1.

The following are the requirements to exempt retirement pay due to old age from income
tax, except
a. The retiree must be a senior citizen
b. The retirement program is approved by the BIR
c. The retirement pay should have been availed of for the first time
d. The retiree should have been employed for atleast 10 years

2. Any person required to file a tax return, statement or document shall be registered and
assigned a TIN. What does TIN mean?
a. Tax informers number
b. Tax identification number
c. Temporary identification number
d. Tax information number

3. Anne Lapada, a student activist, wants to impugn the validity of a tax on text messages.
Aside from claiming that the law adversely affects her since she sends messages by
text, what may she allege that would strengthen her claim to the right to file a taxpayer’s
suit?
a. That she is entitled to the return of the taxes collected from her in case the court
nullifies the tax measure.
b. That tax money is being extracted and spent in violation of the constitutionally
guaranteed right to freedom of communication.
c. That she is filing the case in behalf of a substantial number of taxpayers.
d. That text messages are an important part of the lives of the people she represents.

4. Double taxation in its general sense means taxing the same subject twice during
the same taxing period. In this sense, double taxation
a. violates substantive due process.
b. does not violate substantive due process.
c. violates the right to equal protection.
d. does not violate the right to equal protection.

5. Passive income includes income derived from an activity in which the earner does not
have any substantial participation. This type of income is
a. usually subject to a final tax.
b. exempt from income taxation.
c. taxable only if earned by a citizen.
d. included in the income tax return.

6. Mr. A was preparing his income tax return and had some doubt on whether a commission
he earned should be declared for the current year or for the succeeding year. He sought
the opinion of his lawyer who advised him to report the commission in the succeeding
year. He heeded his lawyer’s advice and reported the commission in the succeeding year.
The lawyer’s advice turned out to be wrong. In mr. A’s petition against the BIR
assessment, the court ruled against Mr. A. Is mr. A guilty of fraud?

a. Mr. A is not guilty of fraud as he simply followed the advice of his lawyer
b. Mr. A is guilty of fraud, he deliberately did not report the commission in the current
yearwhen he should have done so
c. Mr. A’s lawyer should pay the tax for giving the wrong advice
d. Mr. A is guilty for failing to consult his accountant

7. Which of the following properties of A who died April 19, 2016 is subject to Vanishing
deduction?
Property 1- Car purchased 3 years ago from his father
Property2- Land inherited from his mother in 2013 the estate tax thereon is not yet paid
Property 3-Donation from his bestfriend in 2012
Property 4- Community property inherited before marriage from his grandfather who died
April 18, 2011
Property 1 Property 2 Property 3 Property 4
 a. No Yes Yes No
b. No No Yes No
c. Yes No No Yes
d. Yes Yes No No

8. What would be the amount to be deducted in the gross estate of a decedent whose
collectible sum from a debtor is P100,000 and the same debtor was subsequently declared
by the court as insolvent for having total liabilities of P400,000 and total properties of
P80,000?
a. P100,000 b. P64,000 c. P60,000 d. P80,000

9. Which of the following is subject to VAT?

a. Importation of personal or household effects belonging to the residents of the
Philippines returning from abroad and non-resident citizen coming to resettle in the
Philippines where such goods were subjected to custom duties
b. Importation of passengers or cargo vessels including engine, equipment and spare parts
thereof for domestic or international transport operations for the year 2015
c. Importation of fuel, goods and supplies by person engaged in international shipping or air
transport operations
d. Sale of real property nit primarily held for sale to customers or held for lease in the ordinary
course of business

10. The books of account may be kept in the following language except:
a. Native language
b. Spanish
c. English
d. Chinese or Japanese

11. In case a person who is not Vat-registered issues an invoice or receipts showing his TIN,
followed by word “VAT”, the surcharge shall be:
a. 20% c. 50%
b. 25% d. None

12. ABC Corporation, to improve productivity, negotiated productivity incentive program

wherein the employees will receive productivity bonus equivalent to 40% of production
cost savings measured by an independent expert. ABC Corporation requires employees
to undergo studies through an “employee advancement study program” with the TESDA.
All employees who finished their special studies are required to remain at ABC
Corporation for a period of not less than 2 years. The following were determined during
the year;
Total distributable productivity bonus - Php 1,000,000
Cost of Special Studies:
Supervisory employees 500,000
Rank & file employees 1,500,000 2,000,000
Total Php 3,000,000
The allowable deduction for the benefits given is
a. Php 4,500,000
b. Php 4,250,000
c. Php 3,000,000
d. Php 3,750,000

