income taxation (QE reviewer) Flashcards
(131 cards)
1
Q
- The process by which the sovereign raises income to defray the expenses of the government is called (RPCPA)
A subsidy
B. tariff
C. taxation
D. tribute
A
C. taxation
2
Q
- One of the characteristics of internal revenue taxes is that they are (RPCPA)
A. Criminal in nature
B.Penal in nature
C. Political in nature
D. Generally prospective in application
A
D. Generally prospective in application
3
Q
In case of conflict between tax laws and generally accepted accounting
principles (GAAP) (RPCPA)
A. Both tax laws and GAAP shall be enforced.
B. GAAP shall prevail over tax laws
C. Tax laws shall prevail over GAAP
D. The issue shall be resolved by the court
A
C. Tax laws shall prevail over GAAP
4
Q
- Which of the following has no power of taxation? (RPCPA)
A provinces
B. cities
C. barangays
D. barrios
A
D. barrios
5
Q
- “Schedular system of income taxation” means (RPCPA)
A. All types of income are added together to arrive at gross income.
B. Separate graduated rates are imposed on different types of income.
C. Capital gains are excluded in determining gross income.
D. Compensation income and business/professional income are added together in arriving at gross income.”
A
B. Separate graduated rates are imposed on different types of income.
6
Q
- Which of the following statements is true?
A. Opinions of legal luminaries are sources of tax laws.
B. The Constitution grants exemption from all kinds of taxes to religious and charitable organizations.
C. Because the power to tax is unlimited, comprehensive, plenary and supreme, the power to tax can reach over into any jurisdiction to seize upon person or property.
D. The “benefits-protection theory” is the source of the “doctrine of symbiotic relationship.”
A
D. The “benefits-protection theory” is the source of the “doctrine of symbiotic relationship.”
7
Q
- One of the following is a primary purpose of taxation
A. Protection of local industries against foreign competition through imposition of high customs duties on imported goods;
B. Reduction of inequalities in wealth and income by imposing progressively higher tax rates;
C. To secure revenue for the support of the government.
D. Strengthening of anemic enterprises by giving tax exemptions
A
C. To secure revenue for the support of the government.
8
Q
- Which of the following is not a secondary purpose of taxation?
A. To serve as key instrument of social control.
B. To effect a more equitable distribution of wealth among people.
C. To achieve social and economic stability.
D. To raise revenue to defray the necessary expenses of the government.
A
D. To raise revenue to defray the necessary expenses of the government.
9
Q
- Which is the best answer? A tax reform at any given time underscores the fact that (RPCPA)
A Taxation is an inherent power of the state.
B. Taxation is essentially a legislative power.
C. Taxation is a power that is very broad.
D. The state can and should adopt progressive taxation.
A
C. Taxation is a power that is very broad.
10
Q
- The legislative body can impose a tax at any amount underscores the legal truism that taxation is (RPCPA)
A. An inherent power of the tax.
B. A very broad power of the state.
C. Essentially a legislative power.
D. For public purpose.
A
B. A very broad power of the state.
11
Q
- All of the following, except one, are canons of a sound tax system
A. fiscal adequacy
B. theoretical justice
C. administrative feasibility
D. inherent in sovereignty
A
D. inherent in sovereignty
12
Q
- Under this basic principle of sound tax system, the government should not incur a deficit (RPCPA)
A. Theoretical justice
B. Administrative feasibility
C. Fiscal adequacy
D. None of the above
A
C. Fiscal adequacy
13
Q
- The following, except one, are basic principles of a sound tax system
A. It should be capable of being effectively enforced.
B. It must be progressive.
C. Sources of revenue must be sufficient to meet government expenditures and other public needs.
D. It should be exercised to promote public welfare.
A
D. It should be exercised to promote public welfare.
14
Q
- Real property taxes should not disregard increases in the value of real property occurring over a long period of time. To do otherwise would violate the canon of a sound tax system referred to as (BEQ)
A. theoretical justice C. administrative feasibility
B. fiscal adequacy D. symbiotic relationship
A
B. fiscal adequacy
15
Q
- Which of the following is not one of the canons of a sound tax system?
A. Quantifiability C. Certainty
B. Equality D. Convenience
A
A. Quantifiability
16
Q
which theory in taxation states that without taxes, a government would be paralyzed for lack of power to activate and operate it, resulting in its destruction?
a. power to destroy theory
b. lifeblood theory
c. sumptuary theory
d. symbiotic doctrine
A
B. lifeblood theory
17
Q
- in spite of opposition from people engaged in the business of tobacco and tobacco workers, Congress passed a law that increased the tax rates on cigarettes by 200% The funds to be derived from such increase will be used to finance the implementation of the Universal Health Care Law in our country.
The law is -
A. Invalid Congress had abused its levying power.
B. Invalid. It is deprivation of property without due process.
C. Valid. Lifeblood theory.
D. Invalid. The power to tax does not include the power to destroy
A
C
18
Q
- Which statement below expresses the lifeblood theory?
A. The assessed taxes must be enforced by the government.
B. The underlying basis of taxation is govemment necessity, for without taxation, a govemment can neither exist nor endure.
C. The power of taxation is an arbitrary method of exaction by those who are in the seat of power.
D. The power of taxation is an inherent power of the sovereign to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues.
