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Mark, a resident of Isabela Province, had various sources of income both in the Philippines and abroad during the tax year. He received salaries, business income, interest income, royalty income, prize winnings, sweepstakes winnings, and capital gains. He also received dividend income from domestic and foreign corporations. The document provides details on Mark's income sources and requests the computation of his total final income taxes from passive income, both as a resident and as a non-resident citizen.

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Charise Oliva
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294 views1 page

05 Activity 1

Mark, a resident of Isabela Province, had various sources of income both in the Philippines and abroad during the tax year. He received salaries, business income, interest income, royalty income, prize winnings, sweepstakes winnings, and capital gains. He also received dividend income from domestic and foreign corporations. The document provides details on Mark's income sources and requests the computation of his total final income taxes from passive income, both as a resident and as a non-resident citizen.

Uploaded by

Charise Oliva
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BM1804

Name 1: DATE: SCORE:


2:

Final Taxes on Passive Income (2 items x 10 points)


Compute for the final income tax due given the following scenarios on passive income.

Mark, a resident of Isabela Province, had the following data during this current taxable year, assuming that the
exchange rate is $1 - P54.

Philippines Abroad
Salaries P 165,000 $ 2,000
Business Income P 450,000 $ 6,000
Business Expenses P 120,000 $ 1,500
Interest Income:
Personal Receivable P 10,000
Foreign Currency Deposit Unit $ 2,500
On Bank Deposits (20% long-term) P 25,000 $ 3,000
Royalty Income (20% from books) P 22,000 $ 1,000
Prize won in contest P 10,000
Winnings from the Philippine Charity Sweepstakes P 80,000
Sale of shares of stocks of a domestic corporation directly to a buyer (cost P10,000) P 30,000

Additional information: Mark received the following dividend income during the year:
• P70,000 from a domestic corporation. 30% of its income is attributed to its operations abroad.
• P60,000 from a resident foreign corporation. The ratio of its gross income in the Philippines over worldwide
income for the past three (3) years is only 40%.
• P80,000 from a non-resident foreign corporation. The ratio of its gross income in the Philippines over
worldwide income for the past three (3) years is 10%.
• Mark also sold a condominium unit in Manila (residential) for P2,000,000 although its FMV is P3,000,000
but with a zonal value of P4,000,000.

Requirements:
1. Compute for Mark’s total final income taxes from his passive income.
2. Assuming that Mark is a non-resident citizen, compute for his total final income taxes from his passive
income.

Rubric for Grading:


CRITERIA POINTS
Complete solution with correct answer 10
Last two (2) major steps of the solution are incorrect 8
Half of the solution is correct 6
First two (2) major steps of the solution are correct 4
First major step of the solution is correct 2

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