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WorksheetsChapter 6: Partnership
Total questions: 20
Worksheet time: 20mins
For purposes of taxation, which of the following statements regarding partnership is correct?
I. Classified into two major categories, partnership in trade and general professional partnership.
II. Partnership in trade is treated as corporate taxpayer.
III. General professional partnership is exempt from income tax.
a. I, II and III
b. I and II only
c. I and III only
d. I only
Statement 1: All partnership are taxed in the same manner as corporation
Statement 2: The income of a general commercial partnership is also subject to MCIT or Normal Corporate Tax whichever is applicable.
a. statements 1 & 2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 & 2 are true
A taxable partnership may be subject to the following taxes:
I. Minimum corporate income tax
II. Gross income tax
III. Improperly accumulated earnings tax.
a. I, II and III
b. I and II only
c. I and III only
d. I only
A partnership is formed by persons for sole purpose of exercising their common profession, no part of the income of which is derived from engaging in any trade or business.
a. Joint venture
b. General professional partnership
c. Trading partnership
d. Joint accounts
A general professional partnership is exempt from income tax, but is required to file an income tax return
a. For statistical purposes.
b. Because the net income of the partnership will be traced into the income tax return of the partners.
c. Because all income earners are required to file income tax returns.
d. None of the above
In a general professional partnership (GPP),
a. The GPP shall report total partnership income and each individual partnership’s share of that income.
b. The GPP shall be taxed on its income in the same manner as private partnerships.
c. The partners are not liable for taxes on income withdrawn from the partnership.
d. None of the above.
Which of the following statements is wrong?
a. A general partnership in trade is not taxable as a corporation.
b. A joint venture for undertaking construction projects is not taxable as a corporation.
c. A consortium for energy operations pursuant to an operating consortium agreement under a service contract with the government is not taxable as a corporation.
d. A co-ownership where the activities of the co-owners are limited to the preservation of property and collection of income from the property is not taxable as a corporation.
Statement 1: For purposes of computing the distributive share of the partners of a general professional partnership, the net income of the partnership shall be computed in the same manner as a corporation.
Statement 2: Partners of a taxable partnership are considered as shareholders and profits distributed to them by the partnership are considered as dividends.
a. Statement 1 & 2 are false.
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 & 2 are true.
Statement 1: The distributive share of a partner in the net income of a taxable partnership is equal to each partner’s distributive share of the net income declared by the partnership for a taxable year after deducting the corresponding corporate tax.
Statement 2: If a taxable partnership sustains net operating loss, the partners shall be entitled to deduct their respective shares in the net operating loss from their individual gross income.
a. Statement 1 & 2 are false.
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 & 2 are true.
The partner’s share in the profits of a general professional partnership is regarded as received by the partners although not yet distributed. This concept of income reporting under the Tax Code is known as:
a. Installment basis of reporting income
b. Accrual basis of reporting income
c. Constructive receipt basis of reporting income
d. Hybrid method of reporting income
Statement 1: Each partner of a general professional partnership shall report as gross income in his return, his distributive share in the net income of partnership, whether actually or constructively received.
Statement 2: If the partner of the GPP elects the itemized deductions, his tax shall be based on his share of the net income of the GPP.
a. Statements 1 & 2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 & 2 are true
Statement 1: In computing the taxable share of partners in a general professional partnership, the accounting method used (accrual or cash method) is an important factor to consider
Statement 2: Only the share in the net income actually withdrawn by a partner in a general professional partnership is taxable to him.
a. Statements 1 & 2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 & 2 are true
Statement 1: Salaries received by a partner from a general professional partnership is not considered gross compensation income but as part of his share in the distributable net income after tax of the partnership.
Statement 2: Salaries received by a partner from a business partnership is considered gross compensation income.
a. Statements 1 & 2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 & 2 are true
Statement 1: If the amount to be distributed to a partner of a GPP is more than P720,000, it is to be withheld with 15% creditable tax.
Statement 2: The share of a partner in a GPP is subject to final withholding tax of 10% if the amount is below P720,000.
Statement 3: The distributive share of a partner in a commercial partnership is subject to final tax of 10%
a. Statements 1, 2, and 3 are false
b. Only statement 3 is false
c. Only statement 2 is false
d. Statements 1, 2, and 3 are true
TGT & Co. is a general partnership in trade and in its fifth year of operations. During the current taxable year, it had a gross profit from sales and business expenses of P2,000,000 and P1,000,000, respectively. T, G, and T share equally in the profits and losses of the partnership. The income tax due of the partnership is:
a. P 40,000
b. P 300,000
c. P 640,000
d. P 0
The income tax due of the partners as a consequence of being a partner in the partnership is:
a. P0
b. P68,000
c. P77,000
d. P70,000
TG Partnership reported for year net profit from trading amounting to P800,000. The other income included interest income of P8,000 net of 20% final withholding tax, and dividend income from domestic corporation of P20,000 (gross tax). Assuming T and G share profits and losses equally, how much is the applicable tax on the distributive share of T in the earnings of that partnership?
a. P28,700
b. P28,600
c. P28,000
d. P29,400
The gross income of Ramos from the partnership is:
a. P300,000
b. P125,000
c. P640,000
d. P0
The taxable income of Ramos is:
a. P80,000
b. P205,000
c. P155,000
d. P0
Juan and Ponce are partners in a business partnership sharing profits and losses in the ratio of 55:45. The following data on income and expenses og ther partnership show:
Gross income P750,000
Expenses 200,000
Dividend received from a domestic corporation 20,000
Bank interest income, Metrobank (net) 80,000
What are the correct amounts of final taxes withheld on the respective shares of Juan and Ponce in partnership income?
a. P21,175 (Juan) P17,325(Ponce)
b. P26,675(Juan) P21,825(Ponce)
c. P25,025(Juan) P20,475(Ponce)
d. P25,116.50(Juan) P20,587.50(Ponce)
