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INCOME TAXATION > FINALS- MULTIPLE CHOICE > Flashcards

FINALS- MULTIPLE CHOICE Flashcards

1
Q
  1. What is the term for a legal entity that holds property to manage for beneficiaries?
    A) Trust
    B) Estate
    C) Fiduciary
    D) Inheritance
A

A

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2
Q

What is taxed directly to the grantor in a revocable trust?
A) Principal
B) Income
C) Deductions
D) All property

A

Answer: B

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3
Q

Which type of tax is based on the fair market value of property transferred at death?
A) Income Tax
B) Estate Tax
C) Trust Tax
D) Fiduciary Tax

A

B

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4
Q

In what year is the taxable income for estates and trusts determined?
A) Fiscal Year
B) Calendar Year
C) Financial Year
D) Personal Year

A

B

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5
Q

Who is responsible for managing a trust’s property?
A) Beneficiary
B) Fiduciary
C) Co-owner
D) Co-beneficiary

A

B

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6
Q

Which type of trust cannot be altered after creation?
A) Irrevocable Trust
B) Revocable Trust
C) Flexible Trust
D) Grantor Trust

A

A

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7
Q

Who benefits from the property held in a trust?
A) Trustee
B) Beneficiary
C) Grantor
D) Fiduciary

A

B

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8
Q

Which document primarily governs the establishment of a trust?
A) Will
B) Contract
C) Title Deed
D) Probate Certificate

A

A

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9
Q

Which income is not deductible for foreign-administered trusts?
A) Local income
B) Deductible income
C) Distributed income
D) Gross income

A

C

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10
Q

The process of managing and distributing a deceased person’s property refers to:
A) Estate Taxation
B) Income Tax
C) Estate Administration
D) Trust Management

A

C

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11
Q

What type of deduction can GPPs claim instead of itemized deductions?
a) OSD
b) Corporate Deduction
c) Partner Deduction
d) Tax-Free Deduction

A

A

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12
Q

What tax classification applies to general co-partnerships?
a) Corporation
b) Exempt Entity
c) GPP
d) Non-Profit Organization

A

A

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13
Q

In a GPP, who is responsible for paying income tax?
a) The Partnership
b) Individual Partners
c) Both Partnership and Partners
d) None

A

B

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14
Q

Co-ownership income is taxable if it is:
a) From property preservation only
b) From business activities
c) From professional fees
d) From incidental gains

A

B

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15
Q

What is the tax implication of a loss in a GPP?
a) Shared according to profit ratio
b) Partners are not affected
c) Only the GPP absorbs the loss
d) Ignored in tax returns

A

A

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16
Q

The tax treatment of a GPP can best be described as:
a) Corporate Taxed Entity
b) Pass-Through Entity
c) Tax-Exempt Entity
d) Limited Liability Entity

A

B

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17
Q

Which of the following is NOT a duty of a GPP?
a) File corporate income tax
b) Report partner shares
c) File annual information return
d) Report gross income and deductions

A

A

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18
Q

When is a partner’s share in a general co-partnership treated as dividends?
a) Always
b) Only when distributed
c) Never
d) For taxable partnerships only

A

D

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19
Q

Which deduction choice applies to the individual income of a GPP partner?
a) Both OSD and itemized
b) OSD only
c) Itemized only
d) Either OSD or itemized

A

D

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20
Q

In the absence of an agreement, GPP losses are divided based on:
a) Profit-sharing ratio
b) Income earned
c) Ownership stake
d) Equal shares

A

A

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21
Q

Which of the following is NOT included in gross income?
a. Interest income
b. Life insurance proceeds
c. Compensation for services
d. Royalties

A

B

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22
Q

Compensation income includes:
a. Bonuses and honoraria
b. Tax-exempt retirement pay
c. De minimis benefits
d. Both a and c

A

D

23
Q

Passive income subject to final tax is:
a. Always excluded from gross income
b. Included in gross income
c. Subject to withholding tax
d. Exempt from taxation

A

A

24
Q

Income from the sale of stocks held as an investment is classified as:
a. Compensation income
b. Gains from property dealings
c. Rental income
d. Royalty income

A

B

25
Q

The monetary value of fringe benefits is subject to:
a. Final tax
b. Income tax
c. Both income and final tax
d. None of the above

A

C

26
Q

Which type of income is subject to withholding on compensation?
a. Dividends
b. Interest on bank deposits
c. Honoraria
d. Gains from sale of property