ANSWER : B

Total distributable productivity bonus P1,000,000

Cost of special studies
Supervisory employees 500,000
Rank & file employees 1,500,000
Special additional deductions
 Productivity bonus (P1,000,000 x 500,000
50%)
Special studies (rank & file) (P1,500,000 x __750,000 P4,250,000
50%)
13. ABC Corporation installed a lactation station for its nursing employees. ABC Corporation
secured a “Working Mother-Baby Friendly Certificate” from the Department of Health. It
incurred the following costs:
Remodelling of a space for the lactation station - Php 100,000
Tables and comfortable chairs 60,000
Manual and electric breast pumps 12,000
Supplies (sterile milk containers, soaps and others) 10,000
Refrigerator 20,000
ABC Corporation may claim as part of deduction
a. Php 202,000
b. Php 102,000
c. Php 404,000
d. Php 303,000

ANSWER : C

Remodeling of a space for lactation station P100,000

Tables and chairs 60,000
Manual and electric breast pumps 12,000
Supplies 10,000
Refrigerator __20,000 P202,000
Special itemized deduction (P202,000 x __202,000 P404,000
100%)

14. ABC Corporation entered into a memorandum of agreement with Andres Bonifacio High
School, a public secondary school, by contributing its services to the “Adopt a School
Program”, a priority program designated by the NEDA. The agreed value fixed in the MOA
for the construction of the public school building was Php 2,000,000. ABC Corporation
was able to complete the building at total cost of Php 1,600,00. ABC Corporation shall be
allowed to deduct
a. Php 2,000,000
b. Php 1,600,000
c. Php 3,000,000
d. Php 2,400,000

ANSWER : D

Regular itemized cont. expense P1,600,000

Special itemized cont. expense (P1,600,000 x ___800,000 P2,400,000
50%)

15. ABC Corporation employs both regular and senior citizen employees and paid the
following compensation:

Regular employees - Php 800,000

Senior citizen employees:

a. With salary grade above poverty level - Php 200,000
b. With salary grade below poverty level - Php 100,000

The deductible compensation expense is

a. Php 1,100,000
b. Php 1,145,000
c. Php 1,115,000
d. Php 1,120,000
 ANSWER : C

16. Using the above information, except that 20% of the regular employees are persons with
disability receiving a total compensation of Php 160,000, the deductible compensation
expense of the corporation is
a. Php 1,178,000
b. Php 1,155,000
c. Php 1,152,000
d. Php 1,192,000

ANSWER : B

Regular employees (P800,000 – P640,000

P160,000)
Regular employees with disability 160,000
Senior citizen (P200,000 + P100,000) 300,000
Additional compensation expense :
Senior citizen (P100,000 x 15%) 15,000
Person with disability (P160,000 x 25%) __40,000 P1,155,000
17. On April 19, 2015, Mr. A donated 1,000 shares of stock of ABC Corporation. ABC
Corporation shares are listed in the stock exchange. The following are the trading prices
of each share on April 19, 2015:
Opening price - Php 800
Highest trading price - 880
Lowest trading price - 760
Average trading price - 820
Last trading price - 840
The gross gift is
a. Php 820,000
b. Php 880,000
c. Php 800,000
d. Php 840,000

ANSWER : D
18. The importation of the following is exempt from VAT, except
a. grapes, apples and oranges
b. poultry and livestock
c. race horse, fighting cocks and zoo animals
d. rice, corn and coffee beans

ANSWER : C

19. ABC Transport Corporation has land, sea and air transport operations. To improve its
services, which of the following importation in the year 2015 is subject to vat?
a. 20 units of air-conditioned buses
b. 12 units of life-saving, safety and rescue equipment for shipping transport operation
c. 10 airplanes
d. 5 ships

