CORRECT ANSWERS ONLY WITH SUPPORTING CALCULATIONS WILL BE RATED

Exercises: a. On December 1, 2020, Juanito Cruz created a trust for his son Alberto and appointed Danilo Paz as the trustee. On December 26, 2020, another trust was created by Juanito for the benefit of the same son, Alberto, single. Juancho Garcia was appointed as the trustee. The following data pertain to the two trusts: Trust under Danilo Trust under Juancho

Gross income P500,000 P600,000

Expenses 100,000 300,000

Income distributed to Alberto, gross of 15% withholding tax 50,000 100,000

Compute the tax due from:

1) each trust. 3) each trust after share in the consolidated income tax.

2) the consolidated income. 4) the beneficiary.

b. Mr. Sixto Cruz IV, a rich businessman, established on December 2019 a trust for the benefit of his son Sixto Cruz V, 18 years old, single. He transferred to the trust two (2) income producing properties with the following gross rentals:

Vacant lot leased for P600,000 annually, gross of withholding tax

Office building with monthly rental income of P25,000, gross of withholding tax

The appointed trustee was Mr. Osmundo de la Cruz. During the year 2020, ordinary trust expenses amounted to P350,000 and income distributed to the beneficiary amounted to P150,000. The beneficiary has gross sales from his trading business amounting to P500,000 and business expenses totaling P100,000.

Compute the taxable net income of the:

1) Trust using optional standard deduction. (2)Beneficiary using itemized deduction.

Exercise: Mr. JMLH signified her intention to be taxed at 8% income tax rate on gross sales in her 1st Quarter Income Tax Return. However, her gross sales during the taxable year has exceeded the VAT threshold.

Q1

(8% Rate)

Q2

(8% Rate)

Q3

(8% Rate)

Q4

Total Sales

500,000.00

500,000.00

2,000,000.00

3,000,000.00

Less: Cost of Sales

300,000.00

300,000.00

1,200,000.00

1,200,000.00

Operating Expenses

120,000.00

120,000.00

480,000.00

720,000.00

REQ: 1) Compute the quarterly income tax payable and show the due dates

2) Compute the income tax due when the final or adjusted return is filed and show the due date

3) Compute the percentage tax, if any.

4) Compute the VAT, if any.

Exercise: Compute the withholding tax using the table on the next page.

1) An employee receiving daily compensation in the amount of P2,500, net of mandatory contributions.

2) An employee receiving weekly compensation in the of P9,500, net of mandatory contributions.

3) An employee receiving semi-monthly compensation in the amount of P15,500, net of mandatory contributions.

4) An employee receiving monthly compensation in the amount of P170,500, with supplemental income of P5,000, net of mandatory contributions.