Exams

Question 1

On May 14, 2021, Nicanor, single and a resident citizen died. The following day, you were engaged by the heirs of Nicanor to assist them in filing the estate tax return. Below are the properties left by Nicanor:
House and lot located in Makati (family home): P 10,000,000
Montero Sports car: P 2,000,000
Bank deposits - Banko De Pelpens: P 6,000,000
Assuming the heirs successfully
withdraw P1,000,000 from Nicanor’s bank deposits, how much is
the estate tax due, if any?
Select the correct response.
PO
P 180,000
P 120,000
P 780,000

Answer 1

P 120,000

Question 2

During the year 2018, Nicanor, Jr. who resides in R. Papa Street, Sampaloc Manila and
with Tin 135-567 890-006. Made the following gifts:
June 1, 2018:
Donee: Junior, his son, on account of his marriage celebrated June 1, 2018 Amount of
donation: P 150,000 cash
July 10, 2018:
Donee: His friend Aprot Amount of donation: P 400,000 a secondhand motor vehicle
September 30, 2018: Donee: His daughter Julia
Amount of donation: P 450,000 cash dowry, on account of her scheduled marriage on
October 25, 2018
November 23,2018:
Donee: His father, Nicanor, Sr. Amount of donation: A parcel of land worth P 180,000,
subject to the condition that his father would assume the mortgage indebtedness of
Jose in the amount of P 40,000;
Using Donor’s Tax Return (BIR Form No. 1800), how much will be reflected on line 14
(total net gifts) for the return to be filed on November 23, 2018?
P 140,000
P 1,140,000
None of the choices
P 890,000

Answer 2

P 890,000

Question 3

A property acquired at a cost of P 1,000,000 was transferred in contemplation of death
for a consideration of P 1,200,000. Fair market value at the time of transfer, P
1,500,000, while at the time of death, P 1,200,000. How much shall be included in the
gross estate?
Select the correct response:
P1,500,000
P 1,000,000
P 1,100,000
PO

Answer 3

PO

Question 4

S1: Estate tax an ad valorem tax.
S2: Estate tax is an excise tax.
Select the correct response:
Only S1 is correct.
Both are incorrect.
Only S2 is correct.
Both are correct.

Answer 4

Both are correct.

Question 5

Ryan Bangz, a Korean actor residing in Korea, died in 2022. Below are the information
pertaining to his estate:
Net taxable estate, Philippines P 6,000,000 Net taxable estate, Korea 3,000,000 Estate
tax paid China 100,000 How much is the estate tax payable?
Net taxable estate, China 1,000,000 Estate tax paid, Korea 50,000
Select the correct response:
P 490,000
P 450,000
P 600,000

Answer 5

P 490,000

Question 6

A parcel of land inherited from the father was acquired by the decedent’s father then for
a cost of P 250,000. Upon inheritance, the fair market value was P 200,000 as shown in
the schedule of values from the Assessor’s office and P 230,000 as determined by the
office of the BIR Commissioner. How much shall be included in the gross estate?
Select the correct response:
P 250,000
P 200,000
P 230,000
PO

Answer 6

P 230,000

Question 7

Due to COVID-19, the Commissioner of Internal Revenue allowed the filing of 2019
Annual Income Tax Returns (AITR) and payment of tax due at any Revenue District
Office (RDO) or any Authorized Agent Bank where taxpayer is currently held up. This
means that even if the taxpayer is registered in Makati, he/it can file the return
anywhere in the Philippines. This act is more in keeping with:
Select the correct response:
Fiscal Adequacy
Theoretical Justice
Administrative Feasibility
Ability to Pay Principle

Answer 7

Administrative Feasibility

Question 8

S1: In claiming vanishing deduction, there should always be two deaths within five years
from the receipt of property.
S2: In claiming vanishing deduction, there should always be two transfers of properties
within five years. One is onerous and the other is onerous.
Select the correct response:
Only S1 is correct.
Both are incorrect.
Both are correct.
Only S2 is correct.

Answer 8

Both are incorrect.

Question 9

NICKYNOR, a franchisee, had the following data on revenue and receivables (Net of
VAT)
Quarter ending 3/31/2018 Covered by the franchise Revenue: P 4,000,000
Receivables, Beginning: P 600,000 Receivables, Ending: P 800,000
Not covered by franchise
Revenue: P 1,000,000 Receivables, Beginning: PO Receivables, Ending: P 160,000
Assume that the taxpayer is generating and selling electricity, how much value added
tax due will NICKYNOR remit to the BIR, if any?
Select the correct response:
PO
P 600,000
P556, 800
Some other answer

Answer 9

P556, 800

Question 10

S1: Taxation is the process by which the Bureau of Internal Revenue levies and collects
taxes for use to defray public expenditures.
S2: Facts: During the Covid-19 pandemic period, Nicanor a rich man, refused to pay his
income tax on the ground that he did not receive any “ayuda” from the government
since the said “ayuda” was given only for the poor to middle class people. Nicanor may
refuse to pay his income tax.
Select the correct response:
Both are correct
Both are incorrect
Only S2 is correct
Only S1 is correc

Answer 10

Both are incorrect

Question 11

Nicanor, single, died in 2022 leaving the following properties:
Real properties located in Manila: P 8,200,000 Real Property located in Batangas
(Inherited from his father 3½ years before his death): P 1,800,000 Fortuner Toyota Car:
P 2,000,000 Mitsubishi Mirage Car (donated by his mother 6 years ago): P 800,000
Additional information:
Property acquired by gratuitous transfer: a) Real Property located in Batangas: Unpaid
Mortgage: P 100,000; FMV upon receipt: P 1,250,000 b) Mitsubishi Car: Unpaid
Mortgage: P 50,000; FMV upon receipt: P 1,000,000
During his lifetime, Nicanor was able to pay P 50,000 of the unpaid mortgage on the
real property inherited.
Exclusive deductions:
Unpaid taxes before death: P 100,000
Loss of Mirage Car during settlement period (Out of P 800,000, P 600,000 if which is
compensated by insurance company): P 200,000
In his will, Nicanor donated some of the real properties located in Manila to the City Hall
of Manila: P 300,000
Death Benefits from his employer under RA 4917: P 200,000
Family Home (included in his estate): P 2,000,000
From the foregoing facts, how much is the vanishing deduction?
Select the correct response:
P 457,500
Some other answer
P 450,750
P 661,719

Answer 11

P 457,500

Question 12

Zac is a senior citizen. He bought a Kiddie meal at
Jollibee. The sale is:
Select the correct response:
VATable
Subject to percentage tax or reciprocity
Zero-rated sale
VAT exempt

Answer 12

VATable

Question 13

Mari owns a real property. He was given an equivalent ownership in ABC Corporation in
exchange for the property. The tax-free exchange is:
Select the correct response:
VATable
Subject to percentage tax or reciprocity
Zero-rated sale
VAT exempt

Answer 13

VAT exempt

Question 14

Which of the following is not considered as direct tax:
Select the correct response
Donor's tax
Professional tax
Cedula
Value-added tax

Answer 14

Value-added tax

Question 15

S1: The heirs of Nicanor paid foreign tax in the United States of America (USA) with
respect to Nicanor’s properties therein which was subjected to estate tax by the USA’s
taxing authorities. For Philippine estate tax purposes, such foreign tax paid is deductible
in full against the computed estate tax due.
S2: Inday, an OFW, cannot claim credit on the foreign estate tax payment.
Select the correct response:
Only S2 is correct.
Both are incorrect.
Only S1 is correct
Both are correct.

Answer 15

Both are incorrect.

Question 16

S1: No person will be imprisoned for non-payment of
tax. 
S2: Taxes are imposed only for purposes of raising revenues.
Select the correct response:
Both are correct
Both are incorrect
Only S2 is correct
Only S1 is correct

Answer 16

Both are incorrect

Question 17

S1: Inday, a flower vendor made a gross sale of P 3,200,000 from the sale of her
flowers in original state. The sale although exceeds the vat threshold is exempt from
VAT.
S2: Handy Help, a non-stock, non-profit private organization which sell exclusively to its
members in the regular conduct or pursuit of commercial or economic activity are
exempt from value added tax.
Select the correct response
Only S1 is true
Both are true
Only S2 is true
Both are false

Answer 17

Both are false

Question 18

ABC Condominium Homeowners Association (ACHA) collects monthly association dues
and other charges for security, waste management and maintenance of common use
service areas (CUSA) from homeowners in ABC Condominium Tower amounting to P
5,000,000.
How much VAT will ACHA pay?
Select the correct response:
Some other answer
P 535,714
P 600,000
PO

Answer 18

PO

Question 19

Sale of gold is:
Select the correct response:
Zero-rated sale
Subject to 12% VAT
Exempt from VAT
Subject to 3% Percentage Ta

Answer 19

Subject to 12% VAT

Question 20

On May 14, 2021, Nicanor, single and a resident citizen died. The following day, you
were engaged by the heirs of Nicanor to assist them in filing the estate tax return. Below
are the properties left by Nicanor:
House and lot located in Makati (family home): P Montero Sports car: P 2,000,000
Bank deposits - Banko De Pelpens: P 6,000,000
How much is the estate tax due, if any?
Select the correct response:
P 180,000
P 780,000
P 480,000
PO

Answer 20

P 180,000

Question 21

The least source of our tax laws is
Select the correct response:
Supreme Court decisions
Constitution
BIR Rulings
Statues

Answer 21

BIR Rulings

Question 22

The principles of a sound tax system exclude
Select the correct response:
Economic efficiency
Theoretical Justice
Fiscal Adequacy
Administrative Feasibility

Answer 22

Economic efficiency

Question 23

S1: Donor's tax is an indirect tax.
S2: Donor's tax is an excise tax
Select the correct response:
Only S1 is true
Both are true
Both are false
Only S2 is true

Answer 23

Only S2 is true

Question 24

S1: Vague Taxation laws are interpreted liberally in favor of the government. 
S2: Exemptions shall be interpreted strictly against the taxpayer and liberally in favor of 
the taxing authority.
Select the correct response:
Both are true
Only S2 is true
Only S1 is true
Both are false

Answer 24

Only S2 is true

Question 25

Which of the following is deductible from the gross estate?
Select the correct response:
Unpaid property taxes accrued in the year of death.
Unpaid Estate tax after the death of the decedent.
Estate tax paid to foreign country
Income tax paid by the heirs of the decedent with respect to income earned by the
estate.

Answer 25

Unpaid property taxes accrued in the year of death.