ANSWER : A

20. A, a vat taxpayer made a Php 100,000 sales to the government invoiced at Php 112,000
inclusive of output vat. A purchased the same for Php 90,000, net of Php 10,800 input vat.
The government effected payment, net of the 5% final vat. The entry to record the sale to
the government is
a. Cash Php 107,000
Standard Input Vat 5,000
Sales Php 100,000
Output vat 12,000
 b. Cash Php 100,000
Standard Input Vat 5,000
Output Vat 7,000
Sales Php 100,000
Output vat 12,000

c. Cash Php 100,000

Standard Input Vat 5,000
Sales Php 100,000
Output vat 5,000

d. Cash Php 106,400

Standard Input vat 5,600
Sales Php 100,000
Output vat 12,000

ANSWER : A

21. Using the above information, the actual input vat that will be charged to cost or expense
is
a. Php 3,800
b. Php 5,000
c. Php 7,000
d. Php 2,000

ANSWER : A

22. The ABC Corporation, a vat registered taxpayer sold to spouses H, a senior citizen and
W a person with disability, as follows (based on menu prices):
H W
2-pieces spicy chicken Php 150 Php 150
Siomai special 64
Sago – gulaman 64
Mushroom chicken soup 100 100
Tofu 64
Steamed kangkong 64
Buko pandan 70 70
Totals Php 448 Php 448

The output tax due is (year 2015)

a. Php 38.40
b. Php 48
c. Php 43.01
d. P0

ANSWER : A

Sale to :
Senior citizen Exempt
P W D (P448 ÷ 112%) x 80% x 12% __38.40 P38.40

23. A, a VAT registered person had the following data for April 2015 (vat not included):
a. Export sale of feeds for animals
i. For human consumption P 1,500,000
ii. For race horses and fighting cocks 500,000
b. Domestic sale of feeds for animals
i. For human consumption 750,000
ii. For race horses and fighting cocks 250,000
 c. Input tax which cannot be directly attributed to
any of the above sales
100,000
The output tax for April is
a. P30,000
b. P90,000
c. P60,000
d. P120,000

ANSWER : A

Race horses + fighting cocks P250,000

___x 12% P30,000

24. Using the above data, the vat still due (excess input tax) is
e. (P45,000)
f. (P20,000)
g. (P70,000)
h. P5,000

ANSWER : A

Output tax P30,000

2,250,000 _75,000 (P45,000)
Less : Input tax ( 3,000,000 𝑥 100,000)

25. Which of the following is not considered as transaction deemed sale?

a. Transfer, use or consumption not in the ordinary course of business of goods or properties
originally intended for sale or for use in the course of business
b. Distribution or transfer to shareholders or investors as share in the profits of the vat-
registered person or to creditors in payment of debt
c. Consignment of goods if actual sale is not made within 60 days following the date such
goods were consigned
d. Retirement from or cessation of business, with respect to capital goods existing as
of such retirement or cessation

ANSWER : D
26. Federico, a Filipino citizen, migrated to the United States some six years ago and got a
permanent resident status or green card. He should pay his Philippine income taxes on
a. the gains derived from the sale in California, U.S.A. of jewelry he purchased in the
Philippines.
b. the proceeds he received from a Philippine insurance company as the sole beneficiary of
life insurance taken by his father who died recently.
c. the gains derived from the sale in the New York Stock Exchange of shares of stock
in PLDT, a Philippine corporation.
d. dividends received from a two year old foreign corporation whose gross income was
derived solely from Philippine sources.

27. A corporation may change its taxable year to calendar or fiscal year in filing its annual
income tax return, provided
a. it seeks prior BIR approval of its proposed change in accounting period.
b. it simultaneously seeks BIR approval of its new accounting period.
c. it should change its accounting period two years prior to changing its taxable year.
d. its constitution and by-laws authorizes the change
 28. Which among the following circumstances negates the prima facie
presumption of correctness of a BIR assessment?
a. The BIR assessment was seasonably protested within 30 days from receipt.
b. No preliminary assessment notice was issued prior to the assessment notice.
c. Proof that the assessment is utterly without foundation, arbitrary, and
capricious.
d. The BIR did not include a formal letter of demand to pay the alleged
deficiency.

