouse with no sales transactions is in Bataan. Where should A register his business?

2. A, Sole proprietor, buy and sells product X. The taxable period of A shall be:

3. PINK, famous singer In North Korea, a Korean, went to the Philippines to perform a 2 day concert in Araneta Coliseum. PINK is a?

4. The tax situs for interest income from loans is:

5. What is the income tax due of a taxable income of 250,000 in 2018?

6. A, OFW, earned 1M in Dubai for year 2018. Is the 1M taxable under the Tax Code?

7. A resident citizen is taxable for income earned l

8. In general, Cash basis/method is used when:

INCOME TAX REVIEWER QUIZZES

9. A, employee of ABC Corp. His income taxes are correctly withheld and remitted by ABC corp. Is A required to file a separate ITR?

10. A Filipino is considered non-resident when he stayed outside Philippines at aggregate of:

11. The following are considered juridical persons except:

12. The following are required to file tax return except: a) Self-employed individuals receiving income from the conduct of trade or business and/or practice of profession b) Individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession c) Individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax d) Individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing e) Non-resident citizens receiving income from sources within the Philippines

13. The following are not required to file tax return except:

14. Requisites to qualified for substituted filing for BIR form No 1700 are the following except:

15. A filed his tax return for CY 2019 in April 2020. In 2020, he received an assessment notice from BIR. In 2021, he filed an amended tax return, since he has 3 years to amend the tax return.

INCOME TAX REVIEWER QUIZZES

16. On Jan 1, 2019, Nanay donated the Apartment to X, daughter, worth 10M. The donor’s tax is already paid by Nanay. IN 2019, the rental income from the Apartment is 1,000,000. Nanay earned compensation income of 2,000,000. What is the taxable income of NanaY?

Q7. In 2018, A has net income of 400,000. On Jan 2019, he sold personal assets at a gain of 500,000 and business net income for 2019 is 300,000. What is the income tax due for year 2019?

Q8. The term 'nonresident citizen' means:

.

19. I. A resident alien - on his income derived from sources within the Philippines; means an individual whose residence is within the Philippines and who is not a citizen thereof. II. A nonresident citizen - on his income derived from sources within the Philippines; Example are OFW or OCW (Overseas Contract Worker). Who stayed outside the Philippines for more than 183.

20. A taxpayer who is taxable at Gross income (without allowed deductions).

21. Special Individual taxpayers- Are individual whose income from Philippines are taxed at preferential or single rate. Includes the following except: a) Special Aliens b) MIE (Minimum Wage Earner)- refers to worker in private or public sector receiving compensation of not more than the statutory minimum wage in agricultural and non- agricultural sector where he is assigned. c) Non-resident alien cinematographic film owner, lessor or distributor d) Subcontractor, whether citizen, RA or NRAETN, of service contractors engage d in petroleum operation e) Not Registered in BMBE

INCOME TAX REVIEWER QUIZZES

22. A, lives in manila, a Japanese national married to B, a Filipina. A owned a land in Japan with rental income of 1M per year. Under the tax code, the 1M rental is :

23. A, regular employee of MCDO, started his employment on Jan 1, 2019, earning 50,000 per month in 2019. He sold his personal assets at a gain of 200,000 in 2020. What is the basic income tax due of A in 2020?

24. A granted a loan to B for 100M in 2019. A lives in Manila while B lives in USA. A is a US citizen. In Dec 2019, B paid the 100M to A as agreed in their contract. What is the taxable income of A in 2019?

25. ASTA, an OFW, working in Dubai in 2019. He is working as a manager in Dubai for 10 years. Every 2 years, he visits his family in Philippines. From Jan to Nov 2019, he received a compensation income of 1.2M. By Dec 2019, he returned in the Philippines for a three days visit. On the first day of visit, he won in a singing contest for a prize of 500,000. How much is the taxable income of ASTA in 2019?

ASSIGNMENT NO 3 1. The following are required to file ITR except: a) Employees deriving purely compensation income from two or more employers, concurrently or successively at any time during the taxable year b) Employees deriving purely compensation income regardless of the amount during the calendar year, the income tax of which has been withheld correctly (i.e. tax due is equal to the tax withheld) resulting to collectible or refundable return c) Self-employed individuals receiving income from the conduct of trade or business and/or practice of profession d) Individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession e) Individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax f) None of the above

INCOME TAX REVIEWER QUIZZES

2. THE REQUISITES FOR INDIVIDUALS QUALIFIED FOR SUBSTITUTED FILING OF BIR FORM NO. 1700 are the following except: a) b) c) d) e) f) g)

Receives purely compensation income regardless of amount; Compensation from only one employer in the Philippines for the calendar year; Income tax has been withheld correctly by the employer (tax due equals tax withheld); The employee's spouse also complies with all the three conditions stated above; Employer files the BIR Form No. 1601-C The employer issues each employee BIR Form No. 2316 (latest version) None of the above

3. X file his annual ITR on February 2019. On May 2020, he received a notice of assessment from BIR for under payment of taxes. Thus, X file an amended ITR of 2018 due to notice from BIR. Decide.

