1.
The Board of Directors of UNITEAM Corporation, a company primarily engaged in
the business of marketing and distributing pest control products, approved the
partial cessation of its commercial operations, resulting in the separation of 32
regular employees. Only half of the affected employees were notified of the board
resolution. Is the amount subject to or exempt from income tax? Explain (10pts)
2. Ms. C, a resident citizen, bought ready-to-wear goods from Ms. B, a nonresident
citizen.
a) If the goods were produced from Ms. B's factory in the Philippines, is Ms. B's
income from the sale to Ms. C taxable in the Philippines? Explain.
b) If Ms. B is an alien individual and the goods were produced in her factory in
China, is Ms. B's income from the sale of the goods to Ms. C taxable in the
Philippines? Explain. (10pts)
3. Mr. H decided to sell the house and lot wherein he and his family have lived for
the past 10 years, hoping to buy and move to a new house and lot closer to his
children's school. Concerned about the capital gains tax that will be due on the
sale of their house, Mr. H approaches you as a friend for advice if it is possible for
the sale of their house to be exempted from capital gains tax and the conditions
they must comply with to avail themselves of said exemption. How will you
respond? (15pts)
4. Mr. A, a citizen and resident of the Philippines, is a professional boxer. In a
professional boxing match held in 2023, he won prize money in United States
(US) dollars equivalent to P300,000,000.
a) Is the prize money paid to and received by Mr. A in the US taxable in the
Philippines? Why? (15 pts)
b) May Mr. A's prize money qualify as an exclusion from his gross income? Why?
(15pts)
c) The US already imposed and withheld income taxes from Mr. A's prize money.
How may Mr. A use or apply the income taxes he paid on his prize money to the
US when he computes his income tax liability in the Philippines for 2023? (15pts)
