answer key tax 501

8/13/2019 Answer Key Tax 501

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EXERCISE 21

1. The query should be addressed to the Commissioner of Internal Revenue

2. I will inform him that a compromise is not allowed anymore

3. Piolo is correct.

. I will request for a compromise of the assessed ta! on "round that the financial position of theta!payer demonstrates clear inability to pay the assessed ta!.

#. The claim for refund should be denied on "round of prescription.

$. The Commissioner may not "rant the refund when there is a deficiency ta! assessment a"ainst theclaimant%ta!payer.

&. 'es.

(. a. The countin" of the two )2* year period commences to run from the date of final payment.

b. +u"usto has thirty days from receipt of the decision of the CIR to file an appeal with the CT+

c. ,e is "iven 3- days from receipt of the CIRs decision but not e!ceedin" 2 years from the dateof final payment.

EXERCISE 2-2. MULTIPLE CHOICE

1. C

2. C

3. +

. /

#. 0

$. C

&. /

(. +

. 0

1-. 0


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11 C

12. 0

13. /

1. /

1#. C

EXERCISE 2-3

1. 0

2. +

3. 0

. C

#. 0

EXERCISE 24

The proper party to question, or seek a refund of an indirect tax is the statutorytaxpayer, the person on whom the tax is imposed by law and who paid the sameeven if he shifts the burden thereof to another.

EXERCISE 3-1

1. The partnership is not liable to pay income tax.

2. The contention of Judge itafan is wrong. .

!.

"ncome sub#ect to tax$%air discountedvalue

&','''

b.


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"ncome sub#ect to tax, 2'11 1','''

c. "ncome reportable in 2'12 ( 2',''' x)'*+

1','''

-. henever a stockholder is indebted to the corporation and said creditorcorporation decides to condone the debt, such condonation has the effect of apayment of dividend to the stockholder.

.

). /ilario is not required to report income on the condonation considering that thecondonation of debt was given without requiring him to render services.

0. es.

. 3nder the tax benefit rule, whenever a bad debt is claimed as deduction fromgross income and it resulted to a reduction in its tax liability, the recovery ofsuch is sub#ect to tax.

&. a. 4alue5added tax 5 not taxableb. 6eal property tax 5 taxablec. "ncome tax 5 not taxabled. 7tock transaction tax 5 not taxablee. 7pecial assessment 5 not taxablef. 8ccupation tax 5 taxableg. 9state tax 5 not taxableh. "ncome tax paid to a foreign

country5 taxable if claimed as deduction

i. :ommunity tax 5 taxable#. 9xcise tax 5 taxable

;. a. es,b. sub#ect to a final tax of 1'*c. They are not sub#ect to tax.d. both the stockholders who were paid stocks and cash dividends are sub#ect to

final tax.

1'. a.


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1'*.

12. a.

she has to report an income of 1'',''' on the leasehold improvement and-&,''' (-,''' x 12+ on the rent, or a total amount of 1-&,'''.

b. 6ent (-,''' x 12+ -&,'''?dd@ "ncome on leasehold improvement

:ost of improvement 1'',''' Aess@ ?ccumulated depreciation(1'','''$2) x 1&.)+

-,'''

Book value, end of lease 20,''' (20,''' $ 1&.) x C + '!

-&,'!

c.

6ent ( -,''' x 0+ 2-,'''

Aeasehold improvement@ :ost 1'','''

Aess@


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3-3. TAX BENEFIT RULE

3-

3.1:

ANSWER: B

:ase 1 = -','''

:ase 2 5 2',''':ase ! 5 -',''':ase - 5 ','''

3-

3.2:

(1) ANSWER: D

3-

3.3:

(2) ANSWER: D

(3) ANSWER: B

EXERCISES 3 3.4. MULTIPLE CHOICE THEORY

1. ANSWER: C

2. ANSWER: C

!. ANSWER: D


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EXERCISE 3-4

3-

4.1:

LEASEHOLD

IMPROVEMENT

1. ANSWER: B

2. ANSWER: D

!. ANSWER: A

-. ANSWER: C

). ANSWER: B

0. ANSWER: B

. ANSWER: C


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EXERCISE 3-4.2:

1. ANSWER: A

2. ANSWER: C

!. ANSWER: C

EXERCISE 34.3:

ANSWER: B

EXERCISE 34.4

1. ANSWER: A

2. ANSWER: C


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!. ANSWER: D

EXERCISE 3-5

EXERCISE 35.1:

1. ANSWER: D

2. ANSWER: D

EXERCISE 35.2:

1. ANSWER: C

2. ANSWER: B

EXERCISE 35.3:1. ANSWER: C

EXERCISE 3-6. MULTIPLE CHOICE

1. ANSWER: B

2. ANSWER: C

!. ANSWER: C

-. ANSWER: C


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). ANSWER: B

0. ANSWER: D

. ANSWER: C

&. ANSWER: D

;. ANSWER: C

1'

ANSWER: D

11

ANSWER: B

12

ANSWER: C

1!

