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Question 11 pts
A purely self-employed individual’s gross sales/receipts and other non-operating income do not exceed
the VAT threshold.
He failed to signify his intention to avail of the 8% income tax rate on his first quarter return, he will pay:
Group of answer choices
Income tax based on graduated income tax rates and percentage tax under Section 116 if not-Vat
registered.
Percentage tax under Section 116 only in lieu of income tax
Income tax on gross sales/receipts excluding non-operating income in excess of P250,000 in lieu of
graduated tax rates and percentage tax under Section 116
Income tax on based on graduated income tax rates only
Flag question: Question 2
Question 21 pts
Statement 1: QAP files, or also known as Quarterly Alphabetical List of Payees is a file which contains all
the names of payees included both in your 1601-EQ/1601-FQ report
Statement 2: List of the content of Certificates of Taxes Withheld at Source (Form 2307) like income
received; period when income earned, amount of tax withheld. All 2307 shall be attached to SAWT.
False; True
True; False
False; False
True; True
Question 33 pts
ABC Corporation is organized and operating under the Philippine law. The following data were taken
from the financial statements of ABC Corporation for the current taxable year (2020):
Philippines Abroad
Gross sales P10,000,000 P5,000,000
Sales returns 200,000 -
Cost of goods sold 3,500,000 2,250,000
Operating expenses 2,800,000 1,100,000
Interest income from trade receivable 100,000 50,000
Interest income from BPI deposits – Phils. 100,000 -
Interest income from BPI deposit – USA - 80,000
Interest income –FCDU 150,000 -
Income from money market placement 200,000 100,000
Dividend income from domestic corporation 75,000 -
Dividend income from resident corporation 45,000 -

Dividend income from non-resident corporation - 30,000
Royalty income 50,000 25,000
Gain on sale of shares of stock of domestic corporation held as

capital asset thru local stock exchange; Selling price- P500,000 120,000 -
(Note: shares of stock at par value)
Gain on sale of shares of stock of domestic corporation, held as

capital asset directly to a buyer; Selling price- P650,000 (Note: 150,000 -
shares of stock at par value)
Gain on sale of real property in the Philippines not used in

5,000,000 -
business. Cost P4,000,000; FMV P8,000,000.
How much is the tax due on its ordinary income?
P1,856,000
P1,789,000
P1,674,000
P1,956,000
Question 43 pts
A domestic corporation provided the following data for 2020:
Gross profit from sales P3,000,000

Business expenses 1,800,000
Dividend income from domestic corporation 100,000
Dividend income from a resident corporation 50,000
Dividend income from a non-resident corporation 40,000
Capital gain on sale of land in the Philippines (SP-P2M; FMV-P1.8M, Cost-P1.5M) 500,000
Capital gain on sale of land in China (SP – P1.5M; FMV – P1.8M, Cost – P1.3M) 200,000
Capital gain on shares of domestic corporation (direct sale to buyer) @par value
120,000
P100,000
Gain on sale of shares of a domestic corporation thru a local stock exchange (SP-
50,000
P200,000; Cost P150,000) @par value P150,000
Interest income from
 Notes receivable 20,000
 Bank deposits (peso accounts) 30,000
 Bank deposits (foreign currencies) 25,000
 Treasury bills 10,000
For the year 20x9, a domestic corporation declared and paid dividends to its shareholders as follows:
To A, a resident citizen P100,000
To B, a non-resident citizen 100,000
To C, a resident alien 100,000
To D, a non-resident alien engaged in trade in the Philippines 100,000

To E, a non-resident alien not engaged in trade in the Philippines 100,000
To F, a domestic corporation 100,000
To G, a resident foreign corporation 100,000
To H, a non-resident foreign corporation (without tax sparing) 100,000
The total capital gains taxes for the year 2020 is
P138,000
P121,750
P37,000
P127,000
Question 53 pts
Mr. X has the following data on his passive income earned during 2019:
Philippines Abroad
Interest income from long term peso bank deposits P45,000 P25,000
Interest income from long term FCDU deposits 50,000 60,000
Royalties from books 20,000 30,000
Royalties from computer programs 20,000 40,000
Winnings from an electronic raffle during Smart Communication’s

50th anniversary (chosen randomly by the network using smart 10,000 -
subscribers sim card numbers)
Dividend income from a domestic corporation 27,000 13,000
Dividend income from a foreign corporation 33,000 22,000
How much is the final withholding tax if the taxpayer is a non-resident alien engaged in trade or
business?
P13,450
P9,700
P13,750
P13,400
Question 63 pts
A domestic corporation has the following data for 2018:

