tax 1 reviewer quizzer

8/9/2019 Tax 1 Reviewer Quizzer

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ASSOCIATION OF TAXATION AND LAW STUDENTS

ACADEMICS DEPARTMENT http://www.facebook.com/atlas.ue

0!"#!0$00 % 00"#&!0!&'"

QUIZZER

Note: Problems on Fringe Beneft Ta !a"e no #!oi#es$ %ean&!ile' (roblems on

Taation o) Partners!i( an* Taation o) Estate an* Tr+st are in t!e %+lti(le C!oi#e ,

)ormat o) eam$ Sol+tions are (ro"i*e* in t!e last (ages$ Ans&er t!is -+i..er as i) it

is /o+r a#t+al *e(artmental eam$ 0o(e it1ll !el($ 2o* bless3

FRINGE BENEFIT TAX

EASY

1.) Al Christian, single, an accounting clerk of Coco Corporation, a domestic corporation. He received the

following from the corporation during the ear!

1" month pa #$,%%%

Christmas &onus 1%,%%%

'ift 1%,%%%

(aor *nion 1,%%%

+edical Cash Allowance 1$% per month

+idear &onus 1#,$%%

+onthl salar %,%%%

-agiig Contriutions ",%%%

-hilHealth /,%%%

-roductivit incentives pa #%,%%%

0ice Susid #,%%% per month

SSS $,%%%

*niform Allowance /,%%%

0euired! How much is the 'ross Compensation 2ncome of Al Christian3


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EASY

#.) Al Christian owns a residential house which was allowed to e used the manager. He also

purchased a rand new car for use its marketing and another residential house in #%11for -,%%%,%%%

when its fair market value was ,4/%,%%% and transferred ownership thereof in the name of the manager.5he car costing -"%,%%% was registered in the name of the manager. 5he fair market value of which as

determined the Commissioner of 2nternal 0evenue is -/,6%%,%%% while the value per cit Assessor is

-$,%%%,%%%. How much is the total fringe enefit ta73

+89E0A5E

".) 8campo Compan gave enefits to its emploees during the ear as follows!

a. to the / rank and file emploees

0ice Susid 1%,%%%

Christmas &onus #1,%%%*niform Allowance 1#,%%%(aundr Allowance 1,6%%(oans at 4: interest w; a term of 1 ear 4%,%%%

. to the compan supervisor

Entertainment allowance 1$,%%%0eimursement the emploer of the purchase of groceries for personal consumption of the emploee 11,#%%Christmas &onus ",$%%


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92>6. 1>>>c. #%%%

. 'ive the deductile e7penses for gross income.

+89E0A5E

6.) +att Sod Compan owns a fleet of motor vehicles. 2n #%%6, one of the cars which was acuired ata accost of -%%,%%% was allowed as service vehicle one of its officials. 9uring the ear, its ook

value amounted to -"4$,%%%. How much was the grossup monetar value and the fringe enefit

ta7 due3

+89E0A5E

>.) &ased on 6, suppose that +att Sod Compan is =ust leaving the car that is eing used partl for

personal and for usiness purposes and in paing an annual rental of - 1%%,%%%. 5he annual fringe

enefit ta7 and monetar value will e for the ear !

a. 1>>6. 1>>>

c. #%%%


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5/22

EASY

$. 5he ta7ale income of koko isa. 1//, %%%. 1>1, %%%c. 11, %%%d. #11, %%%

HA09

/. += is a general partnership in trade with a net income from usiness of 1, %%%,%%%. -artners +and G share euall in the partnership net income ut neither withdrew his share in the netincome. 5he partners are prohiited their partnership agreement from engaging in an other usiness. -artner + or partner G has an income ta7 of !

a. 44,%%%. %c. ",%%%

d. #6,%%%

HA09

4. (? is a general professional partnership. -artners ( and ? share euall in the net income andloss of the partnership.


6/22

HA09

>. &ron 'eoff Co. is a usiness partnership. &ron is a widower, contriuted a land cost to her of

"4>,%%% ut was appraised at , %%%.'eoff, single, contriuted 6,%%% worth of cash. 8n its

current ear the gross income is 1,%%%,%%% while operating e7penses amounting to /%%,%%%.8nthe #nd ear, it earned an income after ta7 of 46%,%%%. 8ther than his investment in the

partnership, &ron also has a clothing line usiness. His income during the ear was -"$, %%%.

