FINALD - T OR F Flashcards
Estates and trusts are allowed a personal exemption of P20,000
F (Per TRAIN, they are no longer allowed this exemption).
Estates are taxed on income received during the period of administration or settlement.
T
A trust must be irrevocable to be taxable.
T
Estate taxation applies to the income generated by an estate
F (Estate tax applies to property transfer, not income).
A beneficiary has an equitable title to property in a trust.
T
Income accumulated in a foreign-administered trust is deductible from gross income
F (Such deductions are not allowed in foreign-administered trusts).
A fiduciary may distribute or retain income, depending on the terms of the trust.
T
In a revocable trust, the trustee is taxed on the income
F (The grantor is taxed in a revocable trust).
Income from an estate under judicial settlement is taxable.
T
Gross income for estates and trusts includes similar items as for individual taxpayers.
T
GPPs are taxed as corporations.
F
The distributive share of GPP partners is taxable
T
GPPs are allowed to deduct OSD and itemized deductions simultaneously.
F
Co-owners are taxed individually on their distributive share if limited to property preservation.
T
A co-ownership becomes a taxable partnership if it generates income through business activities.
T
General co-partnerships are considered tax-exempt for their business operations.
F
A GPP may opt to claim itemized deductions or OSD but cannot switch within the same year.
T
The profit-sharing ratio is used to distribute losses if no agreement exists on loss division.
T
A partner’s share in a taxable partnership’s income is taxed as dividends.
T
Income received from a GPP is subject to a final tax at the corporate level.
F
Are tips accounted for by the employer?
F
Are tips subject to withholding tax?
F
Are service charges collected by the employer distributed to employees taxable?
T
Are tips part of gross compensation?
T
Compensation income includes allowances, honoraria, and taxable fringe benefits.
T
Gains from dealings in property form part of gross income.
T
Passive income subject to final tax is excluded from gross income when computing taxable income.
T
Dividends received by an individual taxpayer always form part of taxable gross income.
F
Living quarters and meals provided for the convenience of the employer are excluded from compensation income.
T
Employee bonuses are considered de minimis benefits and are always exempt from income tax.
F
Medical assistance not exceeding PHP 10,000 per annum is considered a taxable benefit.
F
Monetized unused vacation leave credits up to 10 days are tax-exempt for private employees.
T
Pensions received as retirement pay are always subject to income tax.
F
Prizes and winnings are always part of gross income
T
Tips paid directly to employees are exempt from tax.
F
Tips are subject to withholding tax.
F
Gratuities received by an employee must be reported to the employer.
F
Employers must withhold tax on tips received by employees.
F
Tips are considered part of an employee’s taxable income
T
Tips from customers are included in gross income.
T
Service charges distributed to employees are exempt from tax.
F
Tips paid in cash are treated differently from tips paid via credit card.
F
Tips are considered a benefit for tax purposes.
F
Voluntary tips are always subject to withholding tax.
F
Tips paid directly to an employee by customers are subject to withholding tax.
F
Tips received by employees are considered taxable income.
T
Gratuities must be declared as part of the gross income in tax filings.
T
Employers are required to report employee gratuities to the tax authority.
F
Tips and gratuities are tax-exempt in the Philippines.
F
A mandatory service charge is considered a tip.
F
Tips form part of the employee’s gross income even if not declared.
T
Tips given to employees are always fixed amounts
F
Gratuities voluntarily paid by customers are not subject to withholding tax.
T
Tips directly paid by customers to employees must be included in payroll computation.
F
Dividends received by a non-resident alien not engaged in business are subject to a 15% final tax.
F
Stock dividends are always non-taxable
F
Prizes and awards received in recognition of civic achievement are taxable.
F
Annuities are taxable to the extent that they represent a return of premium.
F
PCSO winnings up to PHP 10,000 are subject to a 20% final tax.
F
Dividends received by a domestic corporation are exempt from income tax.
T
Compensation income is taxed based on the place of performance of the service.
T
Tax informer’s rewards are subject to a 10% tax rate on the recovered amount.
T
Retirement benefits are always taxable, regardless of conditions.
F
Non-resident aliens engaged in business are subject to a 20% final tax on dividends.
T
