Introduction to Transfer Taxation

Chapter Quiz

1. Which is subject to transfer tax?

a. Gratuitous Transfer c. Complex Transfers
b. Onerous Transfers d. A and C

2. Which is subject to transfer tax?

a. Sale c. Donation
b. Barter d. Loan

3. A property is transferred for less than full consideration when it is sold

a. above the fair value of the property
b. below the fair value of the property
c. at the fair value of the property
d. at any price which is deemed unacceptable to the seller

4. Gratuity is not characterized by

a. Absence of consideration
b. Presence of adequate consideration
c. Presence of inadequate consideration
d. A and C

5. Transfers for full or adequate consideration is subject to

a. Income Tax c. Both A and B
b. Transfer Tax d. Neither A and B

6. Transfer for inadequate consideration is subject to

a. Income Tax c. Both A and B
b. Transfer Tax d. Neither A and B

7. The transfer for adequate consideration is

a. Exempt from transfer tax
b. Exempt from income tax
c. Subject to Transfer Tax
d. B and C

8. The gratuitous component of a transfer for inadequate consideration is

a. Subject to income tax
b. Exempt from income tax
c. Exempt from transfer tax
d. A and B

9. Which is not a rationalization of transfer taxation?

a. Tax evasion c. State partnership
b. Tax recoupment d. All of these

10. Transfer tax is imposed to partially recover future reduction in income tax which will
arise from the split of income producing property to few or several taxpayers.
This statement describes what theory?
a. Tax evasion theory c. Benefit received theory
b. Tax recoupment theory d. Wealth distribution theory

11. The government enforces the transfer of property by donation and succession. By
exercising these privileges, the transferor must have to be taxed.
This statement describes which theory?
a. Tax evasion Theory c. Benefit received theory
b. Tax recoupment theory d. Ability to pay theory
12. The transfer of wealth should be taxed so that it will benefit the entire society.
This statement describes which theory?
a. State partnership theory
b. Wealth distribution theory
c. Ability to pay theory
d. Tax recoupment theory

13. Wealth accumulation could not be possible without the governments indirect
participation. The transfer of wealth should be subject to tax because it is just fair for the
government to take its just share on the wealth.
The statement describes
a. State partnership theory
b. Wealth distribution theory
c. Ability to pay theory
d. Tax minimization theory

14. Transfers can be structured in such a way to avoid payment of income tax. Thus, the
gratuitous component of transfer must be taxed.
The statement describes
a. Tax evasion theory c. Benefit received theory
b. Tax recoupment theory d. Ability to pay theory

15. Which is not a characteristic of transfer tax?

a. Privilege tax c. Local Tax
b. National tax d. Direct tax

16. Transfer taxes are not

a. Fiscal taxes c. Ad valorem taxes
b. Progressive taxes d. Transaction taxes

17. Transfer taxes are

a. Regressive taxes
b. Indirect taxes
c. Specific taxes
d. Revenue taxes

18. Which is subject to transfer tax?

a. Transferor c. Both transferor and transferee
b. Transferee d. None of these

19. Statement 1: All Philippine transfers are subject to transfer taxes

Statement 2: All foreign transfers are subject to transfer taxes
Which statement is generally correct?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement

20. Statement 1: The amount of transfer tax is dependent upon the value of the thing
transferred
Statement 2: Donors tax is imposed upon the properties of a decedent while estate tax is
imposed to a donor.
Which is incorrect?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement

21. Transfer tax on donation mortis causa applies at

a. Natural person c. Both A and B
b. Juridical person d. Neither A and B

22. Transfer tax on donation inter vivos applies to

a. Natural person c. Both A and B
b. Juridical person d. Neither A and B
23. Which is taxable on all transfers regardless of location?
a. Resident citizen c. non resident citizen
b. Resident alien d. all of these

24. Which is not subject to transfer tax on transfer of properties located abroad?
a. Resident citizen c. non resident citizen
b. Resident alien d. non resident alien

25. A non resident alien is

a. Exempted from transfer taxes
b. Subject to transfer tax on Philippine properties
c. Subject to transfer tax on global properties
d. Subject to transfer tax only on transfer of tangible properties

26. Which of the following may be exempt on transfer on the basis of reciprocity?
a. Resident alien c. Non resident alien
b. Non resident citizen d. B and C

27. The reciprocity exemption covers which properties?

a. Intangible personal property located abroad
b. Intangible personal property located in the Philippines
c. Tangible and intangible properties located abroad
d. Tangible and intangible properties located in the Philippines

28. Which of the following is an intangible personal property?

a. Franchise c. Bonds
b. Stocks d. All of these

29. Which of these is subject to tax only on transfer of properties situated in the Philippines?
a. A citizen of Japan residing in the Philippines
b. A citizen of the Philippines residing in Hong Kong
c. A citizen of America residing in Korea
d. A citizen of the Philippines residing in the Philippines

30. Which of these is taxable on global transfer of properties?

A. An American residing in the Philippines
B. A Filipino residing in Malaysia
C. A Sudanese residing in Bahrain
D. A Chinese residing in the Philippines
a. A and B ` c. C only
b. B and D d. A, B and D

31. Which is subject to donors tax?

a. Donation mortis causa
b. Donation inter vivos
c. Sale for an adequate consideration
d. Both B and C

32. Which is not a characteristic of a donation inter vivos?

a. Inspired by the generosity of the transferor
b. Inspired by the thought of death of the transferor
c. Zero consideration
d. Insufficiency of consideration

33. Which of these is a donation mortis causa?

a. Donation in contemplation of death
b. Donation to take effect upon death
c. Revocable donation pre terminated by death
d. All of these
34. Which of the following donations made during the lifetime of the donor is subject to
donors tax?
a. Donation inspired by motives associated with life
b. Donation made during the lifetime of the decedent inspired by the thought of the
decedents death
c. Donation made in the contemplation of death
d. All of these

35. Which of the following is not a motive associated with life?

a. To settle family dispute
b. To safe on transfer taxes
c. To see children financially independent
d. To relieve the donor of the burden of management of the property

36. Donation made on the decedents last will and testament is

a. A donation mortis causa
b. A donation inter vivos
c. Subject to income tax
d. Subject to donors tax

37. Which of the following forms of non-taxable transfers will not be subject to transfer tax?
a. Void transfer c. Incomplete transfer
b. Quasi transfer d. A and B

38. Which of the following forms of non taxable transfers may be subject to transfer tax n
the future?
a. Void transfer c. Incomplete transfer
b. Quasi transfer d. All of these

39. Which is incorrect regarding the taxation of incomplete transfers which are eventually
completed?
a. They are subject to estate tax
b. They are subject to donors tax
c. They are subject to both donors tax and estate tax
d. They are subject to either donors tax or estate tax

40. Which is a complete transfer?

a. Condition transfer
b. Transfer in contemplation of death
c. Irrevocable transfer
d. Transfer with reservation of certain rights until death

41. A conditional donation may be completed by

a. Fulfillment of the condition specified by the transferee
b. Waiver of the condition of the transferor
c. Lapse of the right to revoke
d. A and B

42. Conditional transfers and revocable transfers which are still pending completion at the
point of transferors death are
a. Donation inter vivos c. subject to estate tax
b. Subject to donors tax d. subject to income tax

GOOD LUCK