'eoff has a grocer store. His gross income and e7penses during the ear were $%,%%% and

#%,%%%, while in the succeeding ear the net income amounted to >$,$%%. 8n Ganuar of the

following ear, &ron invested additional #$#,%%% to the partnership. 5he partners agreed that

their profit and loss ratio on the first ear will e ased on the original investments, while in the #nd

ear it will e ased on the partners capital at the eginning of the ear.

hat is the income ta7 paale &ron on the first ear of the operation3

a. //,%%% . //,1%% c. //,#%% d. //,"%%

HA09

1%. hat is the income ta7 paale 'eoff on the second ear assuming the partnership is a

general partnership3

a.6,$>% . 6",%$> c. 6>,$% d. 6$,>$

+89E0A5E

5he &25&25 -artnership is a general professional partnership, with partners +r. 2 and +r. G, sharingeuall in the partnership net income and loss. 5he partnership had a gross income of -/%% %%% and

other costs of operations of -#%% %%% in #%1#. -artner 2 had a personal income and e7penses of - 6%

%%% and - "% %%%, respectivel. +r. G had a personal income and e7penses of ->% %%% and -#% %%%.

5here were no uarterl income ta7 paments on the personal incomes of each partner. &oth partners

withdrew his share in the partnership net income and there was withholding ta7 of 1%: thereon.

11. How much is the net income of the partnership3

a. %. %% %%%

c. /%% %%%d. "%% %%%

1#. How much is the income ta7 of -artner 23

a. %. "4$%%c. 14$%%


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d. #%%%%

1". How much is the income ta7 of -artner G3

a. %

. "4$%%c. 14$%%d. #$%%

1. How much is the income ta7 still due of -artner 23

a. %. "4$%%c. 14$%%d. #%%%%

1$. How much is the income ta7 still due of -artner G3

a. %. ##$%%c. 14$%%d. #$%%

+89E0A5E

Yellow, -ink, &lue are partners sharing profits and losses %: "$: #$:, respectivel. 5he

following data are availale for the ear #%1#.YE((8 -2FD &(*E -A05FE0SH2-

'ross income $%% %%% %% %%% #$% %%% >%% %%%9eductions 1$% %%% 1#$ %%% >% %%% "%% %%%

All partners withdrew their share in the partnership net income and there was withholding ta7 of

1%: thereon.

1/. 5he income ta7 of &lue if the partnership is '-- isa. $1%%%. $#%%%c. $"%%%d. $%%%

14. 5he income ta7 still due of &(*E if the partnership is '-- isa. "4%%%. "6%%%c. ">%%%d. %$%%

16. 2ncome ta7 paale of the partnership if it is a usiness partnership isa. 16% %%%. #%% %%%


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c. #"% %%%d. $#% %%%

1>. 5a7ale income of Yellow if the partnership is '-- isa. $"% %%%. $% %%%c. $/% %%%d. $#% %%%

#%. 5he income ta7 of Yellow if the partnership is '-- isa. 1"$#6%. 1$6/%c. 1"46%%d. 1$#%%

#1. 5he income ta7 still due of Yellow if the partnership is '-- isa. 116%%. 11"6%%c. 11#6%%d. 11%6%%

TAXATION OF ESTATE AND TRUST

EASY

1. A revocale transfer, with a consideration received!

Consideration receivedIIIIIIIIIIIIIIIIIIII-#$%,%%%


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9eduction for a famil home!a.) -6%%,%%% c.) -1,#%%,%%%.) -$%%,%%% d.) -4%%,%%%

+89E0A5E

". +r. Co died, leaving a gross estate of -/,%%%,%%%. 5he estate is under administration. 5heeneficiar is the son of the decedent, named -aul, who is single, with personal income as anemploee of -"%%,%%%. 9uring the ear, the estate produced a gross income of -#,%%%,%%% withrelated e7penses of -1,%%%,%%% used to produce an income. 9uring the third uarter of #%1#,-aul received -$%%,%%% from the income of the estate.

hat is the income ta7 of the estate3

a.) -11>,%%% c.) -,"/%,%%%.) -1#%,%%% d.) -$,%%%,%%%

+89E0A5E

. 0efer to uestion numer ", what is the income ta7 of -aul3a.) -$%%,%%% c.) -#"4,%%%.) -6$%,%%% d.) -11#,%%%

+89E0A5E

$. Christian and -aul are the decedent , oth single, inherited a piece of agricultural land in 2saelaworth -#,%%%,%%% from last will and testament. Christian and -aul decided to let the land ecultivated farmers originall chosen the decedent. 9uring the ear the land produced net

income of -/%,%%%. 2f Christian and -aul had a personal incomes from emploment of -6$,%%%and -/$,%%%, respectivel, how much would the income ta7 due e for each of them3

a.) -#$,$%% and -1>,$%% c.)-,4$% and -44$%.) -4,4$% and -,4$% d.) none of the aove

HA09

/. +r. Co died, leaving an estate with the a net worth of -",%%%,%%%. 5he estate is under administration.