4. X is engaged in business. His net income for 2018 is 250,000. Thus,

5. Husband and Wife are engaged in business of selling product X in Mindanao, where there are many terrorist groups operating in the business area. In 2018, they have a total business net income of 250,000. Decide. e

6. X, operates a restaurant in San Mateo. The restaurant provides delicious foods and drinks to various customers at a very low price. In 2018, X has a total sales of 3,500,000 (500,000 are still on credit) ; while the cost of sales and expenses is 1,000,000. Under the tax code, what should be the amount of taxable revenue (before deductions) that X must filed in BIR?

7. X, operates a restaurant in San Mateo. The restaurant provides delicious foods and drinks to various customers at a very low price. In 2018, X has a total sales of 3,500,000 (500,000 are still on credit) ; while the cost of sales and expenses is 1,000,000. Can X avail the 8% optional tax rate?

INCOME TAX REVIEWER QUIZZES

8. Income tax is a

9. X, bought a land in 2012 worth 1M (for used in business). In 2018, the land appreciated in value and increased BY 4M. Later, X sold the land in 2018 at its fair value. What is the taxable gain?

10. I. Compensation and business income are returnable income that are subject to final income tax. II. When a taxable income is subjected to final tax, that income shall be excluded in the computation of taxable net income subject to basic income tax under the graduated tax rate.

11. X, RC, received a dividend income from C, Resident Foreign Corporation amounting to 100,000 in 2018. C Corp operates in Philippine as authorized by law. C’s gross income from the past 3 years earned within the Philippines prior to declaration of dividend is 400M. While its gross income outside the Phil for the past three years is 600M. Thus,

12. X, RC, has the following data for 2019: Gross Sales is 2,000,000 and Other income 200,000; Bus. Net Income=1.5M and Salary of 1M. X is subject to Sec 116. He avails the 8% optional income tax rate. What is the tax due of X?

13. Asta is a NON VAT registered person in 2020, subject to Sec 116. His previous vatable sales in 2019 do not exceed the threshold of 3M. At the beginning of 2020, he opted the 8% optional income tax rate. From Jan to September 2020, his total sales is 3M. As of December 2020, total sales for the whole year is 5M. Total expenses and cost of sales is 2.5M. What is the income tax still due at end of year 2020?

14. X, a minimum wage earner. In 2018, his salary and overtime pay totaled 200,000 and his hazard pay is 40,000. He received a 13th month pay of 100,000. At the same year, his business has net income of 700,000. He

INCOME TAX REVIEWER QUIZZES

also noticed that his bank account in BDO was increased by 1,000 due to interest (from cr balance of 90,000; his bank account has credit balance of 91,000). What is the taxable income of X in 2018 subject to graduated tax rate?

15. X, a minimum wage earner. In 2018, his salary and overtime pay totaled 200,000 and his hazard pay is 40,000. He received a 13th month pay of 100,000. At the same year, his business has net income of 700,000. He also noticed that his bank account in BDO was increased by 1,000 due to interest (from cr balance of 90,000; his bank account increased to 91,000, credit balance). What are the total taxes due from X in 2018?

16. I. Before RA 10963, there is personal exemption. Additional exemption is 25,000 for all children; but with a maximum of 4 children. II. Before RA 10963, the basic personal exemption allowed to individual taxpayer is 50,000.

17. I. The income from compensation and business net income shall be combined to compute the basic income tax due under the Graduated tax rate under Sec 24. II. Person earning purely compensation income shall be subject to graduated tax rate only.

18. In 2019, A, employee of MCDO Corp, has an annual salary of 2.5M only. Can avail the 8%?

19. In 2019, A is classified as NRC. In Jan 1 to Nov 30, 2020, A stayed in Japan as immigrant. While staying in Japan, he worked as Hotel manager and earned 1M. However, in Dec 1, A arrived in the Philippines with intention to reside in Manila permanently. A was able to submit documents to prove his intention to stay here in Phil. In Dec 2-Jan 31, 2021, A earned a salary of 400,000 (for two months as a manager in Hotel Manila). In 2020, A owned a Apartment located Italy with annual rental income of 480,000 per year. In 2020, A is classified as a? Answer: NRC from Jan 1 to Nov 30 and RC from Dec 1 to 31, 2020

20. Asta, non-resident alien not engaged in business in the Philippines, has the following income for 2019: Business income in USA of 7,000,000 and; Other income of 2,000,000 earned in the Philippines. How much is the income tax due of Asta?

INCOME TAX REVIEWER QUIZZES

21. A, engaged in business of selling fish and vegetables in San Mateo Market. His sales is 2,900,000. Cost of sales is 1,000,000 and OPEX is 300,000. A is registered as NON VAT taxpayer. A also earned compensation income of 1M from ABC Corp as a Acctg manager. In 2019, A choose 8% Optional income tax rate claiming that he can avail the 8% income tax rate since he is engaged in business of selling fish and vegetables with sales below 3M threshold. Given the above data, what should be the basic income tax due of A?

22. 1,000,000 and OPEX is 300,000. A is registered as NON VAT taxpayer. A also earned compensation income of 1M from ABC Corp as an Accounting manager. In 2019, A choose 8% Optional income tax rate claiming that he can avail the 8% income tax rate since he is engaged in business of selling fish and vegetables with sales below 3M threshold. Can he claim the 8% optional income tax rate? Answer: No, because engaged in VAT exempt transaction (fish and vegetables)...