ANSWER: A

1-

ANSWER: D


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1)

ANSWER: C

10

ANSWER: D

1

ANSWER: A

1&

ANSWER: D

1;

ANSWER: A

EXERCISE 3 -7.

es.


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EXERCISE 41. CROSSWORD PULE

21

52

! D3

" T4

W E L # E

E M

R5

A N $ % F I L E

R N

S &6 S I S

37

M

C'

L O T H I N &

( S

EXERCISE 4 2

1. T

2. F

3. F

4. F

5. T

6. F

7. T

'. F

). T

1(. F

11. T

12. F

13. T

14. T

15. T

EXERCISE 4-3


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1.

a.

"nterest on corporate bonds 5 Taxable

b.

7alary 5 Taxable

c.

Tips 5 Taxable

d.

innings in lotto 5 ot taxable (expressly exempt underthe law+

e.

innings in #ueteng 5 Taxable (income from whatever sourcederived+

f. >oney stolen frommotherDs purse

5 Taxable (income from whatever sourcederived+

g.

6ice subsidy of !2) permonth

5 ot taxable (de minimis benefit+

2.

The value of the free meals and lodging is not taxable to aya

!.

o..

-.

The rice allowance is considered as a de minimis benefit which is exemptfrom income.

)

.The free parking and courtesy discounts are sub#ect to fringe benefit tax

The excess of the laundry allowance in the amount of -)' ()'5!''+ is part of gross compensation income if such excess is beyond the

!',''' ceiling for Eother benefits.F The rental value of the residential property is sub#ect to fringebenefits tax which is sub#ect to final tax. .

0.

The cost of the educational assistance extendedby


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2. ANSWER: C

!. ANSWER: A

-. ANSWER: B

EXERCISE 4-5

1. ANSWER: B

2. ANSWER: B

!. ANSWER: D


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-. ANSWER: AEXERCISE 4-6

1. ANSWER: C

2. ANSWER: C

!. ANSWER: D

-. ANSWER: D

). ANSWER: D

0. ANSWER: D

. ANSWER: B

&. ANSWER: B

;. ANSWER: D

1'.

ANSWER: D

EXERCISE 4-

1. ANSWER: C


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2. ANSWER: A

!. ANSWER: B

-. ANSWER: D

). ANSWER: D

0. ANSWER: B

. ANSWER: C


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&. ANSWER: A

;. ANSWER: D

1'. ANSWER: A

11. ANSWER: D

12. ANSWER: D

EXERCISES 5-1

1. one.


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2.a.

one.

b.

%ernando must report 2',''' G(12,''' x 1'+ = 1'','''H as income.

c.

o.

!. one

-. 6odolfo must report an income of ),'''.

).a.

Both actual and moral damages are not sub#ect to tax.

b.

not taxable.

c.ot included in the gross income..

d.

Taxable.

e.

ot taxable.

0. 0. o, because all the requisites for exemption from income tax arepresent@

. The amount is taxable to ilo.

&.a.

Taxable.

b.

Taxable.

c.

ot taxable.


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P*+, 5-2.3

ANSWER: D

P*+, 5-2.4:

ANSWER: B

P*+, 5-2.5:

ANSWER: C

P*+, 5-3.1

ANSWER: C

P*+, 5-3.2

ANSWER: C

P*+, 5-3.3

ANSWER: B

P*+, 5-3.4

ANSWER: D

P*+, 5-3.5

ANSWER: A

P*+, 5-3.6

ANSWER: D


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EXERCISES 54.

P!"# $4.1

ANSWER: C

P!"# $-4.2

ANSWER: A

P*+, 5-4.3

ANSWER: C

P*+, 5-4.4

ANSWER: D

EXERCISES 55

EXERCISE $

$.1:

ANSWER: C

EXERCISES $-

$.2

a. The !)',''' value of the car is sub#ect to a final tax of 2'*.b. The ),''' is sub#ect to graduated tax to be reported in the income tax

return.c. The cash priIe and the equivalent amount of the 1'' shares are sub#ect

to 2'* final tax.


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EXERCISES $-$.3

a. The income of ),''' is taxable to her unless she has acquired the

status of a contract worker.

b. The talent fees 1'',''' is a professional income sub#ect to graduatedrates of tax.

c. The ),''' value of the trophy is not taxable

PROBLEM $-%.1

ANSWER: D

EXERCISE 5 7

1. one.

2.

1-,)''

EXERCISES $ &

1. ANSWER: D


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2. ANSWER: C

!. ANSWER: C

-. ANSWER: A

). ANSWER: A

0. ANSWER: B

. ANSWER: C

&. ANSWER: D

;. ANSWER: A

1'. ANSWER: C

11. ANSWER: C

12. ANSWER: D

1!. ANSWER: D

1-. ANSWER: D


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1). ANSWER: B

10. ANSWER: D

1. ANSWER: A

EXERCISES %-

11. :A?77"%":?T"8 7"T37 8% T?K?BA9":8>9

a. onresident citiIen ithin onlyb. onresident alien

(9TB+ithin only

c. onresident citiIen ithin onlyd. 6esident alien ithin onlye. onresident alien

(9TB+ithin only

f. onresident alien

(9TB+

ithin only

2. a. o.

b. o. .

c. es.

d. es.

e. o.