Question 26

On May 14, 2021, Nicanor, single and a resident citizen died. The following day, you
were engaged by the heirs of Nicanor to assist them in filing the estate tax return. Below
are the properties left by Nicanor:
House and lot located in Makati (family home): P Montero Sports car: P 2,000,000
Bank deposits - Banko De Pelpens: P 6,000,000
How much is the gross estate of Nicanor?
Select the correct response:
P 12,000,000
P 3,000,000
P 18,000,000
P 13,000,000

Answer 26

P 18,000,000

Question 27

For a tax bill to become a law, it has to go thorough how many readings in the House of
Representatives and the Senate (acting separately)
Select the correct response:
One
Two
Four
Three

Answer 27

Three

Question 28

The general rule under the Tax Code, as amended, the person statutorily liable to pay 
the VAT is the:
Select the correct response:
Buyer
Either the seller or the buyer
Seller
Neither the seller of the buyer

Answer 28

Seller

Question 29

During the year 2018, Nicanor, Jr. who resides in R. Papa Street, Sampaloc Manila and
with Tin 135-567 890-006. Made the following gifts:
June 1, 2018:
Donee: Junior, his son, on account of his marriage celebrated June 1, 2018 Amount of
donation: P 150,000 cash
July 10, 2018:
Donee: His friend Aprot Amount of donation: P 400,000 a secondhand motor vehicle
September 30, 2018:
Donee: His daughter Julia Amount of donation: P 450,000 cash dowry, on account of
her scheduled marriage on October 25, 2018
November 23,2018:
Donee: His father, Nicanor, Sr.
Amount of donation: A parcel of land worth P 180,000, subject to the condition that his
father would assume the mortgage indebtedness of Jose in the amount of P 40,000;
Using the Donor’s Tax Return (BIR Form No. 1800), how much will be reflected on line
18 (tax payable) on November 23, 2018?
890,000

Answer 29

890,000

Question 30

Nicanor, married to Inday, died on August 15, 2022, leaving the following properties:
Conjugal properties:
Vacation house acquired by the spouses located in
Makati: P 5,000,000 Family home built on the land inherited by Nicanor before his
marriage by the spouses during their marriage: P 6,000,000
Exclusive properties:
Parcel of land inherited by Nicanor from his father before his marriage: P 10,400,000
Parcel of land bought by Nicanor before his marriage:
P 1,200,000
Conjugal deductions:
Unpaid mortgage: P 1,200,000
Unpaid taxes before death: P 400,000 Unpaid taxes after death: P 200,000
How much is the Nicanor, married to Inday, died on August 15, 2022, leaving the
following properties:
Conjugal properties:
Vacation house acquired by the spouses located in Makati: P 5,000,000 Family home
built on the land inherited by Nicanorbefore his marriage by the spouses during
theirmarriage: P 6,000,000
Exclusive properties: Parcel of land inherited by Nicanor from his father before his
marriage: P 10,400,000 Parcel of land bought by Nicanor before his marriage: P
1,200,000
Conjugal deductions: Unpaid mortgage: P 1,200,000 Unpaid taxes before death: P
400,000 Unpaid taxes after death: P 200,000
How much is the estate tax due?
Select the correct response:
P 60,000
Some other answer
P 72,000
P 78,000

Answer 30

P 78,000

Question 31

Ching Chong, Chinese, died in 2019. If Ching Chong was a resident of old China town 
in Manila (Binondo), how much is the deductible standard deduction?
Select the correct response:
P 500,000
Zero or NIL
21
P 5,000,000
P 1,000,000

Answer 31

P 5,000,000

Question 32

Which is TRUE? A restaurant with videoke is:
Select the correct response:
Subject to 8% optional tax
Subject to VAT if exceeded the threshold
Subject to 3% percentage tax if below the VAT threshold
Subject to amusement tax of 18%

Answer 32

Subject to amusement tax of 18%

Question 33

S1: In case of conflict between the recognition of revenue by a revenue regulation and
PFRS (GAAP) 15, PFRS 15 should be used because we follow the standards of
accounting in recognition of revenue.
S2: In case of conflict between a provision of tax code and a provision of PFRS,
provision of tax code should prevail over the provision of PFRS
Select the correct response:
Only S1 is correct.
Both statements are incorrect.
Only S2 is correct.
Both are correct.

Answer 33

Both are correct.

Question 34

An official document that empowers a revenue officer to examine and scrutinize a
Taxpayer’s book of accounts and other accounting records, in order to determine the
taxpayer’s correct internal revenue tax liabilities.
Select the correct response:
Notice of Informal conference
Letter of authority
Preliminary assessment Notice
Formal Assessment Notice

Answer 34

Letter of authority

Question 35

Nicanor is paying his Professional Tax Receipt every year in the city hall of Manila. The 
reason for paying it, is that basically tax is imposed upon the enjoyment of a privilege or 
the engaging in an occupation.
Select the correct response:
Personal, poll or capitation tax
Excise or privilege tax
Property tax
Ad valorem tax

Answer 35

Excise or privilege tax

Question 36

S1: De Lasalle College, a non-stock, non-profit educational institution, has a canteen,
bookstore, and dormitory inside its campus which are commercial in nature. The income
from the sale of goods and/or services by the canteen, bookstore, and dormitory inside
the campus are actually, directly, and exclusively used for educational purposes. Such
income is exempt from income tax. S2: De Lasalle College, a non-stock, non-profit
educational institution, has a building which has a canteen, bookstore, and dormitory
inside its campus. For real property tax purposes, such building is exempt from real
property tax for it is owned and used by De Lasalle College for educational purposes.
Select the correct response:
Only S1 is true
Both are false
Both are true
Only S2 is true

Answer 36

Only S1 is true

Question 37

S1: Generally, tax laws operate only within Philippine jurisdiction.
S2: Visa fees collected by the United States are not taxed by the Philippine government.
Select the correct response:
Both are constitutional limitations
S1 is a constitutional limitation while S2 is an Inherent limitation
Both are Inherent limitations
S1 is an Inherent limitation while S2 is a constitutional limitation

Answer 37

Both are Inherent limitations

Question 38

Nicanor died on February 14, 2022. Below are the decedent’s properties which were
loss: P#1. Diamond ring, which was robbed on February 9, 2022: P 1,000,000
P#2. Improvement located in Cavite, which was destroyed by fire on March 15, 2022,
not compensated by insurance: P 5,000,000 P#3. Household furniture located in
Bulacan, which was destroyed by fire on February 15, 2023: P 200,000 P#4.
Improvement located in Batangas, which was destroyed by fire on June 16, 2022,
compensated by insurance: P 2,000,000
Select the correct response:
Loss from P3 is deductible.
Loss from P#3 and P#4 are deductible from gross estate.
Loss from P#1 and P#2 are deductible from gross estate.
Loss from P#2 is deductible.
Loss from P#1 is deductible from gross estate.

Answer 38

Loss from P#2 is deductible.

Question 39

Sana, a singer, and an actress in the Philippines, is paying her community tax every
year. The said tax is a fixed amount imposed on individuals residing within a specified
territory without regard to their property or the occupation in which they be engaged in.
What is the classification of the community tax?
Select the correct response:
Personal, poll or capitation tax
Ad valorem tax
Property tax
Excise or privilege tax

Answer 39

Personal, poll or capitation tax

Question 40

S1 In a claim against the insolvent person, the insolvency of the debtor must be proven
and not merely alleged.
S2 In order that unpaid mortgage may be deducted from the gross estate, the fair
market value of the mortgage property must from part of the net estate infull.
S3 As a rule, deduction from the gross estate are presumed to be conjugal, unless
specifically identified as exclusive.
Select the correct response:
Only S1 is false
Only S2 is false
Only S3 is false
All is true

Answer 40

Only S2 is false

Question 41

Due to COVID-19, the Government needed funds to cover budgetary deficits, hence the
enactment of the CREATIVE law which broadened the tax base and institutionalized the
tax incentives given to a group of non-individual taxpayers. This act is more in keeping
with:
Select the correct response:
Fiscal Adequacy
Ability to Pay Principle
Administrative Feasibility
Theoretical Justice

Answer 41

Fiscal Adequacy

Question 42

S1: For estate tax purposes, the real estate, in general, shall be valued at cost at the
time of death of the decedent.
S2: In his will, Nicanor donated his real property to Samahan ng Magsasaka
Foundation, a non-stock, non-profit organization but reserved his right to use the same
until such time he needs it. Upon death of Nicanor, the donation is still part of the estate.
Select the correct response:
Only S2 is correct.
Both are incorrect.
Both are correct.
Only S1 is correct.

Answer 42

Only S2 is correc

Question 43

A property acquired for P 1,000,000 was transferred in contemplation of death for a
consideration of P 100,000. Fair market value at the time of transfer, P 1,500,000, while
at the time of death P 1,200,000 How much shall be included in the gross estate?
Select the correct response:
P1,500,000
P 1,100,000
PO
P 1,000,000

Answer 43

P 1,100,00

Question 44

The Commissioner of Internal Revenue is not empowered to
Select the correct response:
Make or amend a tax return for and behalf of the taxpayer
Obtain information and to summon, examine, and take testimony of persons to
effect tax collections
Grant amnesty for erring taxpayers
Compromise tax liabilities of taxpayers

Answer 44

Make or amend a tax return for and behalf of the taxpayer

Question 45

Real property taxes should not disregard increases in the value of real property 
occurring over a long period of time. To do otherwise would violate the canon of a 
sound tax system referred to as
Select the correct response:
symbiotic relationship.
administrative feasibility.
theoretical justice.
fiscal adequacy

Answer 45

fiscal adequacy

Question 46

Zac is riding the Canadian Airlines going to Canada. His ticket is:
Select the correct response:
Subject to percentage tax or reciprocity
VAT exempt
Zero-rated sale
VATable

Answer 46

VAT exemp

Question 47

During the Covid-19 pandemic, some of the massage parlors/Spa along Valenzuela are
being used as fronts for prostitution, the Sangguniang Panglungsod ng Valenzuela
passed a tax ordinance subjecting massage parlors/Spa within its jurisdiction to such
onerous taxes that leave them no other alternative but to stop operating. The passage
of the ordinance is a valid exercise of?
Select the correct response:
Power to taxation as the Sanggunian collected taxes to punish the wrong doings
Police power to exercise power of the government to destroy such wrong doings
Police power to exercise power of the government to collect taxes to generate revenue
for the government
Power to taxation as the Sanggunian collected taxes to generate revenues for the
government

Answer 47

Police power to exercise power of the government to destroy such wrong doings

Question 48

S1: If the consideration received is less than adequate and full consideration, the value
to be included in the gross estate shall be the excess of the fair value of the property at
the time of the decedent’s death and the fair market value at the time of sale.
S2: If the transfer is not shown to have been made in contemplation of death or to take
effect upon the decedent’s demise, the transfer is subject to donor’s tax.
Select the correct response:
Only S2 is correct.
Only S1 is correct.
Both are incorrect.
Both are correct.

