Taxationreview
Taxationreview
Taxationreview
33. Andrew is the owner and beneficiary of a P500,000 policy on the life of his father. Andrew sells the policy to his
brother Randy for P150,000. Randy subsequently pays premiums of P50,000. Upon his father’s death, Randy must
a. include P 500,000 in his gross income. c. include P 300,000 in his gross income.
b. exclude the entire proceeds in his gross income. d. include P 350,000 in his gross income.
34. Mr. Marte was injured in a vehicular accident in 2016. He incurred and paid medical expenses of P20,000 and legal
fees of P10,000 during the year. In 2017, he received P 70,000 as settlement from the insurance company which
insured the car owned by the other party involved in the accident. From the above payments and transactions, the
amount of taxable income of Mr. Marte in 2016 is:
a. zero b. P 40,000 c. P 70,000 d. P 50,000
35. Liela was hit by a bus while on her way home. She survived but had to pay P 150,000 for her hospitalization. She
was unable to work for six (6) months which meant that she did not receive her usual salary of P 10,000 a month or
a total of P60,000. She sued the bus company and was able to obtain a final judgment awarding her P 150,000 as
reimbursement for her hospitalization, P 60,000 for the salaries she failed to receive while hospitalized, and
P 250,000 as moral damages for her pain and suffering. She was able to collect in full from the judgment. How
much income did she realize when she collected from the judgment?
a. P 400,000 b. P 250,000 c. P 60,000 d. P 400,000
36. Samson was injured in a vehicular incident in 2014. He incurred and paid hospital expenses of P30,000 and legal
fees of P15,000 during that year. In 2015, he recovered P 40,000 as settlement from the insurance company which
insured the car owned by Mardi., the other party involved in the accident. From the above payments and
transactions, the amount of income taxable to Samson is:
a. P 40,000 in 2015 b. P 5,000 in 2015 c. P 5,000 in 2014 d. none
37. Which of the following is a taxable income?
a. income from a qualified pension plan c. moral damages
b. compensation for personal injuries d. interest on moral damages
38. All the items below are excluded from gross income, EXCEPT:
a. Gain from sale of long-term bonds, debentures and indebtedness.
b. value of property received by a person as donation or inheritance.
c. retirement benefits received from the GSIS, SSS, or accredited retirement plans.
d. separation pay received by a retiring employee under a voluntary retirement program of the corporate
employer.
39. On October 1, 2015, Samantha inherited properties worth P 3,000,000 from her mother. The properties are
earning income of P 90,000 a month. How much income is to be reported by Samantha in 2015?
a. P 3,000,000 b. P 3,090,000 c. P 3, 270,000 d. P 270,000
40. Which of the following statements is wrong about fringe benefits?
a. the fringe benefit tax does not apply to rank and file employees.
b. the rule on the de minimis benefit does not apply to rank and file employees.
c. the monetary value received by an official or employee is presumed to be net of the fringe benefit tax.
d. if the recipient of a fringe benefit is a non-resident alien not engaged in trade or business, the monetary value
shall be divided by 75% in order to arrive at the gross-up monetary value.
41. Which of the ceilings on the following de minimis benefits is correct?
Rice Subsidy Uniform Allowance
a. P 1,200 P 3,000
b. 1.500 4,000
c. 1,000 3,500
d. 2,000 6,000
42. Statement 1 – Laundry allowance not exceeding P 300 per month is not an exempt de minimis benefit if given to
rank and file employee.
Statement 2 – Rice subsidy of P 2,000 per month is an exempt de minimis benefit regardless of whether the
recipient employee is occupying a managerial position or not.
a. statement 1 and 2 is wrong c. statement 1 is correct while statement 2 is wrong
b. statement 1 and 2 is correct d. statement 1 is wrong while statement 2 is correct.
43. Which of the following compensation payments to a minimum wage earner is subject to income tax?
a. Holiday pay b. overtime pay c. night shift differential pay d. none of these
44. For purposes of income taxation, which of the following is not considered as a corporation?
a. general professional partnership c. business partnership
b. unregistered partnership d. joint stock corporation
45. Which of the following is subject to income tax?
a. SSS and GSIS c. Philippine Health Insurance Corporation (PHIC)
b. Local Water Districts d. Philippine Amusement and Gaming Corporation (PAGCOR)
46. A resident corporation is one that is:
a. Organized under the laws of the Philippines that does business in another country.
b. organized under the laws of a foreign country that sets up a regional headquarter in the Philippines doing
product promotion and information dissemination.
c. organized under the laws of the Philippines that engages business in a special economic zone.
d. organized under the laws of a foreign country that engages in business in Makati City, Philippines.
47. One of the following is taxed on gross income.
a. domestic corporation c. non-profit cemetery
b. resident foreign corporation d. nonresident foreign corporation
48. Interest income of a domestic commercial bank derived from a peso loan to a domestic corporation in 2014 is:
a. subject to the 30% income tax based on its net taxable income. c. subject to 10% final withholding tax
b. subject to the 20% final withholding tax. d. subject to the 7.7% final withholding tax.
49. Which of the following statements is wrong on corporation?
a. domestic corporations are taxable in the Philippines on income derived from Japan and Philippine sources.
b. resident foreign corporations are taxable in the Philippines on income earned in the United States.
c. nonresident foreign corporations are taxable in the Philippines on income derived from sources in the
Philippines only.
d. domestic corporations are taxable in the Philippines on income earned from business operation in the Unites
States.
50. If the gross income from unrelated activity exceeds 50% of the total gross income derived by any private
educational institution, the rate shall be 30% based on the entire taxable income. This principle is known as:
a. constructive receipt b. tax benefit rule c. end result doctrine d. predominance test
51. “Taxable net income received during each year from all sources” is the tax base fro income tax purposes of this
class of taxpayers.
a. domestic corporations c. resident foreign corporations engaged in trade or business in the Philippines
b. resident corporations d. resident foreign corporations nt engaged in trade or business in the Philippines.