A
B
19
Q
The power to tax is the power to destroy. Is this always so? (BEQ)
A No. The Executive branch may decide not to enforce a tax law which it believes to be confiscatory.
B. Yes. The tax collectors should enforce a tax law even if it results to the destruction of the property rights of a taxpayer.
C. Yes. Tax laws should always be enforced because without taxes the very existence of the State is endangered.
D. No. The Supreme Court may nullify a tax law, hence, property rights are not affected.
A
D
20
Q
- The requirement of equality or theoretical justice is complied with if the tax is
A. progressive
B. regressive
C. ad valorem
D. specific
A
A
21
Q
- The power of taxation can only be exercised by the lawmaking body
A. subject to constitutional and inherent limitations
B. equality or theoretical justice
C. legislative in character
D. inherent in sovereignty
A
C
22
Q
- The President of the Philippines and the Prime Minister of Japan entered into an executive agreement in respect of a loan facility to the Philippines from Japan whereby it was stipulated that interest on loans granted by private Japanese financial institutions in the Philippines shall not be subject to Philippine income taxes. What basic characteristic of taxation has been violated by this agreement?
A. inherent limitation
B. theoretical justice
C. legislative in character
D. administrative feasibility
A
C
23
Q
- Although the power of taxation is basically legislative in character, it is not the function of the Congress to (BEQ)
A fix with certainty the amount of taxes.
B. collect the tax levied under the law.
C. identify who should collect the tax.
D. determine who should be subject to the tax.
A
B
24
Q
- Which statement gives the correct answer? That a feasibility study needs or need to look into the taxes of different political subdivisions of government which may be alternative sites of the business because (RPCPA)
A. Provinces, cities and municipalities must have uniform taxes between and among themselves.
B. The local taxes of a political subdivision need not be uniform with the local taxes of another political subdivision.
C. Businesses that are subject to national taxes are exempted from local business taxes.
D. Local business taxes may be credited against national business taxes.
A
B
25
26. Those restrictions on the exercise of the power of taxation that are found in the constitution or implied from its provisions
A. theoretical justice
B. legislative in character
C. inherent limitations
D. constitutional limitations
D
26
27. Which of the following statements is not correct? (RPCPA)
A. Taxes may be imposed to raise revenue or to provide disincentives to certain activities within the state.
B. The state can have the power of taxation even if the Constitution does not expressly give it the power to tax.
C. For the exercise of the power of taxation, the state can tax anything at any time.
D. The power of taxation in the Philippine Constitution are grants of power and not limitations on taxing powers.
D
27
28. One of the following is not an inherent limitation on the exercise of the power of taxation-
A. international comity
B. double taxation
C. non-delegation of the legislative power to tax
D. territoriality
B
28
29. The City Council passed an ordinance imposing an occupation tax on an airconditioning technician. Conde is the only person with such occupation in the city. He challenged the validity of the ordinance as being discriminatory since he is the only one adversely affected
A. The contention of Conde is tenable.
B. The ordinance is unconstitutional because Conde is denied of his right to equal protection of the law.
C. The contention of Conde is not justified because the rule on uniformity is not violated considering that the ordinance would also be imposed on all airconditioning technicians who may come within the jurisdiction of the city.
D. The issue on validity or invalidity of the ordinance should be set aside.
C
29
30. Those who have more income should pay more income tax, while minimum wage earners should be exempt
A. Uniformity of taxation;
B. Equality of taxation
C. Due process of law
D. Non-delegation of legislative power
B
30
31. All subject or objects that are similarly situated are treated alike as to the burden that may be imposed and the benefits that may result
A. equitable
B. proportional
C. uniformity
D. progressive
C
31
32. A tax law is not violative of the due process clause when it is
A. arbitrary
B. discriminatory
C. excessive
D. proportionate
D
32
33. Which of the following is violative of the uniformity rule in taxation?
A. Different tax rates on boarding stables for racehorses and boarding horses that are not for racing:
B. Wholesale dealers in oil are subject to occupation tax while wholesale dealers in other articles such as sugar, bacon, coal, iron and other things are not so subject;
C. A road users' tax imposed on all motor vehicles registered and operating in the City of Manila but does not subject vehicles not registered therein but also operating temporarily in said city;
D. A tax of P2 per square meter or fraction thereof is imposed on every billboard or sign anywhere in the country.
C
33
34. the lung center of the philippines, a charitable institution, is erected in the middle of a twelve hectare lot:
1. A big space at its ground floor is being leased to private parties, for canteen and small store spaces, and to medical or professional practitioners who use the same as their private clinics for their patients whom they charge for their professional services.
II. The rest of the portions of the building are used for its patients, whether paying or non-paying.
III. Almost one-half of the entire area of the lot on the left side of the building is vacant and idle.
IV. A big portion on the right side is being leased for commercial purposes to a private enterprise known as the Elliptical Orchids & Garden Center. Which portion is subject to real property tax?
a. I only
b. I and II
c. III and IV
d. I, III and IV
D
34
35. Statement 1: The constitutional exemption on income taxes, property taxes and customs duties is allowed on non-stock, non-profit educational institutions only.
Statement 2: A building being leased by its owner to a private educational institution for use as classrooms is exempt from property tax.
Statement 3: Income of a non-stock, non-profit educational institution run by the Archdiocese is exempt from tax provided that the incomes are actually. directly and exclusively used for educational purposes.