Answer 48

Both are incorrect.

Question 49

Tax as to rates excludes
Select the correct response:
Specific Tax
Progressive Tax
Mixed
Proportional Tax

Answer 49

Specific Tax

Question 50

Nicanor, married to Inday, died on August 15, 2022, leaving the following properties:
Conjugal properties:
Vacation house acquired by the spouses located in
Makati: P 5,000,000 Family home built on the land inherited by Nicanor before his
marriage by the spouses during their marriage: P 6,000,000
Exclusive properties: Parcel of land inherited by Nicanor from his father before his
marriage: P 10,400,000 Parcel of land bought by Nicanor before his marriage: P
1,200,000
Conjugal deductions:
Unpaid mortgage: P 1,200,000
Unpaid taxes before death: P 400,000 Unpaid taxes after death: P 200,000
How much is the net taxable estate?
Select the correct response:
P 1,200,000
P 1,300,000
P 1,000,000
Some other answer

Answer 50

P 1,300,000

Question 51

Nicanor was born in Pampanga. He resides in Quezon City. He works in Manila. His
only property is in Pasay. He executed a deed of donation of the said property to Inday,
a resident of Mandaluyong City. The deed of donation was notarized Taguig City.
Where is the venue of the filing of the donor’s tax return?
Select the correct response:
Quezon City
Taguig
Pampanga
Manila

Answer 51

Quezon City

Question 52

Which of the following statement is NOT correct?
Select the correct response:
A memorandum circular promulgated by the CIR that imposes penalty for violations of
certain rules need not be published in a newspaper of general circulation or official
gazette because it has the force and effect of law.
The reversal of a ruling shall not generally be given retroactive application, if said
reversal will be prejudicial to the taxpayer
In case of doubt, statutes levying taxes are constructed strictly the government
The construction of a statute made by his predecessors is not binding upon the
successor, if thereafter he becomes satisfied that a different construction should
be given

Answer 52

A memorandum circular promulgated by the CIR that imposes penalty for violations of certain rules need not be published in a newspaper of general circulation or official gazette because it has the force and effect of law.

Question 53

On May 14, 2021, Nicanor, single and a resident citizen died. The following day, you
were engaged by the heirs of Nicanor to assist them in filing the estate tax return. Below
are the properties left by Nicanor:
House and lot located in Makati (family home): P Montero Sports car: P 2,000,000
Bank deposits - Banko De Pelpens: P 6,000,000
Assuming the heirs told you that they do not have sufficient money to pay for the estate
tax due, so, you advised to withdraw money from the Bank deposits of Nicanor. The
following day, the heir’s fill-up BIR Form 1904 and have it verified in the BIR. The said
form together with a copy of Nicanor’s death certificate was submitted to the Banko De
Pelepens. The bank allows the heirs to withdraw P 1,000,000 from Nicanor’s bank
deposits. What is the tax consequence, if any?
Select the correct response:
Subject to estate tax
Subject to final withholding tax of 6%
No tax consequences
Subject to creditable withholding tax of 6%

Answer 53

Subject to final withholding tax of 6%

Question 54

Which of the following is subject to rule of reciprocity
Select the correct response:
Investment in bonds in EFG Corp, a corporation established under the laws of
Philippines owned by Park Solomon, a Korean.
Investment in bonds in HIJ Corp, a corporation established under the laws of Korea
owned by Park Solomon, a Korean.
Investment in stocks in ABC Corp, a corporation established under the laws of Korea
owned by Nicanor Reyes, a Canadian.
Investment in stocks in XYZ Corp, a corporation established under the laws of
Philippines owned by Inday Reyes, a resident citizen of the Philippine

Answer 54

Investment in bonds in EFG Corp, a corporation established under the laws of Philippines owned by Park Solomon, a Korean.

Question 55

Mr. Barrera, a decedent was married at the time of his death and under the system of
conjugal partnership of gains.
Among the properties in the gross estate were: Land, inherited before the marriage, fair
market value: P 5,000,000
Family home built by the spouses on the inherited
land: P 8,000,000
Based on the foregoing facts, how much is the allowable family home deduction?
Select the correct response:
P 9,000,000
Some other answer
P 6,500,000
P 10,000,000

Answer 55

P 9,000,000

Question 56

Banko De Pelepens deposit money with Banko De Uru which earns interest that is
subjected to the 20% final withholding tax. At the same time, Banko De Pelepens is
subjected to the 5% Gross Receipts Tax (GRT) on its interest income on loan
transactions to customers. Which statement below INCORRECTLY describes the
transaction?
Select the correct response:
There is no double taxation because the first tax is income tax, while the second tax is
business tax
There is double taxation because two taxes - income tax and gross receipts tax are
imposed on the interest incomes described above and double taxation is prohibited
under the 1987 Constitution
There is no double taxation because the income tax is on the interest income of
Banko De Pelepens on its deposits with Banko De Uru (passive income), while
the gross receipts tax is on the interest income received by Banko De Pelepens
from loans to its debtor-customers (active income)

Answer 56

There is double taxation because two taxes - income tax and gross receipts tax are
imposed on the interest incomes described above and double taxation is prohibited
under the 1987 Constitution

Question 57

CREATIVE Law was enacted by the congress. One of its provisions provides that the
proprietary educational institution is now taxed as a domestic corporation. When it was
enacted, confusion arises among the practitioners because the law is vague. Since
there is doubt about the law, the BIR will be most likely to issue.
Select the correct response:
Revenue Memorandum Order
Revenue Regulations
Revenue Rulings
Revenue Memorandum Circular

Answer 57

Revenue Rulings

Question 58

S1. The heirs or beneficiaries have the primary obligation to pay estate tax and the
surviving spouse has the subsidiary liability for the payment of estate tax.
S2. The executor or administrator has the primary obligation to pay estate tax and the
heirs or beneficiaries have the subsidiary liability for the payment of estate tax.
S3. The surviving spouse has the primary obligation to pay estate tax and the executor
or administrator has the subsidiary liability for the payment of estate tax.
Select the correct response:
Only S1 is correct
Only S3 is correct
Only S2 is correct
All is correct

Answer 58

Only S2 is correct

Question 59

A quasi-public corporation like the National Grid Corporation of the Philippines (NGCP)
may exercise one of the inherent powers of the state. Which is it?
Select the correct response:
Police power
Taxation power
Power of eminent domain

Answer 59

Power of eminent domain

Question 60

Nicanor died in 2019. The deed of extra-judicial settlement of the estate of Nicanor was
signed by the heirs in 2020. In 2021, the corresponding estate tax was paid. In 2022,
the heirs partitioned the property in accordance with their respective shares. The
properties are transferred to the heirs:
Select the correct response:
2020
2022
2019
2021

Answer 60

2019

Question 61

A fundamental rule of taxation is that the property of one country may not be taxed by 
another country is called as?
Select the correct response:
international inhibition
international comity
reciprocity
international law

Answer 61

international comity

Question 62

The Commissioner of Internal Revenue can delegate the power to
Select the correct response:
recommends rules and regulations to the Secretary of Finance
assign and re-assign revenue officer to establishments of excisable articles
refund or credit internal revenue tax
compromise or abate tax liabilit

Answer 62

recommends rules and regulations to the Secretary of Finance

Question 63

Philippine tax laws are, by nature
Select the correct response:
Civil
Political and Civil
Political
Penal and Civil

Answer 63

Civil

Question 64

S1: Only VAT-registered taxpayers are required to pay Value-Added Tax.
S2: In all cases, taxpayers whose gross annual sales or receipts exceed the VAT
threshold amount are required to pay Value-Added Tax.
Select the correct response:
Both are true
Only S2 is true
Both are false
Only S1 is true

Answer 64

Both are false

Question 65

Nicanor was married under the property regime of absolute community of properties. He
died on June 08, 2022, leaving the following properties:
Vacant land, which was inherited before marriage:
FMV @ the time of death: P 1,500,000;
FMV @ the time of acquisition: P 1,000,000
Family home built the spouses on the inherited land: FMV @ the time of death: P
4,000,000; FMV @ the time of acquisition: P 5,000,000
From the foregoing facts, how much is the deductible family home?
Select the correct response:
P 5,500,000
P 3,500,000
P 3,000,000
P 2,750,000

Answer 65

P 2,750,000

Question 66

S1: Donation is perfected from the time of the acceptance by the donee.
S2: Donation between husband and wife are always void.
Select the correct response:
Both are true
Only S1 is true
Only S2 is true
Both are false

Answer 66

Both are false

Question 67

NICKYNOR, a franchisee, had the following data on revenue and receivables (Net of
VAT)
Covered by the franchise
Not covered by franchise
Quarter ending 3/31/2018 Revenue: P 4,000,000 Receivables, Beginning: P 600,000
Receivables, Ending: P 800,000
Revenue: P 1,000,000 Receivables, Beginning: PO Receivables, Ending: P 160,000
Assume that the taxpayer is generating and selling gas and water, how much value
added tax due will NICKYNOR remit to the BIR, if any?
Select the correct response:
P 176,800
P 556,800
P 100,800

Answer 67

P 100,800

Question 68

S1: Nicanor, a VAT-registered person exported his product abroad. The sale is exemp
of VAT
S2: Agri-rice corp., an agricultural cooperative, imported machines that will be used for
its operation. Such importation is not exempt from VAT as importation, whether for
personal or business purpose is subject to 12% VAT.
Select the correct response:
Only S2 is true
Both are true
Both are false
Only S1 is true

Answer 68

Both are false

Question 69

S1: Nicanor paid a facilitation fee to the BOC. The facilitation fee shall be included in the
determinati of applicable input vat on importation.
S2: Under the current rules, sale of gold to the BDO is exempt from VAT.
Select the correct response:
Only S2 is true
Only S1 is true
Both are false
Both are true

Answer 69

Both are false

Question 70

S1: A BIR Ruling issued by a Commissioner of Inte Revenue which grants tax
exemption would create perpetual exemption in favor of the taxpayer.
S2: A tax exemption may be withdrawn anytime at the pleasure of the taxing authority.
Select the correct response:
Only S2 is correct.
Both are correct.
Only S1 is correct.
Both statements are incorrect

Answer 70

Only S2 is correct.