29. On March 30, 2005 Miguel Foods, Inc. received a notice of assessment and a letter of
demand on its April 15, 2002 final adjustment return from the BIR. Miguel Foods then
filed a request for reinvestigation together with the requisite supporting documents on
April 25, 2005. On June 2, 2005, the BIR issued a final assessment reducing the amount
of the tax demanded. Since Miguel Foods was satisfied with the reduction, it did not do
anything anymore. On April 15, 2010 the BIR garnished the corporation's bank deposits
to answer for the tax liability. Was the BIR action proper?
a. Yes. The BIR has 5 years from the filing of the protest within which to collect.
b. Yes. The BIR has 5 years from the issuance of the final assessment within which
to collect.
c. No. The taxpayer did not apply for a compromise.
d. No. Without the taxpayer’s prior authority, the BIR action violated the Bank Deposit
Secrecy Law

30. A car dealer could not pay his taxes on sales. The dealer delivered several units of the
car to the BIR in payment of the taxes. Which of the following statements is correct?
a. This is a valid payment of the tax
b. This is in effect a collection of the tax by distraint
c. This is a valid forfeiture of property
d. This is not a valid procedure for collection of the tax

31. A donation was made on April 15, 2010. The donor’s tax return was filed on May
30,2011. The assessment was sent on June 1, 2013 which was protested
administratively by the taxpayer by filing a request for reconsideration on June 15, 2013.
When is the last day for the BIR to decide on the request for reconsideration?
a. July 15, 2013
b. August 14, 2013
c. December 12, 2013
d. Cannot be determined, date of submission of documents not given

32. Vanderwoodsen is a radio-TV broadcasting franchise grantee. The previous year, its
gross receipts did not exceed P10,000,000. In the first month of the current year, it had
the following data:
Gross receipts, sale of airtime P2,000,000
Payments received from user of radio station’s communications
facilities for overseas communications 500,000
Business expenses 700,000
How much was the franchise tax due?
a. P75,000 c. P50,000
b. P60,000 d. P40,000

33. Based on the above problem, how much was the overseas communications tax?
a. P250,000 c. P75,000
b. P200,000 d. P50,000

34. A PEZA registered enterprise for the year 2017 provided the following:
Gross Income 11,250,000
Allowable Deductions 5,650,000
Income 5,600,000
The income tax due for the year?
a. 1,680,000 c. 562,500
b. 280,000 d. Exempt

35. The National Economic Development Authority in coordination with Board of Investment
gave tax incentives to preferred areas of activities, except?
a. Business Process Outsourcing
b. Electronic Industry
c. Renewable energy
d. Medical Tourism

36. The Philippines adheres to promote small scale business as essential to country’s
economic development since the government gave tax exemption for incomes
generated from its activities by Micro Business Enterprises. What, is therefore, a “Micro
Business Enterprise”?
a. Any business engaged in production, processing or manufacturing of products or
commodities, including agro-processing, trading and services whose total assets
excluding loans and lands not exceeding Php 3,000,000
b. Any business engaged in production, processing or manufacturing of products or
commodities including agro-processing, trading and services whose total assets including
loans and lands not exceeding Php 3,000,000
c. Any business engaged in production, processing or manufacturing of products or
commodities, including agro-processing, trading and services whose total capitalization
not exceeding P3,000,000.
d. Any business engaged in production, processing or manufacturing of products or
commodities, including agro-processing, trading and services whose total
capitalization excluding lands not exceeding P3,000,000

37. What are special tariff and duties impose by the Bureau of Customs?
a. Compound duty
b. Alternative Duty
c. Specific duty
d. Discriminatory duty

38. Which is a function of tariff commission?

a. Border control to prevent entry of smuggled goods
b. Facilitation and security of international trade and commerce through informed
compliance program
c. Study the impact of tariff policies and programs on national competitiveness and
consumer welfare
d. Simplification and harmonization of custom procedures to facilitate movement of goods of
international trade

39. An individual taxpayer, single, has the following data for the current year:
Ordinary income P150,000
Long term capital gain 40,000
Short term capital loss 10,000

How much is the net taxable income?

a. P180,000
b. P160,000
c. P140,000
d. P110,000

40. Tax credit for foreign tax paid is allowed on

a. Income tax paid by a non-resident citizen
b. Estate tax paid by a resident alien
c. Income tax paid by a non-resident alien
d. Donor’s tax paid by a non-resident alien
 41. A’s income tax liability for 2014 was P75,000. She filed the return and paid the total
amount due but not with the proper internal revenue district office on July 15, 2015. The
amount payable (ignoring compromise penalty)
a. 97,500 b. 112,500 c. 116,250 d. 135,000

42. DODC airlines, an international air carrier showed the following gross receipts:

Point of origin Destination Gross Receipts

Philippines China P2,000,000
Philippines Singapore 1,600,000
Singapore Japan 3,000,000