Which of the above statements are correct?
A. Statement 1 only
b. Statements 1 & 2
C. Statement 2 only
d. All of them
D
35
which of the following statements is not correct?
A. An inherent limitation of taxation may be disregarded by the application of a constitutional limitation.
B. The property of an educational institution operated by a religious order is exempt from property tax, but its income is subject to income tax.
C. The prohibition of delegation by the state of the power of taxation will still allow the Bureau of Internal Revenue to modify the rules on time for filing of returns and payment of taxes.
D. The power of taxation is shared by the legislative and executive departments of government.
B
36
37. Business College (BC) is a non-stock, non-profit educational institution. It owns a 5-hectare lot one half of which is being used as its school campus while the other half is vacant. To cope with the increasing operating costs and to upgrade its facilities, BC plans to do the following effective January 1, 2016: (1) rent out to a marketing firm the vacant portion of the lot; (2) increase tuition fees by 10% in accordance with government regulations; and (3) import 20 sets of computers for use in its computer courses. Which of the following questions is answerable by "Yes."
A. is BC subject to real estate tax on the one-half portion to be rented out to a business establishment?
B. Will it be exempt from income tax on its rental to the marketing firm?
C. Will the increase in tuition fees be subject to income tax if it results to a net income from school operations?
D. Will it be subject to customs duties on the importation of the computers?
A
37
38. The Bicol School of Business and Arts, a proprietary educational institution which is offering primary, secondary and tertiary education, is registered with and accredited by the Department of Education (DepEd) and the Commission on Higher Education (CHED).
Which of the following is exempt from tax? What kind of tax?
A. The importation of laboratory equipments - from customs duties.
B. The school building being rented by the school - from real property tax.
C. A portion of the school building being leased to a fastfood chain - from real property tax.
D. The income from operation - from income tax.
B
38
39. Assuming that the school in the preceding number is a non-stock non-profit educational institution. Which of the following is subject to tax? What kind of
tax?
A. The school building owned by the school - from real estate tax.
B. The school building being rented by the school - from real property tax.
C. A portion of the school building being leased to a fastfood chain - from real property tax.
D. The income from operation - from income tax
C
39
40. The head priest of the religious sect Tres Personas Solo Dios, as the corporation sole, rented a 5,000 sq. m. lot registered in its name for use as school site of a school organized for profit. The sect used the rentals for the support and upkeep of its priests. The rented lot is (BEQ)
A not exempt from real property taxes because the user is organized for profit.
B. exempt from real property taxes since it is actually, directly, and exclusively used for religious purposes.
C. not exempt from real property taxes since it is the rent, not the land, that is used for religious purposes.
D. exempt from real property taxes since it is actually, directly, and exclusively used for educational purposes
D
40
41. The Municipality of Monte Cristo has a ten (10) hectare cemetery consisting of four (4) different cemeteries which are owned by different entities. Which of the following is subject to real estate tax?
A. Cementerio Municipal del Monte Cristo - a government cemetery owned by the municipality which was established for the purpose of using it as burial ground of the paupers in Monte Cristo.
B. Monte Cristo Catholic Cemetery
owned by the catholic church; payments are remitted to the catholic church and for the improvement of the cemetery.
C. Last Trip Memorial Park - owned by a corporation where dividends are distributed to the shareholders at the end of the year.
D. Quita-Quita Memorial Park - owned by an association consisting one hundred (100) different families; each family owns several square meters of lot; not a single portion is held for sale to either member or non-member of the association.
C
41
42 Lualhati Educational Foundation, Inc., a stock educational institution organized for profit, decided to lease for commercial use a 1,500 sq. m. portion of its school. The school actually, directly and exclusively used the rents for the maintenance of its school buildings, including payment of janitorial services. Is the leased portion subject to real property tax? (BEQ)
A. Yes, since Lualhati is a stock and for profit educational institution.
B. No, since the school actually, directly, and exclusively used the rents for educational purposes.
C. No, but it may be subject to income taxation on the rents it receives.
D. Yes, since the leased portion is not actually, directly, and exclusively used for educational purposes.
D
42
43. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the (RPCPA)
A. Office of the President
B. House of Representatives
C. Senate
D. Supreme Court
B
43
44. Which statement is wrong? Tax laws (RPCPA)
A Must originate from the House of Representatives and on which same bill the Senate may propose amendments.
B. May originate from the Senate and on which same bill the House of Representatives may propose amendments.
C. May have a House version and Senate version approved separately
D. May be recommended by the President to Congress.
B
44
45. Congressman Luis R. Villafuerte of the 3rd district of Camarines Sur and Senator Juan Ponce Enrile sponsored a bill in the House of Representatives and the Senate, respectively, increasing the personal exemptions of individual taxpayers as well as granting tax exemption to minimum wage earners. Which of the following is correct?
A The senate bill should be discussed ahead of the house bill.
B. The senate and house bills maybe discussed at the same time in both houses.
C. the house bill should be discussed ahead of the senate bill.
D. no priority, each bill can be discussed ahead of the other.
C
45
46. No law granting any tax exemption shall be passed without the concurrence of (RPCPA) -
A. Majority of all members of the Congress.
B. 2/3 vote of all members of the Congress.
C. % vote of all members of the Congress.
D. Unanimous vote of all members of the Congress.
A
46
47. Which of the following statements is incorrect with respect to the power of the President?
A. Congress may authorize the President to fix within specified limits tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the national development program of the government.
