WorksheetsIRTAX 004
Total questions: 26
Worksheet time: 13mins
As a rule, this is not part of taxable income
Profit sharing of a partner from SVG & Co., a general professional partnership.
Hazard pay received by a civil engineer working at ABC Corporation.
Overtime pay received by a rank-and-file employee.
13th month pay amounting to 87,000.
This is taxable income
Retrenchment pay received by Gon Hunter because of his poor eyesight
SSS Maternity benefits received by Clarice amounting to 70,000.
Refund of excess income tax received by Rolly on her his last payroll cut-off upon annualization
Separation pay received by Jonathan amounting to 100,000 upon resignation.
If an individual performs services for a creditor who in consideration therefor cancels the debt, the cancellation of indebtedness may amount to
A gift
A donation inter-vivos
A capital contribution
A payment of income
Mae, a dedicated and honest employee of Beef Corp. for the past 20 years, was advised that she is to be retrenched as the company was losing heavily but that she would be given the separation pay provided by law. To avoid the implication of inefficiency, Mae was advised to file a letter of resignation instead of being retrenched. If Mae files a letter of resignation and receives the separation pay, the amount is.
Partly taxable, partly exempt.
Exempt from income tax
Subject to final tax
Taxable in full
Christine is engaged in the marketing of cars. When her son got married to the daughter of a respectable senator Bato Dela Rose, she gave the newly wedded couple a brand-new car worth P800,000 as a wedding gift. The value of the car is.
Taxable income to the newly wedded couple
Deductible expense of Christine.
Taxable income to the couple and deductible expense of Christine
Not taxable income to the newly wedded couple
Statement 1: Gains realized from the sale or exchange or retirement of bonds, debentures, or other certificates of indebtedness with a maturity of more than 5 years, shall not be taxable to the investor seller.
Statement 2: Income derived from investments in the Philippines in loans, stocks, bonds, or other domestic securities, or from interest on deposits in banks in the Philippines, including sale of investments, by foreign governments and financial institutions wholly owned, controlled, or enjoying financing from foreign governments, shall be exempt from income tax, and consequently from withholding tax.
Statement 1 is true.
Statement 2 is true
Both statements are false
Both statements are true.
Faye Toos has been an employee of Bling Corp. for the last 25 years. Her employer set up a BIR-approved private benefit plan primarily for retirement payments to its retiring employees. Her employer also set up a trust fund for the exclusive benefit of its employees, and to which the employees can make contributions. So far, Faye has contributed a total of ₱40,000 to this trust fund. When she retired at age 55, she received the following amounts from her employer: (1) ₱200,000 representing her retirement benefits and which was paid out of the BIR-approved benefit plan; and (2) a dividend of ₱200,000 from the trust fund. Which statement is incorrect?
Faye Toos’ retirement benefits from the BIR-approved private benefit plan are income tax-exempt.
₱40,000 of the ₱200,000 which Faye received from the trust fund is exempt from income tax.
₱160,000 of the ₱200,000 which Faye received from the trust fund shall be subject to an FWT.
None of the above.
Advance rental in the nature of prepaid rental, received by the lessor under a claim or right, and without restriction as to use is.
Taxable income of the lessor in the year received if he is on the cash method of accounting.
Taxable income of the lessor in the year received if he is on the accrual method of accounting.
Taxable income of the lessor up to the amount earned in the year the rental is received.
Taxable income of the lessor in the year received whether he is on the cash or accrual method of accounting.
Which payments made by the lessee under such terms of the lease contract should be considered as additional rent income of the lessor?
A. If a lessee paid directly to the local government the real estate tax on the property of the lessor B. If the amount received by the lessor is a security deposit for the faithful compliance by the lessee of the terms of the contract C. If the amount received by the lessor is a loan extended by the lessee to the lessor.
Only A and C
Only B and C
A, B and C
Only A
Should the lessee make permanent improvements to the property leased under an agreement that upon the expiration of the lease contract the improvements shall belong to the lessor, the lessor may recognize income from the leasehold improvements.
A. At the time when such improvements are completed, the fair market value of such improvements.
B. By spreading over the remaining term of the lease the estimated depreciated value of such improvements at the termination of the lease and report as income for each year of the lease an aliquot part thereof.
A but not B is allowed.
B but not A is allowed.
Neither A nor B is allowed.
Either A or B is allowed.
After 10 years of a romantic relationship, Liza decided to end her relationship with Ken. With anger in her eyes, Liza boxed, kicked, and berated Ken. Ken tried to pacify Liza, but she slipped, lost control, and fell to the ground requiring hospitalization. To buy peace, Ken decided to shoulder the medical expenses for the injuries suffered by Liza. The amount is.
