SYSTEMS PLUS COLLEGE FOUNDATION, INC.

Angeles City
College of Business

TRANSFER AND BUSINESS TAXATION

FINAL EXAMINATIONS

Name: ______________________________ Section: _____ Score: ___ / 100

Instructions: Answer the following items and submit your file to patrick_cura2@yahoo.com on or before
1:00pm on March 24, 2017

1. Will there be an instance that tax refund can be denied by the BIR? Why or Why not? Explain your
answer. (15 points)
2. Are you in favor of lowering the personal income tax bracket by increasing VAT from 12% to 14%?
Expound your answer (15 points)

3 & 4 are based on the following

Purobuto, non-resident Japanese, died leaving the following:
Executive properties, Philippines P 560,000
Conjugal properties, Philippines 420,000
Conjugal properties, Abroad 1,820,000
Deductions claimed:
Funeral expenses 100,000
Judicial expenses 100,500
Unpaid expenses 150,500
Losses: occurring 3mos. After death due to fire 120,000
Donation mortis causa to Makati City Hall 100,000
Family Home (inc. above) 200,000
Standard deductions claimed 1,500,000

3. The taxable net estate is:

a. P410, 000 b. P516, 500 c. P596, 500 d. 526, 500

4. The taxable net estate if the descendant is a resident alien:

a. P 244,500 c. P 264, 500
b. P 170, 000 d. P 450,500

5. Mr. tuna, head of the family died on January 15, 2005, leaving the following properties and obligations:
House and lot in Makati, F. Home P 1,500,000
Personal Properties 1,500,000
Farm lot, USA 825,000
Claim against an insolvent debtor 225,000
Transfer in contemplation of death (gratuitous) 1,500,000
Transfer passing special power of appointment 75,000
Deduction Claimed:
Funeral Expenses 575,000
Judicial Expenses 67,000
Death benefits from employer 300,000
Unpaid mortgage on the farm lot 75,000
Medical expenses (included in the funeral
expense incurred within the 1 year period with receipts) 225,000

The farm lot was inherited 4 years ago by the decedent before his death with a value then P575,000 and a
mortgage indebtedness of P150,000.

The total deduction from the gross estate is:

a. P3,092,500 b. P3,363,398 c. P 3,982,500 d. P1,867,500

6. Based on the preceding number, the taxable net estate is:

a. P2,486,602 b. P4,982,500 c. P3,982,500 d. P2,757,500

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7. John sold his residential land in Manila to Sam. Its cost is P500,000 and has a fair market value of
P400,000 at the same time of sale. It was sold for P200,000. For donors tax purposes, which of the
following statements is correct?
a. there is taxable gift of 300,000
b. there is taxable gift of 200,000
c. the transfer is for insufficient consideration, hence, not subject to gift tax.
d. the transfer is subject to capital gains tax

8. Three of the following are exempt or excluded from the donors tax. Which is the exception?
a. 150,000 donation to non profit school
b. Donation of condominium in Hong Kong to a Filipina by a British nation not residing in the
Philippines
c. 10,000 cash given by a resident alien donor to his legitimate son who is getting married in the
Philippines
d. 20,000 cash given by a non-resident alien donor to his legitimate son who is getting married in
the Philippines to a Filipina.

9. Mr. and Mrs. Cruz gave the following conjugal donations:

Date Donee
7/15/05 Son on account of marriage on 8/20/04 100,000 with mortgage of 20,000
assumed by the done.
8/15/05 Daughter on account of marriage 8/1/04 160,000
10/22/05 Niece of Mrs. Cruz on account of marriage 11/20/05 60,000
11/22/05 Granddaughter on account of marriage 12/22/05 140,000

The combined donors tax payable by Mr. and Mrs. Cruz on 8/15/05 is:
a. 200 c. None
b. 400 d. 600

10. The tax payable by Mr. Cruz only on 11/22/05 is:

a. 9,000 c. 7,600
b. 1,400 d. 9,600

11. Mr. and Mrs. Reyes gave the following gifts out their conjugal property. March 15,2000 Land
valued at 200,000, mortgaged for 50,000 and 20,000 of which was assumed by the done, brother of Mr.
Reyes on account of his brothers marriage held last February 14, 2000.
The donors tax due on the gift is:
a. 27,000 c. 1,600
b. 54,000 d. 0

12. In addition to the above problem, if on April 15, 2000, Mr. and Mrs. Reyes donated a car in USA
worth P 395,000 to their daughter ( he paid 15,000 donors tax) but the car is exclusive property of Mr.
Reyes, and a conjugal car in the Philippines worth 300,000 to the son of Mr. Reyes by first marriage on
account of marriage last April 25, 1999. The donors tax due for Mr. and Mrs. Reyes shall be:
a. 21,500; 45,000 c. 22,100; 42,000
b. 7,912; 45,000 d. 8,600; 42,000