!. a. "n the absence of an agreement, John has the right to claim the

additional exemption.

b. "f >arsha could prove that she provided chief support over the children,both spouses would be disqualified to claim additional exemption.

c. one.

-. a. one.


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). a. one. .

b. one.

c. one.

d. one.

e. 1'','''.

0. a. o.

b. es.

c. "ncome tax 2!,)'

d. "ncome tax !),'''

. a. Taxable income 1),'''

b. "ncome tax = Jim 11,)''

"ncome tax = at !1,2)'Total income tax -2,)'


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&. a. 2.''

b. )''

c.

"ncome tax 2-.)-

d. )','''

e.

"ncome tax due 112,'!-

f.

"ncome tax due !2-,--'.-1

;

.

a. 7alary 5 :ompensation

b. "nterest on bank deposit 5 assive income = tax exempt (long5term+

c. /onorarium 5 :ompensation incomed. riIes 5 8rdinary business income (not exceeding

1','''+e. Aotto winnings 5 Tax exemptf. "ncome from farming 5 Business income


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g. 6oyalties on books 5 assive income (1'*+h.


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b.


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:ase 1 :ase 21!.

Taxable income 1&0,0''

1)),'''

EXERCISE 6 2

1. ANSWER: B

2. ANSWER: D

!. ANSWER: B

-. ANSWER: B

EXERCISE % - 3

" : 8 > 96esidentor citiIen

6?9TB

1. "nterest on bank deposit with Banco de8ro5 hp

2'* 2'*


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2. "nterest on bank deposit with a bank in the3nited 7tates in 3.7. dollar Tax table ot taxable

!. 9arnings from interest on money market 2'* 2'*-. 6oyalties on inventions 2'* 2'*). 6oyalties on books 1'* 1'*0. riIes amounting to ,)'' Tax table Tax table

. riIes amounting to 2',''' 2'* 2'*&. innings in lotto = hilippines 9xempt 9xempt;. innings in lottery 2'* 2'*1'. "nterest on long5term investment 9xempt 9xempt11. "nterest on deposit for - C years )* )*12. :ash dividends = domestic corp. 1'* 2'*1!. 7hare of partner in net income of taxable

partnership1'* 2'*

1-. "nterest income under expanded foreigncurrency deposit system .)* 9xempt

EXERCISE %4.1

1. ANSWER: A

EXERCISE %4.2

":8>9 6: 6?,6:

6?(9TB+6?(9TB+

1. 6ent on apartment in the

hils.

97 97 97 '

2. 6ent on apartment in

:anada

97 8 8 8

!.


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2. ANSWER: C

!. ANSWER: A

-. ANSWER: B


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). ANSWER: A

0. ANSWER: B

. ANSWER: D

&. ANSWER: D

EXERCISE %-

$.1

ANSWER: D

EXERCISE %-

$.2

ANSWER: B


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PROBLEM %-$.3

1. ANSWER: A

2. ANSWER: D

PROBLEM %-$.4


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1. ANSWER: C

2. ANSWER: C

EXERCISES %-%.1: PERSONAL

EXEMPTIONS

1. ANSWER: B

2. ANSWER: A

!. ANSWER: C

-. ANSWER: B

). ANSWER: C

0. ANSWER: C

. ANSWER: D


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&. ANSWER: B

;. ANSWER: D

1'. ANSWER: C

EXERCISES %-%.2

1. ANSWER: C

2. ANSWER: B

!. ANSWER: D

-. ANSWER: C


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). ANSWER: D

0. A*+,!: A

. A*+,!: C

&. A*+,!: C

EXERCISES % . CLASSIICATION O INDIVIDUAL INCOME

TAXPAYERS

1. ANSWER: D

.

2. ANSWER: A


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!. ANSWER: D

-. ANSWER: D

). ANSWER: B

0. ANSWER: A

. ANSWER: C

EXERCISES %&.1. PREMIUM PAYMENTS ON HEALTH ANDOR

HOSPITALI/ATION INSURANCE

1. ANSWER: D

2. ANSWER: D

!. ANSWER: C

EXERCISE %.&.2

:ase1@

one.

:ase one..


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2@

:ase!@

The husband can only claim a maximum amount of 1,0''

:ase

-@

1,2''.

EXERCISES %-0

1. ANSWER: A

2. ANSWER: D

!. ANSWER: D

-. ANSWER: C

). ANSWER: D

0. ANSWER: A


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. ANSWER: D

&. ANSWER: A

;. ANSWER: B


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1'.

ANSWER: B

11.

ANSWER: B

12.

ANSWER: B

1!.

ANSWER: A


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1-.

ANSWER: C

1).

A*+,!: B

EXERCISE 6-1(.

The petition has merit.

Cooperatives are not required to withhold taxes on interest from savings and time deposits of theirmembers based on a BIR Ruling.

answer key tax 501

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