Question 71

1st statement – The police power can only be exercised by the State
2nd statement – The power to tax can only be exercised by the State.
3rd statement – The power of eminent domain can only be exercised by the
State.
Which is FALSE

Answer 71

3rd statement

Question 72

Generally, power of taxation can be exercised by

Answer 72

Senate and the House of Representatives

Question 73

In light of the recent news about the “Community Pantry” which under the government,
violates the social distancing policy, it passed a law imposing 60% donor’s tax based on
gross gifts, on those taxpayers who donate goods to the organizations forming such
“Community Pantry”
This power exercised is in accordance with the concept of:

Answer 73

Police Power

Question 74

It is a fixed amount of tax imposed upon persons residing in a community without
regard to their property or occupation:

Answer 74

Capitation tax / poll tax

Question 75

The 8% optional tax is an example of the following, except

Answer 75

Progressive

Question 76

Imported vehicles are taxed according to value. This is an example of:

Answer 76

Ad valorem tax

Question 77

The following are similarities among Fundamental Powers of the State, except:

Answer 77

They can be abolished by the Constitution.

Question 78

First statement: Symbiotic relation is the reason why the government could impose
taxes on the income of the resident citizens derived from sources outside the
Philippines.
Second statement: Jurisdiction is the reason why citizens must provide support to the
state so the latter could continue to give protection.

Answer 78

Both statements are incorrec

Question 79

An annual tax of P 1,000 was imposed upon all residents of the Philippines, who are
above 21 years of age, with a gross income of P 250,000, whether or not they send
their children to public schools, for the purpose of raising funds in order to improve
public school buildings. The tax is:

Answer 79

For public purpose

Question 80

A law was passed by congress which granted tax amnesty to those who have not paid
income taxes for a certain year without at the same time providing for the refund of
taxes to those who have already paid them. The law is

Answer 80

Valid because it was congress which passed the law and it did not
improperly delegate the power to tax

Question 81

S1: Taxes may be imposed to raise revenues or to provide disincentives to certain
activities within the state.
S2: The state can have the power of taxation even if the Constitution does not expressly
give it the power to tax.
S3: For the exercise of the power of taxation, the state can tax anything at any time.
S4: The provisions of taxation in the Philippine Constitution are grants of power and not
limitations on taxing power.

Answer 81

Only S4 is false

Question 82

A tax reform at any given time underscores the fact that: Choose the best statement.

Answer 82

Taxation is a power that is very broad

Question 83

S1: The National government, including its political subdivisions, has the power to tax
inherently.
S2: The provisions of the Philippine Constitution on Taxation are grants of power.

Answer 83

Both false

Question 84

Question 14
S1: The father of Nicanor, in his will, transferred his Bulacan property in trust for
Nicanor giving powers to designate anybody he pleases to succeed to the property. The
value of the property is Php 1,000,000.00. Upon Death of the father, the property is part
of his gross estate.
S2: The father of Nicanor, in his will, transferred his Bulacan property in trust for Nicanor
giving powers to designate anybody he pleases to succeed to the property. The value of
the property is Php 1,000,000.00. Upon Death of Nicanor, the property is part of his
gross estate.

Answer 84

Both are true

Question 85

S1: For estate tax purposes, the valuation for the Montero Sports left by Nicanor is the
Fair Market Value at the time his death.
S2: For estate tax purposes, the valuation of the real property left by Nicanor is the
highest among the Selling Price, Fair Market Value, and Zonal Value at the time of his
death.

Answer 85

Only S1 is true

Question 86

Statement 1: John, a Filipino citizen who is residing in Manila, Philippines, died on
February 14, 2021. He left a Ferarri SF90 Stradale car worth P 30,000,000 in Saudi
Arabia. For estate tax purposes, the Ferrari car is included in the computation of John’s
gross estate.
Statement 2: John, a Canadian citizen, died on February 14, 2021. He left a Toyota
Supra worth P 5,200,000 in Canada. For estate tax purposes, the Ferrari car is included
in the computation of John’s gross estate

Answer 86

Only S1 is correct

Question 87

A transfer subject to tax other than estate tax

Answer 87

Bona fide sale or transfer

Question 88

If a Chinese is a resident of the Philippines, are the properties outside the Philippines
be included in his gross estate?

Answer 88

Yes, regardless of the location of properties will be included in the gross
estate because he was a resident.

Question 89

The reciprocity clause in the donor’s tax law applies to:

Answer 89

Kate Williams, an American citizen, residing in Seattle

Question 90

In relation to no. 19, the reciprocity clause applies to:

Answer 90

Trademark registered with intellectual property office in Makati

Question 91

Statement 1: Persons subject to VAT are likewise subject to percentage tax.
Statement 2: Persons exempted from VAT are likewise always exempted from other
percentage tax.

Answer 91

Both of the statements are false.

Question 92

Statement 1: In general, a non-VAT registered taxpayer has the option to register under
the VAT system which shall not be revoked for a period of three (3) years.
Statement 2: Percentage tax is imposed together with the excise tax.

Answer 92

Only S1 is true

Question 93

S1 - The estate of any decedent is entitled to a standard deduction in the maximum
amount of Php 5 Million.
S2 – The estate of any decedent with family home can claim up to Php 10 Million
deduction against gross estate.

Answer 93

Both are false

Question 94

Which of the following is subject to the 3% common carrier’s tax?

Answer 94

Jeepney owned by Mang June for the transport of passengers

Question 95

In 2022, Kimmy rents her 15 residential units for P 14,500 per month and 20 residential
units for P 15,500 per month. During the taxable year, her accumulated gross receipts
from rentals amounted to P 5,400,000.
20 residential units x P 14,500 per month x 12 months: P 3,480,000
20 residential units x P 15,500 per month x 12 months: P 3,720,000

Answer 95

None of the choices

Question 96

Period for the BIR to refund VAT applications by taxpayers under TRAIN law

Answer 96

Ninety (90) days from submission of complete document

Question 97

What is the proper sequence of the BIR assessment process?

1. Actual/table audit
2. Issuance of electronic Letter of Authority (e-LoA)
3. Issuance of Final Decision on Disputed Assessment (FDDA)
4. Issuance of Formal Letter of Demand/Final Assessment Notice (FLD/FAN)
5. Issuance of Notice of Discrepancy (NOD)
6. Issuance of Preliminary Assessment Notice (PAN

Answer 97

2, 1, 5, 6, 4, 3

Question 98

St. Clementine Academy (SCA) is a private education institution. To be exempt from
VAT, SCA must obtain accreditation from the following, except

Answer 98

Bureau of Internal Revenue (BIR)

Question 99

Export-oriented enterprise are subject to zero-rated sale based on 70% of:

Answer 99

Total annual production

Question 100

Under the TRAIN law, if monthly rental does not exceed Php 15,000.00 and the total
gross receipts exceeds Php 3 Million, the taxpayer is:

Answer 100

Exempt from VAT and Percentage Tax

Question 101

In the filing of income tax returns for individual taxpayers, which is TRUE in terms of
deadline?
Q1 ITR; Q2 ITR; Q3 ITR; Annual ITR

Answer 101

May 15; Aug 15; Nov 15; Apr 15

Question 102

In the filing of income tax returns for non-individual taxpayers (assuming the taxpayer
employs calendar year), which is TRUE in terms of deadline?
1st statement: April 30; August 29; November 29; Apr 15
2nd statement: 60 days after qtr; 60 days after qtr; 60 days after qtr; Apr 15

Answer 102

Only the 2nd statement is true

Question 103

Statement 1: Real property initially acquired by a taxpayer engaged in the real estate
business will result in its conversion into a capital asset even if the same is
subsequently abandoned or becomes idle.
Statement 2: Real properties classified as ordinary assets for being used in business by
a taxpayer other than real estate business are automatically converted into capital
assets without need of proof that the same have not been used in business for more
than two (2) years prior to the consummation of the taxable transaction involving said
properties.

Answer 103

Both false

Question 104

Statement 1: Capital losses are deductible only up to the extent of ordinary gains.
Statement 2: Ordinary losses are deductible only up to the extent of ordinary gains.

Answer 104

Both statements are false

Question 105

Mr. V has a Lot in Taguig worth P 10,000,000. Since he is residing in Quezon City, he
decided to rent the said lot to Mr. C for P 30,000/month for a period of 2 years. After the
lapse of 2 years, Mr. V sold the same lot to Mr. C.
For taxation purposes what is the classification of the lot being rented when
subsequently sold?

Answer 105

ordinary asset

Question 106

1st statement – Goyo, a person engaged in trading of laptop, sold one unit for Php
10,000.00. The fair market value of the laptop is Php 50,000.00. The transfer for
insufficient consideration is subject to donor’s tax.
2nd statement – Goyo, a person NOT engaged in trading sold his personal cellphone
for Php 10,000.00. The fair market value of the cellphone is Php 50,000.00. The transfer
for insufficient consideration is subject to donor’s tax.

Answer 106

Only the 2nd statement is true

Question 107

Nicanor died in 2020 and left several properties. During the period of administration or
settlement of his estate, one of his real properties located in Manila has earned P
500,000 as rent income from its tenants.
For tax purposes, what is the proper treatment for the P 500,000 rent income?

Answer 107

Ang iinclude na income lang ay yung kinita bago mamatay na hindi pa narereceived

Question 108

Statement 1: If a taxpayer is engaged in real estate business, all real properties are
ordinary assets.
Statement 2: If a taxpayer is engaged in retail industry, all real properties are ordinary
assets if used in business.

Answer 108

Both statements are correct.

Question 109

S1 – Lisa, a non-resident alien, modeled for a local company and appeared in
commercials. She was paid Php 1 Million. Her professional fee is subject to VAT.
S2 - All discounts are deductible against gross selling price or the gross receipts.

Answer 109

S1 is true

Question 110

S1 - The sale to senior citizens, PWDs and national athletes where 20% discounts
were granted are considered VAT-exempt transactions.
S2 - The allowable discounts given to senior citizens and persons with disabilities have
no limit in terms of purchase.

