chap 3-4 Flashcards
All remuneration for services performed by an
employee for his employer under an employee
-employer relationship.
Salaries,wages, emoluments, honoraria, allowances,
commission, etc.
Compensation
Any goods, service or other benefits furnished or granted by an employer in cash or in kind, other
than the basic compensation by an employer to an
individual employee except rank and file employee.
Fringe Benefit
Monetary burden imposed by the sovereignty on any
good, service,or other benefit furnished or granted by an employer in cash or in kind in addition to basic
salaries to an individual employee
Fringe Benefit Tax
Covers only those fringe benefits given or furnished to a
managerial or supervisory employee.
Fringe Benefit Tax
Final tax imposed on the employee withheld by the
employer computed at 35% on the Grossed -Up
Monetary Value.
Fringe Benefit Tax
Rank and file subject to fringe benefit?
No, all are subject to taxable compensation
supervisory and managerial subject to fringe benefit tax?
Yes
Tax-exempt Fringe Benefit
Fringe Benefits which are authorized and exempted
from income tax under any special law such as;
Contributions required under SSS law
Contributions required under GSIS law
Similar contributions under an existing law
Premiums for group insurance and employees.
Tax Exempt Fringe Benefit
- If the grant of fringe benefits to the employee is
required by the nature of, or necessary to the trade,
business or profession of the employer. - De minimis benefit
- If the grant of the benefits is for the convenience or
advantage of the employer.
Granted to certain officials and employees of the
government and are considered reimbursements for
the expenses incurred in the performance one’s duties rather than as additional compensation. However the
excess of RATA if not returned to the employer, constitutes taxable compensation income of the
employee.
Representation and Transportation Allowance
when two or more heirs or
beneficiaries inherit an undivided property from a
decedent, or when a donor makes a gift of an
undivided property in favor of two or more donees.
Co-ownership
is subject to Estate tax while Donation is
subject to Donor’s tax
Inheritance
Both taxes are not income taxes but classified as
transfer taxes.
dONOR’S TAX AND ESTATE TAX
taxed individually on their
distributive share in the income of the
Co-Ownership.
CO-OWNERSHIP
a mass of all property, rights and obligations of
a deceased person which are not extinguished by his death including those who have accrued threto since the opening of succession.
ESTATE
refers to the tax on income
received by the estate during the period of
administration or settlement.
INCOME TAX OF ESTATE
generally limited to the
preservation of the common property and the
collection of the income therefrom.
CO OWNERSHIP
computed in the same manner as an individual taxpayer.
TAXABLE INCOME FOR ESTATE
Refers to the period when title to the properties left by a decedent is not yet finally transferred to the heirs or beneficiaries.
Administration or Settlement Period
The executor named by the deceased in his last will and testament if any or the administrator appointed by the court as the case may be is temporarily in-charge of the administration of the estate until such time that the estate is finally distributed to the rightful heirs.
Administration or Settlement Period
right on property, real or personal held by
one party for the benefit of another.
TRUST
who administer and manages the
properties for the benefit of the designated persons called beneficiaries.
trustee or fiduciary
delivers part of all of his
properties to another person
trustor or grantor
person who establishes a trust.
Trustor
one in whom confidence is reposed as
regards property for the benefit of another person.
Trustee
any person or corporation that holds in
trust an estate of another person or persons
Fiduciary
person for whose benefit trust is
created
Beneficiary
The income of the trust may be held or distributed to the benefit of the grantor.
Taxable to the Grantor/Trustor
the income is to be accumulated or held for future distribution whether ordinary income or gain from sale of assets included in thr corpus of the trust.
Taxable to the Trustee
In such a case, the beneficiaries include in
their return their distributive share in the net income of the trust.
Taxable to the Beneficiaries
the trust income is accumulated and
held for distribution to the beneficiaries.
Ordinary Trust
a trust where at any time, the power to
revest in the grantor, title to any part of the corpus of the trust vested.
Revocable Trust
income tax shall not apply to
employee’s trust which forms part of pension, stock bonus or profit sharing plan of an employer for the benefit of his employees.
Employee’s Trust
