FMCT310-Exclusion from Gross Income

Mr. X was insured in an life insurance with his daughter Ms. Y, as the irrevocable beneficiary. Ms. Y was paid the proceeds when Mr. X died. The proceeds constitutes

• a taxable income subject to regular income tax

• an exclusion from gross income

• a taxable income subject to capital gain tax

• a taxable income subject to final tax

A policy holder who outlived the policy and received a cash surrender value of premiums paid is

• taxable the entire amount received

• taxable in the amount representing a return of premiums

• taxable in the excess of amount received over the premiums paid

• not taxable in the entire received

Which is not a requisite of exemption of a retirement benefit plan?

• 10 years of employment

• The employer maintains a reasonable benefit plan

• The retiree must be a senior citizen

• First time availment of retirement exemptions

Which is not an item of exclusion of gross income

• SSS benefits

• Income of government-owned and controlled corporations

• Income of government and its political subdivisions

• Income of foreign government governmnets

Which is not an acceptable grounds for exemption of termination pay?

• mass employee lay-off

• closure of employer's business

• grave misconduct and neglect of duty

• retrenchment of employers' business

On December 25, 2014, Mr X was terminated by his employer at age of 60 due to failing eyesight. He joined the company in February 2006 and has since worked as treasurer of the company. Is Mr. X retirement pay exempt from income tax?

• Yes, because his termination was beyond his control

• No, because he was employed for less than 10 years

• Yes, because he is over 50 years old

• No, because the employee is already a senior citizen

Mr. X was hurt in a bus accident. He received a total indemnity of P800,000 from the insurer of the bus company. Mr. X paid P250,000 in hospital bills due to the accident. Compute the total amount to be excluded in the gross income.

• 0

• 250,000

• 550,000

• 800,000

At the age of 54. Mr. X was awarded a retirement gratuity of P2,000,000 for her 30 years of service in ABC Co.. The employer's retirement benefit plan was with an employee participation feature where Mrs. X contributed a total premium of P800,000 in the fund. Mrs. X also received P500,000 benefit from SSS.

How much is excluded in the gross income

• 1,700,000

• 1,300,000

• 800,000

• 2,500,000

Mrs. X retired from the government after 30 years of service at the age of 55. He received a total retirement pay of P1,800,000 plus P400,000 GSIS benefits.

How much is excluded from gross income

• 0

• 400,000

• 2,200,000

• 1,800,000

Mr X received the following during the year;

Inherited properties: 200,000

Income from inherited properties , before inheritance 50,000

Income from inherited properties, after inheritance 30,000

Donated properties 100,000

How much is taxable income of Mr X for the year

• 380,000

• 80,000

• 30,000

• 50,000