Taxable income Liza.
Deductible expense of Ken.
Subject to final tax.
Exempt from income tax.
One of the following represents taxable income:
Refund of donor’s tax paid in prior year
Refund of income tax in prior year.
Refund of special assessment paid in prior year.
Refund of overpaid rental expenses in prior year.
Cash allowance of ₱250 per month given to Central Bank employees to cover the medical expenses of their dependents shall be.
Included as part of gross compensation income.
Partly included, partly excluded from gross compensation income.
Subject to final tax
Excluded from gross compensation income.
Statement 1: Damages for loss of earnings represent taxable income.
Statement 2: Exemplary damages received by the plaintiff do not constitute taxable income to the plaintiff
Statement 1 is true.
Statement 2 is true
Both statements are false.
Both statements are true.
Statement 1: Passive income derived from investments or deposits in the Philippines by foreign governments shall be taxable in the Philippines.
Statement 2: Income derived from governmental or proprietary functions by the National Government of the Philippines or any of its political subdivisions as well as those corporations owned by the Philippine government, are exempt from tax following the principle that the government does not tax itself.
Statement 1 is true.
Statement 2 is true
Both statements are true
Both statements are false.
Exclusions from gross income, except:
Interest in the price of land covered by the Presidential Decree on land reform
GSIS, SSS, PhilHealth and Pag-ibig contributions and union dues of individuals.
Gains realized by an investor upon redemption of shares of stock in a mutual fund company.
Interest payments on proceeds of life insurance held by the insurer.
Which of the following statements is correct?
The power of taxation reaches even the citizens abroad and their income earned from sources outside the Philippines
Priests and religious institutions are exempt from income and property taxes.
The value of property received as a gift, or under a will or testament or through legal succession is exempt from taxation.
Separation benefits received by terminated employees resulting from a deadlock in their collective bargaining agreement are exempt from income tax.
One of the following is taxable income:
Gifts, bequests, and devices
Proceeds from life insurance
Separation pay received by an employee due to a cause beyond his control.
Amounts received as rewards from giving information instrumental in the discovery of violations of the Tax Code and seizure of smuggled goods
Which of the following statements is not correct?
Proceeds of life insurance policies paid to beneficiaries upon the death of the insured are excluded from gross income regardless of whether the proceeds are received as a single sum or in installments.
In case of transfer for a valuable consideration by assignment or otherwise of a life insurance, endowment or annuity contract or any interest therein, only the actual value of such consideration and the amount of the premium and the sums subsequently paid by the transferee are exempt from income tax.
Marriage fees, baptismal offerings, sums paid for saying masses for the dead and other contributions received by a clergyman, evangelist or religious worker for services rendered are taxable income.
Monetization of leave credits of employees who were unable to go on leave due to exigencies of the service constitutes taxable income.
Which of the following statements is correct as regards a resident citizen?
Income from illegal activities is subject to final tax.
Income tax refunds constitute taxable income to the taxpayer.
Recovery of bad debts previously written off is part of taxable income
As a rule, contest awards and prizes are subject to 20% final tax if they amount to more than P10,000, otherwise they will be part of taxable income in the ITR.
Which of the following statements is not correct?
Minimum wage earners shall be exempt from the payment of income tax on their SMW
Prizes and awards granted to athletes in local and international sports competitions and tournaments whether held in the Philippines or abroad, and sanctioned by their national sports associations are exclusions from gross income.
Benefits received from or enjoyed under the Social Security System are exclusions from gross income.
Holiday pay, overtime pay, night shift differential and hazard pay shall be exempt from income tax.
Which of the following statements regarding dividends is correct?
Exempt from tax if received by a resident citizen from a domestic corporation
Exempt from tax if received by a resident alien from a domestic corporation.
Taxable subject to final tax if received by a non-resident citizen from a non-resident foreign corporation.
Taxable subject to year-end tax if received by a resident citizen from a non-resident foreign corporation.
The following items are exclusions from gross income, except
Labor union dues
SSS/GSIS premiums contribution
Pag-ibig premium contribution
IOUs
Which of the following is part of gross income in the ITR?
PCSO and Philippine Lotto winnings
Bank interest on long term deposit
Proceeds of life insurance upon death of the insured
Raffle prize not exceeding P10,000
If refunded, this is taxable.
Estate tax
Donor’s Tax
Special Assessment
Fringe Benefit tax
A) PCSO and Philippine lotto winnings (of more than ₱10,000) of citizens, resident aliens, and NRAETBs are excluded from gross income in the ITR because they are exempt from tax.
B) All prizes, awards, and winnings are excluded from gross income in the ITR because they are subject to final tax.
Both are true.
Only the first is true.
Only the second is true.
Both are false.
