CHAPTER 3: INTRODUCTION TO INCOME TAXATION Exercise Drill No. 1: Return of capital and Return on capital Indicate the amount representing return of capital or return in capital: Consideration For the loss of Return OF Capital Return ON Capital 1 2 3 4 5 P 1,000,000 500,000 P 300,000 P600,000 P 1,200,000 Health P400,000 car P350,000, building Income Life Exercise Drill No. 2: Income tax and transfer tax Check the box where each of the following items is taxable: Transactions Income tax Transfer tax 1 Barter of properties 2 Sale of goods 3 Rendering of services 4 Donation of properties 5 Transfer of properties from a decedent to the heirs upon death 6 Transfer for less than full and adequate consideration Exercise Drill No. 3: The tax concept of income Check the appropriate box whether the following are exempt or taxable: Taxable Exempt 1 2 3 4 5 6 7 9 Item Winnings from gambling Income from swindling Indemnity for moral damages Harvested fruits from an orchard Compensation income Interest income Amount received by the insured in excess of insurance premiums paid Proceeds of life insurance received by the heirs of the insured Gain on sale of goods by the home office to its branch Gain on sale of goods and services between relatives Gain on sale of goods by parent corporation to a subsidiary corporation Appreciation in the value of land Birth of animal offspring Income of a registered Barangay Micro- Business Enterprise 9 10 11 a 12 13 15 Cancellation of debt out of gratuity of the creditor 16 Cancellation of debt by the creditor in exchange of services rendered by the debtor 17 Matured interest from coupon bonds 18 Receipt of bank loan 19 Salaries of a minimum wage earner 20 PCSO or lotto winnings 21 Benefits from GSIS, SSS, Pag- Ibig or PhilHealth 22 Discovery of hidden treasure Exercise Drill No. 4: Income taxpayer classification Indicate the appropriate classification for each taxpayers: of the following DC - Domestic Corporation RC - Resident citizen RFC - Resident foreign corporation NRC - Non-resident citizen NRFC - Non- resident foreign corporation RA - Resident alien NRA- ETB - Non- resident alien engaged in trade or business NRA- NETB - Non- resident alien not engaged in trade or business NT - Not a taxpayer Classification Person or Entity 1 A fat Mexican tourist 2 A hardworking overseas Filipino worker 3 An expatriate employee 4 A Filipino who is privately employed in the Philippines 5 An unemployed Filipino residing in the Philippines 6 A Chinese businessman who has his domicile in the Philippines for 6 months 7 A Japanese who married a beautiful Filipina and has been residing in the Philippines for 2 years 8 A 2nd year Korean college student studying in the Philippines 9 A corporation incorporated under Philippine law 10 A foreign corporation doing business in the Philippines 11 Trust designated by the donor as irrevocable 12 Trust designated by the donor as revocable 13 A business partnership 14 A joint venture organized under a foreign law and is not operating in the Philippines 15 estate Filipino citizen judicially administered in Japan 16 An estate of a Filipino citizen extra- judicially administered in the Philippines 17 A taxable joint venture organized in the Philippines 18 A profit corporation organized in the Philippines An of a - CHAPTER 3: INTRODUCTION TO INCOME TAXATION Exercise Drill No. 1: Return of capital and Return on capital Indicate the amount representing return of capital or return in capital: Consideration For the loss of Return OF Capital Return ON Capital 1 2 3 4 5 P 1,000,000 500,000 P 300,000 P600,000 P 1,200,000 Health P400,000 car P350,000, building Income Life Exercise Drill No. 2: Income tax and transfer tax Check the box where each of the following items is taxable: Transactions Income tax Transfer tax 1 Barter of properties 2 Sale of goods 3 Rendering of services 4 Donation of properties 5 Transfer of properties from a decedent to the heirs upon death 6 Transfer for less than full and adequate consideration Exercise Drill No. 3: The tax concept of income Check the appropriate box whether the following are exempt or taxable: Taxable Exempt 1 2 3 4 5 6 7 9 Item Winnings from gambling Income from swindling Indemnity for moral damages Harvested fruits from an orchard Compensation income Interest income Amount received by the insured in excess of insurance premiums paid Proceeds of life insurance received by the heirs of the insured Gain on sale of goods by the home office to its branch Gain on sale of goods and services between relatives Gain on sale of goods by parent corporation to a subsidiary corporation Appreciation in the value of land Birth of animal offspring Income of a registered Barangay Micro- Business Enterprise 9 10 11 a 12 13 15 Cancellation of debt out of gratuity of the creditor 16 Cancellation of debt by the creditor in exchange of services rendered by the debtor 17 Matured interest from coupon bonds 18 Receipt of bank loan 19 Salaries of a minimum wage earner 20 PCSO or lotto winnings 21 Benefits from GSIS, SSS, Pag- Ibig or PhilHealth 22 Discovery of hidden treasure Exercise Drill No. 4: Income taxpayer classification Indicate the appropriate classification for each taxpayers: of the following DC - Domestic Corporation RC - Resident citizen RFC - Resident foreign corporation NRC - Non-resident citizen NRFC - Non- resident foreign corporation RA - Resident alien NRA- ETB - Non- resident alien engaged in trade or business NRA- NETB - Non- resident alien not engaged in trade or business NT - Not a taxpayer Classification Person or Entity 1 A fat Mexican tourist 2 A hardworking overseas Filipino worker 3 An expatriate employee 4 A Filipino who is privately employed in the Philippines 5 An unemployed Filipino residing in the Philippines 6 A Chinese businessman who has his domicile in the Philippines for 6 months 7 A Japanese who married a beautiful Filipina and has been residing in the Philippines for 2 years 8 A 2nd year Korean college student studying in the Philippines 9 A corporation incorporated under Philippine law 10 A foreign corporation doing business in the Philippines 11 Trust designated by the donor as irrevocable 12 Trust designated by the donor as revocable 13 A business partnership 14 A joint venture organized under a foreign law and is not operating in the Philippines 15 estate Filipino citizen judicially administered in Japan 16 An estate of a Filipino citizen extra- judicially administered in the Philippines 17 A taxable joint venture organized in the Philippines 18 A profit corporation organized in the Philippines An of a