1.

For income tax purposes, any person or corporation that holds in trust an estate of another person or persons
A. Beneficiary
B. Fiduciary
C. Legatee
D. Devisee

2. A citizen of the Philippines who works and derives income abroad is a resident citizen if he stayed
outside the Philippines
A. for less than 180 days
B. for more than 180 days
C. for 183 days or more
D. for less than 183 Days

3. A citizen of a foreign country is considered a non-resident alien engaged in business in the Philippines
if he stayed inside the Philippines
A. for 183 days or more
B. for less than 183 days
C. for more than 180 days
D. for less than 180 days

4. A non-resident alien is deemed doing business in the Philippines if he

A. Is an individual whose residence is within the Philippines
B. Is an individual whose father or mother is an alien who is engage in business in the
Philippines
C. Is an individual who is naturalized in accordance with law
D. Shall come to the Phil. and stay therein for an aggregate period of more than 180 days during a
calendar year

5. Tax as distinguished from license fee:

A. Non-payment does not necessarily render the business illegal
B. A regulatory measure
C. Imposed in the exercise of police power
D. Limited to cover cost of regulation

6. Value-added tax Is an example of:

A. Graduated Tax
B. Progressive Tax
C. Regressive Tax
D. Proportional Tax

A domestic corp in it’s fourth year of operation had:

Gross profit from sales 3,000,000
Expenses of operations 1,000,000
Quarterly Income taxes paid 500,000
Dividend from domestic corporation 200,000
Interest on bank deposit, MBTC 100,000
Gain on sale of Capital Assets:
Land and building outside the PH on a selling
price of 10,000,000 and cost of 5,000,000 5,000,000
Shares of stock of a domestic corp, traded
directly to the buyer on a selling price of
350,000 and cost of 100,000 250,000

7. How much is the Final Tax due?

A. 20,000 B. 30,000 C. 40,000 D.0
8. How much is the total Capital Gains tax due?
A. 937,500 B. 37,500 C. 600,000 D. 637,500
9. How much is the income tax payable?
A. 100,000 B. 1,600,000 C. 2,100,000 D. 60,000
 Year 5 Year 6 Year 7 Year 8 Year 9
MCIT 400,000 100,000 300,000 200,000 100,000
RCIT 100,000 200,000 200,000 100,000 400,000

10. How much is the income tax due in Year 8?

A, 150,000 B. 100,000 C. 200,000 D. 0
11. How much is the income tax due in Year 9?
A, 150,000 B. 100,000 C. 200,000 D. 0

12. Under this system, the amount of income tax withheld by the withholding agent is constituted as full and
final payment of the income tax due from the payee
A. Creditable Withholding Tax
B. Final Withholding Tax
C. Global Tax System
D. Schedular Tax system

13, The term “public” means borrowing or having stockholders from how many individuals or corporate lenders
at any one time?
A. 25 or more
B. 20 or more
C. 20 or less
D. 10 or more

14. Which of the following passive income from Philippine sources is exempt when received by nonresident
aliens and non-resident citizens?
A. Royalties, in general
B. Yield or any other monetary benefit from deposit substitute
C. Interest income received from a depositary bank under expanded foreign currency deposit system
D. Other winnings

15. Cash and/or property dividends shall be subject to 10% final withholding tax if actually or constructively
received from any of the following except:
A. domestic corporation or from joint stock companies.
B. insurance or mutual fund companies
C. regional operating headquarters of multinationals
D. a nonresident foreign corporation.

16. Share of an individual in the distributable net income after tax shall be subject to 10% final tax if received
from any of the following, except:
A. business partnership
B. general professional partnership
C. association
D. joint account, joint ventures or consortium

17. Which of the following passive income is exempt from tax when received by resident or citizen and
nonresident aliens engaged in trade or business in the Philippines but subject to 25% final tax when received by
nonresident aliens not engaged in trade or business?
A. Prizes of more than PlO,OOO
B. Interest income from long-term deposit or instrument evidenced by certificates by BSP
C. Yield or any other monetary benefits from bank deposits or any similar arrangements
D. Other Winnings

18. Dividends from a domestic Corp and or share in the net income of a taxable partnership received by a
citizen during the year is subject to a final tax of?
A. Exempt
B. 30%
C. 20%
D. 10%
The Bicol School of Business and Arts is a private educational institution recognized by the government. The
following are the financial data for its fiscal year ending June 30, 2019

Tuition Fees 12,800,000

Miscellaneous fees 1,800,000
Interest on bank deposits 12,000
Rent Income of school facilities
to outsiders 350,000
Salary and bonuses, all personnel 7,500,000
Other OPEX 3,500,000
Repayment of Loan 400,000
Quarterly income tax paid 48,000

A building was constructed on April 2, 2019 at a cost 2,000,000 with a depreciable life of 50 years.