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Fand Gc

Compensation income as an emploee -##$,%%% -16%,%%%

Amount received from the income of the estate -#%%,%%% -#%%,%%%

hat is the net income ta7 of the estate and the income ta7 dues of the eneficiaries! Fand and

GC if the have oth # ualified children each.

a.) -1$%,/%%, -#"4,%%%, -$>,%%% c.) -6%,%%%, -/%,%%%, -#%,%%%.) -16$,/%%, -$>,%%%, #"4,%%% d.) none of the aove

HA09

4. A 5a7ale trust administered in the -hilippines had a gross income of-",%%,%%% from thepropert held and e7penses of -1,%%%,%%%. 2t is provided in the trust instrument that a pament of -$%,%%% for the premium on the health and hospitaliJation insurance of the eneficiar e madeever ear.


11/22

2ncome of real propert in Ceu Cit #$,%%%

House in -ili, Camarines Sur, acuired Aldo during marriage "4$,%%%

2ncome in house in -ili $%,%%%

0eal propert in 2loilo Cit, earned wife during marriage ##$,%%%

2ncome in real propert in 2loilo Cit 6%,%%%

5angile properties in +anila, inherited Aldo during marriage $%%,%%%

2ncome of properties in +anila 14$,%%%

2ntangile properties in Singapore, inherited wife during marriage "%,%%%

2ncome of intangile in Singapore 6$,%%%

5angile properties in 9agupan Cit, inherited Aldo efore marriage #%,%%%

2ncome from properties in 9agupan Cit 1%,%%%

2ntangile properties in Canada, inherited wife efore marriage "$%,%%%

2ncome of properties in Canada 6$,%%%

*nder con=ugal partnership of gains, the gross estate of Aldo is

a.) -1,14%,%%% c.) -1,>>%,%%%.) -#,>$,%%% d.) -1,6#%,%%%

SOLUTIONS

FRINGE BENEFIT TAX

1.)


12/22

Salar B%,%%% 7 1#) 6%,%%%

(ess! SSS $,%%%

-hilHealth /,%%%

-agiig Contriutoions ",%%%

(aor *nion 1,%%% 1$,%%%

Fet Salar /$,%%%

Add! 1" month pa #$,%%%

-roductivit incentives pa #%,%%%

+idear &onus 1#,$%%

Christmas &onus 1%,%%%

0ice Susid B#,%%% L 16,%%%) /,%%%

+edical Cash AllowanceB1,6%%1,$%%) "%%

*niform AllowanceB/,%%% L ,%%%) #,%%%

+idear &onus 1#,$%%

'iftB1%,%%% L $,%%%) $,%%%

5otal 6%,6%%

(ess! E7empt &enefits "%,%%% $%,6%%

'ross Compensation 2ncome $1$,6%%

#.)

a)


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14/22

. 0ank and file!

0ice SusidB1,$%% × /) >,%%%

(oan interestB6,%%,>%%) ",$%%*niform allowance 1#,%%%(aundr allowance 1,6%% #/,"%%

Supervisor!%%

",$%%

c. 0ice susid >,%%% Christmas &onusB #1,%%% N ",%%%) #,$%% *niform Allowance 1#,%%% (aundr Allowance 1,6%% 5otal de +inimis &enefits 4,"%%

.)##%,%%% 7 1#: 7 >;1# 1>,6%%##%,%%% 7 4: 7 >;1# 11,$$%+onetar value 6,#$%

÷ /6:

'rossed up monetar value 1#,1"#."$

P "#:",66#."$

$.) "%,%%%,%%%;#% earsM 1,$%%,%%%O 9epreciation e7pense is the value of the enefit of a acht whether owned and maintained or leased the emploer

. 1,$%%,%%%;1#M1#$,%%% Q /6:M 16",6#".$" 7 "#:M $6,6#".$"

/.) a. 1>>6 "%%%;#M 14%%%

9ivided .//

#$4$4.$6 O."M -6464.$6


15/22

1>>> "%%%;#M 14%%%

9ivided ./4

#$"4".1" O.""M -6"4".1"

