UNIVERSITY OF MAKATI COLLEGE OF BUSINESS ADMINISTRATION

MULTIPLE CHOICE 1. Donors tax distinguished from the estate tax: 1st distinction: The rates of gift tax are lower than those for the estate tax; 2nd distinction: The gift tax exemption is only P100,000 while the estate tax is P200,000 Which of the following is correct? a. 1st distinction is correct, 2nd distinction is wrong. b. 1st distinction is wrong, 2nd distinction is correct. c. Both distinctions are correct. d. Both distinctions are wrong. 2. Statement 1: The gross gift of a donor who is classified as a citizen or resident will include all property gifts, regardless of location; Statement 2: The gross gift of a donor who is classified as a non-resident, not citizen of the Philippines, will include only his property gifts located in the Philippines. a. First statement is correct, but second statement is wrong; b. First statement is wrong, but second statement is correct; c. Both statements are correct; d. Both statements are wrong; 3. The reciprocity clause in the donors tax law applies to a: a. Resident citizen; b. Non-resident alien; c. Non-resident citizen; d. Resident alien; 4. Who of the following is deemed a stranger under the gift tax law? a. A grand uncle; b. A second cousin; c. A child of a brother; d. A grand child; 5. A gift on account of marriage will allow a donor a deduction from the gross gifts made if: a. The donee is not a stranger b. The donee is an illegitimate child c. The donee is a legitimate child d. The donee is anybody Data for questions nos. 6, 7, 8, 9: A donor made certain donations in the year 2009 as follows: a. Donations of property in Philippines P 453,000 b. Donations of property abroad 250,000 c. Deductions on gifts in Philippines 76,500 d. Deductions on gifts abroad 45,300

6. How much is the gross gift if a resident donor? a. P453,000 b. P703,000 c. P250,000 7. How much is the taxable is the net gift if a resident donor? a. P581,000 b. P376,500 c. P204,700 8. How much is the gross gift if a non-resident alien donor? a. P453,000 b. P703,000 c. P250,000 9. How much is the taxable net gift if a non-resident alien donor? a. P581,200 b. P376,500 c. P204,700

d. no answer

d. no answer

d. no answer

d. no answer

Data for questions 10, 11: A resident citizen made the following gifts in the year 2009: On June 16, P150,000 to his legitimate son, on account of his marriage celebrated on May 1, 2009 On July 30, a parcel of land worth P180,000 to his brother, subject to the condition that the donee will assume the mortgage indebtedness in the amount of P40,000; 10. How much is the total gross gift for the year? a. P280,000 b. P320,000 11. How much is the total net gift for the year? a. P280,000 b. P270,000

c. P330,000

d. no answer

c. P290,000

d. no answer

Data for questions nos. 12, 13, 14: Contributions by a resident citizen parent to a legitimate child in 2009: Property in the Philippines, a birthday gift P 110,000 Property outside the Philippines, gift on account of marriage 200,000 Gift tax paid abroad 4,500 12. The taxable gross gift is: a. P110,000 b. P300,000 13. The taxable net gift is: a. P110,000 b. P300,000 14. The tax credit for foreign donors tax paid is: a. P 0 b. P8,867

c. P310,000

d. no answer

c. P310,000

d. no answer

c. P4,500

d. no answer

Data for questions nos. 15, 16, 17: A non-resident citizen of the Philippines, made the following donations in July of year 2009: a. To a legitimate child on account of marriage, a property abroad worth P610,000.

b. To a friend, ordinary donation of property in the Philippines subject to a mortgage of P60,000 which was assumed by the donee, the fair market value of the property was P260,000. 15. How much is the gross gifts? a. P870,000 b. P610,000 16. How much is the allowed deduction? a. P70,000 b. P10,000 17. The donors tax due is: a. P32,000 b. P48,000

c. P800,000

d. no answer

c. P60,000

d. no answer

c. P240,000

d. no answer

18. What would be the amount of gross gift for a property contributed which was acquired 3 years ago at P500,000, with fair market value at date of donation equal to P200,000 but with a mortgage payable of P50,000? a. P150,000 b. P200,000 c. P450,000 d. no answer Data for questions 19, 20: A mother donated the following gifts to her recognized natural daughter on account of marriage to be held in February 2009: Cash of P6,000 in December 2009; Lot worth P300,000 in January 2010. 19. How much is the gift tax in the year 2009? a. P120 b. P1,800

