Quiz 2020, questions and answers PDF

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income taxation...

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Mr. Nag-aalangan created a trust naming his eldest son, Kadudaduda as beneficiary. If the eldest son could not abide with the terms provided in the trust instrument, Mr. Nag-aalangan has the power to cancel the trust agreement. For the current taxable year, the trust earned a net income of P1,000,000. On the other hand, Mr. Nag-aalangan earned a compensation income of P1,500,000 and business income of P1,000,000. How much is the taxable income of Mr. Nag-aalangan? Nil 3,450,000 2,450,000 3,500,000 Statement 1: Where the estate is under judicial administration, the income of the estate shall be taxable to the fiduciary or trustee. Statement 2: Where the estate is not under judicial administration, the income of the estate shall be taxable to the heirs and beneficiaries. Statement 1 is true but statement 2 is false. Statements 1 & 2 are false. Statement 1 is false but statement 2 is true. Statements 1 and 2 are true. St at ement1:Whenanest at e,underadmi ni st r at i on,hasi ncomepr oduci ngpr oper t i es , t heannual i ncomeoft heest at ebec omespar toft het ax abl egr ossest at e.

St at ement2:Whenanest at e,underadmi ni st r at i on,hasi nc omepr oduc i ngpr oper t i es andi t si ncomedur i ngt hey eari sdi s t r i but edt ot hehei r s ,t hei ncomes odi s t r i but edi s t ax abl et ot hehei r saspar toft hei rgr os si ncomef ort hey ear .

Statements 1 and 2 are true. Statement 1 is true but statement 2 is false. Statements 1 & 2 are false. Statement 1 is false but statement 2 is true.

Individual taxpayers are subject to the following income tax: I. Basic tax based on graduated tax table II. Final withholding tax on passive income derived from sources within the Philippines III. Capital gains tax IV. Stock transaction tax of 6/10 of 1% of gross selling price I and II only All of these I and III only I, II and III only Which of the following is correct? I. A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines. II. A non-resident citizen is taxable on income derived from sources within the Philippines only. III. An alien individual, whether a resident or not of the Philippines, is taxable on income derived from sources within the Philippines only. IV. A seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged in international trade shall be treated as an overseas contract worker.

I, II, III and IV I, II and IV only l, ll and Ill only I, III and IV only Kardo owns a nightclub and a videoke bar, with gross receipts of P2.500,000. His cost of direct services and operating expenses are P1,000,000 and P600,000 respectively, and with non-operating income of P200,000. Kardo’s total tax due for the year shall be: 706,000 216,000 486,000 188,000 Statement 1: For taxation purposes, the taxable income of the estate shall be determined in the same manner and basis as in the case of individual taxpayers. Statement 2: Upon the effectivity of the TRAIN Law, personal exemption is no longer allowed to be deducted from the income of the estate. Statement 1 is true but statement 2 is false. Statements 1 and 2 are true. Statements 1 & 2 are false.

Statement 1 is false but statement 2 is true. *Situs of taxation is world/global taxation I. Resident citizen II. Resident alien III. Nonresident alien engaged in trade True; True; True True; False; False False; False; False True; False; True Whi c hoft hef ol l owi ngs t at ement si snotcor r ect ? An irrevocable trust is subject to income tax. An irrevocable trust is taxed in the same manner as an individual taxpayer. An irrevocable trust is taxed at a rate of 30% of net taxable income. None of these

Pedro started to operate his taxi business in 2018. He provided the following data for tax purposes: Gross receipts P2,500,000 Cost of direct services 750,000 Operating expenses 400,000 Assuming instead that Pedro is engaged in the business of transporting goods or cargoes and he signified his intention to be taxed at 8% income tax rate on his initial quarterly income tax return. How much is his income tax for the year? 300,000 430,000

540,000 180,000 *Carlo, married, with two dependent children, received the following income for 2020: Business income, Philippines P1,000,000 Business income, Hongkong 200,000 Interest, peso deposit, MBTC 100,000 Interest, US$ deposit, BDO ($10,000 XP42) 420,000 Interest, deposit in Hongkong (HK$10,000 x P5) 50,000 Prize (TV) won in a local lottery 50,000 PCSO/Lotto winnings 2,000,000 Prize won in contest in U.S. 300,000 Lotto winning in U.S. 100,000 Dividend, domestic company 600,000 Determine the taxable net income assuming he is: RC, 1,558,000; NRC, 908,000; RA, 908,000; NRA, 908,000 RC, 80,000; NRC, 180,000; RA, 830,000; NRA-ETB, 180,000 RC, 1,650,000; NRC, 1,000,000; RA, 1,000,000; NRA, 1,000,000 RC, 180,000; NRC, 80,000; RA, 1,000,000; NRA, 1,000,000 Pedro, Juan, and Antonio are heirs of Luna who died on November 1, 2018. The properties of Luna comprised solely of real property valued at P50,000,000 at the time of his death. The property is subject to lease earning rental income. During 2019, the property remained undivided and it derived a net rental income of P15,000,000. For income tax purposes, the heirs will be tax on net rental income from the inherited property for the year 2019 as:

Co-owners Partners in a general professional partnership Partners in a commercial partnership Partners in an unregistered co-partnership Kardo owns a nightclub and a videoke bar, with gross receipts of P2.500,000. His cost of direct services and operating expenses are P1,000,000 and P600,000 respectively, and with non-operating income of P200,000. Kardo’s income tax due for the year shall be: 250,000 188,000 220,000 208,000 It is important to know the source of income for income tax purposes (i.e. from within and without the Philippines) because: Some individual taxpayers are citizens while others are aliens. Export sales are not subject to income tax. Some individuals and corporate taxpayers are taxable based on their worldwide income while others are taxable only on their income from sources within the Philippines. The Philippines imposes income tax only on income from sources within....