Transfer Taxation - Principles

Question 1

Any transmission of property from one person to another

Answer 1

Transfer

Question 2

Involves transmission of property for a consideration.

Answer 2

Bilateral transfer

Question 3

Example of bilateral transfer (choose exception):

a. Sale
b. Barter
c. Succession
d. Choices a and b

Answer 3

c

Question 4

Gratuitous transfer of property from living donor to a donee

Answer 4

Donation

Question 5

Gratuitous transfer of the properties of the deceased person upon his death to his heirs

Answer 5

Succession

Question 6

Transfers for less than full and adequate consideration

Answer 6

Complex transfers

Question 7

Transfers for adequate consideration are deemed pure exchanges and are subject to what tax?

Answer 7

Income tax

Question 8

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?

Answer 8

P20,000

P120,000 - P100,000 is the gratuity (indirect donation)

Question 9

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?

Answer 9

P50,000

P100,000 - P50,000

Question 10

This theory states that exchanges may be intentionally priced to evade or minimize income taxes.

Answer 10

Tax evasion theory / Tax minimization theory

Question 11

This theory states that transfers have an effect of decreasing future income tax collections of the government

Answer 11

Tax recoupment theory

Question 12

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?

Answer 12

Impose taxes on transfer of properties

Question 13

Exercising the privilege to transfer property is a benefit to the transferor, thus the transfers needs to be taxed. What theory is this?

Answer 13

Benefits received theory

Question 14

The government is an indirect partner behind all forms of wealth accumulation by any person within the state under which theory?

Answer 14

State partnership theory

Question 15

As a policy, governments strive equitable wealth redistribution under which theory?

Answer 15

Wealth redistribution theory

Question 16

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

Answer 16

b.

Resident Citizens, Non-resident citizens, and Resident aliens are taxable globally for transfer taxation purposes

Question 17

What is the situs of taxation for transfers of property?

Answer 17

Location of property

Question 18

In donation mortis causa, properties are transferred where?

Answer 18

Where property is at point of death

Question 19

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?

Answer 19

McLaren 720s and Ducati Panigale

Question 20

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?

Answer 20

McLaren 720s and Ducati Panigale

Question 21

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?

Answer 21

McLaren 720s and Ducati Panigale

Question 22

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?

Answer 22

Ducati Panigale only

Question 23

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?

Answer 23

85%

Question 24

True or false: shares, obligations, or bonds issued by any foreign corporation is located in PH if such have acquired business situs in PH

Answer 24

True