B.The President can veto any particular item in a revenue or tariff bill, but the veto shall not affect the items or items to which he does not object.
C. The power of taxation can be delegated to the President of the Philippines.
D. The President of the Philippines is empowered to grant tax exemption on certain class of taxpayers.
D
47
48. Which of the following statements is incorrect?
A. No person shall be imprisoned for non-payment of debt or non-payment of taxes.
B. The passage of laws granting tax exemptions requires the concurrence by a majority of all the members of Congress.
C. The Supreme Court's jurisdiction over tax cases cannot be impaired. D. The revenues and assets of non-stock, non-profit educational institutions and donations for educational purposes are exempted from taxes and duties.
A
48
49. They restrict the exercise of the power of taxation although they are not embodied in the Constitution
A theoretical justice
B. legislative in character
C. inherent limitations
D. constitutional limitations
C
49
50 Money collected from taxation shall not be paid to any religious dignitary except when (BEQ)
A. the religious dignitary is assigned to the Philippine Army.
B. it is paid by a local government unit.
C. the payment is passed in audit by the COA.
D. it is part of the lawmaker's pork barrel.
A
50
51. A tax must be appropriated and spent for public purpose. Which of the following is not a public purpose?
A. dole-out to victims of calamity
B. Pantawid Pamilyang Pilipino Program (4Ps)
C. improvement of sugar industry
D. construction of a barangay chapel
D
51
52. Which of the following activities is not a public purpose?
A. Construction of bridges.
B. Payment of Christmas bonuses of government officials and employees
C. Opening of road on a tract of land owned by a private individual.
D. Scholarship to poor but deserving students.t
C
52
53. A fundamental rule in taxation is that "the property of one country may not be taxed by another country." This is known as (RPCPA)
A. international law
B. international comity
C. reciprocity
D. international inhibition
B
53
54. QUESTION 1: Can the state tax the Armed Forces of the Philippines?
QUESTION 2: Are government-owned and controlled corporations subject to
tax?
a. Yes, No
b. Yes, Yes
C. No, Yes
d. No, No
B
54
55. Diplomatic officials such as heads of states and ambassadors are exempt from taxes and duties because of
A. international comity
B reciprocity provisions
C. principle of territoriality
D exemption in the tax code
A
55
56. Deals with the provisions of the law which determines the person or property to be taxed, the sum or sums to be raised, the rate thereof, and the time and manner of levying, receiving and collecting of taxes
A collection
B. payment
C. enforced contribution
D. levy
D
56
57. Constituted of the provisions of law which prescribe the manner of enforcing the obligation on the part of those taxed to pay the demand thus created
A. collection
B. proportionate in character
C. enforced contribution
D. levy
A
57
58. The amount required is dictated by the needs of the government in (RPCPA)-
A. license fee
B. tax
C. toll
D. tariff
B
58
59. One of the characteristics of a tax is
A. A tax is a pecuniary burden and the law may not allow payment in kind.
B. It is dependent upon the will or contractual assent, express or implied,
of the person taxed.
C. It is levied by the state by virtue of its sovereignty.
D. It is collected for public and private purposes.
C
59
60. One of the characteristics of a tax is that (RPCPA)
A. It is generally based on contract.
B. It is generally payable in money.
C. It is generally assignable.
D. Optional
B
60
61. XYZ Corporation manufactures glass panels and is almost at the point of insolvency. It has no more cash and all it has are unsold glass panels. It received an assessment from the BIR for deficiency income taxes. It wants to pay but due to lack of cash, it seeks permission to pay in kind with glass panels. Should the BIR grant the permission? (BEQ)
A. It should grant permission to make payment convenient to taxpayers.
B. It should not grant permission because a tax is generally a pecuniary burden.
C. It should grant permission; otherwise, XYZ Corporation would not be able to pay.
D. It should not grant permission because the governmnt does not have the storage facilities for glass panels.
B
61
62. Which is not an essential characteristic of tax? (RPCPA)
A Unlimited as to amount.
B. Payable in money
C. Proportionate in character
D. Regular in payment.
D
62
63. No person shall be imprisoned for non-payment of (RPCPA)
A. property tax
B. excise tax
C. poll tax
D. income tax
C
63
64. An example of a property tax is
A. additional community tax on income of real properties
B. real estate tax on real properties
C. estate tax on inherited personal as well as real properties
D. donor's tax on donation of property
B
64
65. Which of the following is not an example of excise tax?
A Transfer tax
B. Sales tax
C Real property tax
D. Income tax
C
65
66. Sharon, a CPA has just obtained her CPA license. Before she can lawfully pursue her occupation, she should pay (RPCPA)
a. Professional Tax
b. Percentage tax
c. CPA's income tax
d. Value-added tax
A
66
a tax that is imposed upon a person who is directly bound to pay it
A. direct tax
B. indirect tax
C. excise tax
D. poll tax
A
67
one is not a direct tax
A. immigration tax
B. transfer tax
C. income tax
D. contractor's tax
D
68
the basic community tax of P5.00 of an individual as an
A. property tax
B. direct tax
C. national tax
D. ad valorem tax
B
69
70. Which of the following statements is not wrong?
A. Non-payment of additional community tax is a ground for imprisonment.
B. In case of conflict between a tax law and a revenue regulation, the latter shall prevail.
C. A revenue regulation can expand the provision of law by imposing a penalty even if the law that it implements does not impose a penalty.