Excess MCIT 2017 – P10,000
Q1 Q2
Income, net of 1% withholding tax P495,000 P792,000
Deductions P480,000 700,000
How much is the income tax still due and payable in the second quarterly return?
P4,000
P13,000
P9,000
P8,000
Question 73 pts
The record of a closely-held domestic corporation show the following data for 2018:
Gross income P1,500,000
Business expenses 600,000
Gain on sale of business asset 60,000
Interest on deposits with Metrobank, net of tax 5,000

Sale of shares of stocks, not listed and traded:
Selling price 150,000
Cost 115,000
Dividends from Victory Corporation, domestic 35,000
Dividends paid during the year 120,000
Reserved for building acquisition 300,000
In 2017, the corporation suffered an operating loss of P130,000. This amount was carried forward and
claimed as deduction from gross income 2018.
The improperly accumulated earnings tax
P36,075
P66,075
P36,035
P34,765
Question 81 pts
De Venecia Corporation grants all its employees (rank and file, supervisors and managers) 5% discount
of the purchase price of its products. During an audit investigation made by the Bureau of Internal
Revenue (BIR), the BIR assessed the company for failure to withhold. The corresponding tax on the
amount equivalent to the courtesy discount received by all the employees, contending that the courtesy
discount is considered as additional compensation for the rank and file employees and additional fringe
benefit for the supervisors and managers. Therefore, the monetary value of the courtesy discount
should be considered as part of the compensation of the rank and file employees subject to tax. For the
supervisors and managers, the employer should be the one assessed pursuant to Section 33 (A) of the
NIRC. Is there a legal basis for the assessment made by the BIR?
There is no legal basis for the assessment because courtesy discount qualifies as de minimis benefits, it
being granted to pro-mote goodwill and contentment.
There is legal basis for the assessment as the NIRC does not consider courtesy discount as de minimis
benefit.
The assessment has no legal basis in that courtesy discount partakes of the nature of exempt fringe
benefits.
The assessment has legal basis, courtesy discount is not considered as de minimis benefit.
Question 91 pts
The payor of passive income subject to final tax is required to withhold the tax from the payment due
the recipient. The withholding of the tax has the effect of
A deduction in the recipient's income tax return.

Consummating the transaction resulting in an income.
A final settlement of the tax liability on the income.
A credit from the recipient's income tax liability.
Question 101 pts
Double taxation in its general sense means taxing the same subject twice during the same taxing
period. In this sense, double taxation
Does not violate the right to equal protection
Violates substantive due process.
Does not violate substantive due process.
Violates the right to equal protection.
Question 111 pts
Which is false?

Toll is a sum of money collected for the use of something.
A Internal revenue is pecuniary aid directly granted by the government to an individual or private
commercial enterprise deemed beneficial to the public.
Special assessment is an enforced proportional contribution from owners of lands for special benefits
resulting from public improvements.
License fee or permit is a charge imposed under the police power for the purpose of regulations.
Question 121 pts
Statement 1: The basis is the reciprocal duties of protection and support between the State and its
inhabitants. The State collects taxes from the subjects of taxation in order that it may be able to perform
the functions of government.
Statement 2: The citizens on the other hand, pays taxes in order that they may be secured in the
enjoyment of the benefits of organized society (benefits received theory).
Statement 3: Taxes are the lifeblood of the Government and their prompt and certain availability are
imperious (expecting obedience) need.
True ; False; True
False ; True; True

False ; False; True
True; True; True
Question 131 pts
The following propositions are erroneous except:
Taxpayer must receive personal benefit for the payment of tax.
The power to tax is inherent because it re¬quires a set of rules.
Taxes are always based on the amount re¬ceived by the taxpayer.
Public purpose includes indirect public ad¬vantage.
Question 141 pts
Which is not an inherent limitation of taxation?
Due Process of Law

Territorial jurisdiction
International comity
Double taxation
Question 151 pts
Statement 1: Taxation is the act of laying a tax, i.e. the process or means by which the sovereign,
through its lawmaking body, raises income to defray the necessary expenses of government.
Statement 2: The power of taxation proceeds upon the theory that the existence of the government is a
necessity, that it cannot continue without means to pay its expenses and that for this means it has a
right to compel all its citizens and property within its limits to contribute.
True ; False
True; True
False ; False
False ; True
Question 163 pts

