THEORIES (1PT EACH) SHORT PROBLEMS (3PTS EACH)

1B P 21 C P 1 100,000.00
2C P 22 D P 2 350,000.00
3D P 23 B P 3 39,000.00
4B P 24 D P 4 Zero
5B P 25 C P 5 24,000.00
6D P 26 D P 6 33,136.00 or
7A P 27 D P 7 (2,488.50) or
8D P 28 D P 8 256,000.00
9B P 29 A P 9 250,000.00
10 B P 30 A P 10 1,440,000.00
11 A P 31 D P 11 540,000.00
12 D P 32 B P 12 1,490,000.00
13 D P 33 A P 13 290,000.00
14 A P 34 C P 14 1,490,000.00
15 A P 35 A P 15 1,480,000.00
16 A P 36 A P 16 379,500.00
17 A P 37 C P 17 59,000.00
18 D P 38 A P 18 2,175,500.00
19 C P 39 C P 19 16,000.00
20 B P 40 C P 20 4,225,500.00
21 15,000.00
22 10,000,000.00
23 13,000,000.00
24 10,000,000.00
25 1,400,000.00
 LONG PROBLEM (3PTS EACH)
P 1 5,207,617.65 P THEORIES 40
P 2 1,010,317.65 P SHORT PROBLEMS 75
P 3 210,000.00 P LONG PROBLEM 45
P 4 17,885,000.00 P TOTAL 160
P 5 300,000.00 P
33,135.48 P 6 1,089,750.00 P
(2,488.31) P 7 11,877,967.84 P
P 8 3,780.00 P
P 9 4,500,000.00 P
P 10 5,183,500.00 P
P 11 1,006,700.00 P
P 12 80,000.00 P
P 13 17,885,000.00 P
P 14 1,089,750.00 P
P 15 9,375,467.84 P
P
P
P
P
P
P
P
P
P
P
 1B 21 C
2C 22 D
3D 23 B
4B 24 D
5B 25 C
6D 26 D
7A 27 D
8D 28 D
9B 29 A
10 B 30 A
11 A 31 D
12 D 32 B
13 D 33 A
14 A 34 C
15 A 35 A
16 A 36 A
17 A 37 C
18 D 38 A
19 C 39 C
20 B 40 C
PROBLEM 1

Leasehold Improvement 2,400,000.00

Lessee 8 years
Lessor 4years 800,000.00
12 years

Annual Income from the leasehold

1 100,000.00

Total loss if the improvement was destroyed by fire 5 1/2 years after the date of lease contract
2 350,000.00

PROBLEM 2
Residential Lot 1
Capital Gains Tax 12,000.00

Initial Payment 50000

Percentage of IP to SP 25%
Contract price 200000
Instalment CGT 3,000.00

3 Capital Gains Tax Payable 39,000.00

4 Capital Gain Subject to regular income Tax Zero
5 Capital Gains tax deposited to the escrow acco 24,000.00

PROBLEM 3 Number of shares

Purchases-Feb 14 300
Purchases-Mar 11 200
Purchases-July 10 120
Total 620

Average Price per Share 103.55

6 Cost of Stocks Sold 33,136.00 or

Selling Price 26500

Cost 33,136.00
(6,636.00)
 7 Loss not recognized (2,488.50) or

PROBLEM 4
Tax Due 200,000.00
Surcharge 50,000.00
Interest 6,000.00
8 Total Amount Due 256,000.00

Tax Due 200,000.00

Surcharge 50,000.00
9 Total Amount Due 250,000.00

PROBLEM 5
Family Home 15,000,000.00
Residential Land-Phil 9,000,000.00
Amount subject to CGT 24,000,000.00
10 Capital Gains Tax Due 1,440,000.00

Residential Land-Phil 9,000,000.00

Amount subject to CGT 9,000,000.00
11 Capital Gains Tax Due 540,000.00

PROBLEM 6
Resident Citizen Non-Resident Citizen
Philippine peso deposit, gross 80,000.00 80,000.00
US Dollar Deposit, gross 1,200,000.00 -
Royalty-Phil 200,000.00 200,000.00
Winnings from Raffle 6,000.00 6,000.00
Dividends from Resident Foreign Corporation - -
Dividends from Domestic Corporation 4,000.00 4,000.00
Final Withholding Tax 1,490,000.00 290,000.00
12 13

