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A tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the gross income.
All of the following are administrative functions of taxation except
It is the exhaustion of the natural resources like mines, oil and gas wells due to production.
Which of the following will be an appropriate deductible expense for the exhaustion of intangible asset of wasting asset corporation?
Statement 1: The income of the undistributed estate is subject to income tax.
It is defined as a contract whereby two or more persons bind themselves to contribute money, property, or industry to a common fund to engage in profitable activities with the intention of dividing the profits among themselves.
The taxpayer’s income tax is fixed or computed based on the gross income. The usual allowable deductions are completely disregarded in computing this income tax.
The fringe benefit tax is the final tax of the employer.
It is a sale or disposition of stock or securities where substantially identical securities are acquired or purchased within a 61-day period, beginning 30 days before the sale and ending 30 days after the sale.
The power to tax includes the power to destroy because the taxpayer has no option but to pay the tax imposed to him.
The share of the beneficiary of the income of estates during the taxable year Is subject to a
As a rule, the original issue by a corporation of its shares of stock at more or less than the par value or stated value shall have no recognition of gain or loss. Hence, it is not subject to capital gains tax.
The amount of income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income.
Those who are citizens of the Philippines at the time of the adoption of the 1987 Philippine Constitution.
Which of the following interest expense is deductible in full?
The Philippine tax laws are not political and penal in nature.
The fringe benefit tax is the income on income earned by the employee.
The liability of the employer is to withhold the corresponding income tax from the fringe benefit earned by the employee.
Dividend income earned by general commercial partnership is no longer taxable against the partner upon its distribution as share of the partner.
A general professional partnership engaged in the practice of profession and trading of goods is subject to
There is no need to file a tax return if the income of estates or irrevocable trusts is 20,000php and below.
The allowances for personal exemptions of a single mother with a dependent child out of wedlock are 50,000php and 25,000php, respectively.
Which statement is wrong? A revenue bill
Which of the following is classified as deductible loss?
Taxation co-exist with the four elements of the state which includes all, except
Where are the sources of Income come from?
It is absorption of a corporation by another corporation, the latter retaining its own name and identity and acquiring the assets, liabilities, franchises, and powers of the former, and the absorbed corporation ceasing to exist as a separate juridical person.
The monetary value of availed vacation and sick leaves is compensation income.
The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the basis or adjusted basis.
Tax Administration is a system involving enforcement of taxes through the use of
All BIR approved retirement pays are exempted from income tax.
All partnerships are taxed in the same manner as corporation.
It is a systematic way of collecting taxes at source, an indispensable method of collecting taxes to ensure adequate revenue for the government.
It is a partnership wherein part of all of its income is derived from the conduct of trade or business.
Which of the following characteristics describes our internal revenue laws?
They provide current and future benefits in business operations.
Estates and trusts are treated as separate taxable entities.
It is a legal claim granted to the government to secure the proper payment of the tax, surcharges, interest and costs on all property subject to levy or distraint.
The net income received by a partner of a general co-partnership is subjected to
The income of several irrevocable trusts shall be included in the consolidated income of the grantor to avail of one personal exemptions.
Cash method of reporting income can deduct prepaid expenses in the year of payment.
An income of a professional entertainer can be reduced by OSD.
The exemption allowed to estate or trust is 50,000php.
Gain from redemption of shares in mutual fund is exempted from income tax.
The absolute exemption allowed to estates and trusts is
Distinctions of Income
Which of the following is a taxable fringe benefit?
Most taxpayers elect to report income in a fiscal year basis.
Tips are taxable.
In installment method, the excess of mortgage assumed over cost of property sold is considered as part of the initial payment.
Which of the following taxes included in the conduct of business is allowed as deduction from business income?
The tax-exempt joint venture is not required to file an ITR.
The 13th month pay and other benefits amounting to P82,000 and below are not taxable.
The following incomes are not allowed to deduct business expenses except
In ordinary assets, 30% of the net taxable income for individual taxpayers.
Interest income from foreign currency deposit of a nonresident Filipino is subjected to final withholding tax of 7.5%.
The gains or losses on short sales are capital asset transactions.
All of the following are not taxes except
A lotto or sweepstakes winnings derived by a resident Filipino citizen within and outside the Philippines are exempted from Philippine income tax.
Co-ownership income is not taxable.
Taxes withheld in certain payments are intended to equal or at least approximate the tax due of the payee on said income.
If the only source of income of the partner is his share in a general commercial partnership, he is no longer required to file the annual income tax return.
This income tax system is a combination of gross compensation income and/or net income from business, trade or profession to arrive at the total income subject to tabular tax rates.
Interest on loans granted by the employer to employee are taxable fringe benefit when the interest rate is
Leasehold improvement is recognized.
Which of the following is not an activity involving tax administration?