D. Revenue bills shall originate exclusively from the Senate.
A
70
71. Statement 1: The value-added tax is a property tax.
Statement 2: The estate tax is a direct tax. (RPCPA)
A. The two statements are correct.
B. The two statements are wrong.
C. Statement 1 is correct, Statement 2 is wrong.
D. Statement 1 is wrong, Statement 2 is correct.
D
71
72. Forms part of the purchase price of the commodity or service and passed on
to customers
A direct tax
B. indirect tax
C. excise tax
D. poll tax
B
72
73. A tax on business is (RPCPA)
A direct tax
B. indirect tax
C. property tax
D. none of the above
B
73
74. Fermin is a mining operator. His mineral lands are not covered by any lease contract. The tax Fermin has to pay based on the actual value of the gross output or mineral products extracted is (RPCPA)
A. mining tax
B. royalties
C. rental
D. ad valorem tax
D
74
75. Tax that is imposed solely to raise revenue for government expenditures
A. revenue tax
B. regulatory tax
C. specific tax
D. ad valorem tax
A
75
76. Tax levied for particular or specific purpose irrespective of whether revenue
is actually raised or not
A revenue tax
B. regulatory tax
C. specific tax
D. ad valorem tax
B
76
77. Tax imposed by the national government and is effective within the entire jurisdiction thereof
A. national tax
B. local tax
C. proportional tax
D. general tax
A
77
78 Taxes imposed by a political subdivision of the state and is effective only within the territorial boundaries thereof
A. national tax
B. local tax
C. progressive tax
D. regressive tax
B
78
79. Which of the following taxes is proportional?
A. value-added tax
B. income tax
C. estate tax
D. donor's tax
A
79
80. The following are kinds of taxes as to graduation. Which one is not? (RPCPA)
A. Digressive
B. Uniform
C. Regressive
D. Progressive
B
80
81. An example of a tax where the concept of progressivity finds application is the (BEQ)
A. income tax on individuals.
B. excise tax on petroleum products.
C. value-added tax on certain articles.
D. amusement tax on boxing exhibitions
A
81
82. The power of the state or those to whom the power has been delegated to take private property for public use upon paying to the owner a just compensation
A. power of eminent domain
B. police power
C. power of taxation
D. people power
A
82
83. There can be classification of the subject matter being required to shoulder the burden. Which is the exception? (RPCPA)
A. tax
B. license fee
C. toll
D. eminent domain
D
83
84. The power of the state to enact such laws in relation to persons and property as may promote public health, public morals, public safety and the general welfare of the people
A. power of eminent domain
B. police power
C. power of taxation
D. people power
B
84
85. The following are similarities of the inherent power of taxation, eminent domain and police power except one (RPCPA)
A. Are necessary attributes of sovereignty.
B. Interferes with private rights and property. C. Affect all persons or the public.
D. Are legislative in their implementation.
C
85
86. Which statement refers to police power as distinguished from taxation? (RPCPA)
A. It can only be imposed on specific property or properties.
B. The amount imposed depends on whether the activity is useful or not.
C. It involves the taking of property by the government.
D. The amount imposed has no limit
B
86
87. Police power as distinguished from taxation or eminent domain
A. Just compensation is received by the owner of the property.
B. Maybe exercised by private individuals.
C. Superior to the non-impairment clause of the constitution.
D. Property is taken by the government for public purpose.
C
87
88. Which statement is wrong? (BEQ)
A. The power of taxation may be exercised by the government, its political subdivisions, and public utilities.
B. Generally, there is no limit on the amount of tax that may be imposed.
C. The money contributed as tax becomes part of the public funds.
D. The power of taxation is subject to certain constitutional limitations.
A
88
89. Mr. No Null is exempt from all taxes.
Q1: Is he exempt from customs duties on the importation of goods?
Q2: Is he exempt from parking fees on the parking areas owned by the government?
Q3: Is he exempt from Mayor's Permit fees?
Which of the above questions is/are answerable by "No?"
A. Q2 only.
B. Q1 and Q2
C. Q2 and Q3
D. Q1, Q2 and Q3
C
89
90. After having been informed that some massage parlors are being used as fronts for prostitution, the Sangguniang Panlungsod of Manila passed a tax ordinance subjecting massage parlors within its jurisdiction to such onerous taxes that leave them no other alternative but to stop operating. The passage of the ordinance is a valid exercise of -
A taxation
B. eminent domain
C. police power
D. police power and power of taxation
D
90
91. Which of the following statements is correct?
A. Non-payment of tax and debt is a ground for imprisonment.
B. The power to tax may include the power to destroy.
C. Provisions in the Philippine Constitution on taxation are grants of power.
D. Lands and buildings being used actually, directly and exclusively for religious and charitable purposes by churches and charitable institutions are exempt from income and property taxes.
B
91
93. Statement 1: An Executive order passed by the President of the Philippines directing the Commission on Higher Education (CHED) to regulate the operation of review centers is a valid exercise of police power.
Statement 2: Construction of a church building is exempt from the payment of building permit fees because the constitution provides that churches are exempt from property taxes.
Which of the above statements is true?
