Taxation MCQ (21-30) Post under MCQ, Taxation at Monday, October 17, 2011 Posted by Schizophrenic Mind 21.

The municipal council passed an ordinance imposing an occupation tax or profession or occupation of a "plant accountant." A is the only person with such an occupation in the municipality. Which of the following is correct?

a. A can successfully challenge the validity of the ordinance as being discriminatory since he is the only adversely affected. b. The ordinance violates the constitutional rule of equality in taxation. c. The ordinance is a "class legislation" since it does not subject to occupation tax the other accountants. d. The ordinance is a valid exercise of the council's power to enact laws to raise revenue under the Local Government Code.

ANSWER: D

22. A non-resident alien donor cannot claim one of the following deductions from gross gift:

a. Encumbrance on a property donated which is assumed by donee b. Dowry c. Gift to the national government for public purpose d. A requirement by the donor to the donee, which would result in diminution of file property donated

ANSWER: B

23. Not a deduction from gross estate for purposes of determining net distributable estate

a. Vanishing deductions b. Actual medical expenses c. Losses d. One-half share of the surviving spouse on the net conjugal property

ANSWER: A

24. For purposes of computing minimum corporate income tax of a corporation engaged in the sale of services, cost of services means:

a. Salaries and employees' benefits of personnel directly rendering the service b. Cost of facilities directly utilized in providing the services c. Cost of supplies d. All of the above

ANSWER: D

25. The power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the Tax Code or other laws or positions thereof administered by the BIR is vested in the:

a. Regional Trial Court b. Court of Tax Appeals c. Secretary of Finance

d. Commissioner of Internal Revenue

ANSWER: D

26. The Secretary of Finance, upon accommodation by the Commissioner of Internal Revenue, issued a Revenue Regulation using gross income as the tax base for corporations doing business in the Philippines. Is the Revenue Regulation valid?

a. Yes, the Secretary of Finance has the power to issue Revenue Rules and Regulations b. Yes, gross income taxation over corporation is valid c. No, the Secretary of Finance has no power to amend the NIRC d. No, only the Commissioner of BIR has the authority to make revenue rules and regulations

ANSWER: C

27. Which of the following cases falls within the jurisdiction of the Court of Tax Appeals? Except:

a. Criminal action for violation of the NIRC b. Question of whether or not to impose a deficiency tax assessment upon a taxpayer c. Appeal from undisputed tax assessment d. Action for refund of real property tax

ANSWER: B

28. Which of the following losses is deductible?

a. Loss on wash sale b. Loss on merger c. Loss in transfer of property to a corporation solely for stock resulting in control d. Loss on transfer of property to a controlled corporation solely for stock

ANSWER: D

29. Interest income received by a foreign government of financial institutions organized by a foreign government from its Philippine bank deposits shall be

a. Subject to the 20% final tax on passive income b. Subject to 32% final tax starting year 2000 c. Exempt from Philippine income tax d. Subject to 5% tax on gross income allowed to PEZA-registered enterprises

ANSWER: C

30. One of the following inhabitants is not required to pay basic community tax

a. Engaged in business or occupation b. Owns real property with aggregate assessment value of one thousand pesos (P1,000) or more

c. Required by law to file an income tax return d. Diplomatic and consular representatives

ANSWER: D