13. All are incorrect except one:

a. claims against insolvent person must be notarized to be deductible
b. losses must occur before decedents death to be deductible
c. allowable deduction for funeral expenses can never be more than the actual expenses
d. onerous revocable transfers are includible in the gross estate

14. Emong donated 100,000 cash to his daughter Baby on account of marriage, he is entitled to a 10,000
deduction or exemption if he is a:
a. Non-resident alien
b. Resident alien
c. Both resident and non-resident
d. A or b above

15. One of the following is not subject to 0-15% first donors tax rates:
a. A donation to the illegitimate child of the donors niece
b. A donation to the only brother of his paternal uncle

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 c. A donation to the only sister of his maternal aunt
d. A donation to the grandson of his fathers brother

16. Maximus died leaving the following:

Real property located in Italy
(w/100,000 mortgage) 840,000
Shares of stocks of foreign co. 300,000
Shares of stocks of domestic corp. 90,000
Life insurance proceeds Phil. 90,000
Franchise, Phil 600,000
If he is non-resident Filipino citizen residing in USA, the gross estate is
a. 780,000 c. 1,140,000
b. 1,920,000 d. 1,250,000

17. If he is non-resident Romanian in the above problem, the gross estate, assuming there is reciprocity
law is
a. 90,000 c. 180,000
b. 600,000 d. 0

18. Dina Nakahinga, Filipino, married, died on February 14, 200B. Assets declared and deductions
claimed by the estate are as follows:

Assets, conjugal
Family Home(House) Quezon City 800,000
Fishpond, Bulacan 1,000,000
Apartment, Manila 1,600,000
Shares of stock, Good Luck Co. domestic 600,000
Shares of stock, BX Inc., a foreign corporation
60% of the business is in the Phil. 400,000
Cash in Bank 100,000

Assets, Exclusive of Decedent

Family Home (lot), Quezon City 500,000

Deductions claimed
Funeral expenses 300,000
Family home deduction 1,300,000
Loss (decedent has a receivable from Mr. MAX,
A solvent debtor who absconded) 40,000
Liability (this represents unpaid subscription to 2000 shares
Of Tililing Co. acquired on February 10, 200A 200,000
Standard deduction (unitemized and undocumented) 1,000,000
Death benefits under RA 4917 300,000

The gross estate of Dina Nakahinga is:

a. 5,000,000 c. 2,620,000
b. 4,600,000 d. 5,540,000

19. In problem no. 18, the total allowable deductions from the gross estate is:
a. 1,100,000 c. 2,100,000
b. 2,300,000 d. 2,600,000

20. Baby Sales Corporation provided the following data for the first quarter of 200A, its first year as VAT
registered person:
Cash sales, total value 336,000
Open account sales 112,000
Consignment made ( exclusive of VAT)
January 1 - 200,000
February 15 150,000
Purchases of materials, net of VT 80,000
Value of inventory as of Jan. 1 of the year:
Purchased from VAT registered person 40,000
Purchased from non-VAT registered person 200,000

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 Purchases of VAT exempt goods 10,000
VAT paid on the above inventory 4,000

The VAT due is:

a. 37,000 b. 45,200 c. 57,600 d. 51,200

21. One of the following activities is not subject to VAT:

a. Movie house operators c. Pawnshops
b. Massage Parlor d. Parking lot operator

22. A building contractor provided the following data ( all figures are net of VAT )
Amount received from building 1 800,000
Advances received from building 2 400,000
Amount received from building 3 800,000
Receivable from building 4 1,000,000
Disbursements:
Services of contractors 500,000
Materials for construction 700,000
Imported material, landed cost 200,000
Other general and operating expenses 100,000
Note: The imported material was also subjected to 20,000 excise taxes.
The VAT due is:
a. 58,000 b. 20,000 c. 69,600 d. 72,000

23. Crocodile Trans, is a common carrier by land. During a particular quarter its receipts consist of the
following: ( Figures are net of any business taxes)
Transport of passengers 4,000,000
Transport of goods 5,000,000
Transport of cargoes 6,000,000
The total business taxes payable is:
a. 1,500,000 b. 450,000 c. 120,000 d. 1,440,000

24. Taxpayer operates a variety store but is not registered under the VAT system. His annual gross sales
during the year amounted to 550,000.
Which of the following is correct?
a. The taxpayer is subject to 3%
b. The taxpayer is subject to VAT
c. The taxpayer is subject to both taxes
d. The taxpayer is neither subject to VAT nor OPT

25. Make a matrix/summary on our VAT and OPT discussions (30 points)

Sometimes all you have to do is try something

And a whole new world of learning opens up for you.

--- Goodluck and Godbless on your next Accounting Journey---

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