Twenty-five percent of the shipment from the Philippines to Singapore were later
shipped from Singapore to Japan. The percentage tax due is
a. 198,000 b. 186,000 c. 108,000 d. 96,000

(43-45) ABC, a domestic corporation usually bills its foreign branch at cost. ABC and the BIR
entered into an advanced pricing agreement which fixed ABC’s cross border pricing to its
foreign branch at 150% of cost. The following are provided for the year:
Philippines Branch
Sales through the branch:
(intra-company sales)
Selling price P10,000,000 P18,000,000
Cost of sales 10,000,000 10,000,000
Gross Income P0 P 8,000,000

Sales to another domestic corporation

Selling Price P8,000,000
Cost of sales 3,000,000
Gross Income 5,000,000
43. The gross income from the Philippines is
a. P5,000,000 b. P10,000,000 c. P13,000,000 d. P15,000,000

44. The total gross income of ABC is

a. P13,000,000 b. P18,000,000 c. P5,000,000 d. P10,000,000

45. If the foreign operation is not a branch but a foreign subsidiary incorporated abroad,
ABC’s gross income is
a. P5,000,000 b. 10,000,000 c. P9,000,000 d. 13,000,000

46. Money collected from taxation shall not be paid to any religious dignitary EXCEPT when
a. The religious dignitary is assigned to the Philippine army
b. It is paid by a local government unit
c. The payment is passed in audit by the COA
d. It is part of a lawmaker’s pork barrel

47. Which of the following is included in gross income?

a. Amounts received by insured as return of premium
b. Life insurance proceeds
c. Compensation for injuries or sickness
d. Share in net income of a general professional partnership

48. One of the following does not form part of the gross income?
a. Interest b. Royalties c. Annuities d. Gifts, bequest and devices

49. For the given year 2015 the following information from business:
Gross receipts from business 900,000
Rental Income 650,000
Operational Expenses 400,000
Real Properties 17,000,000
 Compute the individual community tax?
a. 1555 b. 1155 c. 5200 d. 5005
50. Assuming the above problem is a corporation, compute the corporate community tax?
a. 7920 b. 7560 c. 1120 d. 10500

51. Statement 1: Documentary stamp tax is a national tax

Statement 2: A document, without documentary stamp attached to it, could not be
accepted as evidence in court

a. True, True c. False, True

b. True, False d. False, False

52. Statement 1; The object of the documentary stamp tax is the document
Statement 2: Documentary stamp tax is an operating expense if related to the regular
conduct of business

a. True, True c. False, True

b. True, False d. False, False

53. In January 2011, the BIR issued a ruling that Clemen's vodka imports were not subject
to increased excise tax based on his claim that his net retail price was only P200 per 750
milliliter bottle. This ruling was applied to his imports for May, June, and July 2011. In
September 2011, the BIR revoked its ruling and assessed him for deficiency taxes
respecting his May, June and July 2011 vodka imports because it discovered that his net
retail price for the vodka was P250 per bottle from January to September 2011. Does the
retroactive application of the revocation violate Clemen's right to due process as a
taxpayer?
a. Yes, since the presumption is that the BIR ascertained the facts before it made its ruling.
b. No, because he acted in bad faith when he claimed a lower net retail price than
what he actually used.
c. No, since he could avail of remedies available for disputing the assessment.
d. Yes, since he had already acquired a vested right in the favorable BIR ruling.

54. Which of the following is not subject to excise tax?

a. Car c. Clothes
b. Perfume d. Jewelry

55. Quezon city imposes real property tax within its territorial jurisdiction over lands,
buildings and other improvements in accordance to Local Government Code shall:
a. Not exceed 1% of assessed value within its territorial jurisdiction where the property
is situated
b. Not exceed 1% of zonal value within its territorial jurisdiction where the owner
resides
c. Not exceed 1% of fair market value within its territorial jurisdiction where the property
is its owner may be found
d. Not exceed 2% of assessed value within its territorial jurisdiction where the
property is situated
56. In the preceding question, such real property will be tax based on
a. Owner’s tax declaration
b. Fair market values
c. Zonal values
d. Fair market values multiply by assessed level

