Name: Date: September 26, 2022
Subject: TAX 1 Score:
Tax concept of Income
Check the appropriate box whether the following are exempt or taxable:
Item Taxable Exempt
1. Winnings from gambling /
2. Income from swindling /
3. Indemnity for moral damages /
4. Harvested fruits from orchard /
5. Compensation income /
6. Interest income /
7. Amount received by the insured in excess of insurance premiums paid /
8. Proceeds of life insurance received by the heirs of the insured /
9. Gain on sale of goods by the home office to its branch /
10. Gain on sale of goods and services between relatives /
11. Gain on sale of goods by a parent corporation to a subsidiary /
corporation
12. Appreciation in the value of the land /
13. Birth of animal offspring /
14. Income of Barangay Micro-Business Enterprise /
15. Cancellation of debt out of gratuity of the creditor /
16. Cancellation of debt by the creditor in exchange of services rendered by /
the debtor
17. Matured interest from coupon bonds /
18. Receipt of bank loan /
19. Salaries of a minimum wage earner /
20. PCSO or lotto winnings /
Income taxpayer classification
Indicate the appropriate classification for each of the following taxpayers:
DC – Domestic corporation RC – Resident citizen
RFC – Resident foreign corporation NRC – Non-resident corporation
NRFC – Non-resident foreign corporation RA – Resident Alien
NRA-ETB – Non-resident alien engaged in trade or business
NRA-NETB – Non-resident alien not engaged in trade or business
NT – Not a taxpayer
Person or entity Classification
1. A fat Mexican tourist NRA-NETB
2. A hardworking overseas Filipino worker NRC
3. A Filipino who is privately employed in the Philippines RC
4. A Chinese businessman who has his domicile in the Philippines for 6 months NRA-ETB
5. A Japanese who married a beautiful Filipina and has been residing in the RA
Philippines for 2 years
6. A corporation incorporated under the Philippine Law DC
7. A foreign corporation does business in the Philippines RFC
8. A business partnership DC
9. A joint venture organized under a foreign law and is not operating in the NRC
Philippines
10 A non-profit corporation organized in the Philippines DC
.
Location and Situs of Income
Compute how much is earned within and earned outside the Philippines from each of the following
independent cases:
Income description Within Without
1. Rey earned P100,000 interest income; 40% of these were from non- 60,000 40,000
resident debtors.
2. A finance company earned P1,000,000 royalties from a franchise; 600,000 400,000
40% of these were derived abroad.
3. Raymond earned P100,000 rent from OFWs from his apartment in 40,000 100,000
the US. He also earned P40,000 rent from his Philippine
condominium unit.
4. Chester, a resident citizen, works home online and submits his 120,000 0
output to clients. He collected P100,000 service fee from foreign
clients and P20,000 from resident clients.
5. Mark rendered audit services to client in Afghanistan for P500,000. 0 500,000
The services were paid in Afghanistan.
6. Jun has a store in a tourist park in Baguio City, Philippines. He 40,000 0
earned a total of P40,000 gain from selling souvenir items. 40%
were from foreign tourists.
7. Don Mariano sold at gain of P2,000,000 to a client abroad a 2,000,000 0
commercial building located in Quezon City, Philippines
8. John sold his stocks in a domestic corporation to a foreign investor 50,000 0
at a gain of P50,000
9. Manso received P20,000 dividends from a domestic corporation and 20,000 30,000
P30,000 dividend income from a non-resident foreign corporation.
10. Davao plant manufacturers tables and sells to resident clients. A 400,000 0
total of P400,000 gross income was realized during the period.