#%%% "%%%;#M 14%%%

9ivided ./6

#$%%% O."#M -6%%%

'ross up monetar M #$4$4.$6K #$"4".1"K #$%%%

>> "%%%N6"4".1"M #"4".1"#%%% "%%%N6%%%M#%%%

4.) 1>>6 RB6%%%%%O.%$);1#O.$ M 1%%%%;.// M -1$1$1.$# O." M -$1$1.$#1>>> RB6%%%%%O.%$);1#O.$ M 1%%%%;./4 M -1>#$."4 O."" M ->#$."41>>6 RB6%%%%%O.%$);1#O.$ M 1%%%%;./6 M -14%$.66 O."# M -4%$.66

'ross up monetar M 1$1$1.$#K 1>#$."4K 14%$.66

#$."4K 4%$.66

. 1>>6 - $1$1.$#1>>> - >#$."4#%%% -4%$.66

6.) %%,%%%;$M6%%%%O.$M %%%%;./6M$66#".$"O."#M-166#".$"

>.) 1>>6 1%%%%%O.$ M $%%%%O.// M 4$4$4.$6O."M -#$4$4.$6

1>>> 1%%%%%O.$ M $%%%%O./4 M 4/#/.64O.""M -#/#/.64#%%% 1%%%%%O.$ M $%%%%O./6 M 4"$#>.1O."#M -#"$#>.1

TAXATION ON PARTNERSHIP AND PARTNERS

1. 'ross income 6$%,%%%(ess! e7penses "$%,%%%5a7ale income $%,%%%0ate of ta7 "%:


16/22

2ncome ta7 1"$,%%% Answer! 9

#. 5a7ale income $%,%%% Add! other income9ividend 11$,%%%B1%,%%%7#%:) interest, net of ta7 1/,%%% 1"1,%%%5otal $61,%%%(ess! income ta7 paid 1"$,%%%2ncome for distriution /,%%%1,%%%(ess! personal addtl e7emptionsDaka B$%,%%%N B#$,%%%7#)) 1%%,%%%Doko $%,%%%

5a7ale income 111,%%% 11,%%% Answer! 9

$. Answer ! C

/. Fet income of the partnership 1,%%%,%%%(ess! ta7 T "$: Btreated as corp) "$%,%%%Fet income after ta7 /$%,%%%Share of either partner B1;# of /$%,%%%) "#$,%%%


17/22

6. -rofit from sales #,%%%,%%%(ess! deductions from e7penses 1,%%%,%%%5a7ale income 1,%%%,%%%+inimum corporate income ta7 B#+7#%:) %,%%%Formal ta7 B1,%%%,%%%7"$:) "$%,%%%hichever is higher "$%,%%%

Answer! &

>. 2ncome during the ear "$,%%% (ess! 9eduction

&asic personal E7emption B$%,%%%)

5a7ale 2ncome 304,000

5a7 on #$%,%%% $%,%%%$,%%% 7 "%: 1/,#%%2ncome ta7 paale //,#%%

1%. &ron! Appraisal value of land ,%%%

Additional 2nvestment #$#,%%%

&rons capital at the eginning of the ear />/,%%%

'eoff!Cash Contriution 6,%%%'eoffM 6,%%%

/>/,%%%N6,%%% ¿ 1:

2ncome of the partnership on the #nd earB46%,%%%71:) "1>,6%%2ncome of the clothing line usiness >$,$%%

5otal 1$,"%%

(ess! &asic personal e7emption B$%,%%%)5a7ale income "/$,"%%

5a7 on #$%,%%% $%,%%%11$,"%% 7 "%: ",$>%2ncome ta7 paale 6,$>%

44546

Solution!

'2 /%% %%%

Cost B#%% %%%)Fet income %% %%% 11. &.

-artner 2

-ersonal income 6% %%%E7penses B"% %%%)

Partner 7

Personal in#ome 89 999E(enses ;9 999<

=9 999A**: S!are >99 999 ?$6< ;99

999 ;=9

999Personal eem(tion 69

999< Taable In#ome ;;9

999In#ome ta P>;699

4@$ DLess: &it!!ol*ing ta

;9999<In#ome ta still *+e

P;;699 46$ B


18/22

$% %%% Add! Share B%% %%% O.$) #%% %%%

#$% %%%-ersonal e7emption B$% %%%)5a7ale 2ncome #%% %%%2ncome ta7 -"4$%% 1#. &(ess! withholding ta7 B#%%%%)2ncome ta7 still due -14$%% 1. C

45;4

S8(*528F !

