Evaluate 2 - Donor's Tax

EVALUATE 2_Donor’s Tax
1. Which of the following cannot claim P10,000 exemption on gifts given on account of marriage?
a. Resident citizen c. Resident alien
b. Nonresident citizen d. Nonresident alien
2. One of the following exemptions cannot be claimed by a non-resident alien donor.

a. P10,000 dowries or gifts given on account of marriage of a legitimate son.
b. Donation to the National government, its agencies and instrumentalities or political
subdivision thereof.
c. Donation to a non-profit educational institution not more than 30% of the gift is used for
administration purposes.
d. The exemption of P100,000 in the tax table for donor’s tax.
3. Given the following statements:

I. A donation by a husband and wife jointly of a conjugal property will require two
separate computations of donor’s tax which will be contained in two separate donor’s
tax return.
II. If the property donated is a community property of the spouses, the spouse who
opposes the donation shall not be considered as a donor and will not be required to pay
donor’s tax return.
III. If the property donated is a community property of the spouses, each of them is
considered as a donor of his or her share in the co-owned property and shall be liable
for whatever tax that may accrue on such donation.
IV. As a rule, a donation inter vivos between spouses during the marriage is voidable.
Choose the best answer.
a. Statements 1and 4 are true c. Statements 1, 2, and 3 are true

b. Statements 1 and 2 are true d. Statements 2 and 3 are true

I. If the marriage is not validly solemnized, the donor is not entitled to the P10,000
exemption because the donation propter nuptias is not also valid.
II. Donations propter nuptias by an adopting parent on account of the wedding of his child
by natural adoption will entitle the donor to an exemption from gross gift of P10,000.
III. A wedding ceremony which was solemnized by the mayor is not valid because he is not
authorized to solemnize marriages under the Family Code, thus the P10,000 exemption
from gross gift cannot be claimed by the donor of a donation propter nuptias.
IV. There is no P10,000 exemption from gross gift on a donation propter nuptias given by a
parent to his daughter who will celebrate her 50 th wedding anniversary.
a. Statement 1 is true c. Statements 2 and 3 are false

b. Statement 2 is false d. Statements 1 and 2 are true
5. Justina donated cash ti his son on account of marriage on October 2014 as follows:
January 15, 2015 - P25,000
March 10,2015 - 20,000
July 15, 2015 - 50,000
September 10, 2015 - 100,000
The donor’s tax due on September 10, 2015 is-
a. P750 c. P1,350
b. P1,700 d. Exempt
6. Which of the following donations result to a net gift of P80,000?

a. Alakdan donated property to Balbakwa with a market value of P140,000. The property is
subject to a mortgage indebtedness of P60,000 which was paid by the donor at the time of
the donation.
b. Altura requested Busina to pay Altura’s liability with Cabangis in the amount of P100,000
and in return, the personap property of Altura valued at P180,000 will be donated to Busina.
c. The daughter of Ananias was married to her boyfriend. As a gift, Ananias donated cash
worth P100,000 to his daughter.
d. Property worth P80,000 was donated by Bibong to Barangay Maaliwalas for use as site of
the Barangay Hall.
7. The following does not result to a gross gift.

a. Donation to the Development Academy of the Philippines.
b. Donation of a parcel of land to brother, the donation is in private document.
c. Donation of a real property to the City of Manila.
d. Donation of property the encumbrance therein was assumed by the done.
8. Exempted from the donor’s taxation are gifts made (BEQ)

a. For the use of the barangay.
b. In consideration of marriage
c. To a school which is a stock corporation.
d. To a for-propfit government corporation.
9. All of the following except one, are exempt from donor’s tax. Which is it?
a. Donation to the Philippine Red Cross.
b. Donation to the Development Academy of the Philippines.
c. Donation directly given to the victims of the eruption of Mount Bulusan.
d. Donation to the City of Davao for public purpose.
10. A non-stock, non-profit school always had cash flow problems, resulting in failure to recruite
well trained administrative personnel to effectively manage the school. IN 2015, Don Leon
donated P100 million peos to the school, provided the money shall be used solely for paying the
slaries, wages and benefits of administrative personnel. The donation represents less than 10 %
of Don Leon’s taxable income for the year. Is he subject to donor’s taxes? (BEQ)
a. No, since the donation is actually, directly, and exclusively used for educational purposes.
b. Yes, because the donation is to be wholly used for administrative purposes.
c. Yes, since he did not obtain the requisite NGO certification before he made the donation.
d. No. because the donation does not exceed 10 % of his taxable income for 2015.
11. There is reciprocity when the donor and the donated property-
Donor Property
a. Nonresident alien intangibles
b. Nonresident citizen immovable
c. Nonresident alien Tangible personal
d. Resident alien Any kind of property
Number 12 to 14 are based on the following data:
12. Annie donated the following properties