PROBLEM 7

Resident Citizen-FWT Non-Resident Citizen-RIT

Gross Income, Philippines 2,000,000.00
Gross Income, USA
Gross Income, Japan
Dividends from San Miguel Corp 7,000.00
Dividends from Ford Motors, USA
Royalties, Philippines 16,000.00
Royalties, USA
Interest (other than from banks) 75,000.00
 Rent, land in USA
Other rent income 100,500.00
Prize, Contest in Manila 36,000.00
Total 59,000.00 2,175,500.00
17 18

PROBLEM 8
Selling Price 240,000.00
Cost (120,000.00)
Capital Gain 120,000.00

Initial Payment 50,000.00

Ratio of Intial Payment to Selling Price 20.83%

Contract Price 200,000.00

Installment Gain 30,000.00
Holding period 50%
21 Taxable gain-2018 15,000.00

PROBLEM 9
Hufflepuff-Philippines
to branch to another domestic corp
Selling Price 15,000,000.00 8,000,000.00
Cost (10,000,000.00) (3,000,000.00)
5,000,000.00 5,000,000.00

22 The Gross Income from the Philippines 10,000,000.00

23 The total gross income of Hufflepuff is 13,000,000.00
24 if foreign operations 10,000,000.00

PROBLEM 10

Sellingt Price 5,000,000.00

Cost (3,600,000.00)
25 Income 1,400,000.00
Income of the lessor

Apartment Principal Residence

Selling Price 300,000.00 Exempt
Cost (125,000.00) CGT Deposited in escrow
Commission (35,000.00) 24,000.00
Selling Expense (15,000.00)
Gain subj to RIT 125,000.00

Initial Payment 70,000.00

Percentage of IP to SP 23%
Contract price 250,000.00
Instalment Ordinary Gain 35,000.00

Total Cost
30,000
21,000
13,200
64,200.00

33,135.48

26500
33,135.48
(6,635.48)
 (2,488.31)

Resident Alien Domestic Corporation NRA-NETB

80,000.00 80,000.00 100,000.00
1,200,000.00 1,200,000.00 -
200,000.00 200,000.00 250,000.00
6,000.00 - 7,500.00
- - 12,000.00
4,000.00 - 10,000.00
1,490,000.00 1,480,000.00 379,500.00
14 15 16

Domestic Corporation-FWT Resident Citizen-RIT

2,000,000.00
500,000.00
1,000,000.00
-
150,000.00
16,000.00
100,000.00
75,000.00
 300,000.00
100,500.00

16,000.00 4,225,500.00
19 20

Branch

Selling Price 18,000,000.00

Cost (15,000,000.00)
3,000,000.00
 Residential Lot 2
Capital Gains Tax 36,000.00

Initial Payment 200000

Percentage of IP to SP 33%

CGT 36,000.00
if the taxpayer is a resident citizen

Income subject to Final Tax Final Tax rate

Prizes from Mrs. Philippines 500,000.00 20%
Winnings from raffle: Metro Supermarket 26,000.00 20%
Winnings from raffle: SM Hypermarket 7,500.00 20%
Dividends from Domestic Corporation 300,000.00 10%
Interest from FCDU 24,117.65 15%
Interest from bank-local currency-short term 750,000.00 20%
Royalties from E-Books-Philippines 600,000.00 20%
Lotto Winnings 6/42 3,000,000.00 20%
Income subject to Final Tax 5,207,617.65 Final Tax Due

Amount Subject to Capital Gains Tax Capital Gains Tax Rate

Sale of ML shares 185,000.00 15%
Sale of Vacation House 8,500,000.00 6%
Residential Lot 9,200,000.00 6%
Amount Subject to Capital Gains Tax 17,885,000.00 Capital Gains Tax Due