57. A corporation gave the following cash benefits to a rank and file employee in 2012:
Uniform allowance P5,000
Rice subsidy 21,000
Monetized unused leave credits (12 days) 9,000
Safety achievement award 10,000
Medical allowance to dependents of the employee 2,000
Medical benefits 12,000
 13th month pay 16,000
Christmas bonus 16,000
The fringe benefits that shall be considered as part of taxable income is
a. 10,000 b. 9,000 c. 20,000 d. 19,000

58. The BIR seized P100,000,000 worth of smuggled goods as a result of the information
given by Mr. A. The reward given to Mr. A is subject to final withholding tax amounting to
a. P10,000,000 b. P1,000,000 c. P100,000 d. P10,000

59. DEF Corporation, due to financial incapacity requested that it be allowed to pay its income
tax liability per return for calendar year 2018, amounting to P1 million in four(4) equal
monthly installments starting April15, 2019. Its request has been duly approved. The tax
due for the second installment on May 15, 2019 is
a. P257,500
b. P254,167
c. P262,500
d. P300,000

ANSWER : A

Tax due – May 15, 2015 P250,000

Add : Interest (P750,000 x 12% x 1/12) __7,500 P257,500

60. When a BIR decision affirming an assessment is appealed to the CTA, the BIR's
power to garnish the taxpayer's bank deposits
a. is suspended to await the finality of such decision.
b. is suspended given that the CTA can reverse BIR decisions when prejudicial to the
taxpayer.
c. is not suspended because only final decisions of the BIR are subject to appeal.
d. is not suspended since the continued existence of government depends on tax
revenues

61. After the province has constructed a barangay road, the Sangguniang
Panglalawigan may impose a special levy upon the lands specifically benefitted by
the road up to an amount not to exceed
a. A. 60% of the actual cost of the road without giving any portion to the
barangay.
b. B. 100% of the actual project cost without giving any portion to the barangay.
c. C. 100% of the actual project cost, keeping 60% for the province and giving 40% to
the barangay.
d. D. 60% of the actual cost, dividing the same between the province and the barangay.

62. An individual taxpayer, other than a corporation may elect to pay the income tax due in
two equal installments if the tax due is
a. More than 100 b. more than 1,000 c. more than 2,000 d. more than 5,000

63. The second installment tax due in number 62 must be paid on or before?
a. October 15 under the TRAIN law
b. October 15 under the old law
c. July 15 under the TRAIN law
d. July 5 under the old law
64. In the year 2018, Mr. Mark Rosales has the following gross receipts:
Trucking Business, gross receipts P3,800,000
Lease of residential units (monthly rental is P15,000 per unit),
gross receipts 3,500,000
 Practice of accountancy, gross receipts 1,000,000

How much is the VAT-exempt gross receipts, assuming the taxpayer is VAT-registered?
a. P4,500,000 c. P1,000,000
b. 3,500,000 d. None of the choices

65 to 68 are based on the following: The decedent, resident alien, is a married man with a
surviving spouse with the following data dies on June 1, 2018:
Conjugal real properties (including a piece of 15,500,000
land valued at P500,000 transferred inter vivos)
Family Home 10,000,000
Exclusive Properties 2,000,000
Exclusive Deductions 1,000,000
Conjugal ordinary deductions
Funeral expenses 200,000
Judicial expenses 500,000
Other deductions 1,500,000 2,200,000
Medical expenses 700,000

65. Assuming the family home is exclusive property, the taxable net estate is:
a. 9,500,000 c. 2,750,000
b. 3,250,000 d. None of the choices

66. Using the same data in the preceding number, the estate tax due is:
a. P570,000 c. P165,000
b. P195,000 d. None of the choices

67. The estate tax return and estate tax shall be paid to avoid penalties on or before:
a. December 1, 2018 c. June 1, 2020
b. June 1, 2019 d. None of the choices

68. Using the same date above and assuming the family home is conjugal property
and the decedent dies on November 1, 2017, the taxable net estate is:
a. 21,300,000 c. 9,900,000
b. 10,400,000 d. None of the choices

69 to 71 are based on the following: The decedent is a non-resident citizen, unmarried, head
of the family, with the following data (dies May 14, 2017)
Real and Personal properties (consisting of piece of land valued P1,000,000; car valued
at P300,000; pieces of jewelry valued at P500,000 and bank deposit valued at P900,000 of
which 100,000 was transferred mortis causa to the government) 2,700,000
Funeral expenses 200,000
Other deductions (includes claims against an insolvent person amounting to P100,000 and
claims against the estate amounting to P50,000) 1,000,000

