Statement 1: The gains or losses in dealings in capital assets including domestic stocks and real properties are subject to regular income tax. Statement 2: To find tax due, one must apply the appropriate tax rate to the taxpayer's taxable income. Both statements are true. Only Statement 1 is false. Both statements are false Only Statement 1 is true. Statement 1: One of the requisites of taxable income is there must be a gain or loss. Statement 2: Income is the gain derived from labor, or from capital, or from both labor and capital, including the gain derived from the sale or exchange of capital asset. Only Statement 1 is true. Both statements are false Only Statement 1 is false. Both statements are true. Clear selec 2 Statement 1: Income tax is based on gross income, not on net income, realized in one taxable year. Statement 2: First step in determining income tax is to identify the entity to which the tax computation formula applies. Both statements are false Both statements are true. Only Statement 1 is true. Only Statement 1 is false. 2 points Clear selection In a certain civil case, Wilfredo, plaintiff, was awarded by the court P20,000 damages representing profit he failed to realize on account of defendant's failure to comply with his obligation to Wilfredo. Are those damages taxable income of Wilfredo? No, because no criminal case was filed by Wilfredo No, because damages are generally not subject to income tax 2 points Yes, because damages arising out of a civil case is always taxable under the current provisions of the Tax Code Yes, because damages which are excluded from gross income are only those that are paid arising from injuries or sickness Monthly VAT declaration is filed on or before the 20th day from the end of each month 25th day from the end of each month 10th day from the end of each month 30th day from the end of each month 2 po Clear selectic Ms. Ma. Estella Santos was selected as the outstanding scientist in her province in 2011. Her name was submitted by her supervisor without her knowledge. She received a plaque, trophy and cash reward of P500,000. What was the tax consequence of the reward? Not subject to any internal revenue tax Subject to final withholding tax 2 poi Statement 1: The gains or losses in dealings in capital assets including domestic stocks and real properties are subject to regular income tax. Statement 2: To find tax due, one must apply the appropriate tax rate to the taxpayer's taxable income. Both statements are true. Only Statement 1 is false. Both statements are false Only Statement 1 is true 2 Statement 1: Actual medical assistance exceeding P10,000 per annum is a 2p de minimis benefit. Statement 2: Annuity is the amount of money received in lump sum or staggered basis in consideration of services rendered. Both statements are false Only Statement 1 is false. Only Statement 1 is true. Both statements are true. Taxes are paid or incurred within the taxable year in connection with the taxpayers profession, trade, or business shall be allowed as a deduction, except; Philippine income tax Estate and donors taxes Foreign income tax claimed as tax credit All of the options Clear se The proportional contributions by persons and property levied by the law- making body of the State by virtue of its sovereignty for the support of the government and all public needs is referred to as: Taxes; Special assessment; Answer not given License fees: One of the following is not a requisite of a taxable income. The gain must not be excluded by law from taxation. There must be gain The gain must be that of resident or nonresident citizen. The gain must be realized or received Statement 1: Royalties earned from sources within the Philippines are generally subject to final income tax. Statement 2: Royalties earned from sources without the Philippines are subject to final income tax. Both statements are true. Only Statement 1 is true. Only Statement 1 is false. Both statements are false 2 P Clear selecti Statement 1: Excess of the amount returned as premium is taxable. Statement 2: Deductions made by employer from compensation of employee is a form of compensation. Only Statement 1 is true. Both statements are false Only Statement 1 is false Statement 1: Exclusions from gross income are subject to another kind of internal revenue tax. Statement 2: 13th month pay and other benefits of P90,000 is excluded from income tax. Only Statement 1 is true. Both statements are true. Both statements are false Only Statement 1 is false. 2 p Statement 1: Annual laundry allowance of P3,600 is not subject to tax. Statement 2: Income arising from leasing properties of any kind is subject to regular income tax. Both statements are false Only Statement 1 is false. Only Statement 1 is true. Both statements are true. Clear se Statement 1: Imputed interest is non-taxable. Statement 2: Income ta based on income, either gross or net, realized in two taxable years. Both statements are false Both statements are true. Only Statement 1 is false. Only Statement 1 is true. Cle Statement 1: There is no distinction is made between classes or grad employees. Statement 2: The timing or basis upon which the remuner is paid is material in determining whether remuneration constitutes compensation. Both statements are true. Both statements are false A domestic corporation may employ, as a basis for filing its annual corporate return the: neither calendar or fiscal year either