A. Statement 1 only
B. Statement 2 only
C. Neither statements
D. Both statements
C
92
92. The following statements are correct. Which is the exception?
A. The rule of taxation shall be uniform and equitable
B. Taxation may be used to implement the police power of the state.
C. Police power is superior to the non-impairment clause of the
constitution.
D. The salary of the justices of the Supreme Court are exempt from income tax.
D
93
statement 1: the congress can enact tax laws even in the absence of a constitutional provision granting said body the power to tax.
statement 2: a tax may be validly imposed in the exercise of police power and not the power to tax.
A. false, false
B. false, true
C. true, true
D. true, false
C
94
95. Which of the following may not raise money for the government? (RPCPA)
A. power of taxation
B. police power
C. power of eminent domain
D. privatization of government's capital assets
C
95
96. In this power of the State, the person who is parting with his money or property is presumed to receive a benefit (RPCPA)
A. taxation
B. police power
C. eminent domain
D. forfeiture power
A
96
97. Which of the following inherent powers of the government is inferior to the non-impairment clause of the constitution?
A taxation
B. police power
C. eminent domain
D. None
A
97
1. Who among the following is a non-resident alien? (RPCPA)
A. An alien who comes to the Philippines for a definite purpose which in its nature may be promptly accomplished.
B. An alien who comes to the Philippines for a definite purpose which in its nature would require an extended stay.
C. An alien who has acquired residence in the Philippines.
D. An alien who lives in the Philippines with no definite intention as to his stay.
A
98
2. Christopher, a staff auditor of the Sycip, Gorres, Velayo & Co., took and passed the examination for Certified Tax Technician (CTT). In the following year, he resigned from his job and left the Philippines on April 10, 2019 to work permanently as tax clerk in a big establishment in Melbourne, Australia. For income tax purposes, which of the following statements is correct with respect to Christopher's classification?
A. He shall be classified as nonresident citizen for the whole year of 2019.
B. His classification as a nonresident citizen will start in 2020.
C. He shall be classified as nonresident citizen for the year 2019 with respect to his income derived from sources without from April 10, 2019.
D. He shall be classified as nonresident citizen for the year 2019 with respect to his income derived from sources without from April 11, 2019.
D
99
3. Michaelani Bongalontani, Italian, arrived in the Philippines on January 1, 2019 and continued to live and engaged in business in the Philippines. He went on a tour in Southeast Asia from August 1 to November 5, 2019. He returned to the Philippines on November 6, 2019 and stayed until April 15, 2020 when he returned to France. He earned during his stay in the Philippines a gross income of P3 million from his investments in the country. For the year 2019, Michaelani's taxable status is that of (BEQ)
A. a non-resident alien not engaged in trade or business in the Philippines.
B. a non-resident alien engaged in trade or business in the Philippines.
C. a resident alien not engaged in trade or business in the Philippines.
D. a resident alien engaged in trade or business in the Philippines.
B
100
4. All of the following, except one, are taxable on income within only:
A. Resident alien
B. Nonresident citizen
C. Resident citizen
D. Nonresident alien
C
101
5. Who among the following individual taxpayers is taxable on income within and without?
A. Alcazar, a native of General Santos City, working as overseas contract worker in Iraq.
B. Philander Rudyman, naturalized Filipino citizen and married to a Filipina. He had been living in Olongapo City since 1970.
C. Rodrigo de la Hoya, Spanish citizen, a resident of Madrid, Spain, spent a one (1) week vacation trip in Boracay.
D. Dao Ming So, Taiwanese singer, held a 3-day concert in Manila.
B
102
6. Which of the following statements is correct about a non-resident alien?
A. Taxable on income within and without
B. May be entitled to claim personal exemption.
C. Subject to tax based on taxable income.
D. Shall be taxable on income derived from sources within the Philippines.
D
103
7. In 2019 Rustom, Filipino, legally separated from his wife, Mina, left for the United States with his daughter, Robina, to permanently reside therein which fact has been established to the satisfaction of the Commissioner of Internal Revenue. In 2020, he earned P 2 million as income from his beauty parlor in that country.
Which of the following statements is correct?
A. For Philippine income tax purposes, Rustom may deduct from his gross income his expenses in earning such income.
B. For Philippine income tax purposes, Rustom's gross income is subject to a creditable withholding tax of 10%.
C. Rustom's gross income of P2 million is not taxable in the Philippines.
D. For Philippine income tax purposes, his income is still taxable in the Philippines.
C
104
9. Which of the following income is subject to final tax if received by an individual taxpayer?
I. Share of a partner in the net income of a business partnership.
II. Cash dividend received by a stockholder from a domestic corporation.
III. Winnings in lotto.
IV. Raffle prizes amounting to P6,000.
A. I, II and III
B. III and IV
C. I, II and IV
D. I, II, III and IV
A
105
1. The proceeds received under a life insurance endowment contract is not considered part of gross income (BEQ)
A. if it is so stated in the life insurance endowment policy.
B. if the price for the endowment policy was not fully paid.
C. where payment is made as a result of the death of the insured.
D. where the beneficiary was not the one who took out the endowment contract.
C
106
2. Proceeds of insurance taken by a corporation on the life of an executive to indemnify it against loss in case of his death is (RPCPA)
A. Exempt from income tax
B. Part of taxable income
C. Subject to final tax
D. Partly exempt, partly taxable
A
107
3. Which of the following is correct? Proceeds of life insurance policy
A. is exempt from income tax upon the death of the insured if the beneficiary is not the estate, executor or the administrator.
