DONOR’S TAX

Question 1

1. An act of liberality whereby one disposes gratuitously of a thing or right in favor of another who
   accepts it
   a. Occupation
   b. Donation
   c. Succession
   d. Tradition

Answer 1

B

Question 2

2. A tax imposed on the gratuitous transfer of property between two or more persons who are living
   at the time the transfer is made
   a. Income tax
   b. Business tax
   c. Estate tax
   d. Donor’s tax

Answer 2

D

Question 3

3. The following are the requisites of a donation for purposes of the donor’s tax except
   a. Capacity of the donor
   b. Capacity of the done
   c. Delivery of the subject matter of gift
   d. Donative intent

Answer 3

B

Question 4

4. For the donation to be considered 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 choices

Answer 4

C

Question 5

5. Statement 1: Donation is perfected from the time the donee has accepted the donation.
   Statement 2: Donations made to conceived and unborn children are not allowed by law.
   Statement 3: In all cases, void donations are not subject to donor’s tax.
   a. Only one (1) of the above statements is true
   b. Two (2) of the above statements are true
   c. Three (3) of the above statements are true
   d. None of the above statements are true

Answer 5

A

Question 6

6. A wrote a letter to B on December 31, 2020 donating his car worth P350,000. The letter received
   by the latter on January 10, 2021 who accepted the donation. The letter of acceptance was
   received only by A on January 17, 2021. The donor’s tax was not paid until March 20, 2022. The
   donation was consummated on
   a. December 31, 2020
   b. January 10, 2021
   c. January 17, 2021
   d. March 20, 2022

Answer 6

C

Question 7

7. Statement 1: Donor’s tax shall be levied, assessed, collected and paid upon the transfer of property
   by any person, resident or non-resident, as a gift.
   Statement 2: Donor’s tax is a property tax.
   Statement 3: Donor’s tax is an excise tax.
   Statement 4: The donor’s tax shall apply whether the transfer is in trust or otherwise, whether the
   gift is direct or indirect, and whether the property is real or personal, tangible or intangible.
   a. Only one (1) of the above statements is true.
   b. Two (2) of the above statements are true
   c. Three (3) of the above statements are true
   d. All of the above statements are true

Answer 7

C

Question 8

8. Statement 1: Donative intent is required for both direct and indirect gifts.
   Statement 2: Donation of real property must be made in a public document specifying therein the
   property donated.
   Statement 3: The acceptance may be made in the same Deed of Donation or in a separate public
   instrument, but it shall not take effect unless it is done during the lifetime of the donor.
   Statement 4: If the acceptance is made in a separate instrument, the donor shall be notified
   thereof in an authentic form and this step shall be noted in both instruments.
   a. Only one (1) of the above statements is false
   b. Two (2) of the above statements are false
   c. Three (3) of the above statements are false
   d. All of the above statements are false

Answer 8

A

Question 9

9. Statement 1: The donation of movable property amounting to P5,000 or below may be made orally or in writing.
   Statement 2: The donation of an immovable property shall be made in public instrument
   regardless of the amount.
   Statement 3: The donation and acceptance should be in writing if the value of the property
   donated is at least P5,000.
   a. Only one (1) of the above statements is true
   b. Two (2) of the above statements are true
   c. Three (3) of the above statements are true
   d. All of the above statements are true

Answer 9

B

Question 10

10. One of the following is a valid donation
    a. Oral donation of a passenger jeepney worth P100,000
    b. A parcel of land worth P5,000 in a private document
    c. Oral donation of an air conditioner worth P4,000
    d. A parcel of land worth P1,000,000 in a private document

Answer 10

C

Question 11

11. Which of the following statements is false? The gross gift of a non-resident alien
    a. Will include all intangible personal properties situated in the Philippines
    b. Will include all intangible personal properties regardless of location
    c. With reciprocity will not include all intangible personal properties regardless of location
    d. Without reciprocity will not include all intangible personal properties situated outside the
    Philippines