TAXATION OF ESTATE AND TRUST

1. 9.


19/22

@alue to include in the gross estate -1%%,%%%

#. 9.(and -#%%,%%%House B1,%%%,%%%;#) $%%,%%%5otal -4%%,%%%

". A.Computation of the income ta7 of the estate!'ross income of the estate #,%%%,%%%(ess! E7penses 1,%%%,%%%'ross 2ncome 1,%%%,%%%(ess! E7emptions #%,%%% Special 9eduction!

Amount given to -aul $%%,%%% $#%,%%%Fet 2ncome 6%,%%%

2ncome ta7 due B$"#:) #$%,%%% $%,%%%#"%,%%% 7 "%: />,%%%

2ncome ta7 due 11>,%%%

. C.Computation of the income ta7 of -aul

'ross compensation income "%%,%%%

Add! Amount received from the estate $%%,%%%

5otal 6%%,%%%

(ess! -ersonal e7emptions $%,%%%

Fet ta7ale income 6$%,%%%

2ncome ta7 due B$"#:) $%%,%%% 1#$,%%%"$%,%%% 7 "#: 11#,%%%

2ncome ta7 due #"4,%%%

$. &.Computation for ChristianCompensation 2ncome 6$,%%%

Add! Share from net income of coownership "%,%%%5otal 11$,%%%(ess! -ersonal E7emptions $%,%%%

Fet 5a7ale income /$,%%%2ncome ta7 due 4,4$%

Computation for -aulCompensation 2ncome /$,%%%

Add! Share from net income of coownership "%,%%%5otal >$,%%%(ess! -ersonal E7emptions $%,%%%Fet 5a7ale income $,%%%2ncome ta7 due ,4$%


20/22

/. A.Computation of the income ta7 of the estate!'ross 2ncome 1,%%%,%%%(ess! E7emptions #%,%%% Special 9eduction!

Amount given to Fand #%%,%%% Amount given to Gc #%%,%%% #%,%%%

Fet 2ncome $6%,%%%

2ncome ta7 due B$"#:) $%%,%%% 1#$,%%%6%,%%% 7 "#: #$,/%%

2ncome ta7 due 1$%,/%%

Computation of the income ta7 of Fand

'ross compensation income ##$,%%%

Add! Amount received from the estate #%%,%%%

5otal #$,%%%


Additional e7emption $%,%%%

Fet ta7ale income "#$,%%%

2ncome ta7 due B$"#:) #$%,%%% $%,%%%

4$,%%% 7 "%: ##,$%%2ncome ta7 due #"4,%%%

Computation of the income ta7 of GC!

'ross compensation income 16%,%%%

Add! Amount received from the estate #%%,%%%

5otal "6%,%%%


Additional e7emption $%,%%%

Fet ta7ale income #6%,%%%

2ncome ta7 due B$"#:) #$%,%%% $%,%%%


21/22

"%,%%% 7 "%: >,%%%2ncome ta7 due $>,%%%

4. A.Computation of the income ta7 due of the trust'ross 2ncome ",%%,%%%(ess! 9eduction for!

E7penses 1,%%%,%%%9istriution of income to eneficiar /%%,%%%2ncome for the enefit of the eneficiar $%,%%%E7emption #%,%%% 1,/4%,%%%5a7ale income 1,4"%,%%%2ncome ta7 $16,/%%

Computation of income ta7 due of the &eneficiaries

'ross 2ncome! 2ncome received from the trust /%%,%%%

-ament of health and hospitaliJation and insurance premium $%,%%%

5otal income received /$%,%%%

-ersonal e7emption as a single ta7paer $%,%%%

5a7ale 2ncome /%%,%%%

2ncome ta7 1$4,%%%

6. A.2ncome ta7 of two 5rusta.)

5rust 1 5rust # &20 Consolidation

'ross 2ncome 6#%,%%% 1,%%%,%%%(ess! E7penses $%,%%% /#%,%%%Fet income "4%,%%% "6%,%%% 4$%,%%%(ess! E7emption #%,%%% #%,%%% #%,%%%

Special 9eduction! Amount given to Christian "%,%%% #%,%%% $%,%%%

5a7ale income "#%,%%% "%,%%% /6%,%%%

2ncome 5a7 41,%%% 44,%%% 16#,/%%

>. A.5rust 1 B"#%,%%%;//%,%%% 7 16#,/%%) 66,$"".""

5rust # B"%,%%%;//%,%%% 7 16#,/%%) >,%//./4

(ess! -ament 41,%%% 44,%%%


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