B. is not subject to income tax if taken by a person other than the insured such as the employer.
C. are subject to income tax in its entirety if the insured outlives the policy regardless of the amount of premiums paid by the insured.
D. are exempt from income tax upon the death of the insured because the requirement of irrevocability, and appointment of beneficiary other than the estate, executor or administrator are applicable only on estate tax and not to income tax.
D
108
4. Mrs. Lucena was insured under an endowment policy with a value of P500,000. Total premiums paid by her during the term of premium payments on the policy was P490,000 from which there was a return of premiums of P40,000. At the maturity of the policy, Mrs. Lucena received P500,000. The income of Mrs. Lucena under the policy is (RPCPA)
A. Zero
B. P 500,000
C. P 10,000
D. 50,000
D
109
5. Sonia took a life insurance from Sunstar Insurance Company, with her husband Noli as the beneficiary. Under the policy, Sunstar will pay Sonia the amount of P500,000 when the policy matures, or to her beneficiary husband in case she dies before the maturity. Sonia will pay P10,000 annually for 20
years.
Assuming that the policy matured when Sonia reached 50 years old and she received the entire P500,000 from the insurer, how much income should she report?
A. P 500,000
B. 200,000
C. P 300,000
D. None
C
110
5. Sonia took a life insurance from Sunstar Insurance Company, with her husband Noli as the beneficiary. Under the policy, Sunstar will pay Sonia the amount of P500,000 when the policy matures, or to her beneficiary husband in case she dies before the maturity. Sonia will pay P10,000 annually for 20
years.
Assume that Sonia died after 10 years of paying premium. How much income should be reported to the BIR?
A. 500,000
B. 100,000
C. 400,000
D. none
D
111
Paulo insured his life with an insurance company. Under the contract, he will pay a monthly premium of P2,000 for 10 years. In case of death before the 10th year, his beneficiary will receive an indemnification in the amount of P150,000. If he is still living on the 10th year, he will receive the face value of P500,000.
7. If Paulo dies on the 5th year, his beneficiary will report an income of
A. P 500,000
B. 150,000
C. P 260,000
D. Exempt
D
112
Paulo insured his life with an insurance company. Under the contract, he will pay a monthly premium of P2,000 for 10 years. In case of death before the 10th year, his beneficiary will receive an indemnification in the amount of P150,000. If he is still living on the 10th year, he will receive the face value of P500,000. Suppose paulo dies on the 5th year and his beneficiary was offered to receive the 150,000 in lump sum or to receive it at 20,000 a month for ten (10) months and the beneficiary chose the 2nd option, he will report an income of
A. 500k
B. 150K
C. 50K
D. EXEMPT
C
113
Paulo insured his life with an insurance company. Under the contract, he will pay a monthly premium of P2,000 for 10 years. In case of death before the 10th year, his beneficiary will receive an indemnification in the amount of P150,000. If he is still living on the 10th year, he will receive the face value of P500,000. Suppose Paulo survived the policy and was able to receive 500k, he will report an income of
A. 500k
B. 260K
C. 150K
D. NONE
B
114
10. Andrew is the owner and beneficiary of a P500,000 policy on the life of his father. Andrew sells the policy to his brother, Rolly, for P150,000. Rolly subsequently pays premiums of P50,000. Upon his father's death, Rolly must
A. include P 500,000 in his gross income.
B. exclude the entire proceeds in his gross income.
C. include P300,000 in his gross income.
D. include P350,000 in his gross income.
C
115
16. An accident attributed to the negligence of the driver of Superman Lines resulted in the death of Richard's wife, physical injuries to Richard that prevented him from working for two (2) months, and the total wreck of his brand new car which he had bought for P1,650,000.
In an action for damages, the court awarded to Richard the following:
P 140,000 - Injuries to Richard consisting mainly in the loss of his left leg.
80,000- Two months' salary of Richard.
120k- For the death of his wife.
100k- Moral damages for the physical suffering and mental anguish
1,800,000- For the loss of his car, the value of which had increased.
Based on the foregoing, Richard should report income of -
A. P 190,000
B. 680,000
C. P 230,000
D. 240,000
C
116
11. Mr. Basilio insured his life with his estate as beneficiary. In 2019, after Mr. Basilio had paid P65,000 in premium, he assigned the policy to Mr. Jose Llamado for P60,000, and Mr. Llamado continued paying the premiums. Mr. Basilio died and Mr. Llamado collected the total proceeds of P200,000. Mr. Llamado, after the assignment and before Mr. Basilio's death, paid total premiums of P80,000. As a result of the above transaction, Mr. Llamado: (RPCPA)
A. may consider the proceeds of P200,000 as exempt from tax.
B. derived a taxable income of P55,000.
C. derived a taxable income of 60k
D. answer not given
C
117
12. Binata Reyes won the International Billard Championship held in Madrid, Spain. The tournament was sanctioned by a national sports association which is recognized by the Philippine Olympic Committee. He was awarded U.S. $60,000 by the sponsor of the tournament. He was also given a cash prize of P250,000 by San Miguel Corporation.
In the same year, he entered into a contract with the same company to advertise their product for P1,500,000.
