Donor's Tax Flashcards
1
Q
Donor’s tax shall apply, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible, even if the transfer is merely in trust. T or F?
A
TRUE
2
Q
Any person making a donation, unless the donation is specifically exempt under the Tax Code or other special laws, is required, for every donation, to accomplish under oath a donor’s tax return. T or F?
A
TRUE
3
Q
Donation is a transfer of property for a consideration other than money. T or F?
A
FALSE.
An element of donation is donative intent. Donative intent refers to the proper declaration of the legal owner of a property or right to transfer ownership to another without consideration.
4
Q
As a rule, all persons who may contract to dispose of their property may donate. T or F?
A
TRUE
5
Q
Donor’s tax is imposed to all natural and artificial persons. T or F?
A
TRUE
6
Q
The gross gifts of a citizen or resident donor will include all properties donated, regardless of location. T or F?
A
TRUE
7
Q
Minors can be a donor or a donee. T or F?
A
FALSE.
8
Q
Under the TRAIN Law, the 6% donor’s tax rate shall apply regardless of the relationship of the donor and the donee (relative or stranger). T or F?
A
TRUE
9
Q
Donation inter-vivos is subject to estate tax, while donation mortis cause is subject to donor’s tax. T or F?
A
FALSE
Donation inter-vivos is subject to donor’s tax
Donation mortis causa is subject to estate tax
10
Q
Donor’s tax is a liability of the donee. T or F?
A
FALSE
Donor’s tax is imposed on the exercise of the donor’s right during lifetime to transfer property to others in the form of gift. It is not a property tax but an excise tax imposed on the transfer of property by way of gift inter vivos
11
Q
A donation on which the donor’s tax is not paid is a valid donation. T or F?
A
TRUE
12
Q
Any contribution in cash or in kind to a candidate, political party, or coalition of parties for campaign purposes shall be subject to donor’s tax. T or F?
A
FALSE.
13
Q
Donation on account of marriage is not taxable if the marriage did not actually take place. T or F?
A
FALSE
14
Q
Agreement between the donor and the donee that the latter shall pay the donor’s tax is binding on the BIR. T or F?
A
FALSE
15
Q
In donor’s tax, the exemption is P250,000 while in estate tax, the exemption is P100,000. T or F?
A
FALSE
16
Q
The donor’s tax return is filed within thirty (30) days from the date of completion of the donation. T or F?
A
TRUE
17
Q
Donation of a personal property worth P5,000 must be in writing. T or F?
A
FALSE
18
Q
Donation of real property worth P3,000 need not be in writing. T or F?
A
FALSE
19
Q
Contracts of donation between husband and wife are void in all cases. T or F?
A
TRUE
20
Q
Donation to a senator in view of is public office is void in all cases. T or F?
A
TRUE
21
Q
Donations between persons guilty of adultery or concubinage are void. T or F?
A
TRUE
22
Q
Donations to conceived or unborn children are valid. T or F?
A
TRUE
23
Q
A donation can be both part of the gross estate of the donor and a taxable income to the donee. T or F?
A
FALSE
24
Q
A donation may be exempt from donor’s tax, but not necessarily a deduction from the donor’s gross income. T or F?
A
TRUE
25
Reciprocity clause is applied to non-resident alien donating real property. T or F?
FALSE
26
Which of the following constitutes a taxable gift?
a. Creditor's gratuitous discharge of a debtor's obligation
b. One day rent-free use of another's property
c. A gratuitous transfer by a minor
d. An agreement to make a future transfer which is not supported by a consideration
Creditor's gratuitous discharge of a debtor's obligation
27
The donation of personal (movable) property may be made:
I. Orally if the value is P5,000 or less requiring simultaneous delivery
II. In writing if the value is more than P5,000
Which of the following is correct?
Both I and II are correct
28
Which of the following donations is required to be in a public document?
a. Donation of personal property worth more than P5,000
b. Donation of personal property
c. Donation of real property
d. Donations required to be in writing
Donation of real property
29
For the donation to be valid, acceptance of the donation must be made
a. During the lifetime of the donor only
b. During the lifetime of the donee only
c. During the lifetime of the donor and the donee
d. None of the above
During the lifetime of the donor and the donee
30
Statement 1: Citizen or resident donor is subject to donor's tax regardless of where the gift was made or where the property donated is located.
Statement 2: Resident alien would be subject to donor's tax only on their donations of property located in the Philippines
Which of the following is correct?
