WorksheetsACC 26 Q3
Total questions: 28
Worksheet time: 26mins
S1: Individual taxpayers are natural persons with income derived within the territorial jurisdiction of a taxing authority
S2: Individual taxpayers are natural persons classified as citizens and aliens
S1 only
S2 only
S1 and S2
None of them
Bud-hoy, Mongolian, arrived in the Philippines to visit his girlfriend on Jan 1, 2019 and stayed in the country until 2021 by which time he would go back to his legal wife in Mongolia. For the taxable year 2019, Bud-hoy shall be classified as a
RA
Manny, a Filipino business man, went on business trip abroad and stayed there most of times during the year
NRC
Engr Dimagiba, Filipino free lancer, hired y a foreign contractor in Thailand to provide technical assistance for 2 months, Feb to Mar. he was hired again in Jun to July and Oct to Dec of the same taxable year. Engr Dimagiba is
NRC
Rihanna, American singer, was engaged to sing for one week at the Philippine Arena which she returned to USA. For income tax purposes, she shall be classified as:
NRA NETB
S1: Tax avoidance is a scheme used outside of those lawful means to escape tax liability
S2: Tax avoidance is a tax-saving device within the means sanctioned by law, and, when availed of, it usually subjects the taxpayer to further or additional civil or criminal liabilities
Only S1 is correct
Only S2 is correct
Both statements are correct
Both statement are incorrect
S1: In case of conflict between a revenue regulation and the provision of the National Internal revenue Code, the latter shall prevail
S2: The revocation of a revenue regulation cannot be made retroactive even if the reason for its revocation is that it is erroneously or contrary to law
Only S1 is correct
Only S2 is correct
Both statements are correct
Both statements are incorrect
The basic principle of a sound taxation system, where, "taxes must be based on the taxpayer's ability to pay" is called:
(a)
The usual mode of avoiding occurrence of double taxation is/are:
Reciprocal exemption, either by law or treaty
Tax credit of foreign taxes paid
Deduction of foreign taxes paid
All of them
Reorder the following: The sources of the tax laws according to priority:
Constitution
Treaty
Statutes or Law including Juridicial decisions
Administrative Rulings
Local tax ordinances
The Philippine Income Tax System has the following features, EXCEPT:
Comprehensive tax situs by using the nationality, residence, and sources rules
The individual income tax system is mainly progressive in nature
Indirect rather than direct system
Semi-global and semi-schedular system
Match the following: Application of Situs of Taxation
Persons
Residence of the taxpayer
Real Property
Location
Business
Place of business
Intangible Personal Property
Domicile of the owner
Income
Residence. citizenship, sources
The sources from which income is derived
Labor
Illegal Activities
Profits derived from sale or exchange of capital assets
All of them
Characteristics of Income:
1. Increase in taxpayer's wealth
2. Realization of Gain
3. Return on taxpayer's wealth
1 only
1 & 2 only
2 & 3 only
all of them
Which is NOT a valid definition of income?
Income is a return from capital invested
Income is a fund at one distinct point in time
Income means all wealth that flows into the taxpayer other than a mere return of capital
Income means cash or its equivalent unless otherwise specified
There is a constructive receipt of income when:
Payment is credited to payee's account
Payment is set aside to the payee, or otherwise made available so the payee could have drawn upon it during the taxable year if no intention to withdraw had been given without substantial limitations
Both of the choices
Neither of the choices
Which of the following is NOT an income for income tax purposes?
collections of loans receivable
condonation of debt for services rendered
excess of selling price over the cost of an asset sold
none of them
Which of the following situs of income is incorrect
Interest Income - residence of the debtor
Income from Services - place of performance
Royalties - place of use of intangible
gain on sale of property - place of sale
S1: Tips and gratuities paid directly to an employee by a customer of the employer that are not accounted for by the employee to the employer are considered as taxable income subject to basic tax.
S2: The tips described in S1 shall not be subject to withholding tax for the reason that tips are not accounted for by the employee to the employer
Only S1 is correct
Only S2 is correct
Both statements are correct
Both statements are incorrect
Which of the following is NOT taxable income?
Bad debts previously deducted as item of expense and partially recovered subsequently
Tax expense previously disallowed as a deduction from taxable income fully refunded subsequently
Income from gambling
Income from usurious financing
Which of the following tax refunds is taxable?
Percentage tax on persons exempt from VAT
Estate or donor's tax
Stock transaction tax
Income tax paid to a foreign country if claimed as tax credit during the year
Pobre borrowed from Rich Php 100,000 payable in five (50 monthly installments. Before the first installment became due, Pobre rendered general cleaning services in the entire office building of Rich, and as compensation, Rich cancels his indebtedness of Pobre up to the amount of Php 75,000. The Php 75,000 may amount to:
To a gift
To a capital contribution
To a donation inter vivos
To a payment of income
Which of the following income shall be returned in the year received?
Interest earned on bank deposits
Share in the net income of professional partnership
Stock dividend
Rentals for 2021, 2022 & 2023 received in 2021 bya lessor under accrual method
On Jan 1, 2019, Mike leased to Leomar a piece of a vacant lot on which the latter constructed a 3-storey building for Php 6M. The building was completed on Jan 1 , 2021. Term of lease - 10 years, while the estimated useful life of the building is 15 years. Mike opted to use the spread out the method in recognizing income. Which of the following statements is correct?
Mike annual depreciation expense on the leasehold is Php 400,000
Aside from rent, Mike should recognize annual income of Php 350,000 due to construction of the building
Mike has the option either to deduct in full the cost of the building in the year of completion, or claim deductions for such building annual depreciation up to the end of the term of the lease
If the FMV of the building as of the date of completion is known, Mike is required to recognize as income such FMV in the year of completion
Any amount subsequently received on account of bad debt previously charged off and allowed as a deduction from gross income for prior years must be included in the gross income for the taxable year in which received. This is known as
end result doctrine
destination of income test
equitable doctrine of tax benefit
severance theory
In 2019, the net income before write-off of Makanos Corporation is Php 20,000, the bad debts written off is Php 30,000. If the 30,000 is fully recovered in the following year -
The entire amount of Php 30,000 is taxable to the corporation
The amount recovered is not taxable
The Php 20,000 is taxable while Php 10,000 is not
Php 10,000 is subject to tax
Which of the following is not included in the income to be reported by the lessor?
Rent paid by the lessee
Taxes paid by lessee
Income on the leasehold improvement
Depreciation on the leasehold improvement
There is an effect of a payment of dividend when
fringe benefit are recieved by an employee from the company
Promissory note paid to the employee for the services he had rendered to his employer
Creditor condones the debt of the corporation
A corporation condones the debt of its stockholders
S1 : Return of capital is not subject to Income Tax while Income is subject to Tax
S2: Excess of cash advance on travel allowances of employees are taxable to them if not returned to their employer
Only S1 is true
Only S2 is true
Both statements are true
Both statements are not true
Which of the following taxpayers is taxable on income from all sources within and outside the Philippines?
Resident Citizen
Non resident Citizen
Resident Alien
Non resident alient engaged in trade and business
Means all income from whatever source, flows into the taxpayer other than return of capital.
(a)
