GENERAL REVIEW GIVEN

1. SELLING PRICE 6M 100%

- DOWNPAYMENT 1.2 20%

BALANCE 4.8M 80%

X M.A.F 0.022

MO. AMORTIZATION - P105,600.00

SOLUTION :

1. 105,600 / .022 = 4.8M

2. SP = 4.8 / .80 = 6M

3. DP = 6M X 20% = 1.2M

APPRAISED VALUE 2. 6M

LOAN TO VALUE RATIO - 80%

LOAN VALUE 1. 4.8M

M.A.F 0.022

MO. AMORTIZATION - P105,600.00

SOLUTION :

1. 105,600 / .022 = 4.8M

2. SP = 4.8 / 6M

3. DP = 6M X 20% = 1.2M

ASSESSORS VALUE PER TAX DEC

LOT - 600,000

HSE - 1.2M BIR ZONAL VALUE

LOT - 1M

HSE - NONE APPRAISED VALUE - 1.9M SELLING PRICE - 2M INCLUSIVE OF 500K MORTGAGE COMPUTE 1. CGT

2.2M X 6% = 132,000

2. DST ON SALE

2.2M X 1.5% = 33,000

3. DST ON MORTGAGE

( 500K X .002 ) + 10 = 1,010.00

4. TRANSFER TAX (MAXIMUM) IF IN THE CITY

2.2M X 1% X 75% = 16,500.00

5. TRANSFER TAX (MAXIMUM) IF IN THE PROVINCE

2.2M X 1% X 50% = 11,000.00 6. BASIC REGISTRATION FEE (EXCLUSIVE OF IT FEE AND MISC. FEES)

( 2.0M / 20,000 X 90 ) + 1,146 =10,146.00

GIVEN

VAT ON SALE - 480K

SELLER - DEVELOPER COMPUTE 1. VAT

480K 2. SELLING PRICE BEFORE VAT

480K / 12% = 4M 3. SELLING PRICE INCLUSIVE OF VAT

4M X 1.12 = 4,480,000 4. CWT ON SALE

4M X 5% = 200K 5. DST ON SALE

4M X 1.5 = 60K 6. 5% BROKERS COM. NET OF 10 CWT

4M X 5% X 90% = 180K 7. OUTPUT TAX OF THE DEVELOPER ON THE SALE

480K

8. WHAT IF THE BROKER IS VAT REGISTERED?

NET AMOUNT RECEIVED FROM DEVELOPER INCLUSIVE OF VAT ON COMMISSION (NET OF 10% cwt ON commission) o (4M X 5% X 90% ) + 12% OF 200K = 204K

INPUT TAX OF THE DEVELOPER ON COMMISSION o 200K X 12% = 24K

OUTPUT TAX OF THE BROKER ON COMMISSION o 24K

COMMISSION TO BE REPORTED TO THE BIR o BY THE DEVELOPER - 200K o BY THE BROKER - 200K

COMMISSION AND CWT SHARING o BROKER SAY, 2% AGENTS SHARE 3% o NET COMMISSION - P180K o CWT ON COM. - 20K o o SHARING ON COMMISSION

BROKER 2/5 X 180K = 72K AGENT 3/5 X 180k = 108K

o SHARING ON CWT ON COM. BROKER 2/5 X 20K = 8K AGENT 3/5 X 20k = 12K

INCOME TAX

GROSS INCOME - P200K

LESS: PERSONAL EXEMPTION - P 50K o 1 CHILD AT 25k 25k o 40% STANDARD DEDUCTION 80K - 155K

NO MORE RECEIPTS

NET INCOME SUBJECT TO TAX - 45K

INCOME TAX AT 32% - P14,400

CWT PAID - 20,000

REFUND - (P5,600) --------------------------------------------------------------------------------------------- PERSONAL RESIDENCE GIVEN :

SELLING PRICE - P8M

BIR FMV ON SP - 9.6M

COST OF NEW RESIDENCE - 5.0M COMPUTE:

CGT TO BE ESCROWED o P9.6m x 6% = P576,000

DST ON SALE o P9.6M X 1.5% = P144K

CGT ON THE UNUTILIZED PORTION OF THE PROCEEDS OF SALE o P8M - 5M = 3M X 6% X 1.20 = P216K

SUPPORTING COMPUTATION o 9.6M / 8M = 1.20 o o 8M X 1.20 = 9.6M X 6% = 576K o 5M X 1.20 = 6.0M X 6% = 360K o 3M X 1.20 = 3.6M X 6% = 216K

COST PROPERTY INDEX ( CPI METHOD) GIVEN : VAT EXEMPT TRANSACTIONS UP TO 12.31.11 NEW (1.01.12)

LOT ONLY - P1500,000.00 - ?????

HOUSE AND LOT - 2500,000.00 - ?????

RES. LEASES - 10,000.00 - ?????

