Transfer Taxation - Principles Flashcards
Any transmission of property from one person to another
Transfer
Involves transmission of property for a consideration.
Bilateral transfer
Example of bilateral transfer (choose exception):
a. Sale
b. Barter
c. Succession
d. Choices a and b
c
Gratuitous transfer of property from living donor to a donee
Donation
Gratuitous transfer of the properties of the deceased person upon his death to his heirs
Succession
Transfers for less than full and adequate consideration
Complex transfers
Transfers for adequate consideration are deemed pure exchanges and are subject to what tax?
Income tax
A property is sold for P100,000. the property has fair value of P120,000 and tax basis of P50,000. How much is subject to transfer tax?
P20,000
P120,000 - P100,000 is the gratuity (indirect donation)
A property is sold for P100,000. the property has fair value of P120,000 and tax basis of P50,000. How much is subject to income tax?
P50,000
P100,000 - P50,000
This theory states that exchanges may be intentionally priced to evade or minimize income taxes.
Tax evasion theory / Tax minimization theory
This theory states that transfers have an effect of decreasing future income tax collections of the government
Tax recoupment theory
If a parent donates to each of their children their properties and said properties earn income, it will result to lesser tax collection. Therefore, what action does the government perform to ensure that future losses in income taxes due to transfers be recovered?
Impose taxes on transfer of properties
Exercising the privilege to transfer property is a benefit to the transferor, thus the transfers needs to be taxed. What theory is this?
Benefits received theory
The government is an indirect partner behind all forms of wealth accumulation by any person within the state under which theory?
State partnership theory
As a policy, governments strive equitable wealth redistribution under which theory?
Wealth redistribution theory
Which of the following is taxable on global transfers of property?
a. Willy, an American residing in USA
b. Nick, an Australian residing in La Union, Philippines
c. Yuki, a Japanese residing in Germany
d. Zhou, a Chinese residing in Mexico
b.
Resident Citizens, Non-resident citizens, and Resident aliens are taxable globally for transfer taxation purposes
What is the situs of taxation for transfers of property?
Location of property
In donation mortis causa, properties are transferred where?
Where property is at point of death
A donated his McLaren 720s to L, his friend, and his Ducati Panigale to B, his sister. The properties were located in USA and Philippines, respectively.
If A is a Filipino who resides in the Philippines, which of the properties are subject to transfer tax?
McLaren 720s and Ducati Panigale
A donated his McLaren 720s to L, his friend, and his Ducati Panigale to B, his sister. The properties were located in USA and Philippines, respectively.
If A is a Filipino who resides in Peru, which of the properties are subject to transfer tax?
McLaren 720s and Ducati Panigale
A donated his McLaren 720s to L, his friend, and his Ducati Panigale to B, his sister. The properties were located in USA and Philippines, respectively.
If A is a Brazilian who resides in Mandaluyong, Philippines, which of the properties are subject to transfer tax?
McLaren 720s and Ducati Panigale
A donated his McLaren 720s to L, his friend, and his Ducati Panigale to B, his sister. The properties were located in USA and Philippines, respectively.
If A is an Australian residing in UK, which of the properties are subject to transfer tax?
Ducati Panigale only
Shares, obligations, bonds issued by a foreign corporation should have how many % of business (which is located in PH) in order for it to be considered located in PH?
85%
True or false: shares, obligations, or bonds issued by any foreign corporation is located in PH if such have acquired business situs in PH
True