Answer 11

B

Question 12

12. Which of the following is not considered as an intangible personal property within
    a. Franchise which must be exercised in the Philippines
    b. Obligations or bonds issued by a foreign corporation with business situs in the Philippines
    c. Shares of stock issued by a foreign corporation 51% of the business of which is located in
    the Philippines
    d. Shares of stocks issued by a domestic corporation

Answer 12

C

Question 13

13. Statement 1: The gross gifts of a donor who is a non-resident alien will include all properties
    regardless of location.
    Statement 2: The gross gifts of a donor who is a non-resident alien of the Philippines, will include
    only property located in the Philippines.
    Statement 3: The reciprocity clause in the donor’s tax law only applies to non-resident alien (NRA).
    Statement 4: The reciprocity clause in the door’s tax law only applies to tangible and intangible personal properties donated by an NRA.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. All of the above statements are true

Answer 13

B

Question 14

14. One of the following is subject to donor’s tax
    a. Donation inter vivos to the Catholic Church
    b. Remission of debt where the debtor did not render services in favor of the creditor
    c. Donation inter vivos to International Rice Research Institute
    d. Cash contribution to a political candidate, duly reported to the Commission on Election

Answer 14

B

Question 15

15. All of the following, except one, are exempt from donor’s tax
    a. Donation to the Philippine Red Cross
    b. Donation to the Development Academy of the Philippines
    c. Donation of cash to the City of Cebu for public use
    d. Donation directly given to the victims of the eruption of Mt. Mayon

Answer 15

D

Question 16

16. Which of the following renunciations shall not be subject to donor’s tax?
    a. Renunciation by the surviving spouse of his/her share in the conjugal partnership or
    absolute community after the dissolution of the marriage in favor of the heirs of the
    deceased spouse or any other person/s
    b. General renunciation by an heir, including the surviving spouse, of his/her share in the
    heredity estate left by the decedent
    c. Renunciation by an heir, including the surviving spouse, or his/her share in the hereditary
    estate left by the decedent categorically in favor of identified heir/s to the exclusion or
    disadvantage of the other co-heirs
    d. None of the choices

Answer 16

B

Question 17

17. Statement 1: As a rule, donations to candidates in local and/or national elections are not subject
    to donor’s tax.
    Statement 2: Donation to a political party is not subject to donor’s tax if it is reported by the donor
    to the Comelec and by the candidate in his Statement of Expenditures.
    Statement 3: When the donee is exempt from income tax the donation made by a taxable
    individual is also tax-exempt.
    Statement 4: Proceeds of life insurance policy on the life of the decedent where the designation
    of the beneficiary is irrevocable is always subject to donor’s tax.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. All of the above statements are true

Answer 17

B

Question 18

18. Statement 1: A donation by 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.
    Statement 2: If the property donated is a community property of the spouses, each of them is
    considered as a donor of his share in the co-owner property and shall be liable for whatever tax
    that may accrue on such donation.
    Statement 3: As a rule, a donation inter vivos between spouses during the marriage is voidable,
    except for moderate gifts.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. None of the above statements are true

Answer 18

B

Question 19

19. What is the tax implication if a corporation condones the debt of a stockholder because of a good
    thing done by the latter to the corporation?
    a. The condonation is subject on its liberality. Moreover, it is equivalent to a payment of
    dividend to the stockholder which is, therefore, subject to a dividend tax of 10%
    b. It is just a simple case of extinguishment of an obligation which is neither subject to income
    tax on the stockholder nor subject to donor’s tax on the corporation
    c. The condonation is based on the liberality of the corporation; therefore, it is subject to
    donor’s tax
    d. It is tantamount to a declaration of dividend. Therefore, it is an income which is subject to
    10% dividend tax on the shareholder. However, it is not subject to donor’s tax on the
    corporation

Answer 19

D

Question 20

20. Which of the following donations result to a net gift of P80,000?
    a. The daughter of A was married to her boyfriend. As a gift, A donated cash worth P90,000
    to his daughter
    b. Property worth P80,000 was donated by A to Barangay Teacher’s Village for use as site of
    the Barangay Hall
    c. A donated property to B 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
    d. A requested B to pay A’s liability with C in the amount of P100,000 and in return, the
    personal property of A valued at P180,000 will be donated to B