calendar or fiscal year calendar year only fiscal year only Clear s A final or annual return is filed on or before the 15th day of the? 2nd month following the close of the taxable year. 3rd month following the close of the taxable year. 4th month following the close of the taxable year 4th month of the current taxable year Which is not and essential characteristic of tax? It is unlimited as to amount; It is a regular payment. It is payable in money; It is proportionate in character; Cle There shall be allowed a deduction from gross income for entertainment, amusement and recreation expenses in an amount equivalent to the actual entertainment, amusement and recreation expenses paid or incurred within the taxable year by the taxpayer, but in no case shall such deduction except: 1.0.50% of net sales (gross sales less sales return or allowance and sales discounts) for taxpayers engaged in sale of goods or properties II. 1% of net sales (gross income less discounts) for taxpayers engaged in sale of services, including exercise of profession and use or lease of properties. Both I and II are correct 2 points One of the characteristic of a tax is that: It is generally based on contract; Answer not given. It is generally assignable; It is generally payable in money; 2 point Clear selection Which of the following is not a sale and therefore is not subject to the value-added tax? Distribution or transfer to creditors in payment of debt; 2 point Distribution or transfer to shareholders or investors of share in the profits of a VAT- registered person; Which statement is wrong? Research and development costs: 2 points If not related to land and building, may be treated as an outright deduction When related to the acquisition and/or improvement of land and building, must be capitalized If not related to land and building, may be treated as a deferred expense which may be amortized Cannot be deducted because it has an unlimited life Clear selection Statement 1: Gains from the sale of bonds with a maturity of five years are 2 points excluded from gross income. Statement 2: Income from a property received as a gift is included in gross income. Both statements are false Both statements are true. Who among the following cannot avail of 8% income tax? Taxpayer not engaged in VAT exempt sales/transactions Taxpayer subject to 18% OPT Taxpayer with gross sales of P3,000,000 Non-VAT registered taxpayer This term shall mean the excess of allowable deduction over gross income 2 points of the business in a taxable year. Net operating loss Net taxable income None of the options Which of the following retirement benefits received from private firms is not taxable? 2 points Received from an employer which has no reasonable pension plan, employee is 53 years old and has served the company for 12 years Received from an employer under its reasonable pension plan, employee is 52 years old and has served the company for 11 years Received from an employer under its reasonable pension plan, employee is 49 years old and has served the company for 12 years Born of a poor family on February 14, 1963, Mario worked his way through 2 points college. After working for more than 12 years in X Manufacturing Company, Mario decided to retire and avail of the benefits under the very reasonable retirement plan maintained by his employer. On the day of his retirement on April 30, 2011 he received P400,000 as retirement benefit. Is Mario's P400,000 retirement benefit subject to income tax? No, because retirement benefits are not subject to income regardless of the age o the retiree Yes, because it was Mario who decide to retire and avail of the benefits under the very reasonable retirement plan maintained by his employer. No, because Mario worked for the company for 12 years and the retirement benefits are given under a very reasonable retirement plan maintained by his employer. Yes, because Mario was only 48 years at the time of his retirement which is below the 50 year old requirement for exempt retirement benefits. One of the characteristics of our internal revenue laws is that they are: 2 points Generally prospective in operation although the tax statute may nevertheless operate retrospectively provided it is clearly the legislative intent. Answer not given Penal in nature. minal in nature Which of the following input taxes can be refunded, converted into tax credit certificates or carried over to the next quarter at the option of the vat registered taxpayer? 2 points Input tax on purchase of raw materials. Input tax on importation of supplies. Input tax on purchase of services. Which of the following input taxes can be refunded, converted into tax credit certificates or carried over to the next quarter at the option of the vat registered taxpayer? 2 points Input tax on purchase of raw materials. Input tax on importation of supplies. Input tax on purchase of services. Statement 1: All interest income are subject to regular income tax. Statement 2: Dividend in the form of a promissory note is taxable. Only Statement 1 is false. Both statements are true. Only Statement 1 is true. Both statements are false Clear Income of a public cemetery from activities conducted for profit is still exempt from income tax. True False Statement 1: The source of compensation income depends on the place of 2 points performance of service. Statement 2: Pensions are taxable always. Only Statement 1 is true. Only Statement 1 is false