BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS)

SUGGESTED ANSWERS

Chapter 16: DOCUMENTARY STAMP TAXES

CHAPTER 16

DOCUMENTARY STAMP TAXES

Problem 16 1
1. True
2. True
3. False the transaction.
4. False to be taxed against the party who is not exempt.
5. True
6. False 10 days from the close of the month
7. True
8. True
9. True
10. True
Problem 16 2
B
Documentary stamp tax to be paid (P1,000/P200) x P10 x P2

P 100

Problem 16 3
A
Documentary stamp tax to be paid ($5,000 x P40/P200) x P0.30

P 300

Problem 16 4
B
DST on first P5,000
DST on excess of the first P5,000 = (P395,000/P5,000) x P10
Total documentary stamp tax
Problem 16 5
C
Documentary stamp tax (P800,000/P1,000) x P15
Problem 16 6
D
DST on first P2,000
DST on excess of the first P2,000 = (P142,000/P1,000) x P1
Total
Multiply by
Total documentary stamp tax
Problem 16 7
Face value of the bonds
Divide by
Multiply by documentary stamp tax
Documentary stamp tax
Problem 16 8
Par value of the stock (P100 x 1,000 shares)
Divide by

P 20
790
P810

P12,000

3
142
P145
2
P290

P50,000
200
250
P 1.50
P
375

P100,000
200
500

Multiply by documentary stamp tax

Documentary stamp tax
Problem 16 9
Par value (P100 x 100 shares)
Divide by value
Multiply by documentary stamp tax
Documentary stamp tax
Problem 16 10
Face value of document
Divide by
Multiply by documentary stamp tax rate
Documentary stamp tax
Problem 16 11
Face value of document (P50 x $5,000)
Divide by
Multiply by documentary stamp tax rate
Documentary stamp tax
Problem 16 12
Insurance policy
Divide by
Multiply by documentary stamp tax rate
Documentary stamp tax

P
2.00
P 1,000

P10,000
200
50
P 1.50
P
75
P100,000
200
500
P
0.30
P
150

P250,000
200
1,250
P
0.30
P
375

P1,000,000
200
5,000
P
0.50
P
2,500

Problem 16 13
Annual insurance premium
Divide by

Multiply by documentary stamp tax rate

Documentary stamp tax

P
P

5,000
4
1,250
0.50
625

Problem 16 14
The documentary stamp tax on the affidavit of loss is P15.00.
Problem 16 15
The documentary stamp tax would be P10.00.
Problem 16 16
Sales price
Less: Unpaid mortgage balance
Balance
Less: Amount not subject to DST
Balance
Divide by
Multiply by

P1,000,000
200,000
P 800,000
1,000
P 799,000
P
1,000
799
P
15

Documentary stamp tax

Add: DST for the first P1,000
Total documentary stamp tax

Problem 16 17
Documentary stamp (P1,000,000/ P1,000) x 15
Surcharge (P15,000 x 25%)
Interest (from June 25 to July 25) (P15,000 x 20%)
Total payable

P
P

11,985
15
12,000

P15,000
3,750
250
P19,000

Problem 16 18
a. P 0
b. P 0
See page 503 of the textbook. Deeds of property donated to the government are exempt from
documentary stamp tax.