Statement 1 is true
Statement 2 is false
31
The reciprocity clause in the donor's tax law applies to:
a. Juan Dela Cruz, a non-resident citizen
b. Chrispa, a Korean citizen residing in the Philippines
c. Mrs. Pedro, a Filipino citizen residing in Malaysia
d. Mr. G.I. Joe, a non-resident American
Mr. G.I. Joe, a non-resident American
32
Reciprocity clause applies to which of the following?
a. Non-resident alien donating real property
b. A donation of tangible property by a non-resident alien
c. When a resident alien donates intangible property
d. A donation by a non-resident alien of intangible property
A donation by a non-resident alien of intangible property
33
Statement 1: The computation of the donor's tax is on a cumulative basis over a period of one calendar year
Statement 2: Husband and wife are considered as separate and distinct taxpayers for the purposes of the donor's tax
Which of the following is correct?
Statement 1 and 2 are true
34
In computing the donor's tax on a subsequent donation, the donor must also consider
a. Only the present donation
b. All prior net gifts during his lifetime
c. The present and immediately subsequent donations
d. All prior net gifts during the calendar year
All prior net gifts during the calendar year
35
On June 1, 2021, Pedro, a resident citizen, donated a parcel of land to a relative in Makati and a real property located in Canada to a friend. In taking a credit for the foreign donor's tax paid, the credit shall be against the Philippines donor's tax
a. Donation to a friend
b. Donation to a relative
c. Donation to a relative and a friend
d. None of the above
Donation to a relative and a friend
36
Statement 1: Donation made to a legally adopted child shall be considered as donation made to relative, subject to 6% donor's tax rate in excess of P250,000
Statement 2: For donor's tax purposes, donations to the children of the first cousin of the donor are considered donations to strangers, subject to 6% donor's tax rate in excess of P250,000
Which of the following statements is correct?
Statements 1 and 2 are true
37
When the donee is a stranger, the tax payable by the donor for a donation made in 2018 shall be:
a. 6% of net gifts in excess of P250,000
b. 30% of net gifts
c. Based on graduated rates
d. Based on graduated rates or 30% of the net gifts, at the option of the donor
6% of net gifts in excess of P250,000
38
When a property is donated, the basis of the donor's tax is
a. The cost of acquisition if acquired by purchase or the fair market value at acquisition date, whichever is higher
b. The agreed value by the donor and the donee
c. The fair market value at the time of donation
d. Any of the above
Any of the above
a. The cost of acquisition if acquired by purchase or the fair market value at acquisition date, whichever is higher
b. The agreed value by the donor and the donee
c. The fair market value at the time of donation
39
Statement 1: A receivable from a debtor can be a donation only if the creditor notifies the debtor that he is not collecting anymore and the debtor makes a positive act signifying his acceptance of the benevolence of the debtor
Statement 2: A donation inter-vivos that had paid the donor's tax can still be reduced if the legitimes of the compulsory heirs were reduced, and there would be a resulting refundable donor's tax
Which of the following is correct?
Statement 1 is true
Statement 2 is false
40
Statement 1: If the gift is made in properties, it shall be appraised at its fair market value as of the time of donation
Statement 2: In valuing properties for donor's tax, the principles in valuation of properties for estate tax purposes shall apply
Which of the following is correct?
Statements 1 and 2 are true
41
Which of the following statements is false?
a. The donor's tax for each calendar year is computed on the basis of the total net gifts made during the calendar year
b. Gifts in property shall be valued at the fair market value of the property at the date of donation
c. A gift to the International Rice Research Institute is exempt from gift tax
d. None of the above
None of the above is false
a. The donor's tax for each calendar year is computed on the basis of the total net gifts made during the calendar year
b. Gifts in property shall be valued at the fair market value of the property at the date of donation
c. A gift to the International Rice Research Institute is exempt from gift tax
42
Which of the following statements is false?
I. Contracts of donation between husband and wife are void in all cases
II. Donation to the President in view of his public office is void in all cases
III. Donations between persons guilty of adultery or concubinage are void
IV. Donations to conceived or unborn children are valid
Contracts of donation between husband and wife are void in all cases
43
Statement 1: When the donee is tax exempt, the donation of a taxable individual is also tax exempt
Statement 2: Donor's tax shall be paid within 30 days after the donation is made
Which of the following is correct?
