Holy Name University
City of Tagbilaran
College of Business and Accountancy
CHAPTER QUIZ IN TAX 1 Prepared by: Miss Eve
Name: _________________________________________ Date: ________________
General Instructions: Be careful not to miss any important points but not too careful that you run out of time. Sama ra gud
na sa gugma, kung maghinay-hinay ka, maabtan ka sa oras unya mawala na siya.
Part I. True or False: If the statement is true write true. If the statement is false, write false.
1. The holding period assumption shall be applicable to properties owned by individuals operating a business
partnership.
2. A property purchased for future use in business is an ordinary asset even though this purpose is later thwarted by
circumstances beyond the taxpayers control
3. When an office building is sold, any gain shall be subject to capital gains tax.
4. The gain arising from the sale of domestic stocks held for sale is an ordinary gain.
5. Discontinuance of the active use of the property does not change its character previously established as a business
property
6. Ordinary loss is deductible only up to the extent of ordinary gains
7. There is no net capital loss carry over allowable if the succeeding year results to a capital loss
8. Capital loss is deductible only up to the extent of capital gains
9. The net gain in dealing with ordinary asset is subject to regular tax.
10. Real properties used, being used, or have been previously used in trade of the taxpayer shall be considered
ordinary assets
11. Net gain in dealing with real property not used in business shall be subject to 6% capital gains tax.
12. Ordinary gains are taxable in full
13. For taxpayers not engaged in business, assets shall cease to be ordinary assets when they are discontinued from
active use for more than two years.
14. Ordinary loses are deductible in full
15. Sale of domestic stocks directly to a buyer within or outside the Philippines shall be subject to 15% capital gains tax.
16. The annual capital gains tax return is due on or before the 15 th day of the fourth month following the close of the
quarter when the sale was made
17. Ordinary gains may arise from sale, exchange and other disposition of real properties not used in business.
18. Any gain in the sale or exchange of personal property classified as ordinary asset will be subject to 6% final tax of
the selling price or zonal value whichever is higher.
19. The transactional 15% capital gains tax is to be paid On the 15 th day of the fourth month following the close of the
quarter when the sale was made
20. Capital gains may rise from sale, exchange and other disposition of movable properties that are used in business.
Part II. Problem Solving: Show your solution in proper form. Enclose your final answer with a circle/square.
21. In 2012, Leomie Virady, a citizen of the Philippines sold his principal residence in the Philippines at a selling price
equal to P4,000,000. Value prescribed by the CIR is P4,200,000 while value appraised by an independent appraiser
is P4,500,000. The basis or cost of the property was P2,500,000.
a. Compute for capital gains tax and cost of new property under the following assumption:
i. The entire proceeds of the sale is immediately invested in acquiring a new principal residence.
ii. Only P3,000,000 was utilized in acquiring a new principal residence.
iii. P5,000,000 was utilized in the acquisition of the principal residence of his friend.
b. Compute for documentary stamp tax
22. In 2018, Kung Mahal Mo Ipaglaban Mo, a domestic corporation, sold the following shares of stock that it held as
capital assets:
Type of stock Date of Sale Place of Sale Medium No. of Shares Selling Price Cost
Domestic stock January 5 Philippines PSE 10,000 P30/share P28/share
Foreign stock March 1 Abroad Direct buyer 15,000 P20/share P7.5/share
Domestic stock March 18 Abroad Direct buyer 5,000 P50/share P40/share
Domestic stock April 20 Philippines PSE 24,000 P25/share P29/share
Domestic stock June 30 Philippines PSE 10,000 P8/share P10/share
a. Compute for capital gains tax on each of the transactions
b. Compute tax to be paid per BIR Form 1707-A
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