Allowable Deductions (Sec 34) pg. 37

Question 1

what are the allowable deductions (AD)?

Answer 1

EIT LBC RPDD, also known as itemized deductions

Expenses
Interest
Taxes

Losses
Bad Debts
Charitable contributations

research & dev’t
pensions
depreciations
depletion

these are items allwoed by law to be deducted from GI to arrive at NI subject to tax

note
1. not applicable to compensation earners

Question 3

basic principle in relation to allowable DEDUCTIONS (AD) (not exclusions)

Answer 3

1. law authorizing deduction
2. complied all required conditions for entitlment
3. construed strictly against the taxpayer
4. withholding tax must be imposed whenever required by law

note
first two would suffice

Question 4

Deduction vs. Exclusions

Answer 4

D
- initially part of GI

E
- never part of GI

Question 5

Exclusion v. Exemption

both are items of nicome
both are non taxable

Answer 5

EXCL
- are exclusions from GI

EXMP
- exempted not just for determining GI, but from the tax itself

DAFUQ