AAA reported the following:
Related Unrelated Total
Gross income P300,000 P200,000 P500,000
Deductions 100,000 100,000 200,000
Taxable income P200,000 P100,000 P300,000
Under the TRAIN Law: Compute the tax due if the corporation is a/an:
Proprietary educational institution or non-profit hospital
P60,000
P90,000
P30,000
P20,000
Question 173 pts
A domestic bank reports the following income from its regular banking (RBU) and foreign currency
deposit unit (FCDU):
RBU FCDU
Interest from lending with
P- P300,000
FCDUs/OBUs
Interest from lending to other

2,000,000 3,000,000
residents
Interest from lending to non-

1,000,000 1,500,000
residents
Less: Business expenses 1,800,000 2,000,000
Net income P1,200,000 P2,800,000
Under the TRAIN Law: Answer the following:
Compute the regular income tax due
P360,000
P750,000
P240,000
P60,000
Question 183 pts
Mr. B, purely engaged in business had the following for the given year:
Revenue P800,000
Cost of sales 200,000
Other (non-operating) business income
Interest from bank deposit 20,000
Gain from Capital asset (holding period of 5 months) 25,000
Mr B sold his house and lot to his neighbor for P6,000,000, how much is DST?
P12,000
P90,000
P6,000
P9,000
Question 193 pts
CCC shows the following transactions in the shares of AAA Corporation, a closely held corporation:
Date Transaction Quantity Price
2/8/2020 Buy 10,000 P120,000

4/5/2020 Sell 10,000 100,000
5/1/2020 Buy 20,000 240,000
What is the tax basis of the shares acquired on May 1, 2020?
P240,000
P260,000
P220,000
P300,000
Question 203 pts
Sonia took out a life insurance from Sunstar Insurance Company, with her husband Noli as the
beneficiary. Under the policy, Sunstar will pay Sonia the amount of P500,000 when the policy
matures, to her beneficiary husband in case she dies before the maturity. Sonia will pay P10,000
annually for 20 years.
Assuming that after 20 years, the policy matured and she received the entire P500,000 from the insurer,
how much income should she report?
None
200,000
500,000
300,000
Question 213 pts
A government employee received the following benefits in 2019:
Gross salaries P1,044,000
RATA 12,000
PERA 24,000
Additional compensation (ADCOM) 24,000
Christmas bonus 87,000
Christmas gift 5,000
Laundry allowance (P400/month) 4,800
Contribution to GSIS, Philhealth and HDMF 62,000
Determine the taxable compensation income
P1,071,200
P1,009,200
P1,044,000
P1,068,000
Question 223 pts
AAA reported the following:
Related Unrelated Total
Gross income P300,000 P200,000 P500,000
Deductions 100,000 100,000 200,000
Taxable income P200,000 P100,000 P300,000
Under the TRAIN Law: Compute the tax due if the corporation is a/an:
Regular domestic corporation
P60,000
P90,000
P30,000
P150,000
Question 233 pts
AAA Company has been assessed of deficiency income tax of P1,000,000, exclusive of interest and
surcharge for 2018 taxable year. The tax liability has remain unpaid despite the lapse of June 30, 2020,
the deadline for the payment stated in the notice and demand issued by the Commissioner. Payment
was made by the taxpayer on February 10, 2021.
The total amount due on February 10, 2021 shall be
P145,315.07
P103,215.09
P1,498,530.16
P248,530.16
Question 243 pts
During 2019, AAA Corporation gave the following fringe benefit to its employees:
Salaries to rank and file employees P1,000,000

Salaries to managerial employees 1,800,000
De minimis benefits to rank and file employees 54,400
De minimis benefits to managerial employees 27,200
Fringe benefits to rank and file employees 102,000
Fringe benefits to managerial employees 170,000
How much is the total allowable deduction from business income of AAA Corporation?
P3,153,600
P3,271,600
P3,233,600
P3,245,138
Question 253 pts
AAA Corporation maintains a fleet of motor vehicles for business use and employee use. The following
relates to the calendar quarter just ended:
Cost of three motor vehicles used exclusively for sales, freights and delivery
P4,500,000
service
Cost of a motor vehicle for employees’ business use and employee use 500,000
Compute the total quarterly monetary value of the fringe benefit