Land in Los Angeles, California, USA P 250,000
Land and building in Jolo, Sulu 175,000
Car registered in the States of California, USA 225,000
Jewelries in the Philippines 45,000
Shares of stock in a corporation based in USA 60,000
Accounts receivable, debtor is in the Philippines 25,000
If Annie is a resident citizen, the gross gift is-
a. P780,000 c. P245,000
b. P295,000 d. P220,000
13. The gross gift of Annie if she is a nonresident alien without reciprocity is-
a. P780,000 c. P245,000
b. P295,000 d. P220,000
14. The gross gift if Annie is a nonresident alien with reciprocity is-
a. P780,000 c. P245,000
b. P295,000 d. P220,000
15. Butch made donations to his children in 2015. I which of the following successive donations will
Butch pay donor’s tax?
a. January 15 – To Alma on account of marriage, P40,000.
b. March 15 – To Ara on account of graduation, P45,000
c. May 15 – To Aiko on account of her 18th birthday, P50,000
d. In all of the above donations.
16. Which of the following statements is false?

a. Donor’s tax applies also to juridical persons.
b. For purposes of donor’s tax, second cousins are strangers to each other.
c. Encumbrance on the property donated, if assumed by the donor is deductible for donor’s
tax purposes.
d. As a rule, donation between husband and wife during the marriage is void.
17. Which of the following is not a factor in the determination of taxable gifts?
a. Identification of transfers included in gross gift
b. Application of exempt transfers
c. Subtraction of allowed deductions,
d. Multiplying net gift by the applicable rates.

I. The donor’s tax payable on the present donation includes the previous donations made
during the current year.
II. It is not proper to add the prior net gifts during the current year because the taxes paid
on the donations will just be credited from the donor’s tax computed.
III. The tax rate on the tax table for donor’s tax are relatively lower than the tax rates in the
tax table for estate tax.
IV. The highest tax rate on donor’s tax is higher than the highest tax rate on estate tax.
a. Statements 1 and 2 are false

b. Statements 1, 2, and 4 are false
c. Statements 3 ad 4 are correct
d. Statement 2 is false.
19. Mr and Mrs. Abubot donated the following community properties to their children on May 30,
2015.
Amount Donee
P125,000 Baron For graduating cum laude at Central Philippine University, Iloilo City
P200,000 Caricot On account of marriage celebrated April 30, 2014
? Dakila For placing 3rd in the May 2015 CPA Licensure Examinations
If the donor’s tax payable by Mr. Abubot is P10,500, the amount of the donation given by the
spouses to Dakila is?
a. P250,000 c. P500,000
b. P490,000 d. Cannot be determined
20. A stranger in donor’s taxation

a. Great grandchild c. Child by natural adoption
b. Nephew d. Grand auntie
21. Sayers who is a single, gave an outright gift of P150,000 to a friend, Johnson who needed the
money to pay medical expenses-
a. The donation is not taxable because the gift is outright.
b. The donor’s tax payable is P1,000
c. The donor’s tax is P45,000
d. The donation is deductible from the gross income of Sayers
22. Celia donated P110,000.00 to her friend Victoria who was getting married. Celia gave no other
gift during the calendar year. What is the donor’s tax implication on Celia’s donation?
a. The P100,000.00 portion of the donation is exempt since given in consideration of marriage.
b. A P10,000 portion of the donation is exempt being a donation in consideration of marriage.
c. Celia shall pay a 30% donor’s tax on the P110,000 donation.
d. The P100,000 portion of the donation is exempt under the rate schedule for donor’s tax.

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EVALUATE 2_Donor’s Tax

2. One of the following exemptions cannot be claimed by a non-resident alien donor.

3. Given the following statements:

Choose the best answer.

a. Statements 1and 4 are true c. Statements 1, 2, and 3 are true

4. Given the following statements:

Choose the best answer.

a. Statement 1 is true c. Statements 2 and 3 are false

The donor’s tax due on September 10, 2015 is-

6. Which of the following donations result to a net gift of P80,000?

7. The following does not result to a gross gift.

8. Exempted from the donor’s taxation are gifts made (BEQ)

Number 12 to 14 are based on the following data:

12. Annie donated the following properties

If Annie is a resident citizen, the gross gift is-

16. Which of the following statements is false?

18. Given the following statements:

Choose the best answer.

a. Statements 1 and 2 are false

20. A stranger in donor’s taxation

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