Trust device is usually used to transfer property from one generation to another.
It is an obligation imposed or a right to administer over a property given to a person for the benefit of another.
All of the following taxes are classified as income taxes, except 20% royalty tax
This refers to the process of taxation to determine the amount of tax based on existing tax law.
Dependent senior citizen is not entitled for additional exemption of 25,000php.
It is an inter-corporate dividend received by a nonresident foreign corporation from a domestic corporation is subject to 15% final withholding tax provided that foreign law allows taxpayer clause
All amounts received from a life insurance annuity are taxable.
The share of partners from the 700,000 net income of a general professional partnership is subjected to
Income that is not realized is taxable.
Gross income includes other income from other sources.
The absolute exemption applicable to the income of estate or trusts amounts to
Each beneficiary must include in his return his distributive share of the net income of the trust.
Installment of payments.
It is twenty five percent (25%) surcharge.
These are procedures or actions available both to the government to collect taxes and to the taxpayer to avoid abuses in the payment of taxes.
This tax assessment is being asked to be cancelled because there is a question as to its validity or legality.
The share of partners in the general professional partnership is taxable in the conventional manner of computing the normal income tax of individual.
It is a scheme of reducing payment of taxes through legally permissible means.
Taxation is the primary source of government revenue. Hence, all government funds come from taxes.
The distributive share of a partner in a commercial partnership is subjected to final tax of 10%.
Partner's contributions to the partnership are subjected to a final tax of 10%.
If the taxpayer is an individual, his taxable income shall be computed on the basis of calendar year.
~Hasnewline~In corporation, the capital loss is no holding period and deductible from capital gain only.
A government officer considered as tax enforcer by having the power to ascertain the validity of tax laws subject to the review of the Courts of Justice
The monetary value of fringe benefit if given in money is:
The following are business taxes except
By month.
The gross receipts of a professional entertainer is subjected to a 10% creditable withholding tax his/her income during the year.
The net worth method is commonly used in determining the taxable income of taxpayers with complete accounting records.
Sovereign equality dictates that a nation cannot impose taxes on the property of another country.
The additional fringe benefits received by the rank-and-file employees are not subject to final fringe benefit tax rate, but are to be reported in the annual income t ax return.
Which of the following is required to be filed with quarterly income tax return?
The State can still exercise its taxing powers over its citizen, even if he resides outside the taxing State's territory.
A joint venture is taxed like a corporation.
It is a contract whereby the parties, by reciprocal concessions, avoid litigation or put an end to one already commenced.
They are usually called “period cost” because they are related to a particular period of time of business operation.
Fringe Benefits are forms of incentives to managerial employees.
Which of the following co-ownership is not subjected to tax as a corporation?
Which value should be used as tax base to compute the fringe benefit on the property assigned for the use of employers?
Reward for an event.
The income of a trust for the taxable year which is to be distributed to the beneficiaries is returnable and will be taxed to the respective beneficiaries.
It is used frequently to transfer property from one generation to another.
The taxable of the estates or trusts is to be computed in the same manner as
These refer to the last day for filing return and payment of tax.
Capital assets are not subjected to normal tax.
An individual taxpayer is exempted from filing income tax return if his sole income has been subjected to final withholding tax.
Which of the following amount of winnings/prizes is subjected to final tax of 20%?
Statement 1: The grantor is liable for the income of revocable trust,
Which of the following is not included as entertainment, amusement and recreation expenses of a business?
A net taxable income of a nonresident alien sole proprietor of a cinematographic film is subjected to a
As a rule, excess amount of liquidating dividends over cost of shares surrendered is taxable.
He shall be responsible for the withholding and remittance of the right amount of tax needed by deducting and withholding from his employees’ compensation. He is required to collect, account and remit any tax.
Which of the following is not within the scope of authority of the BIR Commissioner?
The computation of the net taxable income of the estate is the same manner as individual taxpayer, except that the personal exemption is limited to 20,000php.
Local tax ordinances must be uniformly and equally applied throughout the country.
Individual taxpayers are allowed to elect installment payment of their income taxes when the tax due is 2,000php.
For self-employed taxpayers, their quarterly income tax returns are to be reduced with corresponding personal exemption.
Merchandise inventory is a capital asset.
Taxation could be described as a power, as a process, or as a means. As a power, taxation is a way of apportioning the cost of government among those who are privileged to enjoy its benefits.
The general professional partnerships and joint ventures are not classified as a corporation.
A Filipino citizen classified as special taxpayer is required to be taxed based on his gross compensation income subject to a final tax of 15%.
All government entities regardless of their functions are exempted from taxes because it would be impractical for the government to be taxing itself.
Which of the following is a subject to a creditable withholding tax at source?
Tax exemption is transferable and assignable.