Answer 110

Both false

Question 111

On October 28, 2021, SMB Corporation, a corporation that manufactures beer in the
Philippines, celebrates its “OKtUber FIEZTA” On the said occasion, the company held a
concert party, and all of its employees were given “Filzen beer” one of its finest beers as
their drink. The company incurred P 4,000,000 expenses for the said event. P
2,000,000 of which was boiled down to miscellaneous expense which represents the
beers that were given to each employee.
S1: The P 2,000,000 miscellaneous expense will not be subject to VAT since it is an
expense account.
S2: The P 2,000,000 miscellaneous expense is considered as deemed sale.
S3: SMB Corporation will have to pay P 240,000 VAT because of the consumed beers.

Answer 111

S1 is false but S2 and S3 are true

Question 112

S1: Inday cutiee, the surviving spouse of Nicanor cutiee (who died last October 21,
2021), renounced her share in the conjugal partnership after the dissolution of the
marriage in favor Nico, the only child of Nicanor and Inday. The renunciation made by
Inday cutiee is subject to donor’s tax.
S2: Inday cutiee, the surviving spouse of Nicanor cutiee (who died last October 21,
2021), renounced her share in the distributive share after the dissolution of the marriage
in favor Nico, the only child of Nicanor and Inday. The renunciation made by Inday
cutiee is subject to donor’s tax.

Answer 112

Only S1 is true

Question 113

S1: Donor’s tax is an indirect tax.
S2: Donor’s tax is considered a property tax.
S3: Donor’s tax is an excise tax.

Answer 113

Only S3 is true

Question 114

S1: Only VAT-registered taxpayers are required to pay Value-Added Tax.
S2: Taxpayers whose gross annual sales or receipts exceed the VAT threshold amount
are required to pay Value-Added Tax in all cases.

Answer 114

Both are false.

Question 115

Juan Dela Cruz procured a life insurance upon his own life. He designated his estate’s
executor as an irrevocable beneficiary. For estate tax purposes, the proceeds of life
insurance is:

Answer 115

Included in the gross estate of Juan Dela Cruz because when the executor of the estate is beneficiary, the proceeds are included in the gross estate regardless of the designation.

Question 116

Nicanor signified his intention to be taxed at “8% income tax in lieu of the graduated
income tax rates and percentage tax under Section 116” in his 1st Quarter Income Tax
for the year 2019. However, his gross sales/receipts during the taxable year have
exceeded the VAT threshold as follows:
January: P 250,000.00
February: P 250,000.00
March: P 250,000.00
April: P 250,000.00
May: P 250,000.00
June: P 250,000.00
July: P 250,000.00
August: P 250,000.00
September: P 250,000.00
October: P 1,000,000.00
November: P 1,000,000.00
December: P 1,000,000.00
Total gross Sales/Receipts: Php 5,250,000.00
How much is the percentage tax due for the year 2019 (before CREATE), if any?

Answer 116

P 0

Question 117

Nicanor signified his intention to be taxed at “8% income tax in lieu of the graduated
income tax rates and percentage tax under Section 116” in his 1st Quarter Income Tax
for the year 2019. However, his gross sales/receipts during the taxable year have
exceeded the VAT threshold as follows:
January: P 250,000.00
February: P 250,000.00
March: P 250,000.00
April: P 250,000.00
May: P 250,000.00
June: P 250,000.00
July: P 250,000.00
August: P 250,000.00
September: P 250,000.00
October: P 1,000,000.00
November: P 1,000,000.00
December: P 1,000,000.00
Total gross Sales/Receipts: Php 5,250,000.00
How much is the VAT payable for the year, if any?

Answer 117

270,000

Question 118

Nicanor signified his intention to be taxed at “8% income tax in lieu of the graduated
income tax rates and percentage tax under Section 116” in his 1st Quarter Income Tax
for the year 2019. However, his gross sales/receipts during the taxable year have
exceeded the VAT threshold as follows:
January: P 250,000.00
February: P 250,000.00
March: P 250,000.00
April: P 250,000.00
May: P 250,000.00
June: P 250,000.00
July: P 250,000.00
August: P 250,000.00
September: P 250,000.00
October: P 1,000,000.00
November: P 1,000,000.00
December: P 1,000,000.00
Total gross Sales/Receipts: Php 5,250,000.00
UNTIL When should Nicanor register under the VAT system WITHOUT INCURRING
PENALTIES?

Answer 118

November 30, 2019

Question 119

In 2022, a non- stock, non- profit organization made an importation of agricultural food
product in its original state from an American farmer amounting to P 3,000,000 (VAT
exclusive amount). Based on the facts given, how much business tax will the importer
pay?

Answer 119

P 0

Question 120

Question 50
In 2022, XYZ Corp. sold goods to the Department of Finance (DOF) in the amount of
Php 100,000.00 after winning the bid. XYZ Corp. purchased the goods it sold from GHI
Corp., a VAT-registered taxpayer at a cost of Php 50,000 .00.
How much is the VAT payable/(overpayment)?

Answer 120

P 1,000

Question 121

In 2022, XYZ Corp. sold goods to the Department of Finance (DOF) in the amount of
Php 100,000.00 after winning the bid. XYZ Corp. purchased the goods it sold from GHI
Corp., a VAT-registered taxpayer at a cost of Php 50,000 .00.
Assume the same facts except that XYZ Corp. is non-VAT taxpayer how much other
percentage tax will be withheld by DOF, if any?

Answer 121

P 0

Question 122

The following information were given to you by Ms. Reyes, a prominent independent
contractor who offers architectural and engineering services for the taxable year 2019:
Total gross receipts from architectural designs (net of P150,000 withholding tax): P
1,350,000
Total gross receipts from engineering services: P 3,000,000
Total cost of services: P 2,150,000
Total operating expenses: P 1,000,000
Based on the foregoing information, how much is Ms. Reyes’ taxable income?

Answer 122

1,500,000 (1,350,000 + 150,000)

Question 123

The following information were given to you by Ms. Reyes, a prominent independent
contractor who offers architectural and engineering services for the taxable year 2019:
Total gross receipts from architectural designs (net of P150,000 withholding tax): P
1,350,000
Total gross receipts from engineering services: P 3,000,000
Total cost of services: P 2,150,000
Total operating expenses: P 1,000,000
Based on the foregoing information, how much is her income tax payable?

Answer 123

190,000 (130,000 + 210,000 = 340,000 - 150,000)

Question 124

The following information were given to you by Ms. Reyes, a prominent independent
contractor who offers architectural and engineering services for the taxable year 2019:
Total gross receipts from architectural designs (net of P150,000 withholding tax): P
1,350,000
Total gross receipts from engineering services: P 3,000,000
Total cost of services: P 2,150,000
Total operating expenses: P 1,000,000
Assume the same facts except that Ms. Reyes opted to be taxed at 8% income tax
regime, how much is her taxable income?

Answer 124

P 4,250,000

Question 125

The following information were given to you by Ms. Reyes, a prominent independent
contractor who offers architectural and engineering services for the taxable year 2019:
Total gross receipts from architectural designs (net of P150,000 withholding tax): P
1,350,000
Total gross receipts from engineering services: P 3,000,000
Total cost of services: P 2,150,000
Total operating expenses: P 1,000,000
What is the proper BIR Form that Ms. Reyes will file with the BIR on or April 15, 2021?

Answer 125

BIR form 1701

Question 126

Nicanor made the following donations to Inday and Nick:
Car to Inday: P 2.5 Million
House and lot: P 2.5 Million
Total donations in 2019: P 5.0 Million
The donor’s tax due is:

Answer 126

Php 285,000

Question 127

Nicanor made the following donations to Inday and Nick:
Car to Inday: P 2.5 Million
House and lot: P 2.5 Million
Total donations in 2019: P 5.0 Million
The donor’s tax due is

Answer 127

Php 285,000

Question 128

in the United States of America valued at P 2,000,000 and he bought a condominium in
Manila valued at P 5,000,000. He died on March 12, 2020.
For estate tax purposes, how much of the foregoing properties will form part of his gross
estate?

Answer 128

P 5,000,000

Question 129

in the United States of America valued at P 2,000,000 and he bought a condominium in
Manila valued at P 5,000,000. He died on March 12, 2020.
Assume the same facts except Ethan is a Filipino citizen, how much of the foregoing
properties will form part of his gross estate?

Answer 129

P 7,000,000

Question 130

Boat Ferrari is a common carrier by sea. During a particular quarter, its receipts consist
of the following (exclusive of taxes):
Transportation of passengers: P 2,000,000
Transportation of goods: P 3,000,000
Transportation of cargoes: P 1,500,000
The output VAT due is for the quarter is:

Answer 130

Php 780,000

Question 131

Boat Ferrari is a common carrier by sea. During a particular quarter, its receipts consist
of the following (exclusive of taxes):
Transportation of passengers: P 2,000,000
Transportation of goods: P 3,000,000
Transportation of cargoes: P 1,500,000
OPT due for the quarter is:

Answer 131

Php 0

Question 132

Assume that the family home is conjugal property, but lot on which it stands is 
exclusive property. Below are the data pertaining to Katrina’s estate.
Conjugal Properties:
Real and Personal Properties: P 14,000,000
Family Home: P 5,000,000
Exclusive Properties:
Family Home (Lot): P 4,000,000
Conjugal Deductions:
Funeral Expenses: P 200,000
Other Conjugal Deductions: P 2,000,000
Medical Expenses (exclusive): P500,000
The net taxable estate is

Answer 132

P 1,000,000

Question 133

Katrina was born in Rizal . She resides in Manila. She works in Makati City. She
suffered an accident in Pasay. She was brought to Makati Medical Center in Makati City
where she was pronounced dead. Her only property is located in Caloocan City. Where
is the venue of the filing of the estate tax return?

