Chapter 8

Question 1

Generally, proceeds from a life insurance policy is exempt from RIT. What is the exception?

Answer 1

When the amounts are held by an insurer under an agreement to pay interests thereon, the interest payments are taxable.

Question 2

Are proceeds of life insurance by a corporation for its officers taxable?

Answer 2

Also exempt

Question 3

Are proceeds of property insurance contracts taxable on RIT?

Answer 3

Yes only to the extent of the tax basis of the property lost or destroyed. The excess is taxable.

Question 4

Generally gifts, bequests, and devises or descent are not taxable. When can it be taxed?

Answer 4

The value of the actual things are not taxable but income derived from these properties are taxable.

Question 5

Gifts vs Exchange

Answer 5

261

Question 6

Gifts vs Bequest vs Devise/Descent

Answer 6

Gift - given without consideration
Bequest - gift of personal property
Devise - gift of real property

Question 7

Are employment gratuities exempt from RIT?

Answer 7

No since it is in exchange of services rendered

Question 8

Is the transfer of property by the employer to managerial or supervisory employees subject to RIT?

Answer 8

No it is subject to fringe benefit tax

Question 9

When an accident happens in a workplace, you are paid moral damages, reimbursement for hospital dues, and your supposed salary for 2 weeks that you would have had worked for if there was no accident. Which of these are taxable?

Answer 9

Only the lost salary since when you receive such salary without the accident you still would have paid income tax for it.

Question 10

Who may avail the exemption under the Retirement Benefit under RA 4917?

Answer 10

1-10-50-RPBP
261

Question 11

To be exempt under RA 4917, what kind of retirement benefit plan should it be?

Answer 11

a trusteed plan

Question 12

Retirement benefit under 4917 vs under 7641

Answer 12

261-262

Question 13

What are the requisites to be exempt under separation or termination? (2)

Answer 13

262

Question 14

Are back wages or illegal deductions repaid by the employer upon termination also exempt?

Answer 14

No they are taxable

Question 15

Is terminal leave pay or the commutation of accumulated unused leave credits also exempt?

Answer 15

No they are taxable

Question 16

How can the availment of tax exemption on separation or termination be done?

Answer 16

Request for a ruling to certificate of tax exemption from the BIR filed at the RDO where the employer os registered

Question 17

Who can the avail of tax exemption on separation or termination be done?

Answer 17

The employee or his heirs

Question 18

USVA meaning

Answer 18

United States Veterans Administration

Question 19

SSS benefits are under RA?

Answer 19

RA 8282

Question 20

GSIS benefits are under RA?

Answer 20

8291

Question 21

GSIS meaning

Answer 21

Government Service Insurance System,

Question 22

Is the income derived by the government and its apolitical subdivisions from any public utility or exercise of essential government function also exempt?

Answer 22

Yes

Question 23

Are GOCCs taxable as regular corporations?

Answer 23

Yes since they are commercial in nature

Question 24

What is the general rule on the taxability of government agencies and instrumentalities? What is the exception?

Answer 24

GR: Not taxable because of public service nature

XPTN: When they engage in income-producing naturally proprietary activities

Question 25

Requisites to be exempt under religious, charitable, academic, and literary prizes and awards (2)

Answer 25

265

Question 26

Requisites to be exempt from prizes and awards in Sports Competitions (3)

Answer 26

265

Question 27

Generally mandatory employee contributions are exempt. How about voluntary contributions?

Answer 27

Taxable

Question 28

New name of tag-ibig

Answer 28

Home Development Mutual Fund

Question 29

This is a contributor's voluntary retirement account established from qualified contributions of the contributor and or his employer for the sole purpose of being invested in qualified PERA investment products.

Answer 29

PERA

Question 30

PERA meaning

Answer 30

Personal Equity Retirement Account

Question 31

OFWs are allowed to contribute to a PERA account up to how much? How about non OFW?

Answer 31

OFW - up to 200,000 Non OFW - up to 100,000\ per year basis

Question 32

When employers contribute to its employees PERA accounts, could this be considered in lieu of contribution to SSS and other related benefits?

Answer 32

No

Question 33

PERA contributors are allowed to claim how many percent of their pERA contributions as tax credit against any internal revenue taxes?

Answer 33

5%

Question 34

Is investment income in PERA accounts exempt?

Answer 34

Yes

Question 35

Is the interest earned in sales of bonds, debentures, and other indebtedness also exempt?

Answer 35

No, only the gain

Question 36

This is an open-end and close-end investment company as defined under the Investment Company Act

Answer 36

Mutual Fund Company

Question 37

MGB meaning

Answer 37

Mines and Geosciences Bureau

Question 38

These are Filipino citizens who have organized themselves as an individual miner licensed by MGB

Answer 38

Registered small scale miner

Question 39

This is aka People's Small-Scale Mining Act

Answer 39

RA 7076

Question 40

These are persons engaged in the business of buying and selling gold that have complied with the BSP's gold trader accreditation procedures

Answer 40

Accredited traders

Question 41

This refers to any gold hoarders, traders, or buyers other than BSP and accredited gold tratders

Answer 41

Black market

Question 42

This is the co-production, joint venture, or mineral production sharing agreement between the government and small-scale mining contractor

Answer 42

Small scale emining contract

Question 43

Who can avail the exemption on the sale of gold?

Answer 43

SSMs and gold traders registered with the BSP

Question 44

Are unregistered SSMs and gold traders also exempt?

Answer 44

No

Question 45

BMBE Act is aka?

Answer 45

RA 9178

Question 46

Who fixes the minimum wage?

Answer 46

RTPWPB or the Regional Tripartite Productivity Wage and Productivity Board

Question 47

This is an allowance paid to both public and private health workers directly catering to in contract with COVID-19 patients for every month they are serving

Answer 47

COVID-19 Special Risk Allowance

Question 48

This is a compensation given to temporary Human Resources Health serving in the front line during the state of emergency due to COVID

Answer 48

Actual Hazard duty Pay

Question 49

This is a business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the business entity's office, plant, and equipment are situated, do not exceed P3,000,000.

Answer 49

BMBE or barangay micro-business enterprise

Question 50

Can a BMBE who is a branch orsubsidiary of a large company be exempt?

Answer 50

No