One of the following is not creditable against the total computed tax per ITR
Dividends received by a cooperative from a domestic corporation are tax exempt.
No taxable income is realized from the passage of property to the executor or administrator on the death of the descendant.
A senior citizen's income is exempted from all income taxes.
The portion of income from irrevocable trust that would be distributed during the year is taxable against the
A trust is a right of property, real or personal, held by one party for the benefit of another.
Tax affects the area or nation as a community rather than as individuals. This is a specific explanation of
Allowance on his retirement.
These represent reductions of resources due to unintended destruction or deprivation of things.
The deferred payment method adopts the present value of reporting income.
A taxpayer that allowed with both personal exemption and additional exemption is a/an
A general professional partnership is not required to file its annual income tax return.
Income accumulated in trust for the benefit of unborn person is not reported income.
The existence of a Constitution is necessary for the exercise of the inherent powers of the Sovereign State.
Amount of wealth plus savings and earnings.
Protection is the basic consideration that justifies tax situs.
It terminates or condenses the taxpayer's period.
Capital Gain refers to the excess of the determined cost over the value received from the sale or exchange of a capital asset.
Statement 1: Both revocable and irrevocable trust are taxable for their income earned.
Reward for a contest.
The creation of trusts may be either expressed or implied.
The properties left by the decedent transferable to the successors are called
In taxation, it is one's civil liability to pay taxes which gives rise to criminal liability.
By hour, day, week.
It is a class of the stock refer to the shares of stock to be issued by the charter or by-laws with respect to dividends and/or assets in case of liquidation over the remainder of the stocks of the corporation which are called common stock.
Which of the following companies would report release reserved funds as part of gross income in the year of release?
If the professional or talent fee of an entertainer exceeds 720,000php per year, the creditable withholding tax should be 20%.
“Any good, service, or other benefit furnished or granted by an employer, in cash or in kind, in addition to basic salaries, to an individual.
Which of the following statements is not correct?
The beneficiary of the income of estate has the status of
As an option of a resident taxpayer, income taxes paid in foreign countries can be claimed as deduction from gross income or tax credit subject to limit.
The share of a partner in the income of a commercial partnership is
The income of co-ownership that is distributed to the beneficiary is subjected to 10% withholding tax if less than 720,000php per year.
Below are the legal sources of income. Select three sources of income.
A corporation cannot enter into a partnership contract, but it can engage in a joint venture.
These resident foreign corporations are subjected to a 10% final tax on interest income derived from foreign currency loans granted to residents.
Which of the following taxes incurred in the conduct of business is not allowed as deduction from business income?
The trustor (grantor) reserves the power to change at any time any part of the terms of the trust.
The following individual taxpayers are granted basic and additional personal exemption except
Who is the BIR Commissioner?
The income of general commercial partnership is also subjected to MCIT or Normal Corporate Tax whichever is applicable.
It paid or payable of 1,000,000php for the preceding taxable year.
Real and personal properties not used in trade or business like residential house and lot, car, jewelries, etc are example of capital assets.
It is an activity intended to make profit
The income of irrevocable trust is taxable in the same manner as the income of the estate.
An allowance paid to a widow or heir out of the corpus of the estate trust is not deductible from gross income.
Which of the following is not true?
It refers to the disposal through sale or exchange of ordinary assets or capital assets.
One of the following is not creditable against the total computed tax per ITR.
Illegal source of income
Which of the following income is allowed to be reduced with itemized deductions?
Passive income is subjected to normal tax only if not subjected to final tax.
Which of the following taxes are not allowed as deductions from reportable gross income, except
As a rule, business expenses are deductible only if they are incurred in relation to the business income taxable in the Philippines. If a business expense could not be traced whether incurred within or not, such expense shall be allocated based on the gross income within and without.
The capital gains on sale of partner's interest is subjected to a final tax of 5% if the amount is 100,000php and 10% in excess of the first 100,000php.
The tabular rates of tax prescribed for individuals shall be used in computing the income tax of trusts or estates.
The tax doctrine of Marshall Dictum explains that tax is a power to destroy.
Nonresident aliens engaged in Philippines are allowed with personal exemptions and additional exemptions is subjected to reciprocity.
The tax rate on special aliens is 15% of their gross compensation income derived within the Philippines from special employment by multinational corporation.
No person shall be imprisoned for nonpayment of income taxes.
It is a system of collecting taxes in accordance with the country’s tax policies.
An increase in the value of property is income.
The special deduction from trust is allowed to reduce the income of trust if such trust is administered in foreign country.
It is one formed by two or several persons for the sole purpose of exercising their common profession of which no part of income derived from engaging in any trade or business.
Which of the following remedies against double taxation requires tax treaty?
A CPA certificate is required if the quarterly gross sales, gross receipts or earnings of an individual taxpayer
Fringe benefits include only salaries and services or similar benefits given by employer to a managerial employee.
