WorksheetsItemized Deductions
Total questions: 10
Worksheet time: 5mins
Which of the following statements is true?
Payments which constitutes bribes, kickbacks, and others of similar nature which are necessary to realize the profit are allowed as deduction from gross income
The taxes which are deductible from gross income include the taxes, interest and penalties incident to tax delinquency
Deductions are amounts allowed by the Tax Code to be deducted from gross income to arrive at the income tax liability of a taxpayer.
Losses from wagering transactions shall be allowed only up to the extent of the gains from such transactions.
No deductions shall be allowed where the transaction is between “related taxpayers” for:
1. Losses from sales or exchanges of property
2. Interest expense
3. Bad debts
1 and 2 only
2 and 3 only
1 and 3 only
1, 2 and 3
Which is not a requisite of a deductible loss?
It must be sustained by the taxpayer in the current year.
It must be reported to the BIR within 45 days from the occurrence of the loss.
It must be compensated by insurance or indemnity contracts.
It must pertain to a property connected to the trade, business or profession of the taxpayer.
Bad debt expenses include
Uncollectible debts due to the taxpayer.
Securities becoming worthless.
Both A and B
Neither A nor B
Wagering losses are deductible
In full
To the extent of capital gains
Up to the extent of gains on wagering transactions
Are treated as deferred charge subject to amortization over 60 months.
A taxpayer engaged in business incurred a partial loss of property as follows:
Book value of the asset at the time of loss
Asset 1 P200,000
Asset 2 P200,000
Cost to restore the property back to its normal operating condition
Asset 1 P120,000
Asset 2 P300,000
Insurance recovery
Asset 1 P50,000
Asset 2 None
Salvage
Asset 1 None
Asset 2 P40,000
The deductible loss for asset 1 is
P120,000
P70,000
P30,000
P80,000
A taxpayer engaged in business incurred a partial loss of property as follows:
Book value of the asset at the time of loss
Asset 1 P200,000
Asset 2 P200,000
Cost to restore the property back to its normal operating condition
Asset 1 P120,000
Asset 2 P300,000
Insurance recovery
Asset 1 P50,000
Asset 2 None
Salvage
Asset 1 None
Asset 2 P40,000
The deductible loss for asset 2 is
P300,000
P200,000
P160,000
P240,000
The following relates to a taxpayer:
Interest expense P 400,000
Interest income - promissory notes
P 100,000
Compute the deductible interest expense
P 400,000
P 367,000
P 333,000
P 300,000
MDG Corporation is engaged in trading business. The reported income and expenses for taxable year 2010 show:
Sales P10,000,000
Cost of sales 6,000,000
General business expenses 1,000,000
Interest on time deposit (gross) 100,000
Interest expense on loans payable 180,000
The net taxable income is
P2,858,000
P2,820,000
P3,000,000
P2,862,000
Who cannot claim foreign income tax credit?
Resident citizens
Domestic corporation
Resident aliens
None of these