A

C

27
Q

Which is considered de minimis?
a. Stock options
b. Monetized unused leave credits (up to 10 days)
c. Dividends
d. Royalties

A

B

28
Q

Which is an example of compensation paid in kind?
a. Salaries
b. Stocks given as payment
c. Rental income
d. Dividends

A

B

29
Q

Which of the following refers to rental income?
a. Payment from tenants
b. Proceeds from sale of property
c. Income from partnerships
d. Fringe benefits

A

A

30
Q

Equity-based compensation, as per Revenue Regulations 13-2022, is:
a. Always non-taxable
b. Taxable compensation
c. Only taxable for managerial employees
d. Tax-exempt for non-residents

A

B

31
Q

Tips paid directly to employees are classified as:
a. Non-taxable benefits
b. Taxable income not subject to withholding
c. Taxable income subject to withholding
d. Non-taxable income

A

B

32
Q

Which of the following is NOT true about tips?
a. They are part of taxable income.
b. They are subject to withholding tax.
c. They are paid by customers.
d. They must be declared by the employee.

A

B

33
Q

Who is responsible for reporting tips to the tax authority?
a. Employer
b. Employee
c. Customer
d. Government

A

B

34
Q

Tips and gratuities are considered:
a. Taxable income but not subject to withholding tax.
b. Tax-exempt income.
c. Subject to withholding tax.
d. Non-taxable income.

A

A

35
Q

Who accounts for gratuities directly paid by customers?
a. Employer
b. Employee
c. Customer
d. Tax authority

A

B

36
Q

Which is true regarding tips in the Philippines?
a. Tips are part of regular compensation.
b. Tips are not declared in income tax returns.
c. Tips are not subject to withholding tax.
d. Tips are reported by the employer.

A

C

37
Q

Tips are given voluntarily as:
a. Additional compensation.
b. Recognition of good service.
c. Service charges.
d. Regular salary.

A

B

38
Q

What type of income includes gratuities?
a. Non-taxable income
b. Taxable income
c. Exempt income
d. Non-compensation income

A

B

39
Q

Who pays taxes on tips received?
a. Employer
b. Employee
c. Government
d. No taxes are required

A

B

40
Q

Tips are usually given by:
a. Employers
b. Customers
c. Tax authorities
d. Co-workers

A

B

41
Q

In the Philippines, tips not declared to employers are:
a. Taxable
b. Non-taxable
c. Withholding-free income
d. Both a and c

A

D

42
Q

Gratuities are subject to:
a. Regular payroll tax
b. Individual tax declaration
c. Service charge deductions
d. Employer matching contributions

A

B

43
Q

If gratuities are declared to the employer, they are:
a. Taxable income
b. Withheld income
c. Both a and b
d. Non-taxable

A

A

44
Q

What is the final tax rate for dividends distributed to a resident citizen?
a. 5%
b. 10%
c. 20%
d. 25%

A

B

45
Q

Under the CREATE Act, what is the reduced tax rate for dividends received by an NRFC?
a. 10%
b. 20%
c. 15%
d. 25%

A

C

46
Q

What is the final tax rate on PCSO winnings exceeding PHP 10,000?
a. 10%
b. 20%
c. 25%
d. Exempt

A

B

47
Q

Which income is NOT taxable?
a. Dividends
b. Interest income
c. Tax refunds for income tax
d. Compensation from damages

A

C

48
Q

Where is compensation income sourced?
a. Place of employment
b. Place of service performance
c. Place of residence
d. Place of payment

A

B

49
Q

What is the final tax rate on prizes for commercial contests if the amount exceeds PHP 10,000?
a. 10%
b. 20%
c. 25%
d. Exempt

A

B

50
Q

What is the income classification for forgiven debts?
a. Gift income
b. Dividend income
c. Taxable income
d. Compensation income

A

B

51
Q

What is the tax implication for bad debts recovered after being charged off?
a. Not taxable
b. Fully taxable
c. Taxable only if they provided tax benefits previously

A

C

52
Q

Prizes from sanctioned sports competitions are:
a. Taxable
b. Exempt if under PHP 10,000
c. Exempt

A

C

53
Q

Non-resident foreign corporations are taxed on dividends if their country of domicile:
a. Has no income tax
b. Allows tax credit for Philippine taxes
c. Both a and b

A

C

INCOME TAXATION (13 decks)

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