A trustee is the person who establishes a trust.
All of the following are National taxes as to collecting authority except
It is the government agency primarily in charge to assess and collect all taxes and charges imposed.
A tax evader sidesteps the law, while the tax avoider breaks it.
Which of the following is entitled to claim NOLCO?
Which of the following income is subjected to a monthly creditable withholding tax?
Professional or talent fees for services rendered by an individual shall be subjected to a creditable withholding value-added tax.
Revenues derived from taxes cannot be used for the exclusive use of private persons.
Which of the following tax rates behaves in the same direction with the taxable value?
It must be imposed directly upon the taxpayer.
All damage recoveries are not taxable.
It is a civil penalty imposed by law in addition to the main tax required to be paid dud to delinquency or misrepresentation of taxes.
The share of a partner in the general professional partnership is subjected to final withholding tax of 10% if the amount is below 720,000php.
Income earned outside the Philippines by domestic helpers is tax-exempt because they are corresponded nonresident citizen.
The personal exemption of a nonresident alien not engaged in business in the Philippines is subjected to reciprocity agreement.
The income of the trust which is accumulated for future distribution is taxed against the beneficiaries.
Which of the following is a party in a joint venture?
If a taxpayer dies during the taxable year, his estate may claim the personal exemption as if he died at the close of such year.
Domestic and foreign corporations shall be taxed with 2% based on gross income and not on their net taxable income
Additional remuneration for overtime and separation pay does not include fringe benefits.
It is a foreign-born person who is not qualified to acquire Philippine citizenship by birth or after birth.
Total earnings from whatever source.
The co-venture in a tax-exempt joint venture are also exempt from income tax.
It exists when more than one person acquired the right to own a piece of property or mass of properties. The ownership acquisition by more than one person over a property or properties may be due to succession of an estate or donation.
If the amount to be distributed to a partner of a general professional partnership is more than 720,000php, it is to be withheld with 15% creditable tax.
In general, bills need not to be signed by the President to become a law.
An alien residing and doing business in the Philippines is allowed to have a tax credit for income taxes paid other country.
It paid or payable of 100,000php for any quarter.
Which of the following is deductible from related gross income?
Which of the following nature of laws describes tax laws?
Which of the following is the correct amount of additional personal exemption?
A beneficiary of an estate engaged in business has the status of self-employed individual player.
De minimisWhich of the following fringe benefit received by a managerial employee is taxable with final income tax?
It refers to the use of regular domestic income tax rates on corporate taxable income which 30%
Which of the following is subjected to tax?
The business income of a domestic corporation may be subject to any of the following except
All housing benefits provided by employer to managerial employee are subject to fringe benefit tax.
Normal taxes are usually subject to creditable withholding tax.
If the casual loss on business property is partial, the deductible loss is the
Which of the following business travel expenses is not subjected to fringe benefit tax?
A Filipino citizen who stayed outside the Philippines and worked abroad for 183 days during the taxable year is classified as
In general, which of the following incomes is not allowed to be reduced with personal exemption
The share of co-ventures in a taxable joint venture is subjected to a final tax of 10%.
Which of the following co-ownership is subject to income tax?
The requisites of wash sale must be the sale of stock or securities is at a gain.
It is a business activity that is organized or established only for temporary or short-period of time.
Co, ownership which exists in 10 years for more than 10 years, is subjected to tax if less than 720,000php per year.
All of the following are inherent restrictions on the exercise of taxation power, except
It is a corporation’s own stock that has been issued and then reacquired but not cancelled.
Taxes collected by the BIR are local taxes.
It represents basic interest of ownership in a corporation. Stockholders holding common shares are called common stockholders.
A citizen who works abroad most of the time during the taxable year is a nonresident citizen.
In tax capitalization, the buyer absorbs the payment if tax and includes the same as part of the cost of the acquired property.
The royalty income in pursuit of business received by franchising companies like Jollibee Corporation is subject to
It is composed of all properties, rights and obligations including those properties, or obligations that have accrued thereto since the opening of the succession the estate is to be transferred from the decent to his successors.
The fringe benefit tax rate shall be the same with the normal corporate tax rate for income taxes.
All of the following taxes are classified as income taxes, except
Dealings in property refers to the disposal through sale or exchange of ordinary assets or capital assets.
In case of two or more trusts created by the same person for the same beneficiary, the taxable income of all trusts shall be consolidated and the tax shall be computed based on the consolidated income.
The benefits from taxation have to be experienced to justify the legitimacy of collection of taxes from the people.
Taxation is the government's legitimate means of interfering with private properties of its subjects.
Which of the following corporate tax is not yet implemented in the Philippines?
The grossed-up monetary value is the benefit expense of the employer.
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