19. Assuming the school opted to expense the cost of the new building, the income tax payable of the the school
for the year ended June 30, 2019 is
A. 343,000
B. 147,000
C. 585,000
D. 537,000
20. Assuming the school opted to capitalize the cost of the new building, the income tax payable of the the
school for the year ended June 30, 2019 is
A. 346,000
B. 147,000
C. 1,128,000
D. 1,203,200

21. For excise or privilege tax, the situs of taxation is the place where the:
A. Act is performed
B. Occupation is acquired
C. Act might occur
D. Occupation might be acquired

22. Although the power of taxation is basically legislative in character, it is not the function of Congress to
A. Fix with certainty the amount of taxes
B. Collect the tax levied under the law
C. Identify who would collect the tax
D. Determine who should be subject to tax

23. Which statements does not properly refer to a general professional partnership? A GPP is one
A. Registered as such with SEC and the BIR
B. That is composed of individuals who exercise a common profession
C. That exclusively derives income from the practice of common profession
D. That derives professional and rental income from property owned by it.

24. The Department of Finance thru its officers entered into a contract with foreign investors granting them
exemptions in all forms of taxes to encourage investments in the Philippines. The contract is
A. Void, unless the President Ratifies
B. Void, because the power to grant tax exemption is vested in Congress
C. Valid, if the President has authorized the officers to enter into such contract
D. Valid, because the purpose is to promote public welfare.

25. Which of the following statements is correct?

A. Proprietary Educational Institutions and Hospitals shall pay a tax of 10% on their taxable income if
the gross income from unrelated trade, business or other activity is less than 50% of its total gross
income.
 B. GOCC’s, agencies or instrumentalities shall pay a tax upon their taxable income as are imposed upon
corporations or associations engaged in a similar business, industry or activity
C. Dividends received by a domestic corp from another corporation shall not be subject
to tax.
 D. Any income of non-residents, whether individuals or corporations from transactions with depositary
banks under the expanded foreign currency deposit system shall he exempt from income tax.
Erika Company a domestic Corp had missing files, she ask of you to compute for her taxes, the following are
the available data:
Accounts Receivable, beg 1,234,055
Accounts Receivable, end 1,052,243
Accounts Payable, beg 286,924
Accounts Payable, end 737,824
Inventory, beg 815,386
Inventory, end 988,874
Freight In 40,000

Actual amount collected on accounts receivable 670,000

Actual amount paid to suppliers 540,000
Cash Sales 1,235,350
Other Operating Expenses 670,000

26. How much is the gross income?

A. 865,124 B. 850,000 C. 866,126 D. 867,125

27. How much is the taxable net income?

A. 195,124 B. 180,000 C. 196,126 D 197,125

28. How much is the Income tax payable?

A. 58,537.2 B. 54,000 C. 58,837.8 D. 59,137.5

29. When Dina Marthday died, she left real properties to her husband and three small children. The husband
administered the property, the rental income of which he accumulated and later used in buying a passenger bus.
Are the income of the inherited properties and the bus subject to tax?
Inherited Property Bus
A. Yes Yes
B. Yes No
C. No Yes
D. No No

Bimbam and Company a business partnership, had the following data of income and expenses:
Gross Income 750,000
Expenses 200,000
Dividend from a domestic Corp. 75,000
Interest on bank deposit(gross) 10,000

Partners Bim and Bam share profit and lossess in the ratio of 55% nad 45% respectively

30. The income tax payable by Bimbam and Company is

A. 218,750
B. 187,500
C. 165,000
D. 192,500

31. The final taxes on the respective share of Bim in the partnership income is
A. 25,740
B. 31,157,50
C. 24,227.5
D.0

32 The final taxes on the respective share of Bam the partnership income is
A. 25,492
B. 21,060
C. 0
D. 19,822.5
Panday and Pandak are partners in the following partnership:

Partnership Gross Income Expenses Withdrawal, Panday Withdrawal, Pandak

Professional Partnership A 400,000 250,000 60,000 40,000
Professional Partnership B 300,000 500,000 0 0
Business Partnership A 500,000 200,000 40,000 20,000
Business Partnership B 200,000 300,000 0 0

Panday holds 60% interest while 40% belongs to Pandak.

The partnership remitted to the BIR the corresponding withholding taxes on the the withdrawals of panday and
pandak.

The partner’s personal income and expenses are shown below:

Panday Pandak
Gross income from sole prop. 800,000 900,000
Business Expenses 250,000 370,000
Other Income:
Rent, net of 5% WT 57,000 0
Royaly 0 50,000
Dividend from Domestic co. 30,000 50,000

33. The Income tax payable of Panday is

A. 66,000
B. 65,000
C. 72,000
D. 70,000
34. The Income tax payable of Pandak is
A. 57,500
B. 53,500
C. 54,500
D. 56,000
35. The final taxes of Panday is
A. 3,000
B. 4,000
C. 7,000
D. 22,000
36. The final taxes of Pandak is
A. 17,000
B. 14,600
C. 22,200
D. 15,200

37. Double taxation in its general sense means taxing the same subject twice during the same taxing period. In
this sense, double taxation
A. Violates substantive due process
B. Does not violate substantive due process
C. Violates the right to equal protection
D. Does not violate the right to equal protection.

38. Tinong died on January 1, 2019. He left a gross estate with a cost of 4,000,000 but valued at 3,500,000
under an administrator. During the year, the gross income derived from the business of the estate was 900,000
while the related expenses amounted to 150,000. Beneficiaries Felipe and Khadafi were given 100,000 each.
How much is the taxable income of the estate?
A. 500,000
B. 550,000
C. 0
D. 600,000