Statement 1 is false
Statement 2 is true
44
A resident alien made the following donations in 2021. Which is exempt from donor's tax?
a. Gifts made on account of marriage and before its celebration by parents to each of their legitimate, recognized, natural or adopted children
b. Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government
c. Gifts in favor of an educational and/or charitable, religious, cultural, or social welfare corporation, institution, foundation, trust or philanthropic organization or research institution or organization, where more than 30% of said gifts were used by such donee for administrative purposes
d. All of the above
Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government
45
Which of the following is subject to donor's tax?
a. Cancellation of debt in exchange for services rendered
b. Share of one of the heirs, which was renounced in favor of another heir
c. Transfer of property for less than adequate and full financial consideration
d. All of the above
Transfer of property for less than adequate and full financial consideration
46
All the following are subject to donor's tax in case there is a transfer for less than adequate and full consideration, except:
a. Real property classified as capital asset
b. Personal property
c. Intangible property
d. Tangible property
Real property classified as capital asset
47
All the following statements are correct, except one. If the donor is a nonresident, not a citizen of the Philippines:
a. Property situated abroad, but donated to a citizen of the Philippines, is exempt from donor's tax
b. Property situated in the Philippines but donated to a donee abroad will pay the donor's tax
c. Property in the Philippines with a value of P300,000, donated to a citizen of the Philippines, is subject to donor's tax
d. None of the above
None of the above are incorrect
a. Property situated abroad, but donated to a citizen of the Philippines, is exempt from donor's tax
b. Property situated in the Philippines but donated to a donee abroad will pay the donor's tax
c. Property in the Philippines with a value of P300,000, donated to a citizen of the Philippines, is subject to donor's tax
48
Which of the following is not a deduction from gross gifts?
a. Unpaid mortgage on the donated property assumed by the donee
b. Unpaid real estate tax on donated property assumed by the donee
c. Diminution on the property donated, specifically provided by the donee
d. Unpaid donor's tax on the property assumed by the donee
Unpaid donor's tax on the property assumed by the donee
49
ABC Corporation donated P100,000 to the barangay for the purpose of cementing a barangay road where its factory is located.
Statement 1: The donation is exempt from donor's tax
Statement 2: The corporation may claim full deduction for income tax purposes
Which of the following is correct?
Statement 1 is true
Statement 2 is false
50
Since a donation to a charitable institution has a deduction without any ceiling
Statement 1: The net gift will be zero, so that in computing the donor's tax, the donation may be omitted in gross gifts as it is likewise omitted in the deductions
Statement 2: The gross gifts should be reported and the deduction shall be claimed
Which of the following is correct?
Statement 1 is false
Statement 2 is true
51
Statement 1: When a donor's tax return was filed, and it was found out by the BIR to have errors which gave rise to a deficiency donor's tax, the donor may be required to pay the deficiency, although he does not possess or own the property anymore
Statement 2: The government is not bound by any agreement between the donor and the donee that the latter shall pay the donor's tax instead of the former
Which of the following is correct?
Statements 1 and 2 are true
52
One of the following statements is wrong. When a donor with several donations during the year fails to file the donor's tax return for each of the dates that the donations were made:
a. Such failure shall be cured by filing a donor's tax return at the end of the year reflecting all donations made within the year and paying the taxes shown in that one return
b. Each failure is subject to penalties for non-filing of return and nonpayment of the tax on time
c. He can voluntarily file late the donor's tax return for each date that donations were made and make payments on the tax due shown on each return, with penalties
d. If the different donor's taxes were not paid on the original due dates because of requests for extension seasonably filed with the Commissioner of Internal Revenue, each required payment of tax shall have an extended period of not more than six months
Such failure shall be cured by filing a donor's tax return at the end of the year reflecting all donations made within the year and paying the taxes shown in that one return
53
A person making a donation is required to file a tax return to BIR at
a. The residence of the donee within 30 days from the date of donation
b. The residence of the donor within 30 days from the date of donation
c. The residence of the donor at the end of the year
d. The residence of the donee at the end of the month when the donation was made
The residence of the donor within 30 days from the date of donation
54
Statement 1: Tax credit for donor's tax paid to a foreign country is allowed only if the donor is a citizen or resident of the Philippines
Statement 2: There can be a donor's tax paid to a foreign country even if the citizen or resident donor had no donation of property in the Philippines
Which of the following is correct?
Both statements are correct
