Business Taxation Quiz 7. Which of the following is taxed at 30%?

Name: ______________________________________ A. GIFT TO SPOUSE

Date: _____________________ B. GIFT TO SISTER
C. GIFT TO BROTHER-IN-LAW
Multiple Choice: Choose the letter of the correct D. GIFT TO A MARRIED NIECE
answer and write on the table provided below.
8. Which of the following is exempted from donor’s tax?
1. B 4. D 7. C 10. A 13. A A. GROSS GIFT NOT EXCEEDING P200,000
B. NET GIFT EXCEEDING P200,000
2. D 5. A 8. D 11. C 14. B C. NET GIFT EXCEEDING P100,000
D. NET GIFT NOT EXCEEDING P100,000
3. A 6. A 9. C/A 12. D 15. A
9. For donor’s tax purposes, who of the following is not
1. This refers to a tax imposed on the transfer without considered as a stranger?
consideration property between two or more person A. SON OF A FIRST COUSIN
who are living at the time the transfer is made. B. WIFE OF THE BROTHER
A. GIFT TAX B. DONOR’S TAX C. FIRST COUSIN
C. DONEE’S TAX D. BUSINESS TAX D. FATHER OF THE WIFE

2. Donor’s tax is not a (an) 10. The condition and legal know-how of the donor to
A. TRANSFER TAX B. EXCISE TAX enter into valid contract is called
C. GIFT TAX D. BUSINESS TAX A. CAPACITY OF THE DONOR
B. ACCEPTANCE OF THE DONOR
3. For donor’s tax purposes, who of the following is C. CAPACITY OF THE DONEE
considered as a stranger? D. DONATIVE INTENT
A. FATHER-IN-LAW B. BROTHER
C. GRANDFATHER D. SPOUSE 11. Which of the following is subject to donor’s tax?
A. DONATION MORTIS CAUSA
4. Which of the following is subject to donor’s tax? B. TRANSFER OF INHERITANCE TO HIS SUCCESSORS
A. TRANSFER OF PROPERTY FOR ADEQUATE AND FULL C. GIFT TO A STRANGER
FINANCIAL CONSIDERATION. D. DONATION BY A SUITOR WHICH WAS NOT
B. CANCELLATION OF DEBT IN EXCHANGE FOR ACCEPTED BY THE BENEFICIARY.
SERVICES RENDERED?
C. ALL THE PROPERTIES OF A HUSBAND GIVEN AS A 12. Which of the following is not an essential element of
GIFT TO THE WIFE DURING MARRIAGE. taxable gift?
D. SHARE OF ONE OF THE HEIRS WHICH WAS A. CAPACITY OF THE DONOR
RENOUNCED IN FAVOR OF ANOTHER HEIR. B. INTENT TO MAKE A GIFT
C. DELIVERY AND ACCEPTANCE OF THE GIFT
5. Which of the following is not subject to Philippine D. CAPACITY OF THE DONEE
donor’s tax?
A. DONATION MORTIS CAUSA 13. The donation to this person is valid.
B. DONATION WHICH WILL TAKE UPON THE BIRTH OF A. UNBORN CHILD B. SPOUSE
THE DONEE. C. DONOR D. ALL OF THE ABOVE
C. A CREDITOR WHO, OUT OF HIS AFFECTION,
CANCELLED THE DEBT OF THE DEBTOR. 14. The transfer of property by gift is perfected from the
D. A PARCEL OF LAND IN USA DONATED BY A. DELIVERY OF THE GIFT
NONRESIDENT FILIPINO TO A FOREIGNER. B. ACCEPTANCE OF THE DONEE
C. FILING OF DONOR’S TAX RETURN
6. One of the following gifts is subject to donor’s tax. D. PAYMENT OF DONOR’S TAX
A. GIFT TO FOREIGN GOV’T.
B. REVOCABLE DONATION
C. GIFT TO PHIL. GOV’T
D. DONATION IN CONTEMPLATION OF DEATH
15. Which of the following is not subject to donor’s tax? __________ 18. Donations made between husband and
A. COURT ORDERED TRANSFERS wife during the marriage is void.
B. DISGUISE SALE OF PERSONAL PROPERTY __________ 19. No spouse may alienate or encumber
C. RENUNCIATION OF INHERITANCE IN FAVOR OF A any common property without the consent of the other.
PARTICULAR HEIR. __________ 20. The rule of reciprocity is applicable only
D. DONATION TO CHURCH to intangible assets within situs in the Philippines
owned by a nonresident alien.
True or False. Write ‘TRUE’ of the statement is correct
and ‘FALSE’ if otherwise. (1 point each) Problem Solving. Read and analyze each problem. On a
separate yellow paper, neatly show your solution. Box
__________ 1. Donation inter vivos takes effect upon your final answer and on the table provided below,
the death of the donor. write the letter that corresponds to your answer. NO
__________ 2. Donation inter vivos is a completed SOLUTION NO POINT. (2 points each)
donation.
__________ 3. Revocable donation is subject to estate 1. 6.
tax.
2. 7.
__________ 4. Donation is a transfer of property for a
consideration other than money. 3. 8.
__________ 5. Under donation mortis causa, the 4. 9.
transfer of property becomes void if the donor outlives
the donee. 5. 10.
__________ 6. The donee must be capacitated to make
a valid donation. 1. The following donations were made by Don Pamigay
__________ 7. The intention to donate is known by during the taxable year: NET GIFT.
observing the forms required by law to make it valid.
__________ 8. Donation of real property with a value of Donation to TESDA – priority project P900,000
P3,000 can be made orally. Irrevocable donation car to his son P800,000
__________ 9. If the gift is made in personal property, Inadequate consideration of personal
the fair market value thereof at the time of the gift is Property sold to his friend P700,000
considered the amount of gift. Donation to his wife P300,000
__________ 10. Donation of personal property with a Donation to his unborn grandchild P200,000
value of P5,000 shall be void if not made in writing.
_________ 11. The basis of donor’s tax is the fair value A. 2,900,000 B. 200,000
of the property at the time of donation; hence it is C. 1,700,000 D. -0-
imposed as a property tax.
__________ 12. A relative by consanguinity in the 2. Mr. A and Miss B are sweethearts. If A, gave to B,
collateral line within the fourth degree of relationship is P100,000 worth of diamond ring as an anniversary gift,
not a stranger. how much is the amount subject to donor’s tax?
__________ 13. Regardless of the relationship to the
donee, donations made by the donor are subject to A. -0- B. 100,000
scheduler rates of 2%-15%. C. 90,000 D. 30,000
__________ 14. If the donated property is imported and
exempted from donor’s tax, it is likewise exempted 3. Mr. Kuripot donated P100,000 net gift to his younger
from business tax. sister in law on account of her marriage. Donor’s tax is
__________ 15. The first P500,000 of the net gift for
every year is not subject to donor’s tax. A. 27,000 B. 30,000
__________ 16. The law allows dowry deduction for C. -0- D. 2,000
properties donated by the husband and wife to their
children. 4. How much is the donor’s tax for a P200,000 donation
__________ 17. If property donated is a conjugal made to the Filipino donor’s 1st cousin?
property and deed of donation is signed by only one of
the spouses, there is no donation made. A. -0- B. 30,000
C. 2,000 C. 60,000
5. Ma, Ru Nong and Daw are brothers and sisters. Their
parents died leaving a total gross estate of P25,000,000.
Ma, being very rich, renounced his inheritance in favor
of Daw. How much is the donor’s tax to be paid by Ma?