c. P none

d. no answer

20. How much is the taxable net gift in the year 2010? a. P306,000 b. P300,0000 c. P290,000

d. no answer

21. A citizen of the Philippines and resident of Davao City, died testate in May 2009. Among his gross estate properties inherited from his deceased father who died in April 2008. What percentage of deduction will be used in computing the amount of vanishing deduction? a. 60% of the value take as basis for vanishing deduction; b. 40% of the value taken as basis for vanishing deduction; c. 80% of the value taken as basis for vanishing deduction; d. 100% of the value taken as basis for vanishing deduction; 22. Which of the following statement if false? a. The gross estate of a resident, not citizen of the Philippines would include all properties regardless of location; b. The gross estate of a non-resident, citizen of the Philippines would include only properties in the Philippines; c. The gross estate of a non-resident citizen would include all properties regardless of location;

d. The gross estate of a non-resident not citizen of the Philippines would include intangibles properties in the Philippines; 23. Which one of the following is excluded from the gross estate? a. Proceeds of life insurance where the beneficiary designated is the estate and designated is irrevocable; b. Proceeds of life insurance where the beneficiary designated is the mother and the designation is irrevocable; c. Revocable transfer where the consideration is not sufficient; d. Revocable transfer where the power of revocation was not exercised; 24. Which one statement is wrong: A forgiveness or cancellation of indebtedness: a. May result in an inclusion of value in the gross estate; b. No answer; c. May result in an income to the debtor; d. May result in a donation to the debtor; 25. Which of the personal properties of a non-resident decedent, not a citizen of the Philippines, is not to be included in the gross estate: a. The tangible personal property in the Philippines; b. The personal property is shares of stock of a domestic corporation 90% of whose business is in the Philippines. c. The intangible personal property in the Philippines, without reciprocity law; d. The intangible personal property in the Philippines and the reciprocity clause of the estate tax law applies; 26. Which one of the following items is not deductible from the gross estate? a. Estate tax paid to a foreign country; b. Donors tax accrued prior to death; c. Income tax accrued on income received on or before death; d. Property taxes accrued prior to death; Data for questions nos. 27, 28: A resident citizen, died in July 2009 leaving properties constituting his gross estate of P6,000,000. Actual funeral expenses amounted to P250,000 and other expenses and claims (excluding yet the P1,000,000 standard deduction) which are deductions from the gross estate amounted to P1,500,000. 27. The allowed deduction for funeral expenses is: a. P200,000 b. P300,000 c. P250,000 28. The taxable net estate is: a. P3,250,000 b. P4,300,000

d. no answer

c. P3,300,000

d. no answer

Data for questions no. 29: A revocable property transfer, with a consideration received is as follows: Fair market value at the time of death P 500,000 Consideration received 400,000 Fair market value at the time transfer 600,000 29. The value to include in the gross estate is? a. P200,000 b. P500,000

c. P100,000

d. no answer

30. Real property with a purchase price of P200,000 and a fair market value at the time of death of P800,000, but subject to a mortgage of P200,000: a. Shall be in the gross estate at P200,000; b. Shall be in the gross estate at the owners equity of P200,000; c. Shall be in the net taxable estate of P200,000; d. Shall be in the gross estate of P800,000; Data for questions nos. 31, 32: Mr Shaw B has the following data related to his estate on date of death in 2009: a. Value of property in Philippines P 5,690,000 b. Value of property abroad 1,850,000 c. Ordinary deductions on property in Philippines 980,000 d. Ordinary deduction on property abroad 630,000 e. Special deduction 2,500,000 31. If a resident alien decedent, the taxable net estate is? a. P5,060,000 b. P3,430,000 c. P5,930,000 32. If a non-resident alien decedent, the taxable net estate is? a. P5,060,000 b. P3,430,000 c. P5,930,000

d. no answer

d. no answer

Data for questions nos. 33, 34, 35: Mr. and Mrs. Dapitan, both resident citizens, had the following data on the death of the former on June 12, 2009: a. Exclusive property of husband P 2,720,000 b. Exclusive property of wife