a. A married resident citizen supports three (3) qualified dependent children and a brother-in-law who is a PWD, unmarried and not gainfully employed. He has the following data on income and expenses for the year 2021:

Salary, Philippines

P 560,000

Gross business income, Philippines (gross sales, P1,700,000)

500,000

Business expenses, Philippines

180,000

Gross business income, USA (gross sales, P1,500,000)

900,000

Business expenses, USA

300,000

Interest income from bank deposit, Philippines

50,000

Interest income from bank deposit, USA

70,000

Interest income from domestic depository bank under EFCDS

80,000

Interest income from a debt instrument not within the coverage of deposit substitute, Philippines, gross of 15% creditable withholding tax (issue price is P300,000)

50,000

Interest income from a debt instrument within the coverage of a deposit substitute, Philippines (issue price P500,000)

60,000

Royalty on book published in the Philippines

100,000

Prize in a contest he joined in the Philippines

5,000

Philippine Charity Sweepstakes winnings

1,000,000

Gain from sale of shares of stock not traded through the local stock exchange (P200,000 par value)

150,000

Dividend received from a domestic corporation

40,000

Tax payments, first three (3) quarters

100,000

Questions:

1. How much is the total final tax on certain passive income?

2. How much is the capital gains tax and the documentary stamp taxes?

3. Can the taxpayer avail of the 8% income tax option?

4. How much is the taxable net income and income tax due?

b. A resident alien individual supports two (2) qualified dependent adopted children and a foster child. He asks you to assist him in the preparation of his tax return for his income in 2020. He provides you the following information:

Gross business income, Philippines (gross sales, P3,000,000)

P 1,000,000

Gross business income, Japan (gross sales, P7,000,000)

5,000,000

Business expenses, Philippines

200,000

Business expenses, Japan

800,000

Philippine Charity Sweepstakes winnings

500,000

Japanese Sweepstakes winnings

400,000

Interest income, Bank of Tokyo, Japan

100,000

Interest income received from a depository bank under EFCDS, Philippines

300,000

Interest on peso bank deposit, Philippines

100,000

Income taxes paid for the first three (3) quarters

50,000

Questions:

1. Can the taxpayer avail of the 8% income tax rate?

2. How much was the taxable net income and income tax due if he avails of the 8% income tax rate?

3. How much was the final tax on passive income?

4. Assuming the taxpayer failed to avail of the 8% income tax, how much is his taxable income and the income tax due?