Answer 133

RDO in Manila

Question 134

The following donations were made by Nicanor:
Date of Donation: Amount
January 20, 2021: Php 2 Million
March 30, 2021: Php 1 Million
September 18, 2021: Php 500,000
The donor’s tax on January 20 is:

Answer 134

Php 105,000.00

2,000,000 - 250,000 = 1750,000 x 6%

Question 135

The following donations were made by Nicanor:
Date of Donation: Amount
January 20, 2021: Php 2 Million
March 30, 2021: Php 1 Million
September 18, 2021: Php 500,000
The donor’s tax payable on September 18 is:

Answer 135

Php 30,000.00

Question 136

Many is an operator of cockpit arena in Batangas. He also operates a restaurant and a
convenience store inside the cockpit. Data for particular quarter follow:
Gross receipts:
Cockpit operations: P 5,000,000
Restaurant operations: P 300,000
Convenience store operations: P 125,000
The amusement tax due of Many Is

Answer 136

976,000

5,000,000 + 300,000 + 125,000 = 5,425,000 x 18%

Question 137

Many is an operator of cockpit arena in Batangas. He also operates a restaurant and a
convenience store inside the cockpit. Data for particular quarter follow:
Gross receipts:
Cockpit operations: P 5,000,000
Restaurant operations: P 300,000
Convenience store operations: P 125,000
Assume that the restaurant and convenience store are owned by another taxpayer,
Jayvee, who is a non-VAT registered and whose annual gross receipt does not exceed
the VAT threshold. The correct amusement tax due of Jayvee is

Answer 137

76,500

300,000 + 125,000 = 425,000 x 18%

Question 138

In March 2022, The City Government of Caloocan, through the initiative of its Mayor,
hired the services of Uy and Sobremonte., CPA’s, a local auditing firm in auditing for its
general funds due to suspicion of massive corruption committed by the Chief of its
assessment division. The agreed professional fee of both the City Government and the
local auditing firm is Php 3 Million. Assuming the actual input tax related to the service
rendered is P 240,000.
How much is the input tax DEDUCTIBLE AGAINST THE OUTPUT TAX of the Uy and
Sobremonte, CPA’s?

Answer 138

P 240,000

Question 139

In March 2022, The City Government of Caloocan, through the initiative of its Mayor,
hired the services of Uy and Sobremonte., CPA’s, a local auditing firm in auditing for its
general funds due to suspicion of massive corruption committed by the Chief of its
assessment division. The agreed professional fee of both the City Government and the
local auditing firm is Php 3 Million. Assuming the actual input tax related to the service
rendered is P 240,000.
Assume the same facts except that, the hired firm, Uy and Sobremonte., CPA’s is an
auditing firm from China, how much is the amount of value-added tax to be withheld by
the City Government of Caloocan?

Answer 139

60,000

Question 140

Ching Chong Bank has the following data for the first month of the current year:
Interest, commissions, and discounts from lending activities (remaining maturity of 5
years): P 5,000,000
Income from finance leasing (remaining maturity is more than 5 years): P 3,000,000
Dividends and equity shares in net income of subsidiaries: P 1,000,000
Rentals of properties: P 500,000
Net trading gains within the taxable year on foreign currency: P 300,000
How much is the gross receipt tax?

Answer 140

P 336,000

Question 141

Taxation is NOT:

Answer 141

A contribution for the support of a government required of persons, groups, or businesses within the domain of that government

Question 142

ABC Corp. disclosed the following information:
Sales:
• VATable (12%) sales – Php 4,000,000
• VAT-exempt sales – Php 1,000,000
SOURCES OF INPUT TAXES
• Carry-over from previous period – Php 1,000,000
• Purchase of capital goods worth Php 1,000,000
• Domestic purchase of goods worth Php 1,000,000
• Domestic purchase of services worth Php 1,000,000
• Imported goods worth Php 1,000,000
In the same period, the company has made the following:
• Filed application for tax credit certificate amounting to Php 100,000
• Filed application for tax refund amounting to Php 1,000,000
• Paid total of Php 100,000 for the two-month period
How much is the VAT Payable/Over-payment?

Answer 142

Php 96,000

Question 143

Below are the data provided to you by Nicanor, a top withholding agent for the month of
May 2021:
Purchases of goods from XYZ Corporation, a regular supplier: P 800,000
Purchases of services from GHI Corporation, a regular supplier: P 200,000
Purchase of services from Jabiiee corporation (meals for employees of the company;
transacted 4 times): P 25,000
Purchases of goods from NBS corporation (purchase of office supplies; transacted 8
times): P 8,000
Rent expense: P 50,000
Professional fees (Individual w/sworn declaration): P 30,000
Professional fees (Individual w/o sworn declaration): P 40,000
Security fees (20% of which is the agency fee): P 100,000
Janitorial services fees: P 10,000
Based on the foregoing data, how much is the total expanded withholding tax required
to be withheld?

Answer 143

21,900 / 20,680

Question 144

A taxpayer made available the following financial information:
Gross sales: Php 10,000,000
Cost of sales: Php 6,000,000
Expenses:
Salaries and wages: Php 1,000,000
Transportation and travel: Php 20,000
Rental: Php 240,000
Representation expense: Php 200,000
Depreciation expense: Php 200,000
Office supplies: Php 20,000
Miscellaneous expenses: Php 10,000
Other information:
• Asset: Php 5,000,000
• Liability: Php 3,000,000
• SHE: Php 2,000,000
How much is the income tax due under CREATE Law if the taxpayer is an ordinary
partnership and opted for OSD?

Answer 144

Php 480,000

Question 145

Donation completed:

Answer 145

When the done accepts the donation and the acceptance is made known to the donor.

Question 146

Nicanor, a resident citizen earned the following incomes:
Interest income on deposits in foreign bank: P 50,000.00
Dividends from a domestic corporation: P 150,000.00
Gain on sale of a condominium unit in Makati City, Philippines: P 500,000.00
Gain on sale of a limousine in Los Angeles, California, USA: P 200,000.00
Gain on sale of domestic shares of stocks: P 200,000.00
Gain on sale of stocks issued by non-resident foreign corp.: P 100,000.00
Gain on sale of personal properties located in Quezon City: P 250,000.00
Business income in the Philippines: P 300,000.00
Other information:
Business expenses - Philippines: P 200,000.00
Acquisition cost of domestic shares of stocks: P 100,000.00
Selling price of condominium unit in Makati City: P 600,000.00
Fair market value of condominium unit in Makati City (zonal): P 1,000,000.00
The taxable income derived from sources within the Philippines is:

Answer 146

Php 1,200,000.00

Question 147

Nicanor, a resident citizen residing in Sampaloc, Manila, deposited $2,000 in BPI,
Morayta Branch, a local bank authorized by the Banko Sentral ng Pilipinas (BSP) to
engage in foreign-currency denominated transactions, given by his mother, Helen, an
OFW, residing in Saudi Arabia.
S1: If the deposited money earns $20 interest income, the interest income is subject to
15% final tax.
S2: If the deposited money earns P1,000 interest income, the interest income is subject
to 20% final tax

Answer 147

Only S1 is tru

Question 148

Upon death of Nicanor and after payment of the estate tax, it was determined that the
net distributable estate amounted to Php 3,000,000.00 while the conjugal share of Inday
as surviving spouse amounted to Php 5,000,000.00. Under the Rules on Succession,
the following are the sharing in net distributive estate:
• Inday – 1/3
• Jose – 1/3
• Boni – 1/3
Assuming Inday waived her conjugal share in favor of his two children, the donor’s tax
is?

Answer 148

285,000

Question 149

1st statement - The power to interpret tax laws of the CIR is subject to review by the
Secretary of the Department of Justice
2nd statement – The power to decide tax cases of the CIR are subject to appeal to the
Court of Appeals

Answer 149

Both of the statements are false

Question 150

Under the following cases, a Mission Order is appropriately issued, except

Answer 150

Surveillance

Question 151

ABC Corp., a listed company, wanted to acquire 10% of the shares of GHI
Landholdings, a listed company. It availed the services of XYZ Capital Securities, an
accredited broker of the Philippine Stock Exchange. XYZ Capital successfully closed
the transaction on behalf of ABC Corp. at the price of Php 100 Million. The stock
transaction tax is?

Answer 151

P 600,000

Question 152

Sale of car by ABC Corporation to the Korean Embassy is:

Answer 152

0% / zero-rated vat

Question 153

Nicanor, a Filipino residing in Manila, borrowed P 50,000 from Inday, an OFW living in
Saudi Arabia. As a result, Inday earned P 2,000 interest income.
S1: Interest income earned by Inday is an income derived from sources within the
Philippines.
S2: The Interest income earned by Inday is taxable.

Answer 153

Both are true

Question 154

S1: Nicanor, a resident citizen, dies leaving properties in the Philippines. All his
properties situated within and without the Philippines are included in the computation of
his gross estate.
S2: Ryan Bangus, a resident alien, dies leaving properties in the Philippines. All his
properties situated within and without the Philippines are included in the computation of
his gross estate.
S3: Justine Beybe, a non-resident alien, dies leaving properties in the Philippines. In
general, all his properties situated within the Philippines are included in the computation
of his gross estate.
S4: The rule of reciprocity applies to all properties situated in the Philippines owned by a
non-resident alien decedent.

Answer 154

Only S4 is false

Question 155

Which is NOT a proper exercise of administrative feasibility?

Answer 155

Requirement to all taxpayers to file tax returns

Question 156

Abatement or cancellation of tax liabilities is available under the following, except:

Answer 156

Except ay kahit ano wag lang excessive assessment and cost of collection is bigger than tax to be collected

Possibly tama and doubtful validity since sa compromise sya.

Pero kung ,ayroon sa choices na financial incorp ay iyun

Question 157

The heirs of Nicanor provided the following data to you so you can help them file the
return and pay the corresponding estate tax, if any:
PROPERTIES
Conjugal Family home:
o Zonal value of land - Php 5,000,000
o Assessed value of land – Php 3,000,000
o Assessed value of house – Php 5,000,000
o Appraiser’s value – Php 20,000,000
Shares in ABC Corp. a listed company:
o Opening price – Php 900,000
o Closing price – Php 1,200,000
o Lowest Quote – Php 800,000
o Highest Quote – Php 1,500,000
o Average Value - Php 1,000,000
2,500 Shares in XYZ Corp. an unlisted company:
Audited Financial Statements of XYZ Corp. disclosed the following:
o Assets – Php 10,000,000
o Liabilities – Php 2,000,000
o Outstanding shares of stocks – 10,000
o Par value Php 100.00 per share
Jewelry of Inday (wife)
o Value at time of purchase - Php 1,000,000
o Value at time of death of Nicanor – Php 2,000,000
Bank deposits:
o Bank of Pabebe – Php 2,000,000
o BTS Bank – Php 3,000,000
Other information:
Expenses
o Funeral expense – Php 500,000
o Accountant’s fees – Php 50,000
o Lawyer’s fees – Php 500,000
o Medical expenses – Php 1,000,000
Losses – Php 2,000,000
Unpaid mortgage on the family home – Php 1,000,000
All sources of properties came from common fund of the spouses.
How much is the estate tax due?

Answer 157

Php 450,000

Question 158

Upon death of Nicanor and after payment of the estate tax, it was determined that the
net distributable estate amounted to Php 3,000,000.00 while the conjugal share of Inday
as surviving spouse amounted to Php 5,000,000.00. Under the Rules on Succession,
the following are the sharing in net distributive estate:
• Inday – 1/3
• Jose – 1/3
• Boni – 1/3
Assuming Inday waived her conjugal share and her right to the net distributive property
in favor of Boni only, the donor’s tax is?