If the exchange rate of every U.S. $1 is P50, Binata Reyes should report an income of -
A. P 4,750,000
B. 1,500,000
C. P 1,750,000
D. 3,370,000
B
118
14. While crossing along the intersection of Legarda St. and Recto Avenue in Sampaioc, Manila, Miss Mina Malas was bumped by a passenger jeepney. As a consequence of the accident, she was hospitalized for 20 days. The driver and the operator of the passenger jeepney paid her a total amount of P135,000 for the following expenses that she incurred:
60K- Hospital bills
15K- Cost of medicines
60K- Moral damages for mental anguish and others
She also received P20,000 as settlement of a libel case that she filed against a television station which announced that she was pregnant at the time of the accident and that the fetus was aborted.
The income to be reported by Mina is --
A. PO
B. 20,000
C. P 60,000
D. 155,000
A
119
Lenny was hit by a wayward bus while on her way home. She survived but had to pay P150,000 for her hospitalization. She was unable to work for six (6) months which meant that she did not receive her usual salary of P20,000 a month or a total of P120,000. She sued the bus company and was able to obtain a final judgment awarding her P150,000 as reimbursement for her hospitalization, P120,000 for the salaries she failed to receive while hospitalized, and P250,000 as moral damages for her pain and suffering. She was able to collect in full from the judgment. How much income did she realize when she collected from the judgment?
A. 460K B. 250K C. 60K D. 120K
D
120
20. All the items below are excluded from gross income, except: (BEQ)
A. Gain from sale of long-term bonds, debentures and indebtedness;
B. Value of property received by a person as donation or inheritance;
C. Retirement benefits received from the GSIS, SSS, or accredited retirement plan;
D. Separation pay received by a retiring employee under a voluntary retirement program of the corporate employer.
D
121
23. During the year, Bata received a coconut land from his mother by way of an inter-vivos donation. The land had a market value of P700,000 and earning an average annual income of P50,000.
In the same year, his mother died. He inherited a passenger bus valued at P400,000 and a residential house worth P2,000,000. The bus earned a total income of P30,000 in the hands of Bata.
As a consequence of his mother's death, he received P400,000 from an insurance company as proceeds of an insurance policy taken by his mother who appointed him as the beneficiary. The total premiums paid was P150,000.
The income subject to tax is-
A. P3,500,000
B. 3,350,000
C. P 330,000
D. 80,000
D
122
24. After working for 30 years at Sto. Domingo Corporation, Miss Tela Pia retired from employment at the age of 60. She received P600,000 as retirement pay from the private retirement plan being maintained by the employer.
Other than her retirement benefits, she also received her endowment insurance policy in the amount of P400,000 which she was paying for 20 years at an annual premium of P5,000.
How much income must be reported by Miss Tela Pia?
A. P 300,000
B. 400,000
C.P 600,000
D. None
A
123
On october 1, 2019, Samantha inherited properties worth 3M from her mother. the properties are earning income of 90k a month.
how much income is to be declared by Samantha in 2019?
A. 3,090,000
B. 3M
C. 3,270,00
D. 270k
D
124
27. Villamayor, an employee of a cooperative was regularly receiving a monthly salary and allowance of P8,500 and P1,000, respectively. On June 1, 2019, he was retrenched by the cooperative paying him a separation pay of P125,000. He decided to use this money in buying a tricycle. For a six (6) month period, he earned a net income of P36,000. How much income should Villamayor declare in 2019 for income tax purposes?
A. P 83,500
B. 46,500
C. P 173,750
D. 171,000
A
125
Creasar Corporation had a total gross income of P4,800,000 and deductible expenses of P3,600,000.
10. If the total net assets of the corporation (excluding the land on which the building which houses its office, plant and equipment) is P80,000,000 how much is the income tax due on Creasar Corporation in 2023?
A. P 330,000
B. 300,000
C. P 360,000
D. 240,000
D
126
Creasar Corporation had a total gross income of P4,800,000 and deductible expenses of P3,600,000. How about if the total net assets (excluding the land) of the corporation in 2023 is 115M?
A. 240k B. 300k C. 360k D. 330k
B
127
Creasar Corporation had a total gross income of P4,800,000 and deductible expenses of P3,600,000. How much is the income tax due in 2023 if Creasar is a nonresident foreign corporation?
A. 1,440,000 B. 960k C. 1,200,000 D. 672k
C
128
13. John & Jan Corporation is a foreign corporation which is not engaged in trade or business in the Philippines. In 2023 it had a gross income of P1,500,000 and expenses of P650,000 on its isolated transaction in the Philippines.
The income tax due is -
A. P 300,000
B. 375,000
C. P 212,500
D. 450,000
B
129
Wobble Bubble Corporation had a gross income of P7,500,000 and deductible expenses of P2,800,000. The total assets of the corporation is P129,000,000 which includes the land where the office building is constructed with a market value of P20,000,000.
How much is the tax due if the corporation is resident foreign corporation?
A. 855k B. 2,250,000 C. 1292,500 D. 1,175,000
D
130
Wobble Bubble Corporation had a gross income of P7,500,000 and deductible expenses of P2,800,000. The total assets of the corporation is P129,000,000 which includes the land where the office building is constructed with a market value of P20,000,000. how much is the tax due if the corporation is a nonresident foreign corporation?
A. 1,875,000 B. 1,292,000 C. 1,410,000 D. 2250000
A
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