P25,000
P500,000
P4,500,000
P12,500
Question 263 pts
Mr. B, purely engaged in business had the following for the given year:
Revenue P800,000
Cost of sales 200,000
Other (non-operating) business income
Interest from bank deposit 20,000
Gain from Capital asset (holding period of 5 months) 25,000
How much is taxable income, if Mr. B opted for standard deduction?
P475,000
P520,000
P505,000
P450,000
Question 273 pts
A farmer under accrual basis has the following data for the year:
Beginning inventory
Livestock and farm products raised in the farm P60,000
Livestock and farm products purchased the previous year 30,000
Ending inventory
Livestock and farm products raised in the farm 100,000
Livestock and farm products purchased 80,000
Sales of livestock and farm products raised and purchased 120,000
Cost of livestock and farm products purchased during the year 100,000
Miscellaneous income:
Gain on sale of work breeding or dairy animals 30,000
Gain on sale of farm equipment and machinery 10,000
Hire of tractor 20,000
Hire of carabaos and horses 6,000

Other income 4,000
Gain due to changes in fair value less costs to sell 5,000
How much is his gross income?
P90,000
P185,000
P180,000
P95,000
Question 283 pts
Sonia took out a life insurance from Sunstar Insurance Company, with her husband Noli as the
beneficiary. Under the policy, Sunstar will pay Sonia the amount of P500,000 when the policy
matures, to her beneficiary husband in case she dies before the maturity. Sonia will pay P10,000
annually for 20 years.
Assume that Sonia died after 10 years of paying the premium and the beneficiary received P250,000
from the policy. How much income should be reported to the BIR?
None
500,000
100,000
250,000
Question 293 pts
Mr. BBB disposed his principal residence for P2,000,000 and immediately acquired a new one for
P1,800,000. The old residence cost Mr. BBB P1,000,000 and had a fair market value of P2,500,000 on
the date of sale.
How much of the capital gains tax will be released to the taxpayer?
P135,000
P15,000
P150,000
P120,000
Question 303 pts

The following relates to the MCIT and RCIT of BBB Corporation:
MCIT RCIT
2017 P80,000 P0
2018 120,000 50,000
2019 110,000 90,000
2020 100,000 105,000
2021 120,000 140,000
Under the TRAIN Law, answer the following:
What is the tax still due in 2021?
P95,000
P0
P20,000
P75,000
Question 313 pts

Nancy bought a second hand car for personal use. The purchase price was P250,000 plus expenses of
P5,000 in the form of commission. After 2 years, she sold the car for P180,000 and paid 1% commission
to the agent. The capital loss to be reported by Nancy is –
P68,200
P76,800
P38,400
P34,100
Question 323 pts
Victor and France are partners in a commercial partnership. Their profit and loss ratios were
3:6. During 2018, the following data were provided:
Data of the Partnership:
Sale of services P3,500,000
Direct cost of services 1,500,000
Rental income in business assets (net of CWtax) 142,500
Interest income on peso bank deposits 20,000
Interest income on U.S. $ deposits under the expanded foreign currency

50,000
deposit system
Capital gain on sale of real property classified as capital asset located in
300,000
Q.C. (Selling price P2M; FMV P2.5M; Cost P1.7M)
Quarterly tax payments 75,000
Data of the Partners:
Dividend income from a resident foreign corporation earned by Victor P120,500
Dividend income from a domestic corporation earned by France 85,000
Royalty income from Philippines earned by France 35,000
Capital gain by France on sale of shares of stock of a domestic corporation

120,000
(Selling price P300,000; FMV P300,000; Cost P180,000) @ par value stock
Gross income from a sole proprietorship business by Victor 925,000
Allowable business expenses of Victor 670,000
Amount of Net Taxable Income Rate
Over But Not Over
- 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 P2,410,000 + 35% of the excess over P8,000,000
Required: Determine the:

Income tax payable of the partnership
P352,500
P437,000
P357,500
P435,000
Question 333 pts

50,000
deposit system
Capital gain on sale of real property classified as capital asset located in 300,000

120,000
Over But Not Over
- P250,000 0%

Documentary stamp tax on the partnership
P13,000
P12,000
P15,000
P37,500
Question 343 pts