Answer 158

P 0

Question 159

The following were sold by Nicanor:
Old Warehouse (Located in Lipa, Batangas)
Selling Price (Net of VAT amt): Php 6,000,000
Book Value: Php 8,000,000
Old factory (Located in Taguig):
Selling Price (Net of VAT amt): Php 12,000,000
Book Value: Php 10,000,000
Old residential house:
Selling Price (Net of VAT amt): Php 16,000,000
The output VAT is

Answer 159

2,160,000

6M x 12% = 720,000
12M x 12% = 1,440,000
2,160,000

Question 160

Facts: Zilldjan is engaged in livestock selling (agricultural contract growing). He sells
the chicken in wholesale to TEM Corp. (Handoks Chicken) and GEN Corp. (Biliwag
Chicken). TEM Corp. sells the roasted chickens to the public. GEN Corp., on the other
hand, sells the roasted chickens in its facility where the roasted chickens are offered as
a menu to customers who would dine-in.
S1: The sale by Zildjan to TEM Corp is exempt from VAT.
S2: The sale by Handoks to consumers is exempt from VAT.
S3: The sale by Baliwag Chicken is exempt from VAT

Answer 160

Only S3 is false

Question 161

Park, a Korean actor, inherited parcel of land located in Clark Pampanga from his
mother Inday, a Filipino residing in Clark Pampanga. Park sold the parcel of land to
Nicanor, a Filipino residing in Manila evidenced by a deed of sale.
S1: The sale of land by Park is subject to 6% capital gains tax.
S2: The sale of land by Park is subject to regular income tax.
S3. The sale is subject to documentary stamp tax.

Answer 161

Only S2 is false

Question 162

ABC Corp., a DC, registered in 2010 made available the following financial information
for TY2021:
Balance Sheet:
Asset: Php 500,000
Liability: Php 100,000
Stockholders' Equity: Php 400,000
Income Statement:
Gross sales: Php 100,000,000
Cost of sales: Php 60,000,000
Operating Expenses: Php 30,000,000
How much is the excess MCIT which can be carried forward in 2022? Consider
CREATE Law

Answer 162

0

Question 163

Which is FALSE?

Answer 163

Tax laws can be applied retrospectively even if there is no express provision

Question 164

As a CPA, you were contracted to submit a Tax Plan regarding tax shields which can
be employed by the Company. Historical projections showed that the gross sales of
ABC Corp. will most likely amount to Php 6,000,000.00, with cost of sales amounting to
Php 4,000,000.00 and operating expenses Php 1,000,000.00. In comparing the effects
of methods of deduction, which of the following is true? Use the 20% Regular Corporate
Income Tax rate under CREATE Law:

Answer 164

Client will save Php 40,000 if will opt itemized deduction

Question 165

1st statement – Holding period does NOT apply to non-individual taxpayers.
2nd statement – Holding period does NOT apply to real properties.
3rd statement – Holding period does NOT apply to shares of stocks not listed in
Philippine Stock Exchange.
4th statement – Holding period does NOT apply to ordinary assets.

Answer 165

All are true

Question 166

Nicanor, a Non-Resident Alien residing in Canada, bought 20,000 (@par value of Php
100) shares of stocks of ABC Corp., Non-Resident Foreign Corporation(NRFC) in the
amount Php 2 Million in 2009. On January 05, 2022, Nicanor sold the shares of stocks
to Inday, a Resident Citizen for Php 4 Million. How much is the capital gains tax due, if
any?

Answer 166

P 0

Question 167

S1: Proceeds of life insurance taken by the decedent upon his own life are included in
the gross estate if the designation of a third person as a beneficiary is irrevocable.
S2: Proceeds of life insurance taken by the decedent upon his own life are included in
the gross estate if the designation of a third person as a beneficiary is revocable.
S3: When the beneficiary of the proceeds of life insurance taken by the decedent upon
his own life is estate, executor of the estate, or administrator of the estate, such
proceeds shall be always in the decedent’s gross estate.
S4: Benefits received from SSS and GSIS shall be excluded from the gross estate of
the decedent whether the designation of a beneficiary is revocable or irrevocable.

Answer 167

Only S1 is false

Question 168

Upon death of Nicanor and after payment of the estate tax, it was determined that the
net distributable estate amounted to Php 3,000,000.00 while the conjugal share of Inday
as surviving spouse amounted to Php 5,000,000.00. Under the Rules on Succession,
the following are the sharing in net distributive estate:
• Inday – 1/3
• Jose – 1/3
• Boni – 1/3
Assuming Inday waived her right to the net distributive property in favor of his two
children, the donor’s tax is?

Answer 168

P 0

Question 169

Nicanor, a resident citizen earned the following incomes:
Interest income on deposits in foreign bank: P 50,000.00
Dividends from a domestic corporation: P 150,000.00
Gain on sale of a condominium unit in Makati City, Philippines: P 500,000.00
Gain on sale of a limousine in Los Angeles, California, USA: P 200,000.00
Gain on sale of domestic shares of stocks: P 200,000.00
Gain on sale of stocks issued by non-resident foreign corp.: P 100,000.00
Gain on sale of personal properties located in Quezon City: P 250,000.00
Business income in the Philippines: P 300,000.00
Other information:
Business expenses - Philippines: P 200,000.00
Acquisition cost of domestic shares of stocks: P 100,000.00
Selling price of condominium unit in Makati City: P 600,000.00
Fair market value of condominium unit in Makati City (zonal): P 1,000,000.00
The total capital gains tax due is:

Answer 169

Php 90,000.00

Question 170

When a property is transferred during lifetime to relieve the transferor from the burden
of the management of such property, and the transfer is subject to tax, the basis of the
tax is

Answer 170

The FMV at the time of donation

Question 171

The following are the reserved powers of Congress in exercising taxation, except:

Answer 171

Discretion on who to tax

Question 172

The Wolt Disny Company, commonly known as Disny, is an American diversified
multinational mass media and entertainment conglomerate headquartered at the Malt
Disny Studios in Burbank, California. The cartoon movie “Mowana” was shown in the
Philippines and it earned Php 100 Million. The tax to be paid by Disny is?

Answer 172

Php 30 Million

Question 173

The following appeared in the BIR Form 2316 of Nicanor, a purely compensation
income earner (assume there is no CBA Agreement):
Basic salary: P 600,000.00
13th month pay: P 50,000.00
Productivity incentives bonus: P 40,000.00
SSS employee contribution: P 10,000.00
PhilHealth contribution: P 10,000.00
Commission (from the same company): P 400,000.00
In relation to the above, the total non-taxable compensation of Nicanor is?

Answer 173

110,000

50,000 + 40,000 + 10,000 + 10,000

Question 174

Which of the following is not considered as transaction deemed sale?

Answer 174

Retirement from or cessation of business, with respect to capital goods existing as of such retirement or cessation

Question 175

The inaction of the Commissioner of Internal Revenue within the
_____________________-period shall be deemed a denial for purposes of allowing the
taxpayer to appeal his case to the CTA and does not necessarily constitute a formal
decision of the Commissioner of Internal Revenue on the tax case.

Answer 175

180

Question 176

A taxpayer registered in 2020 made available the following financial information for
TY2021:
Balance Sheet:
Asset: Php 500,000
Liability: Php 100,000
Stockholders' Equity: Php 400,000
Income Statement:
Gross sales: Php 10,000,000
Cost of sales: Php 3,000,000
Operating Expenses: Php 1,000,000
How much is the income tax due under CREATE Law if the taxpayer is a domestic
corporation?

Answer 176

Php 1,500,000

Question 177

On February 14, 2020, A orally donated to B a residential land with fair market value of
Php 2M. On February 14, 2024, A dies. At the time of A’s death, the residential land has
a fair market value of Php 3M. As a result, the estate of A

Answer 177

Will include the residential land at Php 2M as part of A’s gross estate

Question 178

The CPALE was able to push through after several postponements due to COVID-19.
Inday, who really studied hard, who prayed a lot and who never wavered in her belief of
becoming a CPA, finally became one. Nicanor, Inday’s father, recognized all her efforts
and sacrifices and rewarded her with a brand-new car amounting to Php 2 Million.
Naturally, Inday accepted the car. How much is the donor’s tax payable?

Answer 178

Php 105,000

Question 179

S1: The excess of allowable deductions over gross sales is net operating loss.
S2: Net operating loss is a deduction from gross income even if the taxpayer chose
optional standard deduction.
S3: If net operating loss is incurred in 2021, the taxpayer can carry over the loss in the
immediately succeeding three (3) years
Which is TRUE?

Answer 179

S1 only

Question 180

Nicanor, a resident citizen earned the following incomes:
Interest income on deposits in foreign bank: P 50,000.00
Dividends from a domestic corporation: P 150,000.00
Gain on sale of a condominium unit in Makati City, Philippines: P 500,000.00
Gain on sale of a limousine in Los Angeles, California, USA: P 200,000.00
Gain on sale of domestic shares of stocks: P 200,000.00
Gain on sale of stocks issued by non-resident foreign corp.: P 100,000.00
Gain on sale of personal properties located in Quezon City: P 250,000.00
Business income in the Philippines: P 300,000.00
Other information:
Business expenses - Philippines: P 200,000.00
Acquisition cost of domestic shares of stocks: P 100,000.00
Selling price of condominium unit in Makati City: P 600,000.00
Fair market value of condominium unit in Makati City (zonal): P 1,000,000.00
The taxable income derived from sources without the Philippines is:

Answer 180

350,000

(Interest income on deposits in foreign bank: P 50,000.00
Gain on sale of a limousine in Los Angeles, California, USA: P 200,000.00
Gain on sale of stocks issued by non-resident foreign corp.: P 100,000.00

Question 181

In the issuance of assessment based on best evidence obtainable, which is NOT a
requirement?

Answer 181

The assessment must be based on facts

Question 182

Nicanor, a Resident Citizen residing in Manila, bought 20,000 (@par value of Php 100)
shares of stocks of ABC Corp., Non-Resident Foreign Corporation(NRFC) in the
amount Php 2 Million in 2009. On January 05, 2022, Nicanor sold the shares of stocks
to Inday, a Resident Citizen for Php 4 Million. How much is the capital gains tax due, if
any?