A. -0- B. 463,100
C. 403,250 D. 436,100

COMPREHENSIVE PROBLEM.
ESTATE TAX TABLE
Mr. Mapagbigay, a resident Japanese, donated the
following gifts during the year to his friends and
relatives:

Car (exclusive property) at book value, P800,000 (2nd

hand market price, P650,000) given to his eldest son
and daughter in law on account of their marriage in 2
weeks.

1,000 shares of stock of Jollibee at cost to great-great-

great-grand daughter Luisa, P200,000. Prices/share:
Opening – 180; Highest – 240; Lowest – 95; Closing –
135

Sold his brand new luxury watch to his business partner DONOR’S TAX TABLE
for P55,000. The prevailing market price for such luxury
watch is P1,500,000.

Appliances at cost 300,000. The appliance was pawned

in the pawnshop for P65,000 representing 25% of the
pawn value to be recovered by his personal assistant.

Usufruct to daughter Elisa: FMV of the property

P5,000,000; Effective Rate – 10%; Remaining years in
usufruct – 4 years; Income per year of the property -
P150,000; PV of P1 over 4years at 10% - 3.170

Mr. Mapagbigay also cancelled his maid’s P250,000

debt when the latter’s mother was hospitalized.

Required: For 3 points each. (Write your final answer on

the table provided above)
6. Gross Gift.
7. Net Taxable Gift - Relatives.
8. Net Taxable Gift – Strangers.
9. Donor’s Tax – Relatives
10. Donor’s Tax – Strangers.