69. The total deductible amount of gross estate is:

a. 2,240,000 c. 1,140,000
b. 1,240,000 d. None of the choices

70. The taxable net estate is:

a. 1,560,000 c. 460,000
b. 560,000 d. None of the choices

71. Estate tax return to avoid penalties shall be filed on or before:

a. November 14, 2017 c. May 14, 2019
b. May 14, 2018 d. None of the choices
 72. What is the tax base for the imposition by the province of professional taxes?
a. That which Congress determined.
b. The pertinent provision of the local Government Code.
c. The reasonable classification made by the provincial sanggunian.
d. That which the Dept. of Interior and Local Government determined

73 to 77 are based on the following: Mr. A, CPA practitioner, is also employed with a
manufacturing company and receives the following for the year 2018:
Salary 1,500,000
Overtime 300,000
13th month pay 90,000
Deposit of client 200,000
Retainer fee of 50,000/month 600,000
Out of pocket charged to client 800,000
Capital gains, car 250,000
73. How much is Mr. A’s gross compensation income?
a. 1,800,000 c. 2,690,000
b. 1,890,000 d. 2,940,000

74. How much is Mr. A vatable transaction?

a. 1,600,000 c. 600,000
b. 1,850,000 d. 1,400,000

75. How much is subject to withholding tax?

a. 3,400,000 c.2,400,000
b. 3,200,000 d. 1,600,000

76. If Mr. A opt for 8% gross receipts tax, how much is his tax due?
a. 212,000 c. 498,000
b. 68,000 d. 698,000

77. If the taxable year was 2017, how much is his income tax due?
a. 813,000 c. 720,200
b. 797,000 d. 848,000

78. This is subject to final tax

a. Fringe benefits given to employees of a domestic corporation
b. Marriage fees, baptismal offerings received by a clergyman, evangelists or
religious workers for services rendered
c. Dividend income from a domestic corporation by a non-resident foreign
corporation
d. Share of an individual taxpayer from the distributable net income of a general
professional partnership.

79. If the amount of PCSO lotto winnings received by a resident citizen and resident
alien in 2018 is more than 10,000, what type of income tax will apply?
a. Final withholding tax on passive income
b. Capital gains tax
c. Basic income tax
d. Exempt

80. Bryan sold the following shares of stock domestic corporations which he bought
for investment purposes:
Listed and traded not listed and traded
Selling price 250,000 143,680
 Selling expense 12,000 3,680
Cost 118,000 80,000

Determine the capital gains tax assuming the sale was made in 2018
a. 9,000 c.3000
b. 9,552 d. 3184
81. F sold his residential house to Ms. P for P5M. its FMV when he inherited it was
P6M although its present FMV is P8M. the tax on above transaction is:
a. 360,000 CGT c. 30% donors tax
b. 480,000 CGT d. VAT

82. Mr. A, single received the following during the taxable year:
Proceeds of his life insurance paid at an annual premium of P15,000 within 25
years 2,000,000
Proceeds of his mother’s life insurance paid at annual premium of P10,000 within
20 years 1,000,000
House and lot inherited from his mother 4,000,000
Rent income from inherited properties 200,000

For income tax purposes, how much of the above items must be included in his
gross income?
a. 2,200,000 c. 200,000
b. 1,200,000 d. 1,825,000

83. Which of the following does not properly refer to a general professional
partnership? A GPP is one
a. That is registered as such with the securities and exchange commission and the
bureau of internal revenue
b. That is composed of individuals who exercise a common profession
c. That exclusively derives income from the practice of the common
profession
d. That derives professional income and rental income from property owned by it

84. A general professional partnership and its partners are subject to the following
rules, except
a. The general professional partnership is not subject to income tax
b. The partners shall be liable for income tax only in their separate or individual
capacities
c. Each partner shall report as gross income his distributive share in the partnership
net income
d. The share of the partner shall be subject to a creditable withholding tax of
10%