50,000
deposit system

120,000
Over But Not Over
- P250,000 0%

Documentary stamp tax of France
P1,350
P1,800
P0
P1,380
Question 353 pts

50,000
deposit system

120,000
Over But Not Over
- P250,000 0%

Final tax on passive income of France
P97,067
P85,767
P105,767
P95,767
Question 363 pts
The A Corporation provided the following data for the calendar year ending December 31, 2018 (1$ =
P50)
Philippines USA
Gross income P4,000,000 $40,000
Deductions P2,500,000 $15,000
Income Tax Paid $3,000
If it is a non-resident cinematographic film owner/lessor, its income tax is
P128,000
P1,000,000
P300,000
P100,000
Question 373 pts
The A Corporation provided the following data for the calendar year ending December 31, 2018 (1$ =
P50)
Philippines USA
Gross income P4,000,000 $40,000
Deductions P2,500,000 $15,000
Income Tax Paid $3,000
If it is a non-resident lessor of vessels, its income tax is
P300,000
P128,000
P100,000
P180,000
Question 383 pts
F, sold the following capital assets
Land 1 Land 2 Land 3 Land 4
Selling price P400,000 P600,000 P800,000 P1,200,000
Cost 200,000 250,000 400,000 400,000
Commission paid 30,000 70,000 - -
Selling expense incurred 20,000 30,000 40,000 50,000
Terms of sale:
Down payment, Feb. 14, 2018 50,000 70,000 50,000 150,000
July 14, 2018 50,000 70,000 50,000 150,000
July 14, 2019 150,000 100,000 200,000 200,000
July 14, 2020 150,000 260,000 - 200,000
Mortgage assumed by the buyer - 100,000 500,000 500,000
The final tax for 2018 is

P82,080
P85,080
P112,080
P180,000
Question 393 pts
Lebron Corporation has the following information for the taxable year 2018:
Quarter RCIT MCIT CWT
1st P200,000 P160,000 P40,000
2nd 240,000 500,000 60,000
3Rd 500,000 150,000 80,000
4th 300,000 200,000 70,000
MCIT carry-over from prior year amounts to P60,000 and excess tax credits from prior year amounts to
P20,000.
How much was the income tax payable for the third quarter?
P860,000
P140,000
P600,000
P120,000
Question 403 pts
Lebron Corporation has the following information for the taxable year 2018:
Quarter RCIT MCIT CWT
1st P200,000 P160,000 P40,000
2nd 240,000 500,000 60,000
3Rd 500,000 150,000 80,000
4th 300,000 200,000 70,000
MCIT carry-over from prior year amounts to P60,000 and excess tax credits from prior year amounts to
P20,000.
How much was the annual income tax payable?
P1,260,000
P390,000
P930,000
P230,000

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Question 11 pts

Group of answer choices

Percentage tax under Section 116 only in lieu of income tax

Income tax on based on graduated income tax rates only

Flag question: Question 2

Group of answer choices

Flag question: Question 3

Gross sales P10,000,000 P5,000,000

Sales returns 200,000 -

Cost of goods sold 3,500,000 2,250,000

Operating expenses 2,800,000 1,100,000

Interest income from trade receivable 100,000 50,000

Interest income from BPI deposits – Phils. 100,000 -

Interest income from BPI deposit – USA - 80,000

Interest income –FCDU 150,000 -

Income from money market placement 200,000 100,000

Dividend income from domestic corporation 75,000 -

Dividend income from resident corporation 45,000 -

Royalty income 50,000 25,000

Gain on sale of shares of stock of domestic corporation held as

Gain on sale of shares of stock of domestic corporation, held as

Gain on sale of real property in the Philippines not used in

How much is the tax due on its ordinary income?

Group of answer choices

Flag question: Question 4

A domestic corporation provided the following data for 2020:

Gross profit from sales P3,000,000

Dividend income from domestic corporation 100,000

Dividend income from a resident corporation 50,000

Dividend income from a non-resident corporation 40,000

Interest income from

 Notes receivable 20,000

 Bank deposits (peso accounts) 30,000

 Bank deposits (foreign currencies) 25,000

 Treasury bills 10,000

To A, a resident citizen P100,000

To B, a non-resident citizen 100,000

To C, a resident alien 100,000

To D, a non-resident alien engaged in trade in the Philippines 100,000

To F, a domestic corporation 100,000

To G, a resident foreign corporation 100,000

To H, a non-resident foreign corporation (without tax sparing) 100,000

The total capital gains taxes for the year 2020 is

Group of answer choices

Flag question: Question 5

Royalties from books 20,000 30,000

Royalties from computer programs 20,000 40,000

Winnings from an electronic raffle during Smart Communication’s

Dividend income from a domestic corporation 27,000 13,000

Dividend income from a foreign corporation 33,000 22,000

Group of answer choices

Flag question: Question 6

A domestic corporation has the following data for 2018:

Income, net of 1% withholding tax P495,000 P792,000

Deductions P480,000 700,000

Group of answer choices

Flag question: Question 7

Gross income P1,500,000