1 5,207,617.65
2 1,010,317.65
3 210,000.00
4 17,885,000.00
5 300,000.00
6 1,089,750.00
7 11,877,967.84
8 3,780.00
9 4,500,000.00
Final Tax Due Income subject to Regular income tax
100,000.00 Salary from Employment
5,200.00 Sale from merchandising business
1,500.00 Net revenue from construction business
30,000.00 Incentives given by client for evading tax
3,617.65 Prizes from singing competition
150,000.00 Rent Income received
120,000.00 Ranson Money
600,000.00 Dividends from Resident Foreign Corporation
1,010,317.65 Dividends from Non resident Foreign Corporation
Interest from Notes Receivable
Royalties from E-Books- USA
Capital Gains Tax Due Lotto winnings from Japan
27,750.00 Early Retirement Pay
510,000.00 Income from practice of profession
552,000.00 Recoveries of accounts receivable-allowed by BIR as deduction
1,089,750.00 Net Capital Gain Subject to RIT
Income subject to Regular income tax
 Capital Gain/(loss) subject to RIT
650,000.00 Sale of DOTA Shares 130,000.00
1,000,000.00 Sale of Toyota Car 75,000.00
1,000,000.00 Sale of Jewelry 5,000.00
250,000.00 Net Capital Gain Subject to RIT 210,000.00
6,500.00
231,578.95 Amount Subject to Stock Transaction Tax Stock Transaction tax
100,000.00 Sale of LOL shares 630,000.00 3,780.00
270,000.00
60,000.00 Cost of old residence 3,500,000.00
36,000.00 Additional Cost 1,000,000.00
155,000.00 Cost Basis of new principal residence 4,500,000.00
2,000,000.00
2,500,000.00
3,388,888.89 Capital Gains tax deposited in escrow account 300,000.00
20,000.00
210,000.00
11,877,967.84
Stock Transaction tax
if the taxpayer is a non-resident citizen

Income subject to Final Tax Final Tax rate

Prizes from Mrs. Philippines 500,000.00 20%
Winnings from raffle: Metro Supermarket 26,000.00 20%
Winnings from raffle: SM Hypermarket 7,500.00 20%
Dividends from Domestic Corporation 300,000.00 10%
Interest from bank-local currency-short term 750,000.00 20%
Royalties from E-Books-Philippines 600,000.00 20%
Lotto Winnings 6/42 3,000,000.00 20%
Income subject to Final Tax 5,183,500.00 Final Tax Due

Amount Subject to Capital Gains Tax Capital Gains Tax Rate

Sale of ML shares 185,000.00 15%
Sale of Vacation House 8,500,000.00 6%
Residential Lot 9,200,000.00 6%
Amount Subject to Capital Gains Tax 17,885,000.00 Capital Gains Tax Due

10 5,183,500.00
11 1,006,700.00
12 80,000.00
13 17,885,000.00
14 1,089,750.00
15 9,375,467.84
Final Tax Due Income subject to Regular income tax
100,000.00 Salary from Employment
5,200.00 Sale from merchandising business
1,500.00 Net revenue from construction business
30,000.00 Incentives given by client for evading tax
150,000.00 Prizes from singing competition
120,000.00 Rent Income received
600,000.00 Ranson Money
1,006,700.00 Dividends from Resident Foreign Corporation
Interest from Notes Receivable
Early Retirement Pay
Income from practice of profession
Capital Gains Tax Due Recoveries of accounts receivable-allowed by BIR as deduction
27,750.00 Net Capital Gain Subject to RIT
510,000.00 Income subject to Regular income tax
552,000.00
1,089,750.00
 Capital Gain/(loss) subject to RIT
650,000.00 Sale of Toyota Car 75,000.00
1,000,000.00 Sale of Jewelry 5,000.00
1,000,000.00 Net Capital Gain Subject to RIT 80,000.00
250,000.00
6,500.00 Amount Subject to Stock Transaction Tax Stock Transaction tax
231,578.95 Sale of LOL shares 630,000.00 3,780.00
100,000.00
112,500.00 Cost of old residence 3,500,000.00
36,000.00 Additional Cost 1,000,000.00
2,500,000.00 Cost Basis of new principal residence 4,500,000.00
3,388,888.89
20,000.00
80,000.00 Capital Gains tax deposited in escrow account 300,000.00
9,375,467.84
Stock Transaction tax
THEORIES

3. CHOICES ARE
a) It shall pay a capital gains tax of 30,000
b) It shall pay stock transaction tax of 1,200
c) It shall pay a capital gains tax of 15,000
d) It shall pay stock transaction tax of 12,000

LONG PROBLEM
V. Income from practice of profession (net of withholding)
3,050,000