COMPUTE :

NEW THRESHOLD ON VAT EXEMPT USING THIS FORMULA: o CPI NEW = COST NEW o CPI OLD COST OLD o

IF CPI NEW = 166.10

CPI OLD = 129.80

SOLUTION:

NEW COST = 166.10

1.5M = 129.80

1.5M X 166.10 / 129.80 = 1919,491.00 TO 1919,500

2.5M X 166.10 / 129.80 = 3199,152.00 TO 3199,200

10K X 166.10 / 129.80 = 12,796.00 TO 12,800.00

GROSS ESTATE OF HUSBAND AND WIFE - P20M

BASED ON ABSOLUTE COMMUNITY DEDUCTIONS ( PUT MAXIMUM)

STANDARD DEDUCTION - (1M)

MEDICAL - (500K)

FUNERAL - (200K)

EXISTING LOAN AT THE TIME OF DEATH - P1M - (1M)

PERSONAL RESIDENCE BIR VALUE - 3M - (1M) 3.7

WIFES SHARE ON THE NET ESTATE - (8.150M) o 20M - 3.7 = 16.3M / 2 = 8.150M

COMPUTE :

NET ESTATE SUBJECT TO TAX IF THE HUSBAND DIED P 8.150M

GIVEN:

BASIC REALTY TAX - 1%

SEF TAX - 1%

PROMPT PAYMENT DISCOUNT - 20%

TAX PAID NET OF DISCT - 16K

ASSESSMENT LEVEL - 20% COMPUTE :

ASSESSED VALUE OF PROPERTY

MV PER TAX DECLARATION SOLUTION:

MV X A.L. = A.V. X RATE = X 80% = 16K

5M X 20% = 1M X 2% = 20K X 80% = 16K

GIVEN :

SELLING PRICE - P5M

CASE 1 : INITIAL PAYMENT - 1.2M

CASE 2: INITIAL PAYMENT - 1.5M COMPUTE :

CGT ON CASE 1 o 1.2M / 5M = 24% o THEREFORE : CGT = 1.2M X 6% = 72K

DST ON CASE 1 o NO DST ON INSTALLMENT OR DEFERRED

CGT ON CASE 2 o 1.5M / 5M = 30% THEREFORE DEFERRED o 5M X 6% = 300K

PD 957 UNIT COST COMPUTATION

GIVEN o LAND ACQUISITION COST /SQM - P1K o DEV COST /SQM - 1,800.00 o NON SALEABLE AREA - 30%

COMPUTE o UNIT COST o SELLING PRICE PER SQM. IF

EXPENSES IS 20% OF SELLING PRICE DEVELOPERS PROFIT IS 30% OF SP

SOLUTION o UNIT COST = (P1K + P1.8K ) / 70% = P4K o SP /SQM = _____ + 20% EXP. + 30% PROFIT o THEREFORE: SP = 4K / 50% = P8K

PROFIT AND LOSS

EQUATION FORMULA : SP = COST + GROSS PROFIT GROSS PROFIT = EXPENSES + PROFIT

--------------------------------------------------------------------------------------------- GIVEN :

COST OF PROPERTY - P5M

GROSS PROFIT RATE - 40% BASED ON COST OR OF COST OR ABOVE COST

COMPUTE :

SELLING PRICE SOLUTION:

SP = COST + GROSS PROFIT

140% = 100% + 40%

P7M = 5M + 40% OF 5M = P7M ------------------------------------------------------------------------------------------ MR CRUZ SOLD HIS PROPERTY AT P7M, REALIZED AT GROSS PROFIT RATE OF 40% ABOVE HIS COST. HOW MUCH IS THE COST?

SOLUTION = P7M / 140% = P5M --------------------------------------------------------------------------------------------- GIVEN :

COST OF PROPERTY - P5M

GROSS PROFIT RATE - 50% BASED ON SELLING PRICE COMPUTE :

SELLING PRICE = COST + GROSS PROFIT

100% = 50% + 50%

SELLING PRICE = 5M / 50% = P10M ---------------------------------------------------------------------------------------------

APPRAISAL : OPERATING STATEMENT POTENTIAL GROSS INCOME - 100% - 6.25M LESS : ALLOW. FOR VAC. AND BAD DEBTS - 20% 1.25 EFFECTIVE GROSS INCOME - 80% 5M - 100% LESS: OPERATING EXPENSES 2M 40% NET OPERATING INCOME 3M 60% GIVEN:

NOI - P3M

OPERATING EXP - 40% OF EGI

ALL. FOR VACANCY - 10% COMPUTE

EFFECTIVE GROSS INCOME o P3M / 60% = 5M

POTENTIAL GROSS INCOME o P5M / .80 = P6250,000.00

USING INCOME APPROACH TO VALUE, HOW MUCH IS THE VALUE OF LAND AND BLDG. IF CAPITALIZATION RATE (OVERALL RATE) IS 10%

FORMULA : VALUE = INCOME / RATE = P3M / 10% = P30M

BASED ON THE ABOVE, IF THE RATIO OF LAND TO BUILDING VALUE IS 2:3, WHAT IS THE VALUE OF THE BUILDING?

BUILDING VALUE = 3/5 X 30M = P18M

USING THE ABOVE EXAMPLE, IF INTEREST RATE IS 8%, HOW WILL YOU DISTRIBUTE INCOME TO LAND AND INCOME AND RECAPTURE TO BLDG?

DISTRIBUTION OF INCOME 12M o INCOME TO LAND = (P30M 18M) X 8% = P960K o INCOME TO BLDG

INTEREST = 8% X 18M = 1,440,000 RECAPTURE = 2% X 18M = 360k

o TOTAL = P2,760,000 o

VS. = P3M

DIFFERENCE = P 240k

960K / 10% = 9,600,000

960k / 8% = 12,000,00

DIFFERENCE = 2.4M