85. A domestic proprietary educational institution improved its library facilities by

adding a new wing to its old library building. The capital outlay on library
improvement, for income tax purposes, may be
a. Deducted in full at the time of completion of the improvement
b. Capitalized or expensed outright at the option of the school owner
c. Capitalized and depreciated over the estimated life of the improvement
d. Capitalized or expensed outright at the option of the government
86. Joseph provided the following data on sale of his personal property sold in 2016
held by him for 15 months:
Cost 225,000
Mortgage assumed by the buyer 270,000
Installment collection schedule:
 -2016 67,500
-2017 67,500
-2018 45,000

How much is the income subject to income tax in 2016?

a. 56,250
b. 112,500
c. 225,000
d. None of the choices
87. Which of the following BIR forms is not a certificate of withholding?
a. 2316 c. 2319
b. 2307 d. 2322

88. Who makes revenue regulations?

a. Secretary of finance
b. Commissioners of Bureau of Internal Revenue
c. Board of Accountancy
d. House representatives

89. Which business is required quarterly submission of percentage tax return?

a. International carriage c. Overseas Communication
b. Banks d. Amusement Places

90. Statement 1: Under the TRAIN law, foreign currency denominated sale of goods
to a non-resident customer in the Philippines is subject to 0% VAT
Statement 2: Monthly lease of residential unit amounting to P15,000 is subject to
VAT
Statement 3: Input tax on purchases of capital goods, aggregate acquisition cost
of which exceeds P1M, can now be claimed in full upon acquisition.
a. True, True, True
b. True, False, True
c. False, True, False
d. False, False, False

91. Who are considered Top 5,000 individual taxpayers?

a. Income tax payment of last year amounted to 200,000
b. VAT paid or payable last year amounted to 100,000
c. Total sales or receipt for the year amounted to 10,000,000
d. Other percentage tax paid last year amounted at least 100,000

92. Mang Jose, a horse-owner, received gross winnings of P120,000 during the
current month. His tax on winnings should be:
a. 6,000 c. 18,000
b. 12,000 d. 24,000

93. Which of the following statements is not correct?

a. An irrevocable trust is subject to income tax
b. An irrevocable trust is taxed in the same manner as an individual taxpayer
c. Prior to 2018 taxable year, a taxable trust is allowed to claim personal exemption
of 20,000
d. An irrevocable trust is taxed at a rate of 30% of net taxable income

94. Namahinga nah died leaving an estate worth 10,000,000. The estate is under
administration. In 2017, the properties in the estate earned a gross income of
P600,000 and the estate incurred expenses of P150,000. Francis, one of the
heirs, received P100,000 and P120,000 from the 2016 and 2017 income of the
estate, respectively
 The income tax payable of the estate in 2017 is

a. 119,000 c. 68,000
b. 110,000 d. 59,000

95. Which of the following is a stranger to the donor? If the donee is the
a. Grandfather of the donor’s great grandfather
b. Granddaughter of the sister of the donor’s mother
c. Grandson of the donor’s half sister
d. Brother of the donor’s grandfather

96. Which of the following donations shall be subject to donor’s tax?

a. Donations to parish church
b. Donations of a foreign corporation of its own shares of stock to a resident
employee in the Philippines
c. Donation to an alumni association
d. Sale of capital asset for less than adequate and full consideration

97 to 98 are based on the following: Jose made the following gifts:

I. On June 1, 2017, P150,000 to Anton, his son, on account of his marriage

celebrated May 1, 2017
II. On July 10, 2017, a parcel of land worth P180,000 to his father, subject to the
condition that his father would assume the mortgage indebtedness of Jose in
the amount of P40,000
III. On September 30, 2018, P250,000 dowry to his daughter Dana, on account
of her scheduled marriage on October 25, 2018, and another wedding gift
worth P120,000 on November 23, 2018
97. How much were the total taxable net gifts as of July 10, 2017?
a. 290,000 c. 140,000
b. 280,000 d. None of the choices

98. How much were the total net gifts as of November 23, 2018?
a. 370,000 c. 350,000
b. 360,000 d. None of the choices

99. Where the National Government chooses to tax a particular area or activity the
local government is prohibited to tax the same is known as:
a. Non-encroachment of exclusive prerogative of congress
b. Tax is exclusively levied by congress
c. Inherent limitation of non-delegability
d. Principle of preemption

100. Which is not a requisite of substituted filing?

a. Only pertains to employees
b. There must be only one employer
c. The compensation tax was actually, correctly withheld and remitted to BIR
d. Applies only to single head of the family