Answer 182

P 0

Question 183

On August 1, 2017, Goyo received a notice from the Commissioner denying his request
for reconsideration. On August 16, 2017, he filed a motion for reconsideration. The
Commissioner has denied his motion on September 1, 2017. On September 2, 2018, he
filed a petition for review with the CTA. Which is TRUE?

Answer 183

The petition for review before the CTA has been timely filed

Question 184

Nicanor is an operator of a beerhouse club. His gross receipts which amounted to Php
4 Million is subject to:

Answer 184

P 720,000 (18% amusement tax)

Question 185

1st statement – Holding period does NOT apply to non-individual taxpayers.
2nd statement – Holding period does NOT apply to real properties.
3rd statement – Holding period does NOT apply to shares of stocks not listed in
Philippine Stock Exchange.
4th statement – Holding period does NOT apply to ordinary assets.

Answer 185

Only three of the statements are true

Question 186

As a CPA, you were contracted to prepare a Tax Plan regarding the registration of a
business of a client. You projected that the gross sales will most likely amount to Php
6,000,000.00, with cost of sales amounting to Php 4,000,000.00 and operating
expenses Php 1,000,000.00. Which is true if the client will consider registering the
business as a One Person Corporation (OPC) instead of a sole proprietorship? Use
itemized deduction and the 20% Regular Corporate Income Tax rate under CREATE
Law:

Answer 186

Client will save Php 10,000 if will register as sole proprietor

Question 187

Ms. Tricia sold her rest house in Bicol for P 8,000,000. The Fair market value of the rest
house at the time of sale is P 10,000,000. If Ms. Tricia utilized P 6,000,000 of the
proceeds of the sale in acquiring a new principal residence, the capital gains tax due is?

Answer 187

P 600,000

Question 188

Nicanor, an Australian residing is United Stated of America (USA), inherited a
condominium located in USA, from his mother Helen, a Filipino residing in Clark
Pampanga. Nicanor sold the condominium to Manny, a Filipino residing in Taguig,
evidenced by a deed of sale.
S1: The sale of condominium by Nicanor is subject to 6% capital gains tax.
S2: The sale of condominium by Nicanor is subject to regular income tax.

Answer 188

Only S1 is true

Question 189

Nicanor, a resident citizen earned the following incomes:
Interest income on deposits in foreign bank: P 50,000.00
Dividends from a domestic corporation: P 150,000.00
Gain on sale of a condominium unit in Makati City, Philippines: P 500,000.00
Gain on sale of a limousine in Los Angeles, California, USA: P 200,000.00
Gain on sale of domestic shares of stocks: P 200,000.00
Gain on sale of stocks issued by non-resident foreign corp.: P 100,000.00
Gain on sale of personal properties located in Quezon City: P 250,000.00
Business income in the Philippines: P 300,000.00
Other information:
Business expenses - Philippines: P 200,000.00
Acquisition cost of domestic shares of stocks: P 100,000.00
Selling price of condominium unit in Makati City: P 600,000.00
Fair market value of condominium unit in Makati City (zonal): P 1,000,000.00
Final tax on passive income is

Answer 189

Php 15,000.00

Question 190

In an administrative appeal, which is FALSE?

Answer 190

Without the commissioner

Question 191

The following are mandated to use only itemized deductions, except:

Answer 191

Lanister Corporation, a resident foreign corporation

Question 192

A taxpayer registered in 2010 made available the following financial information for
TY2021:
Balance Sheet:
Asset: Php 50,000,000
Liability: Php 30,000,000
Stockholders' Equity: Php 20,000,000
Income Statement:
Gross sales: Php 10,000,000
Cost of sales: Php 6,000,000
Operating Expenses: Php 2,000,000
How much is the income tax due under CREATE Law if the taxpayer is a domestic
corporation and uses itemized deduction as method of deduction?

Answer 192

Php 500,000

Question 193

Stark Brothers Corporation is in the brink of bankruptcy. The company thus offered
early retirement package to its employees. The plan was approved by the BIR. Goyo,
one of the employees, started working for the company when he was twenty (20) years
old. He is now seventy years old. Which of the following scenario/facts will make the
retirement pay of Goyo taxable?

Answer 193

Goyo’s retirement pay of 50M

Question 194

The CPALE was able to push through after several postponements due to COVID-19.
Inday, who really studied hard, who prayed a lot and who never wavered in her belief of
becoming a CPA, finally became one. Nicanor, Inday’s father, recognized all her efforts
and sacrifices and rewarded her with a brand-new car amounting to Php 2 Million.
Naturally, Inday accepted the car. In relation to the above, how much is the basic
documentary stamp tax?

Answer 194

Php 20,000

Question 195

The following appeared in the BIR Form 2316 of Nicanor, a purely compensation
income earner (assume there is no CBA Agreement):
Basic salary: P 600,000.00
13th month pay: P 50,000.00
Productivity incentives bonus: P 40,000.00
SSS employee contribution: P 10,000.00
PhilHealth contribution: P 10,000.00
Commission (from the same company): P 400,000.00
Tax table:
P0 - P250,000: 0%
P250,000 - P400,000: 20% of the excess over P250,000
P400,000 - P800,000: P30,000 + 25% of the excess over P400,000
P800,000 - P2,000,000: P130,000 + 30% of the excess over P800,000
P2,000,000 - P8,000,000: P490,000 + 32% of the excess over P2,000,000
P8,000,000 and above: P2,410,000 + 35% of the excess over P8,000,000
In relation to the above, the tax due is?

Answer 195

190,000

Question 196

In 2021, ABC Corp. borrowed money from the bank in the amount of Php 1 Million with
an interest rate of 10%. ABC Corp. has interest income from bank deposits in the
amount of Php 50,000.00 from which final tax was withheld. Assume ABC Corp.’s tax
rate is 25%. How much is the allowable interest expense?

Answer 196

90,000

100,000 - 10,000 = 90,000
50,000 x 20% = 10,000

Question 197

The following appeared in the BIR Form 2316 of Nicanor, a purely compensation
income earner (assume there is no CBA Agreement):
Basic salary: P 600,000.00
13th month pay: P 50,000.00
Productivity incentives bonus: P 40,000.00
SSS employee contribution: P 10,000.00
PhilHealth contribution: P 10,000.00
Commission (from the same company): P 400,000.00
The total taxable income of Nicanor is?

Answer 197

Php 1,000,000.00

Question 198

Nicanor is employed by Lovelife Insurance Corp. as a certified public accountant. His
taxable compensation amounted to Php 1 Million. During the same year, he was able to
earn Php 1 Million as a commission from Lovelife Insurance Corp. from his referrals.
Nicanor’s proper tax to pay is?
Tax table:
P0 - P250,000: 0%
P250,000 - P400,000: 20% of the excess over P250,000
P400,000 - P800,000: P30,000 + 25% of the excess over P400,000
P800,000 - P2,000,000: P130,000 + 30% of the excess over P800,000
P2,000,000 - P8,000,000: P490,000 + 32% of the excess over P2,000,000
P8,000,000 and above: P2,410,000 + 35% of the excess over P8,000,000

Answer 198

Php 490,000.00

Question 199

A taxpayer registered in 2010 made available the following financial information for
TY2021:
Balance Sheet:
Asset: Php 500,000
Liability: Php 100,000
Stockholders' Equity: Php 400,000
Income Statement:
Gross sales: Php 100,000,000
Cost of sales: Php 60,000,000
Operating Expenses: Php 30,000,000
How much is the income tax payable under CREATE Law if the taxpayer is a domestic
corporation?

Answer 199

Php 2,500,000

Question 200

S1: The NIRC requires that the 10-year requirement for tax-exempt retirement benefits
should be uninterrupted.
S2: The tax-exempt retirement benefits shall be availed of by official or employee only
once

Answer 200

Both are true

Question 201

A taxpayer registered in 2020 made available the following financial information for
TY2021:
Balance Sheet:
Asset: Php 500,000
Liability: Php 100,000
Stockholders' Equity: Php 400,000
Income Statement:
Gross sales: Php 10,000,000
Cost of sales: Php 8,000,000
Operating Expenses: Php 5,000,000
How much is the income tax due under CREATE Law if the taxpayer is a domestic
corporation?

Answer 201

Php 0

Question 202

1st statement – The police power can only be exercised by the State.
2nd statement – The power to tax can only be exercised by the State.
3rd statement – The power of eminent domain can only be exercised by the State.
Which is FALSE?

Answer 202

S3 only

Question 203

The following principles are inter-related, except:

Answer 203

Benefit - received theory

Question 204

The following principles are inter-related, except

Answer 204

Progressive tax system

Question 205

Nicanor, resident citizen, sold his shares of stock from ABC Corporation, a foreign
corporation based on United Kingdom, to Inday, resident citizen, for P 200,000 with a
cost of P 100,000.
S1: For income tax purposes, the sale of shares of stock by Nicanor is taxable.
S2: The sale of the shares of stock is subject to 15% capital gains tax based on net
capital gain of P 100,000.

Answer 205

S1 only

Question 206

Which is FALSE?

Answer 206

?

Question 207

Justine Beybe, a Non-Resident Alien residing in Canada, bought 20,000 (@par value of
Php 100) shares of stocks of ABC Corp., a Domestic Corporation (DC) in the amount
Php 2 Million in 2009. On January 05, 2022, Justine Beybe sold the shares of stocks to
Bash, a Resident Citizen for Php 4 Million. How much is the capital gains tax due, if
any?

Answer 207

300,000

cost 2,000,000
sell price 4,000,000
gain 2,000,000 x 0.15 = 300,000

Question 208

S1 – Becky, a non-resident alien, modeled for a local company and appeared in
commercials. He was paid Php 1 Million. His professional fee is subject to VAT.
S2 - All discounts are deductible against gross selling price or the gross receipts.

Answer 208

Both are false

Question 209

The following are the data given to you by an employer. You were contracted to handle
the payroll:
Employees Name: Status; Compensation; Frequency of payroll
Rey: Contractor (Pakyawan/Arawan); P 537; Daily
Ram: Probationary; P 900; Daily
Nicanor: Regular; P 20,000; Weekly
Rian: Regular; P 45,000; Semi-monthly
Bryan: Regular; P 150,000; Monthly
Additional information:
• The company operates 26 working days in the month of September
• Assume there are four (4) weeks in September
• The statutory minimum wage rate is P 537 per day as per regional tripartite wage and
productivity board
How much is the total withholding tax on compensation will the employer need to
withhold for the month of September?

Answer 209

7,032,234