Answer 20

D

Question 21

21. 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 upon value by the donor and the done
    c. The fair market value at the time of the donation
    d. Any of the above

Answer 21

C

Question 22

22. Statement 1: A donated real property can be registered in the name of the donee even if the
    donor’s tax thereon had not been paid.
    .
    Statement 2: In case of a deficiency donor’s tax, the donee shall be required to pay the tax if the
    property is already in his possession
    Statement 3: Only one return shall be filed for several gifts (donations) by a donor to the different
    donees on the same date.
    Statement 4: If the donation involves conjugal / community property, each spouse shall file
    separate return corresponding to his/her respective share in the conjugal/community property.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. All of the above statements are true

Answer 22

B

Question 23

23. Donor’s tax return shall be filed within
    a. 25 days after giving the gift
    b. 30 days after the end of every quarter
    c. 30 days after the gift has been made
    d. 6 months after the gift from the date of gift

Answer 23

C

Question 24

24. Mr. X, resident alien, donated a piece of jewelry to his son who got married on January 15, 2021.
    The piece of jewelry was mailed to his son on January 10, 2021, and was received and accepted on
    January 20, 2021. When is the last day to file the donor’s tax return?
    a. February 9, 2021
    b. February 14, 2021
    c. February 19, 2021
    d. March 20, 2021

Answer 24

C

Question 25

25. Statement 1: The income tax on the income of the donated property after the donation but before
    registration in the name of the donee shall be a liability of the donee.
    Statement 2: The 30-day period for filing the donor’s tax return and payment of tax shall
    commence after the gift is made even if the donated property has not yet been delivered to the
    donee.
    Statement 3: The donor’s tax return shall be filed at the place of residence of the donor or of the
    donee, at the option of the donor.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. All of the above statements are false

Answer 25

D

Question 26

26. Statement 1: Where a property that has been subjected to the final capital gains tax is transferred
    for less than an adequate and full consideration in money or money’s worth, the amount by which
    the fair market value of the property at the time of transfer exceeds the actual consideration shall
    be deemed gift and shall be included in the computation of gifts made during the calendar year.
    Statement 2: A purchased a house and lot in 2020 for P5,000,000. In 2021, A decided to sell the
    house and lot to B for P2,000,000 although its fair market value is P7,000,000. The P5,000,000
    difference in selling price and market value is a gift subject to donor’s tax.
    Statement 3: A donation inter vivos by the husband and the wife jointly during the marriage is a
    donation of each spouse to the extent of one-half that will require separate computations for two
    donor’s taxes, under whichever property relationship exists between the spouses.
    Statement 4: A sold his car, costing P3,000,000, to B for P5,000,000. The car has a fair market value
    of P9,000,000 at the time of sale. The difference of P4,000,000 in selling price and fair market value
    constitutes a gift subject to donor’s tax.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. All of the above statements are true

Answer 26

B

Question 27

27. The rule on transfer for inadequate consideration does not apply to
    a. Delivery truck c. Apartment house
    b. Vacant lot
    c. Apartment house
    d. Jewelry for personal use

Answer 27

B

Question 28

28. Which of the following is not a deduction from the gross gifts?
    a. Unpaid mortgage on the donated property assumed by the donee
    b. Diminution on the donated property specifically provided by the donor
    c. Unpaid donor’s tax on the donated property assumed by the donee
    d. Unpaid real estate tax on the property donated assumed by the done

Answer 28

C

Question 29

29. 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 might be required to pay the deficiency
    although he did 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.
    a. Statements 1 and 2 are false
    b. Statement 1 is true but statement 2 is false
    c. Statement 1 is false but statement 2 is true
    d. Statements 1 and 2 are true

Answer 29

D

Question 30

30. A tax minimization scheme which is done by spreading the gift over numerous calendar years to
    avail of lower tax liability
    a. Splitting of gift
    b. Spread-out method
    c